Rhode Island’s sports gambling industry bounces back

Rhode Island's sports gambling industry bounces back

Rhode Island’s sports gambling action may have gotten off to a slow start after it was legalized last year, but things are looking up. Gambling opponents were quick to use the state as an example of how sports gambling wouldn’t generate the revenues people expected, but anyone with a 10th-grade education knows that a business needs a ramp-up period to get going. This is the case in Rhode Island, which is now beginning to see better results and reported month-over-month increases in sports gambling activity from May to June.

Rhode Island's sports gambling industry bounces backAccording to data from Twin River Lincoln and Twin River Tiverton, the only two venues to offer sports gambling in the state, a combined $2.15 million in revenue was picked up in June. This was 68% more than the $899,165 they saw in May and comes as sports activity as a whole is slower than it was in previous months. June is typically a boring month for major sports and sports gambling.

When the sports gambling legislation was making its way through the legislative obstacle course last year, it was touted to be able to give the state $11.5 million in tax revenue. However, an eight-month span from November to the end of June has only produced $3.5 million. With the uptick seen in June, and the upcoming NFL season, Rhode Island can improve its sports gambling take, but it most likely won’t reach the level it expects before the end of the year.

It isn’t possible to accurately project what revenue will be possible from a nascent industry – there’s no historical data upon which projections can be based. However, the American Gaming Association (AGA) had a good idea of what was possible in Rhode Island, and asserts that those that are crying foul over the lackluster performance are doing so based on misinformation.

The media relations director for the AGA, Carolina Ponseti, said this past April “Under the scenario closest to what Rhode Island implemented, we estimated that Rhode Island would generate $6.4 million in sports betting gaming tax revenue [per year], $17.1 million less than the state projected.”

Ponseti further explained, “Further, our estimate is based on a fully stabilized market (not the first four months of operation), a tax rate of 15% (Rhode Island’s is about 50%) and a legal framework that does not include any ‘unusual restrictions’ (like Rhode Island’s prohibition on in-state college sports bets). All of these factors point to expected 2019 sports betting tax revenue of well below even our modest and reasonable projections.”

However, if the AGA anticipated tax revenue of $6.4 million annually and Rhode Island has already achieved $3.5 million, it will come close to the forecasted amount in its first year – not bad for any business.