Bill Inspired By Industry Market Study
The Senate bill was introduced shortly after the release of a Spectrum Gaming study on the market. The lottery-funded report suggested that adding four to six more operators would help grow the market and maintain its competitiveness with other regional operators. While the bill initially called for the creation of more licenses, it was amended during committee reviews.
The lottery has announced it will request more information from Spectrum Gaming over potential expansion next year.
IGT Contract Created Opposition
While the Senate overwhelmingly passed the bill, several key House lawmakers had concerns over Rhode Island’s contract with IGT. Rhode Island signed a deal allowing the operator to be the exclusive sportsbook until late 2026. Any expansion before then would be a violation of the agreement, which could result in an expensive and damaging legal battle.
Speaker K. Joseph Shekarchi has been vocal about this issue, believing the effort was a waste of time as long as the contract with IGT remains in place. However, he has been open to exploring the proposal next year. This would allow for more debate, as well as additional information from Spectrum Gaming.
Bill Omits Tax Change
With the IGT contract allowing for possible expansion next year, there are other issues that Senate and House lawmakers will need to agree on. That includes the state’s tax rate for sports betting operators, which is an industry-high 51%.
SB 748 noticeably omitted any changes to this rate, which some worry could scare off operators. However, the rate is the same as that of fellow northeastern markets in New York and New Hampshire. While Rhode Island doesn’t have the revenue numbers of the Empire State, the market has outperformed all expectations.
Tax rates have been a significant source of tension between states and operators over the last year, and we expect that to play a role when expansion is considered again in 2026.
