Rhode Island Gambling Study: Shows Gradual Decline In Industry

• Rhode Island sports betting revenue could eclipse $64 million in FY 2024 without neighboring expansion.
• Sportsbooks could see a 5% decline in growth through FY2024 should MA and CT add legal sports betting.
• Once the casinos open up FY2021, the Rhode Island revenue numbers fall off the cliff, sharply.

PROVIDENCE, R.I. – As Rhode Island failed to meet expectations for their projected sports betting revenue in fiscal year 2019, legislators are adjusting the FY2020 budget and beyond based around a more up to date study from Christiansen Capital Advisors, LLC.

The analysis breaks down the fiscal projections for the next five years of the gambling industry in Rhode Island into three separate scenarios. Scenario A is the baseline model that would see growth in the industry due to the status quo of the New England casino market.

Scenario B explores the effects of Massachusetts adding a state licensed gaming facility in Taunton. Scenario C dives into the effects on Rhode Island, based around the addition of the Taunton casino as well as legal sports betting in neighboring Connecticut and Massachusetts.

All of these scenarios include the addition of mobile wagering in Rhode Island, which is expected to launch early in fiscal year 2020 as well as the opening of Encore Boston Harbor, which is expected to open its doors on June 23 of this year. Taking into account revenue projections without these known expansions would only be a further detriment to the current failing revenue projections.

Scenario A and B Revenue Projections

Rhode Island legislators will hope for Scenario A to come true, as it sees the most money flooding into the state. Without any other expansion in the neighboring states, Rhode Island would be able to continue onto their path of growth and expansion.

Sports betting is expected to rise in popularity, having both of the state’s casinos see revenue increase through 2024.

For Twin River, revenues are now expected to reach $9.9 million in FY2020. With a 20% increase over the five-year span, Christiansen Capital Advisors, LLC believes that Twin River could see sports betting revenue reach nearly $12 million in FY 2024.

Though less popular, Tiverton Casino would also see sports wagering revenue increase, as the $1.8 million projected in FY2020 could become $2.2 million in FY2024. These projections only account for on-site wagering, as the remote, or mobile betting, outlook is included separately.

Through the online platform, mobile betting in Rhode Island is now expected to reach $19.6 million in revenue from its first year of launch, all the way up to nearly $50 million by FY2024. Gaining about 5% of revenue year after year, the first full-year projection, in FY2021, is set to hit $43.1 million.

Scenario B is nearly identical to the first, as the sports wagering numbers are not influenced. Instead, this outlook only expects the total gaming revenue to be affected, as this scenario does not allow for sports betting in the Taunton casino.

Total gaming revenue would be expected to hit a large drop off in the middle of FY2021 when the Taunton Casino is slated to open. This would be a direct hit to the Rhode Island gaming industry due to its near 20-mile proximity to the two state’s casinos.

Scenario C Revenue Projections

This model assumes the worst for the state of Rhode Island and with good reason. Assuming both Connecticut and Massachusetts move forward with sports betting legalization, something that is already in the works, then Rhode Island would see a decrease in action.

Coming from a variety of factors such as oversaturation, neighboring citizens no longer needing to use a RI sportsbook, or even just the desire to switch up locations, revenue numbers are expected to decline steadily.

Instead of moving from $10 to $12 million for Twin River, the sportsbook is expected to remain under making $10 million a year all the way through FY2024. In Tiverton’s case, there is slated to be no growth for the sportsbook, taking in no more than $1.8 million from FY2020 and beyond. Mobile betting will not be affected according to the projections, even though the report adds in mobile betting for Massachusetts as well.

The total gaming revenue may be the biggest indicator of the new projections, as the expansion of the casino market in New England would only hinder the smallest state’s fortune.

Instead of moving from $709.5m (FY2020) through $746.3m (FY2022) to $751.6m (FY2024), Rhode Island could see their gaming industry take a $100m hit. With the added sportsbooks in the area, Scenario C lays out the path of hitting $709m (FY2020) and slightly increasing in FY2021, only to take the plunge to $685m (FY2022) with the opening of the other markets.

By FY2024, Rhode Island total gaming revenue could be as low as $661.3m, making a huge impact on the budget for the state.

While no revenue projection is perfect, it is vital for states to review these models to set realistic expectations. In Rhode Island’s case, their hope is that they can remain the only state in the area that is offering legal sports betting; however, we know this is unlikely to be true.

Instead, Rhode Island will have to make adjustments and find a different revenue source for their state, should the projected decline become a reality in the next 5 years.

News tags: Rhode Island | Rhode Island sports betting | RI revenue