Rhode Island Legislature Passes Bill for Online Sports Betting

Although the state already allows sports betting inside two Twin River casinos in Lincoln and Tiverton, the bill would make betting online legal with a few caveats.

First, any bettors looking to place wagers online would have to sign up for the online service at either of the Twin River Casinos.

The second requirement is that the bettor can only place bets on the app when they are inside the state boundaries of Rhode Island.

Will there be legal challenges once the bill becomes a law?

Although the bill, introduced by Democrats, is expected to be signed by Governor Gina Raimondo, Republicans are suggesting they may file lawsuits to stop the law.

“I support this type of gaming. I don’t support moving ahead when there are substantial questions about its legality,” said Republican House minority leader Rep. Blake Filippi. “I think we should be asking for an advisory opinion from the Rhode Island Supreme Court before we build our budget around it and invest in the technology.”

Democrats have argued that by not passing this bill, residents will find alternatives in neighboring states to place wagers causing the state to lose much-needed revenue.

According to the Providence Journal, what potentially stands in the way of the online sports betting bill from becoming law is that the Rhode Island constitution requires voter approval for any betting expansion.

Both Twin Rivers Casino and the online site, DraftKings, have offered legal opinions that voters have already approved sports gambling expansion bills in both 2012 and 2016. They argue that this latest bill fits under the umbrella of those approved referendums.

Republicans disagree.

“There’s no way in the world that the citizens of our state, when they approved the referendums several years ago, saw this coming down the line,” said Republican Rep. Jack Lyle.

Why is Rhode Island expanding to online sports betting?

There is a simple answer to why the legislature is pushing for broadening the state’s sports betting and that is more revenue.

The bill raced through both houses of legislature due in part because the state believes that online gaming will add roughly $3 million to create an expected $30 million in total sports betting revenue for the 2019 fiscal budget.

But the state’s forecast may come up woefully short to actual net revenue figures. Right now, the state receives 51% of all the casino’s winnings on sports betting. This taxation figure is the highest right now in the United States.

Twin River’s two casinos are currently bringing in less than $1 million per month in net revenue. So each casino is giving the state less than $500,000 per month, a total that brings the state’s take to around just $12 million per year in taxes.

With the state seeing a projected shortfall in revenue and neighboring states providing stiff competition for gamblers, Rhode Island’s legislators quickly pulled the trigger on a bill that will make online sports gambling far easier for residents.