Rhode Island Sports Betting Could Expand, but Legal Hurdles Complicate Process
In its Request for Information (RFI) inquiry, the Rhode Island Lottery received eight submissions from eligible sports wagering service providers who may be interested in making investments in the state if the market grows.
There is presently only one sports betting option available to Rhode Islanders: Sportsbook Rhode Island. The online and in-person sportsbook is powered by IGT, the Rhode Island Lottery's partner that provides services for its lottery games and video lottery terminals (VLTs) at the two casinos in the state.
The lottery's sports betting business's operating contract with IGT expires on November 25, 2026. Spectrum Gaming was engaged by the Lottery earlier this year to investigate the potential effects of growing the sports betting sector on revenue and the state's benefit.
In order to ascertain "what alternatives there are to the current B2B provider, as well as any B2C providers that may be interested in the current single-provider model," Spectrum suggested that an RFI be carried out before the end of 2025.
Growth Is Hard
According to the Rhode Island Constitution, the state-run lottery must be used for all types of gaming. Therefore, the lottery was given operational and regulatory authority and control over all facets of sports betting by Rhode Island's 2018 sports betting statute.
According to IGT's agreement with the state to serve as the exclusive provider of sportsbooks, the state must get 51% of sports betting's gross revenue, or the money the book makes from wagerers. The two VLT casinos in the state, Bally's Twin River Lincoln and Bally's Tiverton, are run by Bally's, which receives 17% of the proceeds from sports betting. The remaining 32% is kept by IGT.
Additionally, Tiverton and Lincoln's local governments receive $200K a year for operating the only two physical sportsbooks in the state on their grounds.
In addition to IGT and Bally's, DraftKings, FanDuel, Fanatics, BetMGM, Kambi, and OpenBet were among the organizations that answered the lottery's request for information. Their opinions have not been disclosed.
However, Spectrum notes that a number of issues might prevent those sportsbook interests from becoming interested. According to the gaming consultancy, legislative adjustments are probably required if Rhode Island wants to open its sports betting industry.
"Spectrum would recommend Rhode Island pursue a strategy to reduce its effective tax rate to approximately 20% to 35%, reduce the host fee payment to Bally’s over a multi-year period to reduce friction with the incumbent, and enact an annual flat-fee license renewal for market participants,” Spectrum recommended.
Another obstacle is that sports betting, which is a type of Class III casino gambling, is only permitted to take place inside of a land-based casino due to the Rhode Island Constitution. As long as "all servers initiating and receiving online sports wagers be physically located within" the Bally's casinos, internet sports betting was permitted.
The fact that anyone 18 years of age and older is permitted to wager on sports in Rhode Island is one factor that attracts potential incomers. Connecticut and Massachusetts, two nearby states, have a 21-year-old minimum age.
The State That Is Smallest
Rhode Island has the same 51% tax on gross sports betting revenue as New Hampshire and New York, which is the highest in the US. Rhode Island has fewer than 1.2 million inhabitants, yet large bookmakers are willing to split more than half of their winnings with New York because the city is home to over 20 million people.
During the fiscal year 2025, New York sportsbooks made over $2.1 billion in gross income from $24 billion in wagers. The only sportsbook in Rhode Island took $473 million in bets and kept less than $37.8 million.
