Rhode Island signed off new legislation last Friday that will enable sports betting to take place at the state’s casinos, with the first wager expected to happen within weeks. But the freedom to allow betting on sports comes at a high price for the casinos. Their share of the money collected from Rhode Island sports betting will be a mere 17 per cent. A staggering 51 per cent will go to the state with the remaining 32 per cent to be taken by the vendor, currently IGT.
There were some clues as to how high the tax level would be for casinos in the build up to Friday’s sign off. Governor Gina Raimondo had already earmarked a potential $23.5m share of revenue from gambling, with casinos estimated portion for the first year coming in at around $8m. IGT’s slice was projected at under $15m. In order to achieve those numbers, casinos will need to generate total annual wagers of $910m in the first year.
As previously reported, online and mobile sports betting will be allowed, but not outside of the actual premises. All such wagers will have to be placed within the state’s two Twin Rivers casinos at Tiverton and Lincoln. Additionally, there is no provision made for integrity fees for the major sports leagues.
SBC Americas analysis: The big talking point here is the state’s decision to take more than half the revenue from sports betting and how that might affect bettors’ willingness to take the legal option. And with such small margins to fight for, it’s questionable as to how incentivised the two casinos will be to market sports betting. Then there’s governor Raimondo’s revenue target of $23.5m. In theory, yes it might be achievable. But in practice it’s highly unlikely to happen.