Rhode Island Legalises Sports Betting, First Bets in October
The repeal of the federal ban imposed back in 1992 finally allowed the states to decide themselves whether to offer sports betting within their borders or not.
High Fees Could Be a Problem
Rhode Island Governor Gina Raimondo gave the green light for the state’s budget on June 22, effectively paving the way for sports betting to be made legal in the Ocean State.
According to the first estimates, the state coffers will certainly benefit from such a move, with millions of dollars in additional revenue, while interesting sides could be discouraged by high fees. Namely, the state has imposed a 51% tax on all winnings, which is the highest rate in the entire United States.
And while New Jersey and Delaware introduced a tax of around 10%, Rhode Island will take more than half of the overall net revenue in fees. Commenting on the decision to implement such high fees, the Rhode Island Senate President Dominic Ruggerio said the high fees – pushed for by himself and Lawmakers – would assist in funding schools and roads, without the need to increase taxes.
Pennsylvania Made the Same Mistakes
On the other hand, Pennsylvania is still struggling with its high fees. The Keystone State was among the first to seriously consider making sports betting legal, approving a bill late last year, long before the ruling of the Supreme Court. Thanks to this move, Pennsylvania had no legal obstacles to start accepting the wagers once the federal ban was lifted.
However, unlike Delaware, New Jersey or even Nevada, lawmakers in Harrisburg decided to impose a 36% fee on all winnings. This, and a $10 million sports betting license fee has discouraged a lot of operators from entering the state’s market.
The head start they had, didn’t help them, and in the meantime the neighbouring New Jersey opened its market, attracting a lot of potential customers.
And while the state’s legal framework has been deeded perfectly structured, the high fees continue to pose a serious threat to any further market expansion. There are those suggesting Pennsylvania needs to lower its fees, but little has been done to actually do something like that.
The Time Will Tell
This could easily be the scenario waiting for Rhode Island since the proposed fees will chase away operators from promoting and marketing sports betting.
IGT was the only one to accept a bid to facilitate sports betting within the state borders. The gaming company has been present in Rhode Island for some time now, running the lottery.
No other competing bids mean Rhode Island is already at a competitive disadvantage, not to mention the fact that wagering can only take place at two casinos – in Lincoln and Tiverton, both owned by Twin Rivers.
One thing is certain, though: Rhode Island will start accepting sports bets on October 1, 2018.
- Reuters: https://www.reuters.com/article/us-usa-betting-rhode-island/rhode-island-legalizes-sports-betting-gets-51-percent-of-revenues-idUSKBN1JI2TQ
- Legal Gambling and the Law: https://www.legalgamblingandthelaw.com/news/rhode-island-becomes-third-state-to-legalize-sports-betting/
- Legal Sports Report: https://www.legalsportsreport.com/21359/rhode-island-sports-betting-senate-vote/