Rhode Island's Courageous Casino Bailout

Everyone knows that the American people hate bailouts right now. So, there's only one possible explanation for why Rhode Island lawmakers bailed out a casino and the big banks that own it: They believed it was the right thing to do.
by | May 27, 2010

Here's the conclusion to a fascinating story I've been following in Rhode Island. From the Providence Journal:

PROVIDENCE — A financial concession package sought by the big banks and investment houses positioned to take ownership of the bankrupt Twin River slot parlor in Lincoln was headed to Governor Carcieri to be signed into law, after winning its final legislative vote on Wednesday.

The bill provides $3.7 million in new state marketing subsidies to the former dog track; cuts in half a previous hiring commitment; obligates taxpayers to reimburse Twin Rivers owners for any losses to a new in-state competitor; and gives them the right to sue the state for “actual damages” if they feel the state has wronged them.

Bailouts, as you know, aren't that popular right now. Supporters of the Twin River bailout make the same argument that supporters of the federal bailouts have made: That the fiscal and economic costs of inaction would be far greater. That argument hasn't made the federal bailouts well-liked. It's hard to imagine that it's enough to make it popular to bail out a casino by giving taxpayer funds to "big banks and investment houses." If you were trying to make up a policy that would be hated, it would be hard to come up with something better than this legislation.

But, that's also why I feel confident that Rhode Island lawmakers believe they're doing the right thing. They certainly didn't approve this plan for the sake of their own political ambitions.

Josh Goodman
Josh Goodman  |  Former Staff Writer

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