Rhode Island quietly became the seventh state with legal online casino gambling. On June 20, Gov. Dan McKee signed the iGaming bill into law. SB948 permits online slots and table games to launch as early as March 1.
The only evidence that “Little Rhody” added legal online casino gambling on Tuesday showed up on the Rhode Island General Assembly site today. Perhaps because the Ocean State’s online gambling “marketplace” will be a monopoly, there was no fanfare.
None of McKee’s tweets or press releases touted the bill becoming law. Most of the press releases, tweets, and official acts related to him legalizing Juneteenth as a state holiday.
By contrast, North Carolina’s governor held a signing ceremony on June 14 for that state’s new sports betting law.
Meanwhile, HB6348/SB948 names Bally’s Corporation (Bally’s Corporation 14,94 -3,98%) and London-based International Game Technology (IGT) (International Game Technology PLC 31,09 -1,89%) as the providers of the new online casino gambling site. Both are the backend of Sportsbook Rhode Island, which is the Rhode Island Lottery’s sports betting product.
The State Lottery Division of the Department of Revenue will serve as the Rhode Island online casino gambling site’s regulator.
Rhode Island joins these states that have been offering iGaming for years:
- Nevada (online poker only)
- New Jersey
- West Virginia
Bally’s Will Pay a High Tax Rate
The new online casino law specifies a 61% tax rate on slots and 15.5% on table games. That’s one of the highest tax rates on slots in the country.
Delaware’s 62.5% tax rate on online casino and poker has Rhode Island beat, though.
Pennsylvania’s tax rate on slots, 54%, is unusual in that the Keystone State’s online gambling marketplace is far from a monopoly.
Similarly, New York sportsbooks paying a 51% tax rate is notable. At the moment, Ohio’s tax rate is 10%. Most legal sports betting states fall somewhere in between.
Nonetheless, the Rhode Island Department of Revenue (RIDOR) will need to recalculate the estimated gross gaming revenue (GGR) for the new law. RIDOR had provided calculations before lawmakers changed the online casino bill. The department’s study provided totals based on a 51% tax rate on slots and 18% on table games. RIDOR concluded online casino gambling GGR would be $69.3 million during the site’s first year.
One aspect of the law that remains, despite many changes to the bill, is table games include roulette, blackjack, Big Six, craps, poker, baccarat, and paigow.
The Bigger Legal Online Casino Gambling Picture
If there’s a discussion about legal online casino gambling, Howard Glaser is likely to be there. The global head of government affairs and legislative counsel at Light and Wonder (LNW) weighed in on Rhode Island five days ago.
On June 16, Glaser posted on LinkedIn:
RI Goes Mobile Casino: Why it’s Important
Rhode Island is on the verge of becoming the 7th state to adopt online casino gaming. RI would be among the smallest states to adopt iGaming – the state itself estimates a first year market of $70M. By contrast, Michigan/NJ/PA are generating over $100M a month – each. And the RI model is a single operator state, granting an effective monopoly to Bally’s. Yet RI’s adoption of iGaming is nonetheless important for 3 reasons:
Glaser says the Rhode Island law constitutes “Momentum!”
While he mentioned that the Ocean State is the only new online casino state this year, Bonus notes that the last online casino marketplace to launch was on Oct. 19, 2021. That was Connecticut.
So Rhode Island is the first movement for legal online casino launches in two years.
For Reason 2, Glaser says:
Size doesn’t matter.
What will matter for Rhode Island is the “success proportionate to their size,” he wrote.
Indeed, Alex Weldon‘s rundown for Bonus of iGaming revenue figures from each legal online casino state proved Glaser right.
Yesterday, Weldon reported:
Connecticut is now the fastest-growing online casino market in the US, reaching a 57% annual growth rate in May. Until now, West Virginia has been the state known for its small population but explosive iGaming growth rate.
Reason 3 for Glaser’s synopsis of the bigger picture about the measure introduced on April 27 by state Sen. Dominick J. Ruggerio, D-North Providence, is a Realtor’s dream.
Location does matter. Neighboring states move toward adoption when they see the state next door adopt iGaming and capture online casino revenue. PA followed NJ, RI followed CT. This augers well for northeast/mid Atlantic expansion in the next couple of years.
He did caution that states might not want to emulate Rhode Island’s tax rates, though.