Rhode Island Rights Sports Betting Revenue Ship With Online Still To Come

• Rhode Island sports betting returned to profitability in March.
• New projections suggest that RI’s tax revenue budget is not far off the mark.
• Rhode Island expects to generate $30 million from sports wagering in FY 2019-2020.

PROVIDENCE, R.I. – Rhode Island Gov. Gina Raimondo (D) has been heavily criticized for her optimism in legalizing sports betting. So far, the state is falling well short of the industry’s tax revenue projections.

Upon legalization, Raimondo’s budget cited an expected first-year contribution of $11.5 million from the pastime.

However, in the first several months since Rhode Island’s two casinos started accepting sports wagers, the state netted a paltry $150,000 or so.

Critics pounced, calling sports betting in the state an ill-advised boondoggle. The gaming lobby “played” the state like a fiddle, they claimed.

One Republican-led Rhode Island lobby even says the state made a “reckless gamble” in approving sports wagering.

Supporters of Raimondo have called the criticisms unfair. The state’s original estimate was negatively affected by several unexpected factors.

The main factor was a delayed rollout that missed the brunt of the lucrative NFL season. Another factor was (and remains) the lack of online sports wagering platforms. Finally, new industries in new markets tend to experience growing pains.

For example, in February, Rhode Island’s pair of Twin River casinos lost nearly a million dollars thanks to the Super Bowl.

Of course, even more seasoned operators flubbed the odds on last season’s Super Bowl. New Jersey sportsbooks lost money in February, as did a number of Nevada books. Unlike standard casino games, sports betting always includes the potential for the house to lose money.

Nevertheless, Rhode Island’s revenues are creeping ever upwards.

Given March’s numbers, Rhode Island sports betting is finally tracking in line with original estimates.

Here’s how the state’s casino venues have fared since legalization late last year. The numbers show the tax revenue collected by the state for each month.

• November 2018: $72,997
• December 2018: $957,913
• January 2019: $159,978
• February 2019: -$890,623
• March 2019: $1,548,230

Clearly, Rhode Island books had a bad NFL playoffs, capped by a disastrous title game. But with that experience, they fared much better during the three-week March Madness tournament.

Raimondo’s 2019-2020 budget (which begins July 1) projects sports betting to generate $30 million in tax revenue.

If March’s numbers are not a fluke at a house take of 6.6 percent, that should be borderline achievable. Mix in online betting, which will likely launch sometime before the upcoming NFL season, and the goal isn’t even unreasonable.

News tags: Rhode Island | RI revenue | sports betting