Rhode Island GOP Could Sue Over Mobile Sports Betting Bill

The Rhode Island state flag
Rhode Island is pushing hard for legal mobile sports betting. However, the GOP is contemplating legal action.

30-second summary:

  • Rhode Island was the first state in New England to legalize sports betting
  • Its sportsbooks have been open since November 2018 at the two casinos in the state
  • There is a hefty 51% tax on revenues
  • The GOP are fighting a push to legalize mobile sports betting

Rhode Island sports betting

Once the federal ban on sports betting came to an end in May 2018, Rhode Island was one of the first eight states to legalize it in 2018. It was also the first state in New England to make sports betting legal, on June 20, 2018.

The first sports bets in the state were made at the Twin River Casino in Lincoln on November 26.

The initial plan was for the sportsbooks to open in October, but there were numerous delays. There is a temporary sports betting facility in Lincoln until development on a dedicated sports betting lounge finishes.

Rhode Island has always been a pro-gambling state. It launched one of the first state lotteries in the 1970s. Currently, there are two racetracks in operation in the state. These facilities are also able to offer slot machines, to boost their revenues. It ensures that they can keep their doors open.

Casinos have been legal since 2012, but online gambling still remains illegal. Currently, two casinos are operating in Rhode Island, which is the smallest state in the country.

The Rhode Island Lottery has the task of regulating the sports betting space in the state and it also chose the partners for sports betting.

William Hill looks after the operations and risk-management aspects of the sports betting offering at the two casinos. The International Game Technology (IGT) company looks after the backend of the sportsbook.

These two companies have a deal for the next five years. A clause in the contract permits them to extend the deal for two more five-year terms.

Performance to date

The state has high hopes for generating revenues from legal sports betting. Most of the funds will go towards improving infrastructure and education. Rhode Island has the heftiest tax rate on sports betting in the US at 51%.

Of the remaining revenues, the vendor gets 32% while the casino itself gets the remaining 17%. Initially, the government was hoping to generate tax revenues of around $32m. However, due to the numerous delays, this forecast was brought down to $12m.

For their first month in operation, the sportsbooks took in over $13m. The profits for the casinos were only about $950,000. There was an increase in sports betting in January 2019, with about $19m wagered. As the casinos paid out $18.9m in winnings, there was only a profit of $160,000.

The Super Bowl saw a mass of bets in favor of the victors, the New England Patriots. The sportsbooks lost about $2.35m as a result.

Mobile sports betting bill

There has been a push to legalize mobile sports betting for some time now in Rhode Island. The state has seen the success nearby New Jersey is having with its mobile sportsbooks. Revenues from mobile sources make up about 80% of the total sports betting revenue in New Jersey.

A bill to legalize mobile sports betting in Rhode Island has gotten approval from the state Senate. The vote was 31-4 in favor of the two casinos being able to offer it via an app that will have to be developed for them.

The app will allow mobile sports betting once you are inside Rhode Island state lines. Initially, players will have to sign up at one of the casinos for a mobile account. Then they will be able to access the app.

Senate president Dominick Ruggerio said: “Expanding to mobile gaming would provide a convenient option for those wishing to enjoy this form of entertainment and open up the economic benefits beyond the walls of Twin River.

“I can envision a group of friends from out of state spending an evening out in a local establishment where they can both watch the game and place a wager.”

Opposition to mobile sports betting

Despite the strong approval for the measure in the Senate vote, some people oppose this move. Senator Sam Bell is one – he believes that Twin River Casino would have a monopoly on the market. He supports mobile sports betting, but wants to open it up to other competitors.

There are also rumors now that the Rhode Island Republican Party is contemplating filing legal action against this proposal. The bill needs to be subject to a  public vote before coming into law. Party chair Brandon Bell said they were actively looking at a lawsuit before this vote takes place. This announcement has largely been met with surprise.