Rhode Island sports bettors will have to wait a little longer to place a legal bet.
State officials believe sports betting should be up and running by mid-November, the Associated Press reports. The state had originally hoped to take bets by Oct. 1.
Though the delay is undoubtedly a disappointment for would-be Ocean State bettors, the state did formalize details of an important partnership. IGT, a leading gaming technology provider, along with commercial sportsbook partner William Hill will oversee management services at the state’s two casinos, Twin River-owned properties in Lincoln and Tiverton.
Both IGT and William Hill have been among the most active sports betting companies in America following the Supreme Court decision to strike down the federal ban opened up the U.S. market. William Hill was the leading sportsbook in Nevada, the only state that offered single-game wagering before the ban fell, and has expanded its presence in Delaware, New Jersey, Mississippi - the next three states to take legal bets. It will have a partnership in West Virginia, the fifth state to take bets, which plans to do so Sept. 1.
Both IGT and William Hill have shepherded gaming centers in multiple states through regulatory procedures and will almost assuredly pass all inspections from Rhode Island authorities. The anticipated November launch will in turn be a boon to bettors in the state, as well as all of New England, as it will be the first in the region to take legal bets.
It may not have a similar impact for state government coffers.
Legalized sports betting quickly passed through the Rhode Island House of Representatives and Senate with encouragement and support from Gov. Gina Raimondo. With it came a 51 percent tax on winnings – far and away the largest fee of any state. All other states now taking bets have fees around 10 percent. Pennsylvania passed its sports wagering legalization law with a 36 percent tax rate, disappointing perspective partners. Though it passed its bill more than 10 months ago, it has yet to take a wager and only one casino has even applied to do so.
This fee dissuaded similar partnerships in Rhode Island. IGT, which had a longstanding relationship with the state as its lottery operator, was the only company to apply to run the state’s sports gambling operation. Industry observers worry that casino operators may pass the tax on to customers through non-competitive odds that are misaligned with the national consensus.
For example, while Las Vegas may have the Red Sox listed at -140 to win their next game, Twin Rivers may have odds at -240 in order to make up for the tax burden. This could keep bettors away or back toward black market bookies or offshore sites. That means possibly less money than expected – even with such high fees.
High fees could deter gambling stakeholders from supporting sports betting themselves. Historically sports gambling brings in roughly five percent margins for casinos, one of the lowest returns of any gambling offering. Rhode Island’s 51 percent tax rate slices that revenue potential in half. Sports betting could be a way to get people to attend the casinos, but operators may not invest the resource or amenities into a sportsbook that have drawn bettors to facilities in gaming centers like Las Vegas, Atlantic City or Biloxi.
All casinos try to use sports betting as a way to nudge patrons toward higher payout games like slots or roulette. Twin Rivers may turn a nudge into a shove – if it even finds sportsbook promotion worth it to begin with.
Even with the high fees, Rhode Island will enjoy a de facto monopoly on regional sports betting. No other New England state passed a sports betting bill this year and New York, which has a legalization law on the books, could still be months away from formalizing its regulations.
That could change shortly.
Connecticut lawmakers passed a preliminary sports betting framework and tried throughout the year to enact a full-fledged bill, even considering a special summer session to discuss it further. Due to complex negotiations with the state’s Native American tribes, which have an exclusivity agreement with the state to offer gaming in Connecticut, government officials suspended talks earlier this month. Every indicator points to a revived, more fleshed out debate in Hartford when lawmakers return for the next scheduled session in January.
Meanwhile, Massachusetts lawmakers, with eyes on their southern neighbors, has also discussed sports betting in the statehouse and have shown every indication it will be a major topic in Boston. New Hampshire and Maine have also floated sports betting proposals, and New York and Pennsylvania are expected to eventually take bets as well.
That means Rhode Island will see a more robust sports betting market in neighboring states – and multiple competing jurisdictions with far friendlier taxes.
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