Rhode Island’s Special Legislation & Veterans Affairs Committee last week voted to send S. 37, which would authorize online sport betting, to the full Senate for a vote where it passed. Under the bill, bettors would be able to make wagers using an app on their phone.
The bill is moving briskly, although some critics worry about that a requirement for in-person registration could put a damper on the activity as it is being introduced in the state. Nevada has a similar requirement, but new players in sports betting, such as New Jersey and Pennsylvania, don’t. The bill also taxes wagers at the same rate as a brick and mortar casino. It requires mobile operators to be based at one of the two Rhode Island casinos.
Identical bills were introduced in the Senate by Senate President Dominick Ruggerio and in the House by Speaker Nicholas Mattiello. The House has yet to schedule a hearing.
Rhode Island is the only New England state that offers sports betting. It was introduced at both the Tiverton and Twin River casinos shortly after Thanksgiving. Lawmakers who hope sports betting will be a tax windfall for the state fret that requiring people to register in person will take a chunk out of that money. They fear that some would rather place bets at offshore locations rather than drive to a casino.
That’s the position of DraftKings, whose spokesman Sarah Koch told reporters, “Requiring in-person registration is a barrier to people,” Koch testified. “If you make people go to the physical place to register, they just aren’t going to do it.”
Another requirement that might have the same effect is one that forces bettors to show up in person to cash in large bets.
Craig Eaton, senior vice president, general counsel and secretary for the Twin River Management Group which owns both casinos, argued for the need of such requirements: the necessity of fight money laundering, which requires being able to positively identify people carrying out transactions.
Some legislators also want to give another look at the tax structure in which 51 percent goes to the state, 32 percent to the operator and 17 percent to the host casino. This may not be practical, they say, for mobile platforms.
Koch agrees. “We think that mobile is a different beast,” she said. “With mobile, the operator has to advertise … and more revenue goes back into the product. The 32 percent (to operators) would make it very difficult for an operator to make a profit.”
The state lottery has said it can probably get mobile sports book operating in about six months, once it is approved.
