In yet another example of the competitive and cannibalistic, in the words of our own Vince Martin, US regional market, Rhode Island is already fretting the increasing possibility of seeing lottery revenue in the state get submarined by the opening of three new casinos in Massachusetts. That much was made clear by governor Lincoln Chafee after his budget proposal for the 2014 fiscal year accounted for a study the state commissioned surrounding the impact of the new casinos that are all likely to open either in 2015 or 2016.
Apparently, the result of findings couldn’t have been gloomier for Rhode Island. According to the 2014 budget proposal presented by Chafee, Rhode Island stands to lose a whopping $307.6 million in lottery revenue over the next four years. Slicing it year-by-year, the state is estimating lottery revenue losses of $53.7 million in the 2016 fiscal year, $113.4 million in 2017, and a staggering $140.5 million in 2018.
A key factor in determining the extent of Rhode Island’s anticipated drop in lottery revenues hinges on the location of the three new casinos in Massachusetts. ““The impacts of that are very dependent on where those casinos are located,” Paul Dion, Chief of the Rhode Island’s Office of Revenue Analysis, told GoLocalProv News. “No matter what, we’re going to lose some customers to those casinos in Massachusetts and that could be a significant decline in revenues, on the order of 40 percent in total over those three years.”
Dion pointed out that if one of the new casinos would set up shop in Springfield, that location would be too far to have an impact on the state. On the other hand, should any of the new casinos locate their business in Foxboro, the close proximity from Rhode Island’s Twin River’s market would cause a significant dent in the latter’s lottery revenues.
Either way, the state is still bracing for a significant decline in lottery revenue, all because it’s neighboring state is beefing up its own gambling portfolio and proving that revenue competition among neighboring states is a real cause for concern for those that aren’t aggressively pushing for new ways to jumpstart their gambling revenue.
At least Indiana is trying to do something about it
Moving to the Midwest, new casinos in Ohio, Michigan, and Illinois are forcing Indiana lawmakers to revisit existing laws on its riverboat casino taxes in an effort to stem the potential revenue decline stemming from the growing competition neighboring states are beginning to offer in the form of new casinos. The fear, at least as far as state leaders are concerned, is that casino expansions in states like Ohio, Michigan, and Illinois, are undercutting the appeal of Indiana’s riverboat casinos.
With alternative destinations in neighboring states offering more access to gambling, proposals are being discussed by Indiana’s senate committee to give their riverboat casinos a fighting chance to stay afloat – no pun intended – in lieu of the growing number of new casinos in all three states. Among the proposals being thrown out in an attempt to overhaul the state’s existing casino laws is to cut riverboat casino taxes, as well as giving these establishments, essentially floating gambling halls out on the water, a chance to move onto land to attract more customers. Republican senator Phil Boots (Crawfordsville) has been one of the advocates of changing, or at least modifying, the state’s existing casino laws, in light of projections that casino tax revenue in Indiana could fall by as much as 15% from last year’s revenue haul over the next three years.
Given the growing number of options becoming available to casino-goers in Indiana, this discussion should be something that’s treated with utmost importance. It’s neighboring states are taking measures to increase their gambling revenue. If Indiana doesn’t ride with the pack and make their own changes, there’s a good chance that they’ll be left behind and all those riverboat casinos – 10 in total – could end up sinking, figuratively, sooner than later.