BOSTON (CBS) – A confidential 37-page memo from Curt Schilling’s 38 Studios to officials in Rhode Island painted a very risky and speculative investment opportunity.

The 2009 memo was released by the Providence news site GoLocalProv.com.

WBZ NewsRadio 1030′s Anthony Silva With Stephen Beale

Reporter Stephen Beale found the memo which was submitted to the state. He tells me 38 Studios officials didn’t try to minimize the risk, and included the warning that investors should only sink money into the venture if they could afford to lose it all. The memo goes on to call the video game industry unpredictable, because you never know if a game is going to catch on.

The memo raises serious questions over whether the State of Rhode Island should have invested in 38 Studios, which is now in bankruptcy. Beale says the memo paints a very different picture of 38 Studios than the one which was presented to the Rhode Island Economic Development Corporation Board of Directors. He says it spells out “in excruciating detail” all the risk that investing in 38 Studios posed.

Analysts wonder if the state of Rhode Island ever bothered to read and digest the entire confidential memo. Beale says the memo shows that Rhode Island officials did not do their due diligence.

In a related development, Citizens Bank is suing both Schilling and the company, to recover millions of dollars loaned to 38 Studios. The FBI and the Rhode Island Attorney General’s office continue their investigations.