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R.I. governor urges no vote on new casino

Asks House panel to oppose proposal

PROVIDENCE -- Framing the debate over a proposed casino as a fight for the "soul and the future of our state," Governor Don Carcieri yesterday asked a House panel to oppose a request to allow voters to decide on the project.

Harrah's Entertainment wants to build a casino in West Warwick in partnership with the Narragansett Indian Tribe, but they need voters' approval. On Wednesday the Las Vegas-based casino operator proposed paying a $100 million licensing fee and offered a guarantee the state would not see a reduction in gaming revenues if a casino is built.

Carcieri told the Finance Committee that a casino would hurt businesses around it and could lead two existing gaming facilities in the state to try to expand and become casinos.

"I am gravely concerned we are about to get on a path that will change the whole nature of what our state is about," he said.

The Republican governor said those proposing a casino are "people from outside who want to suck the lifeblood out of us. That's what gambling will do."

Robert Goodman, an urban planner and economic development consultant who teaches at Hampshire College in Amherst, Mass., is the former executive director of the United States Gambling Research Institute. He testified that a casino study commissioned by the Senate was flawed, and said more reliable studies show a casino would draw between 35 to 70 percent of dollars now going to the local tourism and hospitality industry.

If a casino brought in $510 million, the loss to local businesses would be at least $175 million that year, he said.

Several local business owners said they fear that type of outcome.

"What we're playing here is Russian roulette. . . . You've got the bullet in the chamber. As a practical matter, you can't afford to be wrong about this," said James Beaulieu, a restaurateur who owns the Le Bistro-Newport.

The governor argued the state already has "a good deal" with Lincoln Park and Newport Grand, which operate video lottery terminals. Those two businesses next year are expected to generate $250 million in tax revenues for the state.

Finance Chairman Steven Costantino, Democrat of Providence, told Carcieri the issue for many lawmakers is determining whether voters deserve the chance to decide on a casino. "If they vote it down that way, at least it is the direction of the people," he said.

Carcieri said lawmakers and the governor are elected to make such decisions, rather than leave them to voters. The governor also said he probably would veto any bill to put the question on the ballot.

Carcieri has proposed requiring any casino to make the same percentage tax payments to the state as do Lincoln Park and Newport Grand, which have video-lottery gaming. The proposed 25 to 35 percent tax rate for the casino is well below the 60 percent rate paid by Lincoln Park and Newport Grand.

Harrah's has sought to allay concern about any negative effects a casino could have on Lincoln and Newport Grand by promising to make up for any drop in overall gaming revenues paid to the state after its casino opened.

Wembley PLC, the London-based owner of Lincoln Park, issued a statement yesterday urging lawmakers to come up with a compromise tax rate that would be applied to all gambling facilities in the state.

Representative John Shanley, Democrat of South Kingstown, told Carcieri that if "it isn't a casino, it's got to be something.

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