Rhode Island Senate Bill 3118 Proposes Ending the State’s Sports Betting Monopoly
Introduction of Senate Bill 3118
Rhode Island is considering major changes to its sports betting industry with the introduction of Senate Bill 3118. Proposed by Democratic Senators Frank Ciccone, John Burke, and Stefano Famiglietti, this legislation aims to expand both online and retail sports betting by allowing multiple operators to enter the market.
Breaking the Monopoly on Sports Betting
Currently, Rhode Island’s sports betting market is dominated by a single licensed entity operating under an exclusive agreement between the Rhode Island Lottery and International Game Technology. This exclusive arrangement restricts competition and limits consumer options.
The new bill plans to open the market to between four and six licensed sportsbooks, ending the exclusive position held by the existing operator. Instead of fixed licensing fees, the Rhode Island Lottery would implement a competitive bidding process to select qualified operators, aiming to boost market diversity and growth.
This move is seen as a significant step forward in the state’s efforts to diversify its online sports betting offerings, responding to growing interest from major operators eager to enter the market if the law changes.
Regulation and Licensing Oversight
The Rhode Island Lottery would retain regulatory authority over sports betting, overseeing the selection and licensing of operators. Applications for licenses would be assessed based on operational capabilities, past compliance, technical standards, and the ability to maximize state revenue.
Despite this expansion, operators would likely still need to partner with existing land-based casinos to participate in the market. Rhode Island currently has two licensed casinos, Bally’s Lincoln Casino Resort and Bally’s Tiverton Casino & Hotel, and the bill does not propose issuing new casino licenses.
Changes to the Tax Structure on Sports Betting
One of the most notable features of Senate Bill 3118 is its proposal to significantly alter Rhode Island’s sports betting tax system, which currently imposes one of the highest tax rates in the country. Online sports betting revenue is presently taxed at 51%, severely limiting operator revenue share.
Under the new legislation, after the state meets its revenue targets for fiscal year 2025, the tax rate on sports betting revenue would be drastically reduced from 51% to 12%. This adjustment would increase the operators’ share of revenue from 49% to 79.5%, while the portion allocated to casinos would decrease from 17% to 8.5%.
Next Steps for Senate Bill 3118
The bill is currently progressing through the legislative process, having been referred to the Senate Labour and Gaming Committee with a public hearing planned for May 20. Should the bill pass, the Rhode Island Lottery will be required to initiate an open application process for sportsbook vendor contracts by January 1, 2027, paving the way for a more competitive and expansive sports betting market in the state.
