Rhode Island’s sports betting has had a first year that was extremely profitable for bettors—much better than the industry average— which means it wasn’t so good for the state that runs the games.
In February, for example, it lost money, paying out $21.6 million in $20.7 million in wagers.
The major hit the state took in 2019 came when betters at Twin River Casino in Lincoln and Tiverton Casino were able to get good odds early on for the Super Bowl, where New Englanders bet heavily on the regional favorite, the Patriots, who won. If the Patriots had lost or the Los Angeles Rams had lost by a narrower margin, Rhode Island might have beat the national average. Instead, the state’s 4.18 percent hold rate was in the basement for the eight states that now allow sports book. Most of those states’ hold rates were higher than 9 percent last year.
The legislature legalized sports book last year, following very closely upon the U.S. Supreme Court’s lifting of the federal ban. It put William Hill and IGT in charge of the nuts and bolts of bookmaking. In March it approved mobile sports betting.
However, the first bets weren’t taken until the day after Thanksgiving, when half of the NFL season was over. This cut into the original projections that the state would take in $23.5 million for the first year. This estimate was rapidly ratcheted back and at this point no one expects those kinds of figures.
Likewise, most industry observers don’t expect the state to have as bad a second year. The House usually wins the sports betting long game, even if there is the occasional glitch, like the payout for the Super Bowl.
As Victor A. Matheson, a professor at Holy Cross who is an expert at sports gaming, told the Boston Globe, “Going after the people betting with their hearts rather than with their minds is going to be profitable in the long run.”
The state’s projection for the second year is $22.7 million. One very important factor that will be in play this next fiscal year is that mobile sports betting, generally considered to be the most profitable, is now available. In neighboring New Jersey, mobile sports betting accounts for 80 percent of the total profits.
Gaming is the third largest source of revenue in Rhode Island, and the Ocean State will take 51 percent of the profits from sports book. The rest goes to IGT and Twin River at 32 percent and 17 percent respectively.
A minor complication has the potential to knock all projections into the wastepaper basket: A former Republican candidate for mayor of Providence has challenged the state’s Democratic establishment by filing a lawsuit challenging the legality of the legislature’s action.
Dr. Daniel Harrop claims the state constitution required that such a measure go before the voters. Governor Gina Raimondo, and most ruling party leaders say the voters approved sports betting when they approved the legalization of table games in 2012.
