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The
budget for the fiscal year starting July 1 counts on $23.5
million of new revenue from sports betting, though the activity
is not expected to go live until Oct. 1.
Even so, the move could give Rhode Island an early edge in New
England's sports betting market, as states across the country
look to legalize the activity after last month's U.S. Supreme
Court ruling overturning a 1992 law that barred it in most
places.
The smallest U.S. state does not soon plan to take sports wagers
online, however, meaning bets can only be placed inside casinos.
That could put it at a disadvantage, especially if neighboring
Massachusetts and Connecticut eventually allow customers to
place wagers anywhere in the state over the internet.
"It could create a flight of customers," said Daniel Wallach, an
expert in gaming and sports law.
Massachusetts is expected to include online wagering in
legislation later this year, Wallach said.
Some states may never legalize sports bets, and each state that
does has its own set of concerns - as illustrated by Rhode
Island's cautious approach to going mobile.
"We wanted to start small and make sure we have the operational
system down pat in the casinos before we explore online or
mobile," said Paul Grimaldi, spokesman for the state's
Department of Revenue.
The department oversees the Rhode Island Lottery, which will
operate sports betting in addition to existing games of chance
including Powerball and instant scratch-off tickets.
Those games are sold by lottery agents, with whom the state has
a decades-long relationship that it does not want to damage by
rushing into online sports betting, Grimaldi noted.
"For some, lottery tickets are a key driver for their customers
and we don't want to steal that away," he said.
The sole bidder to be the state's sports betting technology
vendor was International Game Technology PLC, a U.K. gaming
company with a major office in Rhode Island's capital city
Providence.
Customers will be able to place sports bets at two Twin
River-owned casinos, one of which is set to open in September.
If a player loses $100 on a sports bet, the state will keep $51,
IGT will get $32 and Twin River will get $17, but those rates do
not sit well with critics.
"High tax rates hinder the legal market's ability to compete
with shady, illegal operators that don't pay taxes back to the
state," said American Gaming Association spokeswoman Sara Slane.
Additionally, the low take for casinos may limit their spending
on promotions.
"The relatively small share allotted for casinos means that
those casinos have little incentive to market the product, which
will dampen revenue potential," said Chris Grove, senior analyst
for PlayUSA.com.
(Reporting by Hilary Russ; Editing by Daniel Bases and Tom
Brown)
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