Were Curt Schilling's 38 Studios to go under, it could cost Rhode Island taxpayers $112.6 million over the next eight years.
Reports that the studio is in serious financial trouble have emerged, causing many to question the wisdom of a $75 million dollar loan offered to the studio on the condition it move from Massachusetts to Rhode Island and provide up to 450 jobs.
The RI economic development corporation borrowed the money on behalf of 38 Studios from private institutions under "moral obligation bonds" offered at an interest rate of between 6 and 7.5 percent.
Because these bonds require that the governor ask the general assembly to reimburse investors if 38 Studios is unable to pay.
Though lawmakers are not obliged to consent, it is generally assumed they would not permit a default.
According to WPRI, this means that with interest, the cost of repaying the loan through 2020 would be $112.6 million of taxpayer money.
This number assumes the full cost of the loan, and ignores $23.4 million set aside to repay the loan.
The deal was controversial to begin with, but with taxpayer's money on the line, politicians in the U.S. may look less favourably on future incentives to the game industry.