Armando Abarca is a Somerset resident.

When visitors motor down Route 24 south destined for Rhode Island, there’s no road sign telling drivers where to find the Tiverton Casino, located just off the highway on Exit 1A. Lost drivers are forced to Google it. The town of Tiverton wants it that way. Offering no roadside help, though, is a sure sign to question how much the town is invested in supporting a profitable casino. 

Rhode Island state legislators recently recanted on the promise to reimburse Tiverton lost money if the Twin River casino failed to pay at least $3.1 million in local taxes. It’s reasonable for the town to expect $3.1 million from casino taxes, but foolish thinking to expect the state to meet its yearly obligation and subsidize that goal. The state has budget holes, too.

Casino taxes represent the third highest revenue source for the Ocean State, which translates into paying for essential state services or public subsidies that are hard to cut. This past fiscal year, the casino paid the town approximately $1 million. But the town budgeted for $3.1 million. The coronavirus hit and forced the casino to close for the last four months of the fiscal year.

Let’s assume the pandemic didn’t occur and the casino stayed open. If the numbers are correct, Tiverton would have only expected a half of a million more in taxes. Still only half of what the town budgeted for, and this while the casino operated in a strong economy. With the state no longer taking the role as subsidizer, Tiverton Casino must embrace the concept of expansion. And adding a recreational venue has the potential to generate more money for everybody — town, casino, and state. For the town, growing new streams of income might have a mitigating effect on future budget holes.

With revenues from both Lincoln and Tiverton casinos combined annually at $300 million going into the state’s coffers, Rhode Island legislators can afford to make financial promises. But a worldwide pandemic can make commitments disappear. With the state’s assurance of financial support, town officials felt they could simply go through the casino motions and still receive taxes in the mail. As a result, a windfall of roughly $2 million now leaves a gaping hole in the town’s budget and forces officials there to rethink their casino approach.

The reason for moving the casino to Tiverton was to allow the company to expand the business into a recreational spot that resembles more a resort casino that offers table games and hotel rooms. But not including entertainment was a major oversight, leaving the Tiverton Casino in a less competitive position.

Town officials are realizing the hard realities of the gaming industry, an enterprise filled with more and more resort casinos that offer customers more for their dollar. Before COVID-19, Twin Rivers Worldview Holding planned a $100 million expansion of the Lincoln facility to better compete with Massachusetts casinos. In turn, where does that leave the Tiverton Casino, as the ugly second brother?

Resort casinos retain visitors longer and are more flexible in generating money. Perhaps revenue is down in gaming, but profits can be made in entertainment, food or retail. Entertainment will certainly draw more patrons into the casino; added customers will spend money on other services. Furthermore, expanding into entertainment would help balance the economic scale for the town during a down economy. During a recession, customers tend to stay away, making gaming dollars harder to earn. Thus, entertainment could fill that void.

Expansion is not the panacea for everything that ails the Rhode Island casino industry, but it can be a viable solution. By adding an entertainment venue, Tiverton Casino would be able to compete better with neighboring resort casinos.

Armando Abarca

Somerset