Here’s how much Massachusetts and Connecticut sports betting is squeezing Rhode Island • Rhode Island Current

Massachusetts ended September announcing the second highest net profit in its state lottery’s 52-year history. The Bay State’s win is apparently the Ocean State’s loss.

A new report by the Rhode Island Office of the Auditor General shows that the Rhode Island Lottery transferred $426.4 million to the General Fund in the fiscal year ending June 30, 2024 — down $8.2 million or 1.8% compared to fiscal 2023. 

The Auditor General’s annual report, released three days after Massachusetts’ record announcement, cites increased competition from neighboring states as the reason for the decline. 

“In the overall scheme of things, that’s not a large percentage,” Patrick Kelly, a professor of accountancy at Providence College who studies gambling, said in an interview Friday. “But long term, it shows that the Rhode Island market has gotten smaller.”

That is especially true of Rhode Island’s sportsbook, which generated $458.8 million in total revenue for fiscal 2024. In the fiscal year ending June 30, 2023, sports betting brought in $509.5 million in revenue.

Of the $458.8 million total from fiscal 2024, $19.2 million was transferred to the state’s general fund.

Increased competition from Massachusetts and Connecticut was expected after Rhode Island became the first New England state to legalize sports wagering in 2018, Kelly said.

“If you’re the first to market, you’re going to benefit for a while until the other states decide if they’re going to match you,” Kelly said. “Everybody is trying to gain an advantage and get tax revenue.”

Connecticut, which legalized sports betting in 2021, saw $177.2 million in gross revenue over the last fiscal year. Massachusetts launched online sports betting in March 2023, which generated $506.7 million in revenue from September of last year through June 30, 2024.

The Massachusetts Gaming Commission did not archive its data from the prior months.

“With increased competition, Rhode Island will be challenged to maintain this important revenue source,” Kelly said. “And the problem is once you get matched, more of the revenue is going to come out of the pockets of your residents.”

And state leaders have tried to maintain the market, passing legislation in 2023 that would allow bets on Rhode Island’s collegiate teams when they are participating in tournaments consisting of four or more teams.

Senate President Dominick Ruggerio, a North Providence Democrat who spearheaded the sportsbook expansion, said Monday he will “continue to work collaboratively to position Rhode Island as strongly as possible in the highly competitive gaming market.” 

“Rhode Island was among the first states to launch sports wagering, and it is not surprising that the launch of sports betting in Massachusetts would impact revenues in our state,” he said in a statement.

Another possibility for the state’s sportsbook revenue decrease might stem from the current state of professional New England sports teams — namely the Red Sox and Patriots.

“During the Tom Brady era, the Pats were doing well and people were betting on football in the region,” Kelly said. “And Rhode Island, which instituted sports betting near the tail end of that, was a beneficiary.”

Fewer trips to physical casinos

The only year-over-year increase noted in the Auditor General’s report was a 1.4% jump from the online drawing games like Keno, Powerball and Mega Millions. That was attributed “mostly due to increased wagering on larger jackpot prize drawings,”including three $1 billion Powerball jackpots.

No winners were in Rhode Island.

All physical gaming, meanwhile, was on the decline. The Auditor General’s report notes the state’s share of table games revenue fell 4.1% over the last fiscal year. Video lottery sales decreased 1.8%.

Speaking before the General Assembly’s Joint Committee on State Lottery on Sept. 23,  Director Marc Furcolo attributed declining slot machine revenue to a combination of factors such as the economy and “issues with traffic.”

In the overall scheme of things, that’s not a large percentage. But long term, it shows that the Rhode Island market has gotten smaller.

– Patrick Kelly, a professor of accountancy at Providence College who studies gambling

Officials at Bally’s Corp. during the company’s July 31 quarterly earnings call blamed the ongoing closure of the westbound Washington Bridge for a half a million dollars in lost revenue every month due to decreased traffic at its Lincoln casino.

To try and attract patrons to Bally’s Twin River Lincoln and Bally’s Tiverton Casino & Hotel, state leaders passed legislation that doubled the maximum line of credit Bally’s can offer its customers from $50,000 to $100,000. Connecticut and Massachusetts have no credit caps in their casinos.

Furcolo said the introduction of online gambling earlier in the year also played a role in declining revenue in Lincoln and Tiverton, but he clarified in a statement Monday that “it’s too soon to tell whether iGaming is a significant component of the recent VLT performance.”

iGaming has been relatively modest since it launched in March, providing a net profit of $3.6 million to Rhode Island’s general fund at the end of the fiscal year. Since July, virtual gambling has generated $5.6 million in net gaming revenue, according to data submitted to the Rhode Island Lottery (though how much of that will go into state coffers hinges on how much is doled out through commissions, payouts and marketing expenses).

Before it was passed, online gambling was expected to bring in $160 million in extra tax revenue for Rhode Island over the first five years, according to a 2023 report by Christiansen Capital Advisors, LLC — a consultant hired by the Rhode Island Department of Revenue.

Bally’s spokesperson Patti Doyle declined to say if those numbers have changed.

“With only five months of data in hand it’s really too soon to comment on yearly projections,” Doyle said in an emailed statement Monday.

Kelly said he expects iGaming to take even more bites out of physical casino revenue as time goes on.

If you or somebody you know is dealing with gambling issues, contact Problem Gambling Services, which can be reached 24/7 at (401) 499-2472.

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