The Rhode Island statehouse is probably the most breathtaking in America. As free-standing marble structures go, the only ones more impressive
are St. Peter’s Basilica and the Taj Mahal. Its impressive dome honors the state’s motto
“hope is an anchor of the soul.”
But go inside the building and things are a little less rosy.
Newsweek once reported that, “Rhode Island may not have the most corruption in absolute terms, but it deserves to win because of its debacles per capita.” There’s an old joke that “Rhode Island ethics” is an oxymoron, and the state’s Ethics Commission is “far more like a lapdog than a watchdog.” And now continuing this long-standing Rhode Island tradition is Democrat Gov. Gina Raimondo.
One of the most glaring examples of Raimondo’s corruption is her relationship with International Game Technology (IGT), one which even fellow Ocean State Democrat Nicholas Matiello described as “incestuous.”
Raimondo “negotiated” a $1 billion, no-bid contract with IGT to continue providing lottery service to the state for a jaw-dropping 20 years. Any no-bid contract is a cause for concern, especially since IGT has been underperforming in Rhode Island compared to other competitors with similar contracts elsewhere. Slot machines from competitor SGI generated 56 percent higher profit that year, translating to $31,000 less per machine for the state. Indeed, according to one estimate IGT’s poor performance cost RI taxpayers as much as $25 million in the last fiscal year.
Think of all the “staff retreats” to Newport mansions that $25M could have paid for!
Rhode Island is not alone in the 21st Century gold rush for online gambling revenue. In 2018, the Supreme Court struck down a federal law that banned commercial sports betting, which has opened the door for state-level legalization. But lost in the rush is a sobering reality: many of gambling companies operate abroad and, in some cases, have engaged in practices they couldn’t get away with in the highly regulated markets of the U.S.
When those companies get a foot in the door, they bring their shady practices with them. Like most of the last 20 years of globalization, the promise of wealth has brought unplanned cultural collision.
The news is replete with bad actors. Gaming Innovation Group was fined $5 million in Sweden because they were betting on sports that involved underage players. The UK Gambling Commission handed out £4.5 million in penalties for failure to “prevent money laundering and keep consumers safe from gambling harm.” Norway banned six Malta-based gaming firms for corruption. Apple pulled thousands of gambling apps from its Chinese app store after state media attacked the company for “failing to protect consumers against banned online content.”
Here at home, gaming company SBTech won an exclusive contract for online betting in Oregon, despite controversy that the company is operating in Turkey and Iran, two countries where sports betting is illegal and relations with the U.S. are currently very tenuous. SBTech is trying to make inroads into Pennsylvania, which would strengthen their foothold here even more.
The morality of a taxpayer-funded gambling industry providing state revenue is one that can be debated — the same as any kind of excise tax. But if it’s going to be done, it should be done with due diligence, without empowering bad actors and opening the door to corrupt practices in our homeland.
Hope may be an anchor to the soul, but dirty money can be too. Either way, it’s a gamble.
Jared Whitley is a long-time politico who has worked in the U.S. Congress, White House, and defense industry. He is an award-winning writer, having won best blogger in the state from the Utah Society of Professional Journalists (2018) and best columnist from Best of the West (2016). He earned his MBA from Hult International Business School in Dubai. To read more of his reports — Click Here Now.
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