Rhode Island Sports Betting Revenue Insights

According to the Rhode Island Lottery’s financial reports, the State’s sports betting market has shown steady growth since its launch in 2018, with notable fluctuations in both handle and revenue.

2018–2023 Overview

In its first year, Rhode Island had a sports betting handle of $13.77 million and sports betting revenue of $1.03 million, reflecting its initial retail-only market. Following the introduction of online sports betting in 2019, the handle went up to $245.81 million, with Rhode Island sports betting revenue reaching $17.81 million, marking a significant expansion in market engagement.

By 2021, the Rhode Island handle had more than doubled to $454.46 million, generating $38.75 million in sports betting revenue. The market peaked in 2022, with a handle of $532.61 million and sports betting revenue of $49.3 million, supported by a strong performance during the NFL season games and March Madness gambling. However, last year in 2023 saw a slight decline, with the handle dropping to $461.28 million and gross revenue to $40.28 million, largely due to reduced betting activity during slower sports months with no games.

January–September 2024

The year began strongly in January 2024, with a handle of $44.81 million and sports betting revenue of $5 million due to the NFL playoff games and the Super Bowl. Despite a slight dip in February to $38.76 million, sports betting revenue in Rhode Island remained healthy at $2.89 million, maintaining a hold of 7.45%.

Spring and summer brought steady, albeit lower, activity, with handles averaging between $33 million and $44 million. The lowest handle was recorded in July 2024 at $24.85 million, with Rhode Island sports betting revenue of $2.72 million. This seasonal dip is expected during a period with fewer major sports events.

By September 2024, the market rebounded, driven by the start of the NFL games and college football games. The handle rose to $43.6 million, with Rhode Island sports betting revenue reaching a peak of $5.27 million and a hold percentage of 12.09%, the year's highest monthly sports betting revenue.

Tax Contributions

From January to September 2024, Rhode Island collected over $15.1 million in tax revenue, with September contributing the highest amount of $2.69 million. The state’s 51% tax rate ensures that a substantial portion of sports betting revenue is directed toward the general fund, supporting essential public programs and addressing problem gambling initiatives.

A 51% tax rate is imposed on RI sports betting revenue, one of the highest in the United States. This tax applies to net revenue generated from retail and online sports betting operations in the state, with significant contributions coming from the state-run Sportsbook Rhode Island app and retail sportsbooks at Twin River Casino and Bally’s Tiverton Casino.

By statute, the Rhode Island Lottery transfers all sports betting tax revenue to the State General Fund, which supports critical public services that benefit all Rhode Island residents. The fund is allocated toward:

• Tax Relief: Easing the tax burden for residents through statewide programs.
• Education: Financing public schools, improving infrastructure, and enhancing educational programs.
• Public Safety and Law Enforcement: Supporting police, fire departments, and emergency response services.
• Human Services: Providing resources for healthcare, social services, and assistance for vulnerable populations.

Additionally, the Rhode Island Legislature is responsible for appropriating money from the General Fund among the state’s 39 cities and towns, ensuring equitable distribution of resources to address local needs. (Rhode Island Lottery, 2024)

A portion of the revenue is also directed to programs addressing problem gambling and funding initiatives on prevention, education, and treatment for people affected by gambling addiction.

This allocation of sports betting tax revenue shows Rhode Island’s commitment to leveraging its sports betting industry to enhance public services and support its communities. The system generates significant funds and ensures these resources benefit the state’s residents directly.

Rhode Island's sports betting market has experienced consistent growth since its inception in 2018. However, the state's relatively small population presents inherent limitations on market expansion. Rhode Island, once a leading player in the New England sports betting market, is experiencing a decline in revenue due to increasing competition from all neighboring states like Connecticut and Massachusetts. Sportsbook revenues dropped from $509.5 million in fiscal 2023 to $458.8 million in fiscal 2024, reflecting the challenges of maintaining regional dominance. Rhode Island sits among As more states legalize sports betting, Rhode Island must adapt by exploring innovative strategies to attract both local and out-of-state bettors and sustain its revenue streams. (SCCG Management, 2024)

Challenges

• Population Constraints: With a smaller population, there are challenges in generating sports betting revenue comparable to larger states. This limits the total addressable market for both bettors and operators. (SCCG Management, 2024)
• Regional Competition: All states neighboring Rhode Island have legal sports betting, including New York, New Jersey, Philadelphia, Massachusetts, and New Hampshire, which dwarf Rhode Island sports betting revenue. With many more sports betting options and the potential for more attractive odds and even promotions, very little travel between borders could draw bettors away from Rhode Island's market.
• High Tax Rate: Rhode Island’s 51% tax rate on sports betting revenue, among the highest in the U.S., may deter new operators from entering the market. This limits competition and innovation, potentially capping growth.

Opportunities

• Tax Policy Reforms: Adjusting the 51% tax rate could incentivize additional sportsbooks to enter Rhode Island, increasing competition and providing bettors with more options.
• Cross-State Collaboration: Developing regional betting pools or agreements with neighboring states could position Rhode Island as a leader in cross-state betting, leveraging its central New England location.