Rhode Island Market Is Shrinking Under Neighboring States’ Pressure
According to a report from the Rhode Island Office of the Auditor General, the Rhode Island Lottery transferred $426.4 million to the state’s General Fund for the fiscal year ending June 30, 2024.
This represents a drop of 1.8% or $8.2 million, compared to the previous fiscal year.
The report attributed Rhode Island’s decline to increased competition from neighboring states, particularly Connecticut and Massachusetts.
Last month, the Massachusetts Gaming Commission chair, Jordan Maynard, advocated for the implementation of Multi-Factor Authentication as a means of boosting the security of online sports betting accounts.
Record Net Profit in September for Massachusetts
The report was released shortly after Massachusetts announced the second-highest net profit in its state lottery’s 52-year history.
According to Providence College’s professor of accountancy Patrick Kelly, who studies gambling, Rhode Island’s market “has gotten smaller.”
While the 1.8% decrease might not seem significant at first glance, Kelly highlighted that it could indicate a long-term contraction of the state’s gambling market.
This decline is especially pronounced in Rhode Island’s sportsbook, which generated $458.8 million in revenue for fiscal year 2024, down from $509.5 million the previous year.
Of that total, only $19.2 million was transferred to the General Fund.
Nearby States Catching Up
Kelly further highlighted that, as the first US state in New England to legalize sports betting in 2018, the Ocean State enjoyed the initial perks but soon after started to deal with the issue of neighboring states gradually catching up.
Connecticut, which made sports betting legal in 2021, and Massachusetts, which introduced online sports betting in March 2023, are Rhode Island’s primary competitors.
By the end of fiscal year 2024, Connecticut’s sports betting grossed $177.2 million whereas Massachusetts reported $506.7 million in revenue from September of last year through June 30, 2024.
Rhode Island Looking for Solutions
As Rhode Island faces growing competition, state leaders have sought ways to bolster their position.
In 2023, legislation allowing bets on the state’s college sports in certain tournaments was passed.
Senate president Dominick Ruggerio, a vocal advocate for sportsbook expansion, pledged to continue working to strengthen Rhode Island’s presence in the increasingly competitive gaming market.
Sports team performance also played a role in the decline of sportsbook revenue. Kelly pointed out that when the New England Patriots were dominant during the Tom Brady era, betting on football surged in the region.
Now, with the team’s struggles, there has been a drop-off in sports betting.
Dropping Table Games Revenue and Video Lottery Sales
Other segments of Rhode Island’s gaming industry also saw decreases. The Auditor General’s report noted a 4.1% decline in revenue from table games and a 1.8% dip in video lottery sales.
State Lottery director Marc Furcolo argued that several economic factors along with continuous traffic problems have contributed to the downturn, with special emphasis on the closure of the westbound Washington Bridge, which has hurt traffic to Bally’s Lincoln casino.
In response, the state doubled Bally’s maximum line of credit from $50,000 to $100,000 in an effort to attract more high-stakes players.
Finally, the rise of online gambling has further complicated the landscape. Since its launch in March, iGaming has generated $3.6 million in net profit for the General Fund.
Furcolo indicated that it’s still too early to assess the full impact of iGaming on traditional casino revenue.
However, Kelly predicted that as iGaming continues to grow, it will likely take a larger share of the revenue from brick-and-mortar gaming venues.
