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Rhode Island is on the precipice of legal sports betting.
The legislature has passed a $9.6 billion budget plan that includes provisions to regulate the industry under state operation.
House lawmakers voted 66-7 for passage last week, and the upper chamber followed suit Wednesday evening after brief consideration. The 34-2 concurrence from the Senate was the last legislative step, drawing a round of applause in the statehouse.
The bill now heads to the desk of Gov. Gina Raimondo for final approval. Expect her to add her signature, considering she’s the original author of this proposal. Despite some amendments along the way, sports betting has remained in the plan since January.
July 1 was the drop-dead date to pass this package, but lawmakers are hoping to leave the capital by the end of this week. When they do, Rhode Island sports betting will be legal.
The RI Lottery will administer sports betting via the Twin River casinos — one in Lincoln and one in Tiverton. The two towns will collect $100,000 apiece in annual “compensation for serving as the host communities for sports wagering.”
The state will be duly compensated itself. Here’s the allocation of revenue from RI sports betting:
IGT is likely to fill the role of “vendor” in that list above. The group has a long-standing relationship with the state, providing its land-based and electronic lottery platforms since 2003. Out of 18 parties that expressed interest, IGT was the only bidder for the sports betting contract.
The governor has budgeted $23.5 million in first-year revenue from sports betting, which means the casinos would need to take around $900 million in wagers. The lottery is tentatively targeting Oct. 1 for launch — three months into the fiscal year — so those projections may need to be prorated.
Pardon our skepticism, but those numbers are a bit optimistic.
For the sake of comparison, the Nevada sports betting market churns through about $5 billion in wagers every year. That’s a world-class, decades-old, had-a-monopoly-until-last-month sports betting market. Nevada collected about $17 million in tax revenue from sports betting last year.
Rhode Island can expect to take about one-fifth of Nevada’s wagering handle — and collect more in taxes — but it’s hard to imagine numbers that rosy. A spokeswoman told the Providence Journal that the estimate was produced without input from Spectrum Gaming Group, which consults for the state.
Those projections seem especially ambitious when you consider that sports betting won’t be available on mobile and internet platforms — at least not initially. The law authorizes only land-based wagering, only in Tiverton and Lincoln. Lawmakers contend that voter approval would be required to expand sports betting beyond the walls of the casinos.
Whatever the handle ends up being, Rhode Island will retain a larger share of the revenue — 51 percent — than any other state.
Not surprisingly, the US Supreme Court’s ruling allowing state-regulated sports gambling has sparked a groundswell of momentum. As of this month, Nevada no longer holds a monopoly on the industry.
Delaware went live two weeks ago, becoming the first eastern state to book a legal wager. The DE sports betting model is similar to Rhode Island’s, with the lottery overseeing land-based wagering at the state’s casinos.
New Jersey entered the market last week, bringing the count to three. NJ sports betting was the original catalyst for the SCOTUS ruling, paving the path for itself and other states.
That path is starting to get a little crowded these days. Mississippi, Pennsylvania and West Virginia also have legal sports betting pending regulations, and all three expect to launch in the coming months.
New York sports betting is legal, too — sort of. The enabling law is incomplete, but there may be enough for regulators to move forward with what they have.
In addition to that list of states, about a dozen others have considered sports betting bills this session.