Rhode Island Sports Betting Market Could Expand, but Legal Hurdles Complicate Process
Rhode Island Sports Betting Market Could Expand, but Legal Hurdles Complicate Process
Rhode Island’s sports betting landscape is on the cusp of potential expansion, although numerous barriers remain. The Rhode Island Lottery oversees all gambling activities in the state, including sports wagering.
- Recent Developments: The Rhode Island Lottery has received eight submissions in response to its Request for Information (RFI) from qualified sports wagering service providers, potentially interested in investing in the state’s betting market.
- Current Situation: Presently, the only sports betting option available to Rhode Islanders is Sportsbook Rhode Island, powered by IGT, the Lottery’s partner responsible for lottery games and video lottery terminals at the state’s two casinos.
IGT’s operational contract for the Rhode Island Lottery’s sports betting segment is set to expire on November 25, 2026. Earlier this year, the Lottery enlisted Spectrum Gaming to investigate the implications of a potential sports betting expansion on state revenue and benefits.
Spectrum Gaming has advised conducting an RFI before the end of 2025 to explore alternatives to the current B2B provider and gauge interest from any B2C providers interested in Rhode Island’s existing single-provider model.
Challenges to Expansion
The Rhode Island Constitution mandates that all forms of gambling be managed through the state-run Lottery. Rhode Island’s 2018 sports betting legislation specifically empowers the Lottery to oversee all operational and regulatory aspects of the betting industry.
According to the IGT agreement, 51% of the gross revenue from sports betting is allocated to the state. Bally’s, which runs the two VLT casinos—Bally’s Twin River Lincoln and Bally’s Tiverton—receives 17% of sports betting profits, while IGT retains the remaining 32%.
Additionally, the towns of Tiverton and Lincoln benefit from an annual payment of $200,000 for hosting the physical sportsbooks within the Bally’s facilities.
The Lottery’s RFI responses include major entities like DraftKings, FanDuel, Fanatics, BetMGM, Kambi, and OpenBet; however, their feedback is yet to be disclosed. Spectrum raises concerns that could dissuade interest from these sportsbook operators. Legislative changes could be necessary to facilitate market entry.
Spectrum suggests that Rhode Island consider reducing its effective tax rate to about 20% to 35%, minimize the multi-year host fee payments to Bally’s, and implement a flat-fee annual license renewal for participants.
Another major obstacle is the legal stipulation that all Class III casino gambling, including sports betting, can only occur within land-based casinos. Although online betting has been sanctioned, it mandates that all servers handling online wagers be located physically within Bally’s casinos.
A significant advantage for prospective participants is that Rhode Island permits individuals aged 18 and older to place sports bets. In contrast, both Massachusetts and Connecticut impose a minimum betting age of 21.
The Smallest State Faces Big Taxation
Rhode Island’s 51% tax on gross sports betting revenue aligns it with New York and New Hampshire for the highest in the nation. Major sportsbooks are willing to share their profits due to New York’s large population of about 20 million, whereas Rhode Island’s population is under 1.2 million.
During the 2025 fiscal year, New York’s sportsbooks processed $24 billion in bets, generating over $2.1 billion in gross revenue. In contrast, Rhode Island’s sole sportsbook accepted $473 million in bets, retaining less than $37.8 million.
Summary
The Rhode Island sports betting market is ripe for expansion, but it must navigate through complex legal challenges and taxation policies. With the Rhode Island Lottery actively soliciting feedback from various sports wagering firms, the state may soon determine its path forward in the sports betting arena. By addressing legislative hurdles, Rhode Island could enhance its position in the competitive landscape of sports gambling.
