2012-09-27 / Front Page

Table games at Newport Grand?

Voters will decide the fate by referendum in November
BY KEN SHANE

On Nov. 6, Rhode Island voters will have a number of important decisions to make. In additional to the presidential race, congressional contests and local council elections, two ballot questions will determine the future of legalized gambling in the state.

Last year, Gov. Deval Patrick of Massachusetts signed into law legislation that authorized the creation of three full-service gambling casinos in the Bay State, one to be placed in the southeastern part of the state. The signing sent shockwaves through the casino industry in Rhode Island. In reaction, Twin River and Newport Grand – Rhode Island’s two slot parlors – sought to expand their offerings to include table games.

In accordance with the state constitution, the Newport City Council and the Lincoln Town Council both voted to send requests to the General Assembly to include referendums on the 2012 ballot. The request asked the state to leave the decision up to taxpayers.

The General Assembly approved the requests. As a result, voters will be asked to vote on Question 1, which proposes the addition of table games to Twin River, and Question 2, which does the same for Newport Grand. The referendums include an explanation of the tax rate associated with the additional revenue from table games.

In order for the measures to pass, voters in Newport and Lincoln will have to approve them, and they will have to be approved overall by Rhode Island voters. Should Newport or Lincoln voters fail to approve the question regarding their municipality, or if statewide voters reject both questions, the gambling initiative will be dead. It is also possible for the referendums to be approved by one municipality and not the other.

Diane Hurley of Jamestown is the CEO of Newport Grand. Her father opened the club in 1976. Hurley said that the biggest reason for a “yes” vote on the gambling referendum is jobs. Newport Grand currently employs 200 people – Hurley fears that the impact of the opening of the planned Massachusetts casinos will have a dire effect on the employment situation in the Rhode Island slot parlors.

“We need it to protect the 200 jobs that we have here,” Hurley said. “We have a $7 million payroll that churns in the economy. It’s really a question of protecting what we have, and growing revenues at the same time. Jobs and revenue are the key factors.”

Hurley said that the legislation signed by Patrick last year was “a game changer.”

“Casinos have been coming, have been coming, have been coming to Massachusetts,” she said. “But now it’s reality.”

According to Hurley, Newport Grand currently pays approximately 60 percent of the net terminal income from its slot machines to the state. That amounts to approximately $30 million in revenue each year. The club retains 28 percent of the income. Newport Grand also contributes $900,000 annually to the city of Newport in taxes, and that amount is expected to increase to $1.2 million if the referendum is passed.

Hurley said that demographics indicate that the people who would come to Newport Grand for the table games are the same kind of people who come to Newport for its other attractions, including music festivals, sailboat racing or visits to the mansions.

“It would allow us to remain competitive,” she said.

One of the objections that is often voiced by opponents of legalized gambling is the additional traffic congestion that could be caused. Hurley said that traffic is not a factor in the case of Newport Grand.

The parking lot at Newport Grand can hold approximately 2,000 cars. Hurley said that the proposed addition of 14 to 20 table games, in addition to the 1,100 slot machines on site, will not put undue pressure on the parking situation. “I’ve been here 36 years. We add no traffic to the downtown given our location in the north end of town.”

As for other concerns that have been raised, Hurley added that Newport Grand is a good corporate citizen. “We compliment the city, we don’t compete with the city,” she said. “We do a lot of charitable things. We love the city and are thrilled to be a part of it.”

Hurley said that the addition of table games will create at least 50 new jobs at Newport Grand immediately, and that number could grow to 100 fairly quickly. “Table games, unlike the slots, are very labor intensive.”

According to Hurley, there are no plans to increase the footprint of the existing building, as excess space already exists. She does see an opportunity for the casino to present more frequent entertainment, although the fact that the event center can only provide 400 seats does limit the amount of money that can be spent on performers.

Newport Grand currently offers several food options, all of which are run by the casino and not franchised out. They include the Grand Grille, a full-service dining room that is open every day, walk-up concession stands, and a buffet that is presently open on Fridays and Saturdays. Hurley said that if the referendum passes, she may think about expanding business at the buffet. “I could see adding days to that, maybe even making that a daily part of the schedule. All of that means that the existing facility will be busier on a more frequent basis.”

Hurley, again, emphasized the importance of Question 2 on the state’s economy. “The nice upside is that it would allow for the creation of jobs and additional revenue.”

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