Rhode Island’s two casinos and the state government that gets more than 50 percent of their revenue heaved a collective sigh of relief last week after a superior court judge dismissed a challenge to the legality of sports betting in the Ocean State.
The decision came the day after the state lottery launched a sports betting app that’s expected to truly supercharge sportsbooks in the only New England state that currently offers it. New Hampshire will begin offering sports betting next year.
The judge disallowed GOP activist Daniel Harrop’s lawsuit challenging the law, ruling that he lacked standing to sue. Harrop had argued that the state was required to seek voter approval before offering sports betting almost a year ago.
The state and the casinos made this argument about Harrop’s status: “Can an individual who has waited over (a) year since legislation commencing sports wagering passed, asserts no particularized injury-in-fact (as distinguished from every other Rhode Island voter), and does not reside in either town where sports wagering is hosted, have standing to challenge what he describes as constitutional claims on behalf of all Rhode Island voters? This question must be answered in the negative.”
Judge Brian Stern agreed with lawyers for the state lottery and Twin River Casino, which operates casinos in Tiverton and Lincoln. His ruling didn’t address the constitutional question of whether the state is legally able to offer sports betting without a statewide vote. The legislature approved of sports betting in June 2018 and the first bets were taken the day after Thanksgiving 2018.
Harrop, who ran for mayor of Providence several years ago, says he isn’t finished with his challenge. His attorney will look for someone who does have standing to challenge the law, such as someone who has lost money betting on sports.
The launch of the mobile sports book app just as the NFL season began came with a nervous eye towards the pending lawsuit. But otherwise there was no indication that the state was anything other than full-speed ahead. This included a media blitz on TV, print and billboards. The new lottery website includes a tutorial entitled “Betting 101” that instructs the novice on how to place wagers.
Lottery spokesman Paul Grimaldi commented, “It is an important milestone for the lottery. We are starting before the National Football League season as promised.” He added, “We know this is something people want, and we expect it to be a popular option.”
Since Rhode Island has a current monopoly on sports betting in the region, it should be able to cash in on the sports fanaticism of neighboring Massachusetts, home of the multi-Super Bowl champions, the New England Patriots, not to mention the Boston Red Sox.
It’s generally conceded that sportsbooks by app are far more popular and lucrative than an in-person process that requires bettors to make the trip to the town of Tiverton, which sits on the Massachusetts-Rhode Island state line, or to Lincoln. They must make an initial trip to one of those casinos to sign up and create an account—which requires showing a photo ID.
Using the app, bettors can make straight bets, parlays, futures bets, round robin bets, etc. They can bet on professional and college teams, excepting college teams based in Rhode Island, or college games taking place in the state. Betting must be made within the state lines.
The lottery ensures this by using geo-fencing technology that’s supposed to tell whether someone placing a bet is inside or outside of Rhode Island. The fact that the Tiverton casino is just a few hundred feet away from the state line has created some problems for this system, especially if customers are within 220 yards of the state line.
Despite the sports betting app, both casinos have gone to considerable trouble to create a welcoming place where bettors can relax, watch the games and make wagers. Joe Franklin, Twin River casino, Rhode Island, regional executive director of cage operations, notes that the Sportsbook Bar and Grill has 100 TVs that surround the betting tables and that there is a wall of betting windows.
To prevent long lines from forming, Twin River has added more staff for the NFL season, Franklin said.
The lottery operates the sports book with technology provided by International Game Technology (IGT). William Hill supports the day-to-day operation.
The two casinos are hoping that sports betting will let them recapture some of the revenues siphoned away by the June opening of the $2.6 billion Encore Boston Harbor. Twin River claims this caused a 34 percent decline in table game profits in July.
The state’s sports betting program had a rocky start last year and did not generate nearly the amount that was anticipated. It took in less than half of the initial $23 million that Governor Gina Raimondo had baked into her 2019 budget.
This year the lottery’s projections have caused the state to budget $22.7 million. Next year the state anticipates collecting $26.3 million in taxes, $20.7 million from online wagers.
Since last November’s launch, $136 million has been wagered and $128 million was paid out. The state collected 51 percent of the $7.7 million profit after expenses. IGT gets 32 percent and the casinos get 17 percent.
Meanwhile, the town of Tiverton has taken a move to make its casino, which opened a year ago, more competitive by making a pilot of 24-hour operation permanent. The action was taken after a hearing where no one objected.
Mark Russo, attorney for the Tiverton casino, told council members that the license was needed to remain competitive. The casino offers slots and table games. It added sports betting last December.
The 24/7 license is still subject to annual review and hearings could be triggered if there are violations of its terms.
Tiverton is guaranteed at least $3 million annually from gaming revenue, plus property taxes and taxes on food and beverages. The amount paid to the city has increased each quarter since the casino opened.
Raimondo’s controversial 20-year extension deal with IGT, which she recently forwarded to the legislature for approval, is being subjected to more than the usual scrutiny since the governor was the subject of an ethics complaint brought by the state Republican party and after considerable criticism from Twin River Worldwide Holdings. She signed the deal with IGT in August.
IGT operates the lottery and provides slots machines for the two casinos; the casino operator complains that IGT was awarded the contract without a competitive bid process. IGT provides about 85 percent of the slots for the two casinos, which have complained that some machines are not operating at peak efficiency and produce less revenue.
Senate President Dominick Ruggerio and House Speaker Nicholas Mattiello asked for and received documents they requested from the governor, amounting to more than 1,300 pages.
Mattiello claimed last week that the state lost money when the lottery did not order the removal of 360 underperforming IGT slot machines. He claimed that lottery’s relationship with IGT is “too incestuous,” and that an investigation is called for.
