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Past Agreement May Cut into Tribal Slot Revenues

PROVIDENCE, Rhode Island – As reported by the Providence Rhode Island: "As a result of an agreement to repay their former casino backers, the state's Narragansett Indians might not see any of the new Lincoln Park slot revenue they have been promised by pending legislation until at least 2010.

"Legislation backed by both the governor and Senate president would provide the Narragansetts with 5 percent of the revenue -- up to a maximum of $10 million a year -- from the 1,750 new video slot machines that new owners hope to install at Lincoln Park.

"…But lawmakers have begun to privately question the relevance, if any, of an April 2001 agreement between the tribe and Capital Gaming International, its first partner in the years-long drive to bring a casino to Rhode Island.

"In the fall of 1999, the tribe dropped the financially ailing Phoenix, Ariz., company in favor a new partner, the Boyd Gaming Corp., of Las Vegas. Capital Gaming threatened legal action if the tribe did not make arrangements to repay $9.9 million in 'development loans' and buy out its management contract.

"…The following April, the tribe reached a settlement with Capital Gaming in which it agreed to reimburse the company, in 84 monthly installments, $10 million of what the gambling company said it had spent in the 1990s on the tribe's Rhode Island casino drive.

"…If it is determined that the Lincoln Park deal triggers this pay-back provision -- and the administration's financial projections bear out -- the tribe might not get to keep any revenue from the track until 2010…"

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