Rhode Islanders appreciate high rollers — gaming is the state’s third-largest industry — but Republicans worry that Democratic Gov. Gina Raimondo has stacked the deck in favor of a political associate with a $1 billion, no-bid lottery deal.
The Rhode Island Republican Party filed an ethics complaint last week over her proposed 20-year contract extension with IGT Global Solutions, which runs the state lottery, citing Ms. Raimondo’s close ties to IGT lobbyist and former chairman Donald Sweitzer.
A longtime Democrat, Mr. Sweitzer serves as treasurer of the Democratic Governors Association, which Ms. Raimondo chairs and IGT supports, contributing $1.4 million to the association between 2003-17, according to data from the Center for Responsive Politics.
“Who is the governor of Rhode Island actually working for?” Rhode Island GOP Chairwoman Sue Cienki said Friday in an interview on WPRO talk radio. “Is it for the residents, or is it for inside dealing? This is an inside backroom deal that we just don’t agree with.”
Ms. Raimondo, who is term-limited after winning reelection in 2018, has defended the agreement, saying it was important to keep the 1,100 state jobs and arguing that other companies lack IGT’s experience with the state lottery.
“You’ve never done it before, and I’m not gambling on a company with no track record with Rhode Island’s third-largest source of revenue, and I’m not gambling on losing the jobs of 1,000 Rhode Islanders,” Ms. Raimondo told WPRO host Gene Valicenti in an interview.
“These are our friends and neighbors who have good jobs,” she said. “This would be the only lottery contract in America where there’s a 1,000-job job guarantee for 20 years.”
Her spokesman, Josh Block, called the complaint a “partisan attack,” telling the Providence Journal that Mr. Sweitzer was not involved in the contract-extension talks — “at no point did they negotiate any terms of this agreement” — even though House Speaker Nicholas Mattiello said he learned of the extension request from Mr. Sweitzer.
“I suggested that it was late in the session to be talking about a contract that big, and I asked why the legislature wasn’t notified about the ongoing discussions much earlier in the session so we could address it appropriately,” Mr. Mattiello, a Democrat, told the Journal last month.
The extension isn’t a done deal. The General Assembly is expected to take up legislation to override state competition requirements during the special session in September.
In the meantime, at least one other gaming interest is seeking to place its own bid for a piece of the video lottery-machine action.
Twin River Worldwide Holdings, which operates the state’s two Twin River casinos, launched a social-media blitz this week calling for state legislators to “put Rhode Island taxpayers first” and offering to pony up $125 million upfront, more than IGT’s $25 million.
“The only beneficiary of a no-bid, $1 billion dollar, 20-year deal is IGT,” Twin River Executive Vice President Marc Crisafulli said in a statement. “Certainly not the State of Rhode Island or its taxpayers.”
IGT swung back Monday with a study by a Bryant University professor showing that the company “supports 2,445 jobs (direct, indirect and induced), produces $176.1 million in labor income and generates $329.5 million in value for Rhode Island’s economy annually.”
The contract doesn’t expire until 2023, but IGT Chairman Robert Vincent said the extension provides a fair, market-based fee structure without risk of interrupting the state’s revenue stream while guaranteeing $100,000 jobs to at least 1,000 residents.
“Once we get to the point where there’s a little less drama and a lot more focus on the merits of the agreement, I think that will come through loud and clear,” Mr. Vincent said on GoLocalProv.
A Twin River website, www.stopnobiddeal.com, said the “stakes are too high to rush this deal,” given that gaming provides $350 million annually to the general fund, while a pro-IGT website, Keeping Jobs in Rhode Island, emphasized the company’s state roots and importance of continuity. “Our state needs balanced economic development,” said Keeping Jobs in Rhode island. “We need our leaders to provide employers with predictability. S 1031 and H 6266 put Rhode Islanders first, keep a global, home-grown company headquartered in Rhode Island’s capital city.”
What troubles Republicans is the governor’s close relationship with Mr. Sweitzer, who retired Dec. 31 as chairman of IGT, formerly known as GTECH. He said he was not involved in the negotiations in his role as a $7,500-per-month lobbyist, telling the Journal “I don’t do policy. I do politics.”
Still, his political resume is lengthy. He worked from 1989-1991 as a partner along with Paul Manafort at Black, Manafort, Stone & Kelly, as well as political director of the Democratic National Committee during the Clinton administration.
At 48, Ms. Raimondo is seen as a rising star in the Democratic Party, and “Mr. Sweitzer could be helpful to Ms. Raimondo’s national political aspirations,” said the Journal in an editorial.
“People thought in 2016, if Hillary Clinton had become president, that she was leaving to go to Washington,” said Ms. Cienki. “The whole aura around her is, she’s got one-and-a-half feet out the door, looking for the next job.”
In their complaint, Republicans say that the governor and Mr. Sweitzer are “business associates” through their roles at the DGA, and that if his ownership interest in IGT exceeds $5,000, the governor violated state law by failing to conduct “an open and public bid process.”
All but a handful of states run lotteries, generating in Fiscal Year 2018 sales of $77.7 billion, according to La Fleur’s Magazine, which covers the gaming industry.
IGT is a bipartisan political donor, contributing $947,215 to the Republican Governors Association from 2005-18, according to the CRP.
“This may be the best deal, but it is a 20-year, $1 billion contract. We don’t know if it’s the best deal that the taxpayers could have gotten because it didn’t go out to competitive bid,” said Ms. Cienki. “It’s what we call in Rhode Island, ‘I know a guy.’ You know a guy, so they get the deal, and that’s not the way it should work.”