Rhode Island is one of the few markets with only one online sports betting operator. But that might change soon.
Several other companies have reached out to the Rhode Island Lottery with hopes of launching in the state.
In June, state legislators began exploring the idea of opening up the market to other operators. Sportsbook RI from International Game Technology remains the only legal platform in The Ocean State. The original law legalizing sports betting in 2019 allowed for just a single operator.
However, the shortcoming of having a single sportsbook recently came to light. Sportsbook RI experienced an outage for a little over an hour on Sept. 7, the first Sunday of the NFL season. As a result, many Rhode Island sports bettors couldn’t place wagers.
Senate Looking To Expand Market Options
The Rhode Island Lottery reported that eight companies reached out with interest in doing business in the state. This comes as lawmakers sought ways to increase sports betting tax revenue.
The state senate approved a bill in June that would allow for a more open market. SB 748 would end the agreement with IGT when the contract expires next year and allow the state lottery to accept bids for up to five different operators.
The Senate passed the plan by a 30-2 margin. DraftKings has been a major supporter of the plan, and company officials believe a more open market would be better for the state and its bettors.
“The bill would allow Rhode Island residents to play on their favorite apps, while increasing tax revenue,” DraftKings officials said during a committee testimony. “A marketplace with multiple choices for players leads to a better player experience – operators are forced to innovate, while competing for business.”
Tax Rates Could Be Hurdle
Rhode Island is one of only four states with a lone online sports betting option. They join Florida, New Hampshire, and Oregon.
IGT was the only company allowed to submit a bid in 2019. According to a Providence Journal, IGT officials said the state would have to cut tax rates to bring other companies into the market.
Unsurprisingly, IGT opposes the bill, and company officials said that opening the market doesn’t guarantee additional revenue. The state has the highest sports betting tax rate in the country, levying 51% on revenue along with a 17% “host facility” fee that goes to Bally’s Corp.
Bally’s owns the state’s two casinos and hosts IGT’s servers. The law requires sports betting operators to house servers in a Rhode Island casino. That doesn’t leave a lot of room for profit for companies potentially looking to service Rhode Islanders.
Spectrum gaming release a report commissioned by the lottery this year that offered suggestions for a more open market. The report recommended reducing the tax rate to 30% and the Bally’s hosting fee.
