By Dale J. Venturini
President & CEO, Rhode Island Hospitality and Tourism Association
In 2004, Rhode Island’s General Assembly passed legislation that would have placed a referendum question on the ballot asking the voters of Rhode Island whether or not they wanted a resort casino in Rhode Island. The question was ultimately not placed on the ballot because the legislation was found to be unconstitutional by the Rhode Island Supreme Court. Casino proponents were back in 2005, with new legislation, and once again the Rhode Island Supreme Court, in an advisory opinion, found the proposed legislation to be unconstitutional.
In both cases, the Court’s decision was based on a point in the constitution that requires “lotteries” to be operated by the State. The Supreme Court provided a road map for casino proponents to follow if they want to propose building a casino in Rhode Island – make it state operated.
Instead of heeding the advice of the Rhode Island Supreme Court, casino advocates are looking to circumvent it by proposing a resolution to place a question on the ballot to change the State’s constitution to allow Harrah’s to build and operate a resort casino in West Warwick.
The Rhode Island Hospitality and Tourism Association remains steadfast in its opposition against any casino in Rhode Island, and is further opposed to destroying the State’s constitution to suit the interests of an out-of-state casino operator.
Although I’ve said it before, it is important to remember the important role the hospitality and tourism industry plays in Rhode Island. It is state’s second largest industry, generating more than $6.4 billion in revenue and employing approximately 67,000 people with more than $1.2 billion in salaries and benefit packages.
Rhode Island enjoys ones of the highest percentages of owner-operated restaurants; with the majority of those being small businesses, which operate on small margins. Rhode Island restaurants, hotels, entertainment venues and convention facilities cannot compete against Harrah’s comp program.
Harrah’s is known as the king of the comps. It’s a great business model for them to offer free accommodations, free dinners, free spa services, free entertainment, and even free retail products, including electronics, clothing and anything else you can image. And, Harrah’s has arguably the best player loyalty program in the world. It keeps people inside the casino to spend their money at the gaming stations. It is a program that certainly improves Harrah’s bottom line. But, what will improve their bottom line will crush area restaurants and hotels.
In one study, Harrah’s is reported to comp 85 percent of hotel rooms at their properties in Atlantic City. It’s plain and simple – our restaurants and hotels cannot compete with free.
And, with the latest proposal put forth by Harrah’s, which includes 55,000 square feet of convention and meeting space, the casino would be competing against the Rhode Island Convention Center – which is owned by the State of Rhode Island - and area hotels for conventions, meetings, and hotel rooms.
Nationally, studies show that 67 percent of casino gambling revenues come from the local economy, and another 18 percent from the regional economy. The revenue pumped into Harrah’s casino will be nothing more than a redistribution of money that would have been pumped into area restaurants, entertainment venues and attractions. And, with Harrah’s extensive comp and player loyalty program, not only will area restaurants, retail outlets and attractions lose, but the State will also be a loser in sales, hotel, and meals taxes.
Harrah’s and casino proponents are smart. They are promising all sorts of investments, jobs and revenue allocated to property relief, but there is NO guarantee that it will happen. There are no details on the size and scope of the project, no details on the tax rate, no guarantee of a so-called windfall in property tax relief. The resolution, as presented today, does not provide any solid facts on which the voting public can accurately make a decision. The only question this resolution asks the voters is whether they should change the State’s constitution for Harrah’s Entertainment.
Harrah’s has continued to change the scope of their casino project. Since 2004, the magnitude of the project has grown – not only in the number of slots, but also in the square footage of convention space, the number and type of restaurants, and other amenities. What guarantees do we have that the proposal they put forth today will not change by next year?
This project has grown from $450 million, to $600 million, to the latest proposal of $1 billion. We knew that the devastation that a $450 million dollar casino complex would have on the State’s hospitality and tourism industry would have been irreversible. Imagine our concern when we see plans for a $1 billion facility, with more slots, more convention space, more ability to undercut surrounding hotels and restaurants subsidized by gaming revenue.
This is too important a decision – it affects too many Rhode Islanders – to move to a ballot question without due diligence or guarantees. The Rhode Island Hospitality and Tourism Association strongly urges the General Assembly to not allow the resolution to go forward and to protect not only one of the State’s most valuable industries, but also to protect the integrity of the State’s constitution.
President & CEO, Rhode Island Hospitality and Tourism Association
In 2004, Rhode Island’s General Assembly passed legislation that would have placed a referendum question on the ballot asking the voters of Rhode Island whether or not they wanted a resort casino in Rhode Island. The question was ultimately not placed on the ballot because the legislation was found to be unconstitutional by the Rhode Island Supreme Court. Casino proponents were back in 2005, with new legislation, and once again the Rhode Island Supreme Court, in an advisory opinion, found the proposed legislation to be unconstitutional.
In both cases, the Court’s decision was based on a point in the constitution that requires “lotteries” to be operated by the State. The Supreme Court provided a road map for casino proponents to follow if they want to propose building a casino in Rhode Island – make it state operated.
Instead of heeding the advice of the Rhode Island Supreme Court, casino advocates are looking to circumvent it by proposing a resolution to place a question on the ballot to change the State’s constitution to allow Harrah’s to build and operate a resort casino in West Warwick.
The Rhode Island Hospitality and Tourism Association remains steadfast in its opposition against any casino in Rhode Island, and is further opposed to destroying the State’s constitution to suit the interests of an out-of-state casino operator.
Although I’ve said it before, it is important to remember the important role the hospitality and tourism industry plays in Rhode Island. It is state’s second largest industry, generating more than $6.4 billion in revenue and employing approximately 67,000 people with more than $1.2 billion in salaries and benefit packages.
Rhode Island enjoys ones of the highest percentages of owner-operated restaurants; with the majority of those being small businesses, which operate on small margins. Rhode Island restaurants, hotels, entertainment venues and convention facilities cannot compete against Harrah’s comp program.
Harrah’s is known as the king of the comps. It’s a great business model for them to offer free accommodations, free dinners, free spa services, free entertainment, and even free retail products, including electronics, clothing and anything else you can image. And, Harrah’s has arguably the best player loyalty program in the world. It keeps people inside the casino to spend their money at the gaming stations. It is a program that certainly improves Harrah’s bottom line. But, what will improve their bottom line will crush area restaurants and hotels.
In one study, Harrah’s is reported to comp 85 percent of hotel rooms at their properties in Atlantic City. It’s plain and simple – our restaurants and hotels cannot compete with free.
And, with the latest proposal put forth by Harrah’s, which includes 55,000 square feet of convention and meeting space, the casino would be competing against the Rhode Island Convention Center – which is owned by the State of Rhode Island - and area hotels for conventions, meetings, and hotel rooms.
Nationally, studies show that 67 percent of casino gambling revenues come from the local economy, and another 18 percent from the regional economy. The revenue pumped into Harrah’s casino will be nothing more than a redistribution of money that would have been pumped into area restaurants, entertainment venues and attractions. And, with Harrah’s extensive comp and player loyalty program, not only will area restaurants, retail outlets and attractions lose, but the State will also be a loser in sales, hotel, and meals taxes.
Harrah’s and casino proponents are smart. They are promising all sorts of investments, jobs and revenue allocated to property relief, but there is NO guarantee that it will happen. There are no details on the size and scope of the project, no details on the tax rate, no guarantee of a so-called windfall in property tax relief. The resolution, as presented today, does not provide any solid facts on which the voting public can accurately make a decision. The only question this resolution asks the voters is whether they should change the State’s constitution for Harrah’s Entertainment.
Harrah’s has continued to change the scope of their casino project. Since 2004, the magnitude of the project has grown – not only in the number of slots, but also in the square footage of convention space, the number and type of restaurants, and other amenities. What guarantees do we have that the proposal they put forth today will not change by next year?
This project has grown from $450 million, to $600 million, to the latest proposal of $1 billion. We knew that the devastation that a $450 million dollar casino complex would have on the State’s hospitality and tourism industry would have been irreversible. Imagine our concern when we see plans for a $1 billion facility, with more slots, more convention space, more ability to undercut surrounding hotels and restaurants subsidized by gaming revenue.
This is too important a decision – it affects too many Rhode Islanders – to move to a ballot question without due diligence or guarantees. The Rhode Island Hospitality and Tourism Association strongly urges the General Assembly to not allow the resolution to go forward and to protect not only one of the State’s most valuable industries, but also to protect the integrity of the State’s constitution.
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