Rhode Island Becomes 7th U.S. State for Online Gambling – Mere Months from Inception to Passage

Gamblers Daily Digest -

Rhode Island has become the seventh state to legalize online gambling after Gov. Dan McKee signed off on Senate Bill 948 on Thursday, June 22, 2023. Lawmakers at the Senate and the House approved identical bills days earlier, essentially extending Bally’s brick-and-mortar casino license for Tiverton Casino & Hotel and Twin River Lincoln Casino Resort to cover iGaming.

The new law gives casino operator Bally’s the green light to offer virtual slots and table games, along with online poker. The company will likely operate online gambling through its digital arm Gamesys, which powers some of the biggest names like Tropicana Online Casino and Virgin Online Casino.

Bally’s first batch of gambling sites and mobile gaming apps are slated to go live in the Ocean State sometime in April 2024. RI was among the first few states to offer legal mobile sports betting in 2019 through its only operator, Sportsbook Rhode Island. 

The move makes Rhode Island the first state to approve an iGaming bill in 2023 and the seventh to do so since New Jersey kicked off the U.S. online gambling market in 2013. The country’s least populated state joins the league of Michigan, Delaware, West Virginia, Pennsylvania, and Connecticut.

iGaming bills approved during the activity-field last day of the 2023 session

Ocean State’s lawmakers approved on the last day of the 2023 legislative session to make Rhode Island the seventh in the nation to legalize an online gambling bill. Two mirror-identical bills were tabled in both the House and the Senate in mid-June.

After a highly heated debate, the Rhode Island House approved the two bills and, subsequently, made it the first state to green-light an iGaming law in 2023. There were loud objections and strong opposition to the measure, but several amendments proposed by opposers were ultimately quashed.

The first bill to hit the House floor was H6348-A proposed by Representative Gregory Costantino. It was debated for around two hours, with strong criticisms coming from left, right, and center.

At the end of the fiery discussions, the House approved the unamended bill on a 57-11 vote. The lawmakers also voted 56-11 to pass a mirror bill from the Senate (948), essentially putting Bally’s Corporation in full charge of the lucrative online gambling market in Rhode Island.

Soon after that, the unamended bill headed to the desk of Governor McKee, who signed it into law. The 72-year-old veteran politician and Cumberland native had the choice of vetoing the bill but he didn’t.

Multiple states, including New Hampshire, Iowa, Maryland, Indiana, and New York, proposed but failed to green-light iGaming bills so far this year.

The new legislation extends Bally’s casino monopoly to the state’s online gambling space

The iGaming law extends Bally’s current brick-and-mortar casino monopoly in the Ocean State to include online gambling. It gives the Providence-headquartered company — which already operates the state’s only two land-based casinos — exclusive rights to offer legal online poker, virtual slots, table games, and other iGaming products in Rhode Island for at least a decade.

In 2021, state legislators approved a 20-year no-bid contract for Bally’s to run the two Rhode Island casinos through 2043. The new law extends that contract to cover online gambling as well.

In February, reports surfaced that Bally’s helped write the bill that has now become law. The operator has confirmed this in a statement, saying they worked closely with lawmakers to develop a thoughtful, regulated approach.

Proponents argue that stability and long-term partnership will benefit the state in the long haul, while critics say it limits the state’s options and bargaining power over the full contract period. Heavy critics argue the move limits competition and innovation in the space.

Nonetheless, when Gov. McKee put pen to paper on the bill, Rhode Island joined an elite group of six other states that offer legal online casino gambling and poker betting. The state was among the nation’s first adopters of digital and brick-and-mortar sports betting, and it has long had land-based casinos. 

Nitty-gritty of the iGaming bills

The mirror iGaming bills, which have already been approved and signed into law, requires Bally’s to use live croupiers for table games, which are broadcast to the bettors through live video streaming on the mobile app. They define iGaming as any “casino style” games played with equipment, dice, or cards for credit, money, or any equivalent.

The new law establishes the Rhode Island Division of Lottery as the regulator who will oversee and regulate online gambling. The executive director has the authority to develop reasonable rules and regulations governing things like licensing, responsible gaming, and underage access restrictions.

The proposal not only establishes an online casino mobile app but also incorporates provisions for responsible gambling, such as a requirement that Bally’s put in place deposit limits and create a self-exclusion program.

Bettors must be at least 21 years old to participate in iGaming activities, but the legal age for all other forms of gaming in the Ocean State will remain 18. Geolocation technology will be used by Bally’s to ensure players are within Rhode Island borders, though some out-of-state play will be allowed under reciprocity agreements with other states like Delaware, Nevada, and New Jersey.

A massive revenue potential for Rhode Island

Online gambling is currently only legal in six other states: New Jersey, Pennsylvania, West Virginia, Michigan, Delaware, and Connecticut. Under the newly-signed iGaming law, revenue from virtual slots will be taxed at the rate of 61% while table games revenue faces a 15.5% tax. 

Many experts believe online casinos make more money than sports betting due to higher player spending and longer sessions. Rhode Island is hoping iGaming will be a lucrative addition.

RI online gambling is set to launch in April 2024. This will give Bally’s over a year to prepare its Gamesys online casino brands for the Rhode Island market. The company, which is among the top slot providers in other states like New Jersey, will need to tailor its offerings to Rhode Island customers and build brand awareness.

Wrap-up

As Rhode Island joins the club of states tapping into the lucrative online gambling market, its decision to extend Bally’s casino monopoly to iGaming has elicited plenty of opposition. Nonetheless, a 61% tax on online slots will certainly perk up the state’s coffers and help Ocean State compete with neighboring Connecticut and Massachusetts.

Author: Andrew Smith