International Game Technology (IGT) has announced a new joint venture with Twin River Worldwide Holdings, with the aim of working together in Rhode Island to improve and expand gambling services in the state.
The proposed joint venture (JV) would be established on January 1, 2022, with IGT holding a 60% controlling stake and Twin River the remaining 40%.
The JV would run as a licensed video lottery terminal (VLT) provider and supply all gaming machines to the Rhode Island Lottery, with IGT machines to make up 40% of the total network.
A minimum of 6% of machines would be replaced each year, while 5% of VLTs would be premium machines. Meanwhile, Twin River would seek to secure a license as a technology provider and also acquire approximately 23% of the slot floor from existing third party vendors at its Twin River Casino Hotel facility.
Jay Gendron, chief operating officer of IGT, would serve as chairman of the new joint venture, while Marc Crisafulli, executive vice president of Twin River and president of the Rhode Island casinos, would be vice chairman.
IGT noted that the Rhode Island Division of Lotteries would maintain oversight and regulation of all gaming, with all aspects of the lottery and gaming programs to be state-operated.
“This announcement signals the start of a strong three way partnership that includes not just the two companies, but the State of Rhode Island as well,” IGT Global Services chairman Robert Vincent said.
“Importantly, it will harness the strongest attributes of each company to better serve Rhode Island taxpayers, to preserve valuable jobs and to make meaningful infrastructure improvements at the gambling facilities.”
Meanwhile, the new agreement sets out how Twin River would commence an 18-month renovation and expansion of its flagship Twin River Casino Hotel. This would include adding 40,000sq ft to the first floor gaming space, a new 14,000sq ft spa and a new entertainment concept
The combined improvement and expansion, along with additional technology investments, is expected to require investment in excess of $100m.
IGT’s Gendron said: “It was very important to IGT that we have a comprehensive strategy to improve the competitiveness of the Rhode Island facilities, and the combination of our collective content strategy paired with the expansion plan by Twin River is a powerful way to respond to increasing regional competition.”
Also part of the collaboration, Twin River has committed to a new 12,000sq ft headquarters in the city of Providence, Rhode Island, to replace its temporary home in the state.
The JV agreement also includes a number of legislative pledges, with IGT to seek to extend its current deal with the state until 2043. IGT said that should this pass, it would retain an employment commitment of 1,100 jobs in the state with an aggregate annual payroll of at least 250% of minimum wage, as well as investment of $150m and a payment of $25m in license fees.
In addition, Twin River will seek legislative approval to its regulatory agreement with the state, as well as its Master Contract, to allow for its extension to 2043 in order to match the length of the proposed IGT contract. This would also license Twin River as a technology provider.
Rhode Island Senate President Dominick Ruggerio spoke positively about the plans, saying that the Senate Finance Committee will carry out due diligence on the proposal in the coming weeks.
Ruggerio said: “I am pleased that these two valued Rhode Island companies came together to work in partnership for the mutual benefit of both companies and, most importantly, all Rhode Islanders.
“The state’s taxpayers will be the ultimate beneficiaries of a successful economic development partnership that maintains good jobs while protecting and hopefully enhancing an important state revenue stream.”
The agreement appears to have avoided a protracted dispute over the state lottery’s future, which followed Governor Gina Raimondo’s decision to award IGT a 20-year new contract without a competitive bidding process. This prompted Twin River to strike a partnership with Camelot Lottery Solutions and Scientific Games to put forward a competing proposal.