Rhode Island Gambling Business Struggles Amid Falling Profits

Rhode Island’s online gambling market is struggling and seeing a decline in revenue. The market is run by Gamesys, the online division of Bally’s, and has experienced a consistent decrease in the amount wagered month after month and year after year. In August, sports betting revenue dropped to $1.4 million, a significant decrease compared to the same period last year.

There are several factors contributing to this decline. Firstly, Bally’s monopoly on land-based casinos extends to online gambling, limiting competition and stifling innovation in the market. This lack of competition has negatively affected the market’s performance. Additionally, the high tax rate of 50% on online slot revenue has discouraged potential operators from entering the market.

Gamesys, the exclusive operator in the state, operates under various brands such as Virgin Casino, Tropicana Casino, and Rainbow Riches Casino. Despite their efforts to attract players, the revenue generated from online slots has fallen significantly short of expectations, being 18.8% lower than the previous year.

Rhode Island recently legalized iGaming in hopes of boosting revenue and diversifying online gambling options. However, the revenue generated so far has been disappointing, with a decline of 44.1% compared to the same period last year. It seems that legalizing iGaming alone is not enough to revive the struggling market.

In addition to online gambling, the state also allows sports betting. In August, the total amount wagered for sports betting reached $22.5 million. However, the revenue generated from sports betting was also lower than expected, with a decline of 19.4% compared to the previous year. Mobile betting accounted for $1.2 million of the total revenue, indicating the growing popularity of on-the-go betting.

Despite the challenges faced by the online gambling market, the retail market has performed slightly better. Rhode Island’s retail sportsbooks generated $4.8 million in consumer spending, while the revenue from the retail market reached $144,099. However, even these figures were not enough to offset the overall decline in revenue.

To address some of the challenges faced by the online gambling market, Governor Dan McKee signed Senate Bill 948 into law on June 22. The bill includes provisions to diversify the market and reduce the tax burden on operators. However, it is unclear whether these changes will be effective in reversing the current situation.

Rhode Island’s overall revenue for the year to date is $3.3 million, including revenue from both online gambling and sports betting. However, this represents a decline of 26.3% compared to July 2021 and a significant drop of 53.3% compared to August 2022.

The decline in revenue has also affected the state’s land-based casinos. For example, Tiverton Casino reported a loss of $90,550, while Twin River’s revenue dropped to $234,649, which was 18.8% lower than the previous year.

Although the state’s tax rate on table games is 18%, which may seem relatively lower compared to the 50% tax on online slots, it still poses a burden on operators and may contribute to the decline in revenue.