Updated March 26 at 3:20pm

Rhode Island, a mini Vegas? Gambling, the 3rd-largest revenue stream

It is no secret that Rhode Island relies heavily on gambling revenue. More

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Rhode Island, a mini Vegas? Gambling, the 3rd-largest revenue stream

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It is no secret that Rhode Island relies heavily on gambling revenue.

Nor is it unexpected when the Ocean State ranks near the bottom – or at the very bottom – on national indices that measure the business climate.

Yet, there is one recent index on which Rhode Island lands at the very top: State Lottery Sales Per Capita, Fiscal Year 2008.

In the rankings prepared by the Tax Foundation, Rhode Island ranks first for per capita lottery sales in 2008 at $2,275 per person, far ahead of second-ranked South Dakota at $879 per person.

But do Rhode Islanders really spend as much as $2,275 per person on lottery tickets every year? With a population of about 1 million people, that would mean each man, woman and child in the state spends $44 each week on the lottery.

“I don’t feel that number is right,” Jeffrey Jarrett, professor of management science at the College of Business at the University of Rhode Island, told Providence Business News. “There is nothing in the character of Rhode Islanders or the marketing of the state lottery system to indicate that people in this state should buy almost three times more lottery tickets than the second-ranked state.”

And in fact they don’t. The Tax Foundation study uses numbers that include revenue from the state’s video lottery terminals at Twin River and Newport Grand – which is how the state reports it. But only five states use similar numbers, thus skewing the overall results.

Further clouding the picture is the fact that Rhode Island’s per capita number is inflated by spending from out-of-state visitors at the VLTs.

The video gambling revenue accounts for the lion’s share of state lottery sales – $2.15 billion, or 89.8 percent of the total $2.4 billion in fiscal year 2008, according to figures obtained from the Rhode Island Lottery. Instant tickets raised $81.5 million in 2008, 3.4 percent of the total, and online games such as the Daily Numbers, PowerBall and Keno generated almost $160 million, 6.7 percent of the whole.

Alicia Hansen, staff writer for the Tax Foundation in Washington, D.C., pointed to a footnote on the Tax Foundation’s list that states the Rhode Island figures include gross – as opposed to net – VLT sales.

120610 Page One, economy, public policy, government, Tax Foundation, University of Rhode Island, VLT, twin river, Newport grand, gambling , public policy, economy, 25-35, issue120610export.pbn
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RItruth

Another obvious example of why RI is in such dire fiscal and economic straits.

And it is the mentality that permeates the RI Lot, the state DBR and Gov. Befuddled Carcieri's eight-year reign of incompetence, which underscores how ill-prepared RI is to compete within New England.

We cannot get simple financial data in a cogent form from the RI Lot.

We cannot rely on the state DBR for a sound fiduciary review of ... anything.

And forget about the shameful Chuck Schilling bailout by the state DBR and Gov. Befuddled... that's just another in a long list of screwups by those buffoons.

DBR is the incompetent state agency that allegedly conducted a "due diligence" on the financial fitness of BLB Investors' plan to purchase Twin River for more than $365 million and then to invest $225 million in expanding the facility.

In 2006, had DBR or Gov. Befuddled Carciieri any common sense, someone might have asked whether there was a reason why, after 14 years of operation, millions of Massachusetts residents continued to ignore Twin River and willingly drive an extra hour each way to visit the Connecticut casinos?

Or, they might have asked why, after 14 years of operation, that Rhode Islanders spent more money at the Connecticut casinos each year than at our home state Rhode Island racinos?

Had DBR been a professional entity and availed itself of a minimum of easily available empirical data, perhaps we would not have reached a point where our state's third-largest source of revenue comes from a form of gambling that is, year after year, lurching toward the obsolete?

Now, to add insult to injury, the federal bankruptcy court approves the Twin River bankruptcy plan and, lo and behold, the very people who were in management as Twin River sank into bankruptcy are being kept in place at the "new" Twin River.

What a ludicrous result! Allowing the very people who presided day-in-and-day-out over the financial fall of Twin River to remain in place to mismanage Twin River ... again?

Let's hope that Gov.-elect Chafee, once he takes office, puts the state hammer to Twin River management and cleans house. Let's get some professionals in there --- real professionals who understand the gambling industry --- BEFORE Massachusetts approves casinos and racinos.

It's time for RI to enter the 21st century!!!!!!!!!!

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