Warning: Undefined array key "post_type_share_twitter_account" in /var/www/vhosts/casinonewsblogger.com/public_html/wp-content/themes/cryptocurrency/vslmd/share/share.php on line 24
- Members of the Rhode Island Senate are evaluating a bill to expand the state’s sports betting market
- The bill will to potentially expand the number of sports betting operators to six
- Bally’s and IGT-led SportsBook RI are the only two current sports betting vendors in the state
The smallest state in the U.S. is hoping to expand its sports betting landscape to entice customers to not stray to other markets.
The Rhode Island Senate is scheduled to vote today on a bill to expand its sports betting market to as many as six online operators, up from its currently landscape of just IGT-led Sportsbook RI and Bally’s, which will launch later this year.
Sen. Frank A. Ciccone’s (D-7) bill, SB 3118A, will also amend Rhode Island’s sports betting tax formula.
Expanding the Market
Ciccone’s bill, if signed into law, will expand the available Rhode Island online sports betting operators to no less than four and no more than six. The Rhode Island Lottery will begin accepting applications for new operators no later than Jan. 1, 2027.
The request for proposals shall prioritize new operators that demonstrate the following:
- Technical capability to ensure platform integrity and responsible gaming
- Strong regulatory compliance history
- Strong history of sports betting operation in other states
- Commitment to maximizing state revenue and minimizing harm
The Rhode Island Lottery will continue to oversee all sports betting and iGaming regulations in the state under the potential new law.
Modifying Sports Betting Tax Formats
In addition to an expansion of the sports betting market, Rhode Island will also fundamentally change the way approved operators pay sports betting taxes in the state. Currently, licensed operators are expected to pay a 51% tax rate on all online sports betting revenues.
Under this new legislation, any licensed operator will continue to pay the 51% rate until the state receives the amount of revenue generated by sports betting and online sports betting in fiscal year 2025. Once that mark is met, the tax rate for operators will drop to just 12% for the rest of the year.
If the revenues do not reach the FY 2025 total, each sports betting operators will make an equal additional payment to the state to close the deficit for that year.
For each licensed operator, the bill will increase its revenue share from 32% to 40.5% in a fiscal year until the state receives the amount of revenue generated by fiscal year 2025. Once that mark is reached, the operators will receive 79.5% of revenues for the rest of the year.
As for host facilities, which are the land-based casinos in the state (both owned by Bally’s), revenues will be decreased to 8.5% from 17% for the fiscal year. The host facilities shall receive no less than $4.5 million in sports betting revenues for the year.
Will Market Expansion Be Beneficial?
Rhode Island legalized sports betting in-person sports betting in June 2018 and online sports betting in March 2019. Until this year, the state has only featured one online sports betting platform, Sportsbook RI, which is operated by IGT Play Sports.
According to The Providence Journal, an IGT spokesperson in committee testimony noted that a market expansion will more than likely reduce sports betting revenues in the state.
“Shifting to a market with multiple operators may appear attractive in theory, but in practice, it often results in reduced per capita revenue to states, fragmented oversight, and significant administrative and compliance costs,” IGT Senior Vice President Joe Bertolone reported in committee testimony. “Recent experience shows that these transitions rarely result in the promised revenues to the state.”
Keeping Up With Prediction Markets
The state is likely looking to entice its sports betting customers to stay in Rhode Island with expanded offerings through multiple operators, to keep them from straying to the uber-popular prediction markets currently operating the state.
Rhode Island has become an unlikely legal battleground for regulations of prediction markets. There are currently four ongoing lawsuits in Rhode Island regarding the exclusive regulatory power over the federal markets.
In late May, Rhode Island Attorney General Peter F. Neronha filed lawsuits in Rhode Island Superior Court against both Kalshi and Polymarket, alleging the prediction market operators offering sports event contracts is tantamount to illegal sports betting in the state.
Kalshi threw a counterpunch shortly after, filing its own lawsuit in response against Neronha and Christina Tobiasz, gaming and athletics administrator for the Rhode Island Department of Business Regulation.
Just days after Neronha’s lawsuit, the Commodity Futures Trading Commission filed a lawsuit in the U.S. District Court for the District of Rhode Island to halt the state’s lawsuit against the two prediction market operators.
The CFTC lawsuit attempts to reaffirm its regulatory exclusivity over prediction markets in the U.S.