PROVIDENCE – If Rhode Islanders were allowed to use their phones and laptops to play government-regulated online slot machines, table games and poker, the state could make up for tens of millions of dollars in gambling revenue that’s expected to be lost to growing competition in the region, according to a new report commissioned by the R.I. Department of Revenue.
A 38-page report conducted recently by a third-party consulting firm claims that – even if similar online gaming and sports betting is adopted in Massachusetts, after both were recently authorized in Connecticut – Rhode Island would be able to offset future losses with $37.4 million in new annual gross gaming revenue, a portion of which would go directly to the state, if iGaming is allowed by the state within the next few years. iGaming is a new term for online casino gambling.
That annual gross gaming revenue would amount to $18.5 million in new net revenue each year by 2030 for Rhode Island’s government coffers, according to the report, assuming that the state will rake in profits at the same rate it does at its brick-and-mortar casinos. Rhode Island gets a 60.8% take for in-person slot machines and 15.5% for live table games at the casinos operated by Bally’s Corp. in Lincoln and Tiverton, according to the Dec. 3 report by Christiansen Capital Advisors LLC.
The report states that if sports betting is approved in Massachusetts in 2022, after the state’s senate failed to act earlier this year on a bill to authorize the practice, it would result in a $16.5 million loss for Rhode Island’s annual gross gaming revenues (without iGaming offered in Rhode Island).
The report highlights the possibility for even greater losses to Rhode Island’s annual gambling revenue if a long-planned but legally challenged tribal gaming facility comes to Taunton, or if another commercial casino were to go there in its place. In that case, without iGaming in Rhode Island, the state would lose $74 million compared with baseline revenue projected for fiscal 2025.
And, in a worst-case scenario for the Ocean State, if politicians from Massachusetts allow table games to operate at Plainridge Park Casino – which currently only offers slot machines and pari-mutuel betting on horse races – on top of a Taunton casino and sports betting, it would mean $98 million in lost revenue for Rhode Island, according to the report.
“If Rhode Island were to implement iGaming in the face of all the above prospective competition, the losses described above could be mitigated by as much as $37 million in fiscal year 2030,” the Christiansen Capital Advisors report states.
Currently, iGaming for real money is only available in Connecticut, Delaware, Michigan, New Jersey, Nevada, West Virginia and Pennsylvania, while Nevada only allows online poker at this point but not other digital casino games. Starting with Delaware about nine years ago, states started adopting laws permitting regulated online gambling following a December 2011 decision by the U.S. Justice Department that the Federal Wire Act does not prohibit online casino games.
Two of Rhode Island’s leading lawmakers, who were behind the 20-year contract passed this year allowing Bally’s Corp. and International Game Technology PLC to run legal gambling games in the state, said they support iGaming being made available to Rhode Island gamblers.
“We both supported iGaming in Rhode Island and we are open to new opportunities in this growing industry,” said House Speaker K. Joseph Shekarchi and Senate President Dominick J. Ruggerio in a joint statement provided to Providence Business News. “Should proposals come before the General Assembly this year, we will certainly consider them.”
Providence Business News also reached out to the office of Gov. Daniel J. McKee to see if he’s in favor of regulated online casinos coming to Rhode Island but had not received a comment from the governor or one of his representatives by the time of publication.
If Rhode Island is to implement iGaming, it needs to be done with a variety of competing operators to maximize potential revenue for the state, according to the report. However, currently the way that the R.I. Lottery operates gambling operations in the state makes that a challenge.
“The evidence to date suggests that a monopoly or limited license models for online gaming, whether casinos or sports, results in limited performance,” the Christiansen Capital Advisors report states. “The requirement in Rhode Island that all gaming be owned and operated by the state likely precludes Rhode Island from a diverse iGaming offering akin to the more successful iGaming states like Michigan, New Jersey and Pennsylvania.”
This report comes as the Providence-based Bally’s Corp. has pivoted to focus partly on online gaming through its $2.7 billion acquisition of the London-based Gamesys, which operates two online casinos in New Jersey, in addition to its bread-and-butter online casinos in Europe and Asia. Lee Fenton, Bally’s new CEO who headed Gamesys for about 13 years, said the casino company believes that more states will adopt iGaming in the coming years.
“How long it takes the market to come to maturity is difficult to assess,” Fenton said during an October interview with PBN. “Certainly, over the next three years you’ll see an incredible growth in opportunities online in the U.S.”
Marc Larocque is a PBN staff writer. Contact him at Larocque@PBN.com.
