American Gaming Association Says Rhode Island Misused Sports Betting Data
Posted on: April 19, 2019, 09:07h.
Last updated on: April 19, 2019, 09:09h.
The American Gaming Association (AGA) says Rhode Island Governor Gina Raimondo (D)and state politicians misused statistics on sports betting in order to legalize the gambling activity.
The gaming industry lobbying group in DC said the state misunderstood a study on sports betting, and that’s why Rhode Island sportsbooks are underperforming by 90 percent. The shortfall has created a budget gap of around $40 million in unrealized taxes.
Our research presented several possible combinations of tax rates and sports betting availability. Under the scenario closest to what Rhode Island implemented, we estimated that Rhode Island would generate $6.4 million in sports betting gaming tax revenue, $17.1 million less than the state projected,” AGA Media Relations Director Caroline Ponseti told GoLocal news.
Sports betting went live last November at the state’s two casinos – Tiverton and Twin River, which are both owned by Twin River Worldwide Holdings. William Hill and IGT are the sports betting partners.
In addition to its two Rhode Island casinos, Twin River owns and operates the Hard Rock Hotel & Casino in Biloxi, Mississippi, and Dover Downs Hotel & Casino in Delaware.
Rhode Island’s two sportsbooks were crushed during February’s Super Bowl between the New England Patriots and Los Angeles Rams.
With the state the only legal sports betting market in New England, bettors flocked to Twin River and Tiverton to put money on their beloved Pats. The team’s 13-3 win over the Rams cost oddsmakers severely.
The sportsbooks reported losses of $890,000 on the big game. For the entire month, gamblers placed $20.7 million in bets, and won nearly $21.6 million.
Rhode Island politicians expected to receive $11.5 million in taxes between November and the end of its fiscal year on June 30. Through March, the state has only received about $150,000 in revenue. Along with estimates for the next budget year, and Rhode Island is facing a $40 million budget shortcoming stemming from sports betting.
AGA researcher David Foreman says its estimates for the state were based on a mature market, which is “three to five years,” not “the first four months of operation.”
Ponseti added that its calculations were “based on a fully stabilized market, a tax rate of 15 percent (Rhode Island’s is about 50 percent), and a legal framework that does not include any ‘unusual restrictions’ (like Rhode Island’s prohibition on in-state college sports bets). All of these factors point to expected 2019 sports betting tax revenue of well below even our modest and reasonable projections.”
Last month, Raimondo signed off on allowing Rhode Islanders to place sports bets via the internet so long as they’re within the state’s borders. That should help grow handle and subsequent revenue. In New Jersey, about 80 percent of sports wagers are made through mobile channels.
March is also looking better for Rhode Island sportsbooks due to the NCAA men’s basketball college tournament – aka March Madness. Duke was the heavy favorite, but lost in the Elite Eight.
“With the NCAA basketball tournament in full swing, I anticipate that March numbers will be much better,” Democratic Senate President Dominick Ruggerio said.
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