DARTMOUTH and PROVIDENCE – The R.I. Department of Revenue today condemned as “completely inaccurate” a report by the University of Massachusetts–Dartmouth Center for Policy Analysis that described video lottery terminals (VLTs) in Rhode Island as “a bad bet” for players.

In a review today of slot-machine payout rates at gaming facilities in Connecticut, Delaware, Maine, New Jersey, New York, Pennsylvania, West Virginia and Rhode Island, the center found that in fiscal 2008, on average, patrons received back 92 cents of every dollar wagered.

But at Rhode Island’s two slot parlors – Twin River and Newport Grand – the payout was “on average, only 72 to 73 cents of each dollar wagered in a VLT,” the center reported. Twin River VLTs had an average payout rate of 73.1 percent in the latest fiscal year, the study found, while Newport Grand VLTs paid out 71.9 percent of what they took in.

“This is a surprisingly low payout rate,” Clyde W. Barrow, the policy center’s director, said in a statement today, adding: “It is puzzling that Rhode Island state regulators allow local patrons,” who make up an increasing share of total visitors at the Rhode Island venues (READ MORE) “to be subject to such a low payout rate.”

The study also found that Twin River and Newport Grand pay a state gaming-tax rate of about 61 percent, the same as slot parlors in New York state. The state tax is 55 percent for slot parlors in Pennsylvania and 49 percent (effective) in Maine; “racinos” in Delaware pay 41 percent; the Mohegan Sun and Foxwoods Resort Casino share 25 percent of slot revenues with Connecticut; and casinos in New Jersey pay 9.25 percent of gross gaming revenue, the center found.

Twin River’s financial woes (READ MORE) appear unrelated to that tax rate, because that rate is more than offset by the venue’s low payout rate, Barrow said. He also condemned the recent reports that the Carcieri administration had given more than $2 million in tax breaks to the greyhound park. “The patron’s a loser before he or she even enters the facility, since it’s their own state tax dollars that are being used to subsidize Twin River,” he wrote.

Rhode Island officials, however, blasted both Barrow and his report.

“It is clear he does not understand the payout structure at Rhode Island’s video slot machine venues,” Gary S. Sasse, director of the R.I. Department of Revenue, said in a statement. “Rhode Island’s slot machine payouts average 92 percent, in line with other gaming venues Barrow studies, and is considered the industry standard.”

Meanwhile, Gerald S. Aubin, director of the R.I. Lottery, denounced the study as “fatally flawed.”

The slot and VLT payout study – conducted as part of the New England Gaming Research Project, a Center for Policy Analysis project that is funded entirely by UMass-Dartmouth – was based on public data from gaming regulatory boards and commissions in each state, the center said in its report. But Barrow did not contact the state lottery to request data for his analysis, Sasse and Aubin said in their joint announcement.

In a statement late today, former jai-alai center Newport Grand also criticized the study. “To set the record straight, the slot-machine payouts at Newport Grand are comparable to those in any other gaming jurisdictions throughout the Northeast,” said CEO Diane S. Hurley. “In fact, Newport Grand’s average payout, which is determined in the gaming industry as cash-played minus cash-won, is 91.4 percent. … We have demanded that UMass remove this piece of erroneous data from its Web site and issue an immediate retraction and correction.”

Barrow responded by posting his data for the Ocean State venues as an eight-page document, “The Rhode Island Lottery VLT Revenue Information by Facility: 1994 - 2009,” as a PDF on the center’s home page, above a new link that declares: “Check for yourself! Available directly from the Rhode Island Lottery at this Web site: http://www.rilot.com/financial.asp”

For more information about the University of Massachusetts-Dartmouth Center for Policy Analysis and its New England Gaming Research Project – including the latest data on gambling expenditures in southern New England – visit www.umassd.edu/cfpa/.

News and information from the R.I. Department of Revenue is available at www.dor.ri.gov.