Four Rhode Island senators have introduced a bill that could end IGT’s sports betting monopoly in the state.
Senators Frank Ciccone, John Burke, David Tikoian and Todd Patalano have introduced SB 748.
Rhode Island Senators Propose Major Shake-Up in Sports Wagering
The bill would prohibit the Rhode Island Lottery Division of Gaming from renewing “any existing sports wagering vendor contracts after July 1, 2026.”
The bill also reads: “Prior to the expiration of any existing sports-wagering vendor contracts, the division shall issue an open invitation to applicants for sports-wagering vendor contracts and shall award at least five (5) individual sports-wagering contracts.”
It clarifies: “This subsection shall not be construed to direct the commission to award a sports-wagering contract to an unqualified vendor.”
The bill will head to the Senate Labor and Gaming Commission before potentially making it into the state legislature.
IGT has run the Rhode Island sportsbook monopoly since 2019. As a sole operator, the company faces no competition from legalized gambling operators in most other states, such as FanDuel, DraftKings, and BetMGM.
As a result, Rhode Island residents have sought other means of wagering. This includes crypto sportsbooks, as well as venturing into neighbouring state Massachusetts which offers both retail and online sports wagering.
The lack of in-state competition could help explain the significant reduction in Rhode Island sports betting revenue from 2022 to 2023. The American Gaming Association commercial revenue tracker showed a decrease of 18.3 percent in gross gaming revenue from sports wagering, reaching $40.3 million in 2023.
The RI Tax Rate That May Need to Change
Rhode Island is an anomaly in the United States, where digital adoption has been slower with the legalized sports operator. Online wagering was 76.3 percent of the state’s total, while other states see up to 99 percent of all handle flow through digital platforms. Nevertheless, AGA statistics still showed a decline in brick-and-mortar revenue to $9.6 million in 2023, a dramatic reduction from $20.5 million in 2022.
Industry analysts suggest that should SB 748 pass through to law, the state of Rhode Island would need to revise its current sports betting tax rate. It is set at 51 percent, which IGT has been happy to pay given the monopoly status. Given the relatively small size of the state compared to New York, which also has a 51 percent tax rate, it could serve as a high barrier to entry for commercial operators looking to get a slice of a comparatively small pie.
IGT also has an exclusive contract with the Rhode Island Lottery, providing retail and online lottery services.
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