New state legislation submitted in both the House and Senate is looking to upend the monopoly in Rhode Island’s sports betting market as revenue generated from wagers has declined significantly in recent years.
The companion bills would prevent the R.I. Lottery from renewing its exclusive contract with Bally’s Corp. and International Game Technology PLC to operate a sportsbook in Rhode Island, instead opening the market to at least five vendors. The contract ends in 2026.
The intention is to open the door to prominent sports gambling companies such as DraftKings Inc. and FanDuel Group to take wagers in a state where they’ve been prohibited from operating since Rhode Island launched sports betting in 2018.
Sports bettors in Rhode Island have had one option when it comes to wagering online: Sportsbook Rhode Island, a platform powered by IGT technology in partnership with Bally’s.
Reviewers online have bemoaned the app’s lack of promotions and bonuses, a small number of proposition bets, problems cashing out winnings and technical issues with logging in among other criticisms.
“The app is terrible,” said Rep. Matthew S. Dawson, D-East Providence, the lead sponsor of the House’s version of the bill. “Without competition, the state hasn’t needed to meet consumers’ expectations like the major sportsbook apps do. The state is offering a subpar product and people can see that.”
The revenue that sports betting is generating for the state government has declined in recent years after reaching a peak revenue of $25.1 million in fiscal 2022, according to state financial data.
In fiscal 2024, the state collected $19.2 million from sports betting, the Lottery said, down from $20.5 million in 2023.
State officials say the declining revenue is the result of intense competition from neighboring states. In particular, Massachusetts launched in-person sports betting at three casinos in early 2023, followed by online betting with six sports wagering apps, including FanDuel and Boston-based DraftKings.
Still, it was not immediately clear how much support the legislation would garner.
Providence-based Bally’s and IGT, a global company with its North American headquarters in Providence, have deep ties to the state economy and the lucrative state Lottery. For instance, their exclusive sportsbook contract allows for the state to take an enormous 51% share of gross revenue, tied with New York and New Hampshire for the highest rate in the country.
The state’s hefty cut of the sportsbook revenue could serve as a barrier to entry into Rhode Island for other gambling companies, and the legislation doesn’t address whether the rate will be adjusted if the monopoly ends.
Nevertheless, Dawson sees the exclusive agreement with Bally’s and IGT as problematic.
“It’s a state-run monopoly, and it isn’t even maximizing profits for the state,” he said. “Every state around Rhode Island is getting paid but us. The state is leaving money on the table, and we’re in a deficit. We’re not in a position to let revenue like this get away.”
Bally’s – operator of Rhode Island’s two casinos – declined to comment. IGT did not immediately respond to a request for comment.
Observers say offering a high-quality online sports betting app is crucial to attracting gamblers and keeping them coming back.
“A neighboring state will use any advantage they have over us,” said Patrick Kelly, an accounting professor at Providence College with a focus on gambling. “And all of these states are competing for this sportsbook revenue.”
