Lincoln Greyhound Park was a huge moneymaker during the heyday of dog racing but fell on hard times as other gambling opportunities developed.
However, the Rhode Island lawmakers saw it as a chance to get in on the gambling action so they passed a bill permitting the track to add slot machines.
Wow, what a bonanza.
The state’s share of the slots revenue rose to some $250 million yearly and provided a major cushion for the state budget.
Because of legal problems at the track, a new owner took over. BLB Investors, a consortium, that included Kerzner International, Starwood Capital Group and Waterford Group LLC, bought the place. The new group immediately petitioned the legislature to boost the number of machines on the casino floor to 4,200. Greedy politicians saw only increased revenues by agreeing to a larger property.
That expansion cost the new owners $220 million in borrowed money. Like other major casino companies, when business began to fall off their debt service get heavier.
Recently, BLB was advised that the "probability of bankruptcy" had grown and they had better increase their revenue sources if they hoped to survive. They immediately turned to their partner, the state, seeking a smaller tax. As it stands, the state takes 61 cents out of every dollar held by the house from slots revenue.
That request was dead on arrival at the state capital.
But, what nobody has even suggested is the possibility that if they were to reduce the "hold" of the slot machines, they might increase business. As it stands, the "house" takes about 20 cents of each dollar wagered. That’s a far cry from Nevada casinos that average about 6.5 cents or less per dollar.
Maybe if the players had a chance to win they might play longer. That might be worth a try.