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PROPOSED: Harrah's/Narragansett Casino

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Joe Larisa Jr.: Harrah's casino plan is unconstitutional

01:00 AM EDT on Monday, July 12, 2004

THIS WILL COME as a great surprise to many: For a casino to be legal under the Rhode Island Constitution, it must be operated by the State of Rhode Island (through the Lottery Commission or other state entity) -- not by a private entity, such as Harrah's. Thus, the proposed Harrah's casino is unconstitutional.

Before the adoption of the Rhode Island Constitution, in 1843, lotteries were a fairly common method for financing public-works projects. The Constitution, however, forbade any new lotteries: "All lotteries shall hereafter be prohibited in this state, except those already authorized by the general assembly."

In 1962, the state House of Representatives wanted to consider a limited state-run lottery. So it asked the Supreme Court whether a lottery operated exclusively by the state, for its own benefit, would violate the constitutional language. The Supreme Court's answer was as clear as the prohibition itself: "The people of the state by adopting the constitution containing section 12 [now section 15] expressly prohibited thereafter all lotteries. The language that they used is so comprehensive as to admit of no exception.

"This constitutional prohibition is, therefore, unquestionably the supreme law of the state and an act of the General Assembly authorizing any lottery, even one to be conducted exclusively by the state and for its own benefit would, in our opinion, be void."

The total ban on any new Rhode Island lotteries thus remained for 130 years, until 1973. In the words of the Supreme Court: "In that year, the Constitution was amended to lift the ban on state-run lotteries." The amendment created the Article 6, Section 15, that exists today: "All lotteries shall be prohibited in the state except lotteries operated by the state. . . ."

Since the creation, in 1973, of the state Lottery Commission, all lotteries have been operated by the commission for the state pursuant to the constitutional mandate -- that is, until the Harrah's proposal.

The Harrah's proposal would create a New Jersey-style private casino: the very opposite of a state-operated one. Indeed, the proposed ballot question (just vetoed by the governor) itself asks whether a "casino operated by an affiliate of Harrah's Entertainment in association with the Narragansett Indian Tribe" should be built.

The legislation, although providing for regulation by the Lottery Commission, would leave control over the types of lottery games, the number of games, the odds of winning and all revenues in the hands of the private casino operator.

With respect to all other Lottery Commission lotteries other than the casino -- including Keno and video lottery terminals (VLTs) -- such control rests with the state, in accordance with the state constitution.

For example, with respect to VLTs, the state obtains all of the net revenue and then pays its agents, per statutory formula, to house the machines and assist in their operation. The state keeps nearly 60 percent of the net terminal income. There is no tax, only payments to vendors.

With respect to a private casino, Harrah's would control all the revenue, and pay and control its vendors, and be subject to a state tax (at much less than 60 percent) contained in the statute. The legislation would let Harrah's operate its casino just like other private casinos in the United States.

The private operation, however, is exactly what Rhode Islanders rejected in their constitution. They did so with good reason -- state-operated lotteries keep much more lottery revenue for state programs and much less for private parties.

There can also be no question that a casino is a lottery under the state constitution. Indeed, the Supreme Court referred to the casino contemplated by the Narragansett Tribe in 1994 as a "lottery operation and facility." Moreover, the slot machines to be in the casino would be lottery games.

One constitutional provision that has been a focus in the recent debate -- the public-vote requirement of Article 6, Section 22 -- deals with legislative actions expanding the types of gambling, not expanding the types of entities that can lawfully operate an old or new type of gambling. Thus, while a vote of the legislature and the public can expand the types of state-operated lotteries in Rhode Island, it cannot eviscerate the requirement that all such lotteries must be operated by the state, not a private entity.

Indeed, there is nothing in the public-vote amendment (which is an anti-expansion provision) to even suggest such a result.

Whatever the merits of Harrah's pending casino proposal, the safe bet is that this privately operated casino loses a constitutional challenge.

Joseph Larisa Jr. was chief of staff and executive counsel to Gov. Lincoln Almond and an expert on Rhode Island gaming issues. He was co-counsel in successful defense of the constitutionality of VLT terminals in Newport against a challenge of improper delegation of legislative power to the Lottery Commission and GTECH, and the Almond administration's chief strategist and counsel in preventing a Rhode Island casino, new types of gambling, and VLT expansion during the governor's eight years in office.

The Providence Journal

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The Narragansett's do not have a reservation, The Indian Gaming Regulatory Act doesn't apply to them in the same manner. They are a federally recognized tribe but they are not a federally recognized Indian Nation. The Narragansett's have been pushing for a casino for decades, if they could have made an end run around the state using federal regulations, they would have done so by now. This proposal, unlike other indian casinos will not have the Narragansett's owning the casino, Harrah's will. The Connecticut casinos are owned by the tribes and operated by casino companies.

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Joseph R. Paolino Jr.: If we must have it -- Casino should be in Providence

Friday, July 16, 2004

OVER THE PAST two decades, the City of Providence has enjoyed a remarkable renaissance, which has been supported through the infusion of millions of Rhode Island and Providence taxpayer dollars. The city has enjoyed enthusiastic support from the executive and legislative branches of government, as well as elected and appointed officials across Rhode Island.

This financial support has resulted in the famed river relocation, the construction of the Rhode Island Convention Center and Westin Hotel, and the very successful Providence Place mall. None of these projects would have materialized without the support of the Rhode Island and Providence taxpayers.

With all of these projects in place, and additional development planned, the General Assembly has now seen fit to infuse hotel development via $20 million to a local developer seeking to bring an additional 250 hotel rooms to downtown Providence. Only a few hours before the passage of this tax-benefit legislation, the Assembly passed landmark legislation in its effort to bring a casino to West Warwick.

These actions are evidence of a strong economic-development "disconnect."

I have never supported casino-style gambling. My opposition is based on the fact that gambled dollars are for the most part not savings or budgeted funds. Gambled money is usually funds previously intended to pay family bills, pay the mortgage, pay tuition, or make a major family purchase, such as a car or home.

Placing these personal feelings aside while I put on my economic-development glasses, I still view this as a major disconnect. At both Foxwoods and Mohegan Sun, hotels, convention centers, and numerous restaurants and entertainment centers accompanied the casino developments. These two casinos have now become travel points of destination.

That's the disconnect. If the casino in West Warwick becomes a reality, there is little need for additional hotel rooms in downtown Providence, because the destination shifts focus. The casino will be accompanied by the development of hotels, entertainment venues, additional restaurants, and an overall retail expansion. The casino and all that follows instantly make the town of West Warwick the most popular of Rhode Island convention destinations.

Rhode Island taxpayers have invested millions of dollars in a Providence convention center, the Westin Hotel and the Providence Place shopping mall. The state has created this infrastructure, which serves to establish Providence as a major convention destination site.

However, the casino legislation has the potential to uproot this infrastructure by shifting Rhode Island's tourism and convention focus to West Warwick. That casino city would soon displace downtown Providence as Rhode Island's primary convention destination.

Additionally, the potential of a casino and entertainment complex in West Warwick would most likely have an adverse impact on the discussions regarding the future of the Providence civic center.

If the people of Rhode Island desire a casino, then logic as well as common sense should dictate that it be located in Providence, where the vibrant existing convention infrastructure -- including WaterFire, the civic center, several new hotels, the convention center, and numerous fine restaurants -- await visitors. Otherwise, we are just wasting more of the people's tax dollars.

Joseph R. Paolino Jr., a real-estate owner and developer, is a former mayor of Providence.

From The Providence Journal

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Harrah's secures 84 acres

Deals have been struck with private landowners

BY ZACHARY R. MIDER

Journal Staff Writer | Friday, August 6, 2004

HarrahsPic.jpg

Journal photo / Ruben W. Perez

The proposed $600-million casino would be built in the West Warwick Industrial Park at upper left-center, next to the James P. Murphy Industrial Highway, which ends in a loop. Route 95 borders that roadway. At bottom right is Division Road in East Greenwich.

With the addition of 8 acres last month, Harrah's Entertainment now has options to buy almost 84 acres of land in the West Warwick Industrial Park.

Harrah's, which wants voters in November to allow it to build a $600-million casino on the land, disclosed yesterday that it has an option to buy part or all of 12 parcels -- chunks of land that the tax assessor's office values at more than $13 million.

Lying just off Route 2, the land consists mostly of undeveloped woodlands zoned for industrial use. It includes a few buildings, such as the Eagle Quest Golf & Leisure Dome and Paul Arpin Van Lines, a trucking company.

Harrah's disclosure came after the Las Vegas company refused for months to say which parcels it had under option. Guy A. Dufault, a consultant for the Narragansett Indian tribe, has given conflicting statements about which lots were under option.

This week, Lincoln Park, the dog track and video-slot parlor that opposes the casino project, identified to The Providence Journal most of the lots that Harrah's has under option.

Related stories

A reporter confirmed the information with Town Hall records yesterday, hours before Harrah's itself disclosed the information.

Dufault said Harrah's has been reluctant to disclose the land it has under option because it has been striking deals with the individual landowners.

"When you're in negotiations, you try to keep negotiations as private as possible, so they're not used against you," Dufault said. "In private transactions like that, you try to keep your cards as close to the vest as you can . . .

"It wasn't a secret attempt to withhold from the people, it was simply a matter of negotiating properly and using sound business principles."

SOME OF THE LAND involved in the Harrah's plan has been under option for years, held by the Narragansett Indian Tribe and its previous financial backers. Last year, Harrah's began taking over the tribe's options and reaching new agreements with property owners.

Harrah's has struck deals as recently as July 14, when it reached an agreement with KayD Realty Trust on a 7.9-acre parcel containing a 54,000-square-foot warehouse. The agreement gives Harrah's a 99-year lease on the property, and allows Harrah's to buy it for an undisclosed price.

None of the option agreements on record in Town Hall say how much Harrah's is paying for them -- or what the prices would be if Harrah's exercises its options and buys the land outright. Dufault declined to discuss the terms.

The General Assembly has approved legislation setting a Nov. 2 statewide referendum on whether Harrah's and the Narragansetts should be allowed to build a casino in West Warwick. Harrah's would own the casino, but the tribe says it would get at least $20 million per year.

Harrah's has much more land under option than the 30 acres required by the legislation. But Foxwoods and Mohegan Sun, casinos that stand on tribal lands in Connecticut, have 200 and 240 acres respectively.

Dufault said the Harrah's plan leaves plenty of space for a casino big enough to compete with Connecticut -- a planned 500-room hotel tower, gaming facility and parking garage. "To give you an example, all of those major facilities on the Strip in Las Vegas are on 30-acre parcels. Clearly, there's more than enough room."

Harrah's plans to display a site plan and rendering of the casino when it holds a public forum on Aug. 24 at West Warwick High School, Dufault said. He said the plan for building a new interchange off Route 95 will also be on display.

East Greenwich, which lies just across the highway from the industrial park and which opposes the casino, is getting its own special casino referendum this November. If Harrah's attempts to build part of the casino facility -- including the highway interchange -- in East Greenwich, then East Greenwich would become a "host community" and could stymie the casino by rejecting it at the polls, town officials there say.

HarrahsGraphic.jpg

Journal graphic

Harrah's proposed Narragansett Indian Casino site

But Dufault said Harrah's is not considering using land in East Greenwich to build the casino or any other improvements. "Never, in the history of this project, has there ever been any land in East Greenwich," he said.

During that forum at the high school later this month, Harrah's is likely to hear from the casino's would-be neighbors -- some of whose properties abut the optioned land.

Some of them have complained, at a West Warwick Town Council meeting and at a neighborhood anti-casino rally, about the traffic, crime, noise, and bright lights that they fear a casino would bring. Harrah's has said the hotel tower could be up to 22 stories tall.

The West Warwick Town Council, which must reach a development agreement with Harrah's before the referendum, has been discussing the idea of requiring Harrah's to compensate the neighbors if the casino hurts their property values.

"It's been one of things that's been floated around," said Councilman Mark R. Fleury, a Republican who represents the area, and who opposes the casino.

"The entire Ward 5 area is going to be directly impacted by this," he said.

"This proposal will be done very much with the neighbors in mind," Dufault countered. "If there's one thing that the Narragansett Indian tribe absolutely cherishes, it's land, because they've been stripped of it."

From The Providence Journal

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Projo story

In the article it says:

"The Providence Performing Arts Center, which sells 500,000 tickets annually, might close after 27 years in operation, shuttering a 77-year-old historic building restored with $40 million in state, federal, and local money, according to its president, Lynn Singleton."

and also that

"Amy Kempe, the association spokeswoman, said the casino could spark closings statewide among small hotels, restaurants, and retail outlets; undercut the Dunkin' Donuts Center and the taxpayer-subsidized Rhode Island Convention Center; and compete with established tourist destinations, such as the Newport mansions. "...

Question: is it possible that some of the proposed condos and hotels would be hurt by the casino... or would that help bring people in....?

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The Narragansetts need to snap out of it, they're being taken for a ride; and we can't let them drag the rest of us along with them. They need to look in the mirror, and ask if they would want their children involved with Harrah's.

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The Narragansetts need to snap out of it, they're being taken for a ride; and we can't let them drag the rest of us along with them. They need to look in the mirror, and ask if they would want their children involved with Harrah's.

<{POST_SNAPBACK}>

Your absolutly right. For them its a quick fix, the sole benifit for them would be the nice hunk of change they get up front. If im not mistaken the annual percentage goes down every year. The only way we would even know that its the Narragansetts are part of it would be the theme-parkesk features and names they push on you, as does foxwoods, and the other one.

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this is strange topic because depending on what day it is i can feel one way or the other about this...

on one side of it, i feel that it is hypocritical to chastize this casino on a moral basis when there are so many other things in society that we let go and are much worse

on the other hand, RI's history of corruption gives me pause when imagining how it would turn out...

as a tourist location, this is a great idea. it creates a new destination. a place where a lot of other toursit attractions and auxiallary services would be complimented. if a transit system were in place this would help the convention industry. this also creates competition from other areas of the state, Prov and newport, which, in my opinion is the best way to breed good stable industry.

on a side note, this state drives me nuts when it comes to the subject of competition in business. seems a lot of people are happy when there is only 1 viable business in each industry. if the industry is worth it then the more competition- the better! it will challenge businesses to become better companies in every way and the customer should benefit. let the cream rise to the top!

in the end tho, the main reason im interested in having the casino in RI is because SOOOO many people here and in Mass already go there and leave hundreds of dollars. this makes no sense to me. foxwoods is so close to RI that the corruption problem should not be brought up when building one here because it already exists at some level. corruption exists everywhere at some level. what does the new one in RI change? not too much... i think the state could control this problem better if it were in our state and if they really wanted to make the effort.

buts thats how i feel today...

check in tomorrow when i feel that it creates a situation where hundreds could lose all their money from gambling...

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this is strange topic because depending on what day it is i can feel one way or the other about this...

on one side of it, i feel that it is hypocritical to chastize this casino on a moral basis when there are so many other things in society that we let go and are much worse

on the other hand, RI's history of corruption gives me pause when imagining how it would turn out...

as a tourist location, this is a great idea. it creates a new destination. a place where a lot of other toursit attractions and auxiallary services would be complimented. if a transit system were in place this would help the convention industry. this also creates competition from other areas of the state, Prov and newport, which, in my opinion is the best way to breed good stable industry.

on a side note, this state drives me nuts when it comes to the subject of competition in business. seems a lot of people are happy when there is only 1 viable business in each industry. if the industry is worth it then the more competition- the better! it will challenge businesses to become better companies in every way and the customer should benefit. let the cream rise to the top!

in the end tho, the main reason im interested in having the casino in RI is because SOOOO many people here and in Mass already go there and leave hundreds of dollars. this makes no sense to me. foxwoods is so close to RI that the corruption problem should not be brought up when building one here because it already exists at some level. corruption exists everywhere at some level. what does the new one in RI change? not too much... i think the state could control this problem better if it were in our state and if they really wanted to make the effort.

buts thats how i feel today...

check in tomorrow when i feel that it creates a situation where hundreds could lose all their money from gambling...

<{POST_SNAPBACK}>

Well said, i like the idea of competitive bussiness. who knows in the long run it could be a plus...

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I did not know The Providence Performing Arts Center was having cash flow problems, is this true?

They seem to have a nice draw to every event which has me wondering...

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I did not know The Providence Performing Arts Center was having cash flow problems, is this true?

<{POST_SNAPBACK}>

Theatres in New York are having financial trouble, it's not a very lucrative business a lot of the time, it's very hard to get the right mix and make money. They're always one bomb of a show away from financial ruin.

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I did not know The Providence Performing Arts Center was having cash flow problems, is this true?

They seem to have a nice draw to every event which has me wondering...

<{POST_SNAPBACK}>

I believe PPAC and others are worried about people spending their disposible dollars at the casino instead of cultural venues. And the governor has already said that he wouldn't support Lincoln or Newport Grand adding hotel rooms or convention/meeting space that would compete with the Rhode Island Convention Center and Providence Hotels, and yet here were the Narr's announcing just that yesterday. War is coming.

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I did not know The Providence Performing Arts Center was having cash flow problems, is this true?

They seem to have a nice draw to every event which has me wondering...

<{POST_SNAPBACK}>

This is a very complex issue, as Cotuit pointed out. To add an additional wrinkle, I remember reading in an article while I was in the Midwest that rising home prices in the Twin Cities were a mixed blessing for cultural institutions. While, on the positive side, they were bringing new arts-interested patrons into the downtowns, those patrons were spending more of their income on rising home mortgages and less on arts and entertainment. They noted that while there were more unique individuals showing up to events, fewer of those people were buying season tickets than in the past and were only buying tickets to selected performances. The arts venues like the season pass holders since their business and revenue is more reliable. They'd rather have a theater 50% full with season ticket holders than 80% full with people who just bought for that event.

- Garris

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A casino, it seems, is nothing but Catch 22's. I originally felt that any casino NOT located in Providence would hurt Providence. But a casino wouldnt neccesarily help, either. Too many gray areas.

Good or bad, a casino might at this point be an inevitability. In that case, where should it go?

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In that case, where should it go?

<{POST_SNAPBACK}>

Atlantic City.

Seriously, the Narragansetts don't seem to be bound to building it on their land, they don't have a reservation as such anyhow. If they want a casino, let them go to New Jersey.

Whatever happened to the Native American concept of the 7th Generation? Is this really going to be good for their ancestors 7 generations from now?

--I wouldn't exactly call this inevitable yet, from what I understand, this is still an uphill battle for Harrah's (let's face it, it's not the Narragansett's casino) to get this on the ballot.

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I wouldn't exactly call this inevitable yet, from what I understand, this is still an uphill battle for Harrah's (let's face it, it's not the Narragansett's casino) to get this on the ballot.

<{POST_SNAPBACK}>

I hope so. Even though there is a bunch of money going south to CT, let them have it. Harrah's doesn't belong here. At least the Pequots have a museum and their own schools and living conditions are improving, though that clear resin statue "Thunder God" thing never fails to make me cringe.

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Even though there is a bunch of money going south to CT, let them have it.

<{POST_SNAPBACK}>

The people in Ledyard would probably like to know exactly where in Connecticut that money is going.

I really wish instead of talking about the casino, we were talking about why the Narragansetts think they need this to begin with. As a nation we've never faced head on what we did to the Natives on this continent. One could argue why do the Narragansetts need this, why don't they just have jobs and live like the rest of us, you don't see the Knights of Columbus pushing for a casino. But that doesn't answer what the history of the tribes are or the current realities of racism in this country. The Narragansetts culture should be preserved, and they should have their own schools and whatever they need to maintain their culture. I'd be willing to be taxed to try to make up for those past mistakes, but even thinking about discussing these issues is not on the table.

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There seems to be a dearth of impassioned "white men" in Rhode Island crusading for the Narragansetts and their causes. It's unbelievable if they really believe that a conglomerate out in Las Vegas could care about them any more.

I find it interesting that the tribe wants little to do with the state of RI when it's a question of opening up a tax-free cigarette shop in Charlestown, but so willingly entwines themselves with legislators like Williamson and Alves when this casino business is at stake. It looks like the tribe isn't immune to the forces of economics--looking out for their own interests (at the expense of the rest of the state, I believe). Don't let them fool you otherwise. That's my two cents.

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Capital city best site in state for casino:

This is a short and sweet of the Metro section projo article that I can

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While I agree the best place for a casino is in the capital city, I'm still against any casinos.

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what about parking, and transportaion, and yes casinos are black holes for us, but it seem unavoidable at this point, and Paolino points that out...

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what about parking, and transportaion, and yes casinos are black holes for us, but it seem unavoidable at this point, and Paolino points that out...

<{POST_SNAPBACK}>

Screw Joey Paolino...

yep, of course it makes sense to him, seeing as he's sitting on half the property there. f- that.

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Screw Joey Paolino...

yep, of course it makes sense to him, seeing as he's sitting on half the property there. f- that.

<{POST_SNAPBACK}>

So a new civic arean dosnt make sence, or how about the property development that a group like the starwood/ bbl could partake in.

I think i rather see Paolino with his hands in this than some of the other pricks that seem to think there idea for providence is best>>>

Mij

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