The Rhode Island Senate voted in favor of a bill that proposes opening up the state’s sports betting to more licensed operators.
Senate Bill 748 proposes to end International Game Technology’s (IGT) monopoly on sports betting in the state. Under the bill’s proposal, the Rhode Island Lottery, which administers gambling in the state, would accept bids for at least three more operators and a maximum of five.
The changes would allow new platforms to begin offering sports wagering in Rhode Island from July next year. The bill passed the Senate on Wednesday in a 30-2 vote in favor.
IGT opposes proposal threatening its monopoly
IGT signed a deal with Rhode Island in 2019 to give it exclusive rights to the sports betting market in the state, and opposes the proposal to open up the industry to competitors.
The contract is set to run until November 2026 following an extension signed in 2023. Since the inception of Rhode Island sports betting, the market has seen around $2.5 billion in bets and more than $214 million in revenue, with the state earning approximately $110 million in tax proceeds.
“The Rhode Island model outperforms many of its regional peers despite the presence of high-profile competitors in neighboring states,” IGT Senior Vice President Joe Bertolone wrote in Senate testimony.
“This strong fiscal performance is not coincidental; it reflects the benefits of centralized operations, cohesive marketing and product development through committed in-state operating partners. … The data strongly suggests that maintaining the current model is the most prudent course of action to safeguard and grow state revenues.”
After initial growth, revenue has seen declines in the past few years, however. Betting handle reached a peak of $532 million in 2022, but this dropped to $461 million in 2023, and estimates expect the figure to be lower for 2024.
Gross gaming revenue has also declined in line with the drop in betting volume. Revenue reached $49 million in 2022, but fell to $40 million in 2023 and based on fiscal year performance, around $37 million is expected for 2024.
DraftKings relishes opportunity of new market
DraftKings has expressed support for the bill, which will give them the chance to expand into new territory. DraftKings estimates that Rhode Islanders spend $38 per adult resident on sports wagering, one of the lowest per capita online sports betting revenue rates in the country, and as much as half that of Massachusetts.
The Boston-based sports betting platform wrote in committee testimony supporting the bill, “We believe Rhode Island can reach its market potential with Senate Bill 748. The bill would allow Rhode Island residents to play on their favorite apps, while increasing tax revenue,”
“A marketplace with multiple choices for players leads to a better player experience – operators are forced to innovate, while competing for business.”
The company does not seem put off by the high tax rate the state levies on betting companies. Rhode Island’s rate of 51% is the highest in the country, matched only by New York and New Hampshire.
A tandem bill in the House is still in discussion; if passed there, it would only require a sign-off from Gov. Dan McKee to open up the market next year.
Adam is an experienced writer with years of experience in the gambling industry. He has worked as a content writer and editor for five years on sites such as Oddschecker, CoinTelegraph and Gambling Industry News, bringing excellent knowledge of the world of sports betting and online gambling. Adam focuses on emerging stories in the ever changing landscape of betting in the US. Read the latest on prediction markets, changing legislation, and sweepstakes.
