Rhode Island Approves Sports Betting Starting in October
On Friday, June 22nd, Rhode Island Governor Gina Raimondo approved the state’s $9.6 billion dollar fiscal year budget that detailed a wide range of provisions including the legalization of sports betting. Leaders of the State and the Governor are all publicly hailing this budget as a great plan for improving the overall state economy, improving schools, taking care of those residents in need, and joining a few other states in the new era of legalized sports betting.
According to a press release on RI.gov, Governor Raimondo made the following comments about this budget:
“Together, we’re going to fix our kids’ school buildings, ensure everyone has a shot to compete for a good job and protect the most vulnerable people in our state, including Rhode Islanders with disabilities, young people in foster care and our seniors. This budget protects the progress we’ve made and reflects the values we share. I thank the legislature for their hard work.”
House Speaker Nicholas A. Mattiello echoed the Governor with his following comments:
“This is a budget of which we can all be proud. We worked very hard to live within our means and avoid increasing the burdens on taxpayers, while investing in jobs and education, and helping people on Medicaid, seniors and the developmentally disabled.”
President of the Senate, Dominick J. Ruggerio was the one state politician to touch on the approval of sports betting in his praising of the new budget:
“It maintains the progress we have made in lowering taxes to improve our business climate while also investing in economic development, and it provides Rhode Island with the highest percentage of revenue in the nation for sports wagering.”
The revenue from sports wagering is expected to go a long way in helping to achieve the admirable goals detailed in this new budget. And, after taking a look at the proposed breakdown for legalized sports betting in Rhode Island, the state is definitely going to benefit greatly from sports betting with the “highest percentage of revenue in the nation.”
Sports Betting in Rhode Island
The goal for Rhode Island is to have their sports betting platform up and running by October 1st. Unlike West Virginia and Mississippi, Rhode Island isn’t rushing to get things set up prior to the beginning of football season, which is the most popular sport for wagering on. However, the beginning of October is less than 4 weeks into the football season, so there’s still plenty of time for the state to capitalize on the NFL and NCAAF football seasons. The Rhode Island Lottery will be in charge of sports betting within the state.
The breakdown of sports betting revenue will proceed as follows:
- 51% – Instead of implementing a sports betting tax, like nearby New Jersey and other states, Rhode Island is going with a straight 51 percent off the top. That’s clearly the largest share of revenue out of any state that’s legalized sports betting or has a plan in the works.
- 32% – The vendor will get 32 percent of the revenue. In this case, the vendor is IGT who already works with the Rhode Island Lottery and has an office in Providence. IGT is a gaming company from the UK and will provide the sports betting technology.
- 17% – the two in-state casinos will get the remaining percentage of sports betting revenue.
Where Can Residents Bet in Rhode Island?
Rhode Island will initially offer sports betting on site at the state’s two Twin River casinos located in Tiverton and Lincoln. Each casino will receive $100,000 for hosting sports betting within their respective communities. Unfortunately, Rhode Islanders will not be able to place bets via mobile devices as the state only approved onsite betting without mobile wagering.
In states like Mississippi, they also restrict all wagering to being onsite at the casinos, but they do allow mobile betting while on site. Rhode Island did not implement this option because of two primary reasons. The first reason is that residents will need to vote on mobile sports betting in order for it to become a statewide option.
The second reason is that the state really wanted to start off small and make sure they get things right. A spokesman for the state’s Department of Revenue made the following comments about Rhode Island’s decision not to include mobile betting, according to Reuters:
“We wanted to start small and make sure we have the operational system down pat in the casinos before we explore online or mobile.”
It’s safe to say that as soon as the state lawmakers can get this on a ballot for voter approval, it will happen.
Sports Betting Revenue Projections
According to ESPN, the research firm of Eilers & Krejcik Gaming projects that the state could generate over $25 million in annual revenue off an estimated total of $395 million wagered. These estimates were projected without any mobile sports betting.
This would be ideal for Rhode Island considering the state’s approved budget is projecting $23.5 million in revenue for the first year, according to Legal Sports Report.
Criticism Over Rhode Island’s Sports Betting Framework
Although there are many people within Rhode Island happy over this approval, not everyone supports Rhode Island’s sports betting plan. One of the major points of contention is that Rhode Island didn’t offer mobile wagering right out of the gates. This could be a huge issue if neighboring states like Massachusetts and Connecticut offer mobile wagering because bettors in Rhode Island could just place mobile wagers in those states.
A spokeswoman for the American Gaming Association made the following critical comments about Rhode Island’s high tax rate, according to Reuters:
“High tax rates hinder the legal market’s ability to compete with shady, illegal operators that don’t pay taxes back to the state”
This is certainly a valid concern that bettors within Rhode Island can still choose offshore sports betting websites instead of the two casinos especially if the casinos try to pass off some of their lost revenue sharing onto the customers.
An analyst for PlayUSA.com, added to the concern above by pointing out to Reuters that the casinos had little incentive to promote sports betting due to the low percentage of revenue that they will keep.
What Does the Future Hold for Rhode Island Sports Betting?
With Rhode Island legalizing sports betting, and rolling out a smaller framework by the beginning of October, they will be able to start reaping the financial benefits while learning what works and what doesn’t work.
However, they will have to come up with some provisions for mobile sports betting since it’s a highly popular form of wagering on sports. I expect this to be figured out sooner rather than later as it does prevent the state from making even more money
This new era of legalized sports betting is a learning process for each state. At least Rhode Island is getting into the game and can get valuable experience while other states still fight over trying to figure out what to do. Yes, I’m talking about you New York.
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