Rhode Island House Approves Online Casino Bill So Changed, It Appears Coined Anew

A Rhode Island online casino bill got the green light in the state’s House of Representatives on June 15. The 57-11 vote showed up on the House’s light board with the approvals in green. That means the measure will become law if Gov. Daniel McKee signs it. From there, the marketplace may launch as soon as March 1, 2024.

Meanwhile, the online casino bill almost looks newly coined, after two rounds of changes left only the first four pages of the 20-page-long bill untouched.

HB6348/SB948 outlines one site to serve the state’s 1.1 million residents. Bally’s Corporation (Bally’s Corporation 10,68 -4,98%) and London-based International Game Technology (IGT) (International Game Technology PLC 26,64 -1,95%) would provide its backbone.

It’s unclear if the online casino site will bear Bally’s branding or be similar to Sportsbook Rhode Island. Bally’s is also the online gambling operator behind the Rhode Island Lottery’s sports betting product.

The State Lottery Division of the Department of Revenue will regulate the online casino gambling product serving bettors over 21.

Revenue projections need to be recalculated, as bill substitutions added by the House on Tuesday increase the tax rates on operators.

The online casino bill in the House, HB6348, now matches SB948. It came up for a vote this afternoon during what may be the final day of the House session.

Representatives Spoke Before the Votes

State Rep. David Morales, D-Providence, opposed HB6348. He said it needs more study.

Morales said:

This is being rushed.

State Rep. Teresa A. Tanzi, D-Narragansett, said:

For the state to come in and to sanction it is a problem.

Tanzi said residents are gambling on illegal offshore gambling sites, but that doesn’t mean Rhode Island lawmakers should sanction versions that are legal in other states.

She also asked:

Why does Bally’s get a monopoly on this?

Tanzi emphasized that problem gambling will be more difficult to hide than frequent trips to retail casinos.

She testified:

You also come home stinking like a cigarette.

That comment references Bally’s allowing smoking on the casino floor.

State Rep. Patricia A. Morgan, R-West Warwick, asked about responsible gambling. Specifically, she wanted to know if the app would prevent Rhode Islanders from “gambling away” their homes and IRAs.

Morgan received answers from state Rep. Scott A. Slater, D-Providence, about the app’s safeguards.

Objections continued.

State Rep. Brandon C. Potter, D-Cranston, said:

It is completely unvetted.

It only benefits Bally’s and hurts Rhode Islanders, he said.

Rhode Island Online Casino Bill Tax Rates

On April 27, state Sen. Dominick J. Ruggerio, D-North Providence, introduced SB948. The original version included a tax rate on the operator of 50% for online slots and 18% on table games. Table games include roulette, blackjack, Big Six, craps, poker, baccarat, and paigow.

The tax rate on the sportsbook is 51%. Other than New York’s 51% tax rate on sportsbook operators, higher tax rates tend to happen in jurisdictions where operators have a monopoly.

Meanwhile, the newest Rhode Island online casino bill version includes a 61% tax rate on slots and 15.5% on table games. One representative said tonight that she believes the 61% tax rate is the highest in the country.

That change the House proposed on Tuesday negates the findings of the Rhode Island Department of Revenue (RIDOR). That study found a 51% tax rate on slots and 18% on table games would yield $69.3 million in gross gaming revenue (GGR) during the online casino site’s first year.

Resolving Constitutionality?

On May 10, state Sen. Elaine J. Morgan, R-Ashaway, raised concerns about the online casino bill possibly violating the state constitution. She said it must go to the voters.

That’s a familiar concept to electors. In 2010, Rhode Island voters approved amending the constitution to allow expanded legal gambling.

In response to Morgan’s concern, the June 5 version of the online casino bill included a provision that live dealers will officiate table games on land at Bally’s.

Live dealer studios may emerge at:

  • Bally’s Twin River Lincoln
  • Bally’s Tiverton Casino and Hotel

Online gamblers must also sign up for iGaming accounts at the casinos in person.

By adding the live dealer requirement, lawmakers effectively removed the possibility of purely digital table games driven by random number generators (RNGs). Online slots can still use RNGs, as they operate on the same lines as their retail counterparts.

Bonus believes the inclusion of digital table games may have meant the online casino bill would have needed voter approval to change the state constitution. Voters approved table games and slots in a 2012 referendum. However, the logic appears to be that digital table games wouldn’t meet the definition of the in-person games that won that approval. Conversely, live dealer games streamed directly from the casino do.

Potter appears to disagree and introduced an amendment to add RNG table games back into the online casino bill. His amendment failed 51-14.

Online Casino Vendors Were Optimistic

While online gambling operators generally loathe predicting the outcome of an online casino bill, leaders at gambling vendors are less shy.

Howard Glaser, the global head of government affairs and legislative counsel at Light and Wonder (LNW), commented on LinkedIn a couple of days before the House vote.

Glaser posted:

Your RI iGaming update: The House Finance committee will hear the bill tomorrow. We expect approval there and then onto the House floor. If successful there, it could be sent to the Governor in short order. (This is the Senate version – procedurally the House version could be passed also and then to the Senate before going to the Governor). Bottom line: we see green lights ahead for RI igaming passage in the coming days as the legislature prepares for possible adjournment as early as this week. And shout out to IGT and RI’s Bally’s Corporation for pushing to get a new state opened to the iGaming experience. Industry growth is an objective shared by all!

House approvals come when representatives push green buttons, Bonus observed while watching votes. Disapprovals arrive through red buttons.

Another gambling industry thought leader watching Rhode Island commented yesterday on LinkedIn.

John Pappas is a senior vice president of government and public affairs at the geolocation firm GeoComply. 

The founder of Corridor Consulting wrote:

Rhode Island is now on deck to authorize iGaming, which means four laws passed in the unlikeliest years.

Pappas had also expressed pleasure regarding Kentucky, North Carolina, and Vermont approving legal online sports betting. He’d said 2023 had been an unlikely year for new legal online gambling laws because of “the media headwinds.”

That’s an allusion to November 2022 coverage by The New York Times that online gambling industry leaders called biased. Afterward, many lawmakers and regulators took a closer, often critical, look at the industry.

If the Rhode Island online casino bill becomes law and the marketplace launches on March 1, it will be the first US iGaming launch since Connecticut’s went live on Oct. 19, 2021.

In January 2023, BetMGM CEO Adam Greenblatt predicted no online casino bills would pass this year.

About the Author

Heather Fletcher

Heather Fletcher

Heather Fletcher is Lead Writer at Bonus, concentrating on online casino coverage. She specializes in breaking news, legislative coverage, and gambling marketing strategy overviews. To reach Heather with a news tip, email [email protected].
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