Rhode Island might be facing some serious issues when it comes to making money from legal sports gambling.
Neighboring Massachusetts could take away a ton of money that could have come through Rhode Island. In fact, Rhode Island state adviser Christiensen Capital Advisors told the Newport Daily News on Tuesday that a new possible casino built by the Mashpee Wampanoag tribe in Taunton, Massachusetts, would take away an estimated $37 million a year from the state of Rhode Island’s gambling revenue.
The Newport Daily News story indicated that a new study predicted a massive shortfall for Rhode Island’s gambling revenue – less than 25% of the total which Gov. Gina Raimondo’s budget had projected for 2019.
A clear warning from Christiensen Capital Advisors points out the risk to Rhode Island’s gambling revenue. That all stems from the Mashpee Wampanoag casino, which would be about 15 miles from the Rhode Island border. The potential move would be a huge issue for Rhode Island.
The first estimate for the sports gambling revenue for Rhode Island did not involve Christiensen Capital Advisors this past summer. The estimate projected that the state would make about $23.5 million in sports gambling this year. Raimondo’s administration put the projections at $11.5 million in January.
Now, the projection from Christiensen Capital Advisors sits at just $2.65 million in sports betting revenue by the end of the budget year on June 30, per a report released by the Department of Revenue last Friday.
Rhode Island’s sports gambling market has mainly come from the online realm. The state looks to get the online sports betting options up and ready for August when NFL preseason football is in full force.
According to an Associated Press story, the Super Bowl was costly for Rhode Island sportsbooks.
The nearby Patriots not only won another championship but covered the spread in their victory over the Rams. Rhode Island sportsbooks lost $2.35 million on that game.
But March Madness proved to be a huge moneymaker for Rhode Island as the $1.5 million revenue marked the state’s best month so far. After expenses, Rhode Island will receive 51 percent in tax.
The only positive currently for Rhode Island moving forward is the fact that both Massachusetts and Connecticut have yet to officially open up sports gambling. In fact, Connecticut Gov. Ned Lamont has admitted that his state is out of the running for 2019.
The Mashpee casino in Taunton might not even launch until 2021 so Rhode Island has a headstart. Christiensen Capital Advisors projects Rhode Island to take in $27.3 million in 2020, $26.8 million in 2021, $28 million in 2022 and $29.3 million in 2023.
“Our models indicate that a casino in Taunton will have meaningful deleterious effects on Rhode Island gaming revenue and State of Rhode Island revenue derived from gaming,” Christiensen Capital Advisors told the Newport Daily News. “Sports wagering in Massachusetts and Connecticut will add to these woes but given that the impacts will primarily be on on-site sports wagering and that sports wagering is projected to be a comparatively small revenue source, the overall impacts are not that large.”
But for now, the sportsbooks in Rhode Island can breathe a sigh of relief especially with the online sports gambling market thriving.