Rhode Island Sports Betting Projections Cut in Half for Next Financial Year as Additional Threats Loom
Posted on: May 10, 2019, 06:20h.
Last updated on: May 10, 2019, 06:20h.
Rhode Island is facing a harsh reality that sports betting in the next fiscal year may likely only bring in half of the money that had been predicted.
In a new report, consulting firm Christiansen Capital Advisors warned the state’s Department of Revenue that Rhode Island’s amount for athletic wagering will be about $14.8 million compared to $30 million found in earlier projections.
State officials hope that by 2024 sports betting may reach levels that had been previously predicted. But for now, sports betting in Rhode Island is expected to bring in $2.65 million during the current fiscal year which ends on June 30.
The state had expected to make $11.5 million off sports betting this year. Shortfalls came after many gamblers correctly predicted the New England Patriots would win the Super Bowl.
We learned that our estimation for sports betting is achievable, though it will take longer than expected for the market to mature,” Paul Grimaldi, chief of Information and Public Relations for the state’s Department of Revenue, told Casino.org.
The consultant predicts revenue from sports betting will be $26.8 million in 2021, $28 million in 2022 and $29.3 million in 2023. The state gets 51 percent of venue revenue less expenses.
Yet, it is “premature” to see how the revised numbers would affect government budgets, Grimaldi said. He points out the state still expects to commence online sports betting statewide by the start of the upcoming NFL regular season.
But further concerns arise if new competition comes from other New England states.
One risk for Rhode Island is from a proposed Mashpee Wampanoag $1 billion casino in Taunton, Massachusetts. Another is if statewide sports betting is ever legalized in Connecticut or Massachusetts.
Competition’s Location Matters
The Taunton venue — tentatively called the First Light Resort and Casino — faces many hurdles with the most recent one being President Donald Trump tweeting his opposition to a federal bill that would reaffirm the status of the tribe’s reservation. But if HR 312, the Mashpee Wampanoag Tribe Reservation Reaffirmation Act, is eventually approved, Congress would help move forward the path for the troubled gaming venue.
If opened, the tribal venue could lead to $37 million a year less in total Rhode Island casino revenue, the consultant predicts. Hardest hit would be the Twin River Casino Hotel in Lincoln.
The casino is planned for 20 miles east of Providence, which is Rhode Island’s capital. That means competition for Ocean State casinos from a nearby venue.
Studies have shown the time it takes to drive to a casino “is by far the predominant determinant of … patronage,” the consultant said. “A casino in Taunton will have meaningful deleterious effects on Rhode Island gaming revenue and State of Rhode Island revenue derived from gaming.”
Sometimes, promotions, notable restaurants, musical offerings and other amenities can help attract more visitors to one casino versus another, especially if they are close to one another. As envisioned, the Taunton venue would feature a 150,000 square foot gaming area, some 3,000 slot machines, 150 house-banked table games, 40 poker tables and entertainment spaces.
Christiansen’s report also says impact from proposed legalized sports betting in Connecticut and Massachusetts would cut $1.3 million in Rhode Island revenue each year by 2024. At this point, both states’ legislatures are not expected to approve sports betting any time soon.
Lawsuit Threatens Sport Betting
Sports wagering in Rhode Island faces another challenge after a lawsuit was filed earlier this month. It attempts to immediately stop all legal forms of sports betting because the proposal was never presented to state voters before being enacted by politicians.
The complaint — prepared by prominent Republican attorneys — says the process to enact the law was unconstitutional. Instead, the suit seeks a statewide referendum so voters can weigh in before athletic wagering can proceed.
The reasoning found in the lawsuit was rejected by Josh Block, press secretary for Rhode Island Gov. Gina M. Raimondo, a Democrat.