Tuesday, May 5, 2009

Rhode Island Breaks Off Talks With Racetrack-Slot Parlor, Racing To Be Suspended Early At Track

By Ken Davison
Feather News

The Twin River racetrack-slot parlor announced that it is suspending its greyhound racing, one week after the state broke off negotiations to purchase the facility.

Twin River, despite it being the fifth largest slot machine location with 4,750 slot machines, has been in financial troubles since last year. One reason, according to officials, is that the facility pays about 60 percent of its slot machine revenue to the state of Rhode Island.

Twin River announced that its greyhound racing will end its season on May 31.

There has been speculation that Twin River may seek bankruptcy protection. Discussions had taken place with the state on a possible purchase of the facility but those talks ended last week. The state may feel that it could obtain a better price if it was put up for sale in a bankruptcy proceeding.

The principles of Twin River are also the partners in Trading Cove Associates, which is the company that formerly managed the Mohegan Sun casino. With less than four years remaining on their seven-year Mohegan Sun casino management contract, the Mohegan Tribal Gaming Authority struck a deal to end that contract by agreeing to pay Trading Cove five percent of Mohegan Sun's revenues for fifteen years. That agreeemnt is expected to yield about a billion dollars for the former management company.

MTGA paid Trading Cove Associates $76.1 million for the 12 months of fiscal year 2008.

Not only have these payments to Trading Cove Associates affected MTGA's liquidity but the Twin River slot parlor opened by the former Mohegan Sun partners have affected Mohegan Sun's slot machine revenues.