Harrah’s plans R.I. casino

Feb 17, 2004 4:44 AM

The Narragansett Indian Tribe and its partner Harrah’s Entertainment Inc. (HET) are laying the groundwork to provide competition for two Connecticut casinos with a $450 million gaming emporium in West Warwick, R.I.

Initially, approval will be sought from Rhode Island lawmakers to permit the state’s voters to address the issue with a referendum on the November ballot. Supporters believe voters will be influenced by the plan that will create some 6,700 jobs and generate an estimated $100 million in state revenues annually.

The partnership also is expected to point to a recent study by the University of Massachusetts-Dartmouth Center for Policy Analysis that suggested Massachusetts residents spent $829 million annually at Connecticut’s two casinos. Rhode Island residents contribute some $300 million to the operating casinos in the neighboring state.

"How can anybody watch a billion dollars a year drive right by this location (West Warwick) and go to Connecticut and fund their schools, their state services, their programming?" asked Jan Jones, the former mayor of Las Vegas who now serves as a senior vice president with Harrah’s.

A tribe spokesman said the current $6 million annual budget is insufficient to fund the health, education and economic needs of its members. The planned casino, he said, would boost needed revenues by between $10 million and $20 million.

The casino proposal is opposed by Gov. Don Carcieri as well as by the operators of Lincoln Greyhound Park and Newport Grand whose slot machines generated about $220 million in state taxes last year. Should the voters approve the casino, they said, the casino should be taxed at the 60% level currently being paid by the two slot machine operators.

The additional competition could put a crimp into the plan by MGM MIRAGE Inc. (MGG) to acquire Wembley Plc. the British company that owns the troubled Lincoln Greyhound Park.

To those critics who have charged that Harrah’s/Narragansett Indian casino would take business away from the two slot machine operators, Jones remarked, "There’s more than enough market potential for everyone."

A Lincoln Park spokesman insisted, however, that if a casino is operated it should pay the same tax rate that the pari-mutuel operators currently are charged. The tracks pay 60% while Harrah’s is proposing a 25% tax.