At the end of September, Massachusetts announced the second-highest net profit in the state lottery’s 52-year history. Bay State’s victory is clearly Ocean State’s loss.
The Rhode Island Lottery transferred $426.4 million to the general fund in the fiscal year ending June 30, 2024, compared to $8.2 million in fiscal year 2023, according to a new report from the Rhode Island Comptroller’s Office. dollar or 1.8%.
The Comptroller General’s annual report, released three days after Massachusetts’ records were released, cited increased competition from neighboring states as the reason for the decline.
“In the grand scheme of things, it’s not a huge percentage,” Patrick Kelly, an accounting professor at Providence College who studies gambling, said in an interview Friday. “But over the long term, we see a smaller market in Rhode Island.”
This is especially true for Rhode Island’s sportsbooks, which had total revenue of $458.8 million in fiscal year 2024. For the fiscal year ended June 30, 2023, sports betting generated revenue of $509.5 million.
Of the $458.8 million total starting in fiscal year 2024, $19.2 million was transferred to the state’s general fund.
Kelly said that after Rhode Island became the first New England state to legalize sports betting in 2018, increased competition from Massachusetts and Connecticut was expected.
“If you’re the first to go to market, you’ll be able to make money for a while until other states decide whether to take on you,” Kelly said. “Everyone is trying to make a profit and get tax revenue.”
Connecticut, which legalized sports betting in 2021, recorded total revenue of $177.2 million in the last fiscal year. Massachusetts launched online sports betting in March 2023 and generated $506.7 million in revenue from September of last year to June 30, 2024.
The Massachusetts Gaming Commission did not archive data for the past several months.
(Source: Rhode Island Lottery/Fiscal year ending June 30, 2024)
“Increased competition will challenge Rhode Island to maintain this important source of revenue,” Kelly said. “And the problem is, once the match is made, more revenue comes out of residents’ pockets.”
And state leaders sought to maintain the market, passing a bill in 2023 that would allow betting on Rhode Island college teams when they participate in tournaments with four or more teams.
“We continue to work together to position Rhode Island as strongly as possible in the competitive gaming market,” Senate President Dominic Ruggerio, a North Providence Democrat who spearheaded the sportsbook expansion, said Monday.
“Rhode Island was one of the first states to launch sports betting, so it’s no surprise that the launch of sports betting in Massachusetts would impact the state’s revenue,” he said in a statement. .
Another possibility for the state’s sportsbook revenue decline could be due to the current state of New England’s professional sports teams, namely the Red Sox and Patriots.
“During the Tom Brady era, the Pats were doing well and people were betting on football in the area,” Kelly said. “And Rhode Island, which introduced sports betting in that last phase, benefited.”
Empty slot machine rows at Bally’s Twin River Lincoln Casino in April 2023 (Christopher Shea/Rhode Island Current) Travel to physical casinos reduced
The only year-on-year increase noted in the Auditor General’s report was a 1.4% increase in online drawing games such as Keno, Powerball and Mega Millions. The increase was “primarily due to increased wagering on larger jackpot prize drawings, including three $1 billion Powerball jackpots.”
Rhode Island had no winners.
Meanwhile, all physical games were on the decline. The state’s share of table game revenue decreased by 4.1% from the previous year, according to the Comptroller General’s report. Video lottery sales fell 1.8%.
Speaking before the General Assembly’s Joint Committee on State Lotteries on Sept. 23, Director Mark Furcolo said the decline in slot machine revenue is due to a combination of factors, including economics and “traffic issues.”
In terms of the overall composition, it’s not a big proportion. However, over the long term, we see Rhode Island’s market shrinking.
– Patrick Kelly, Providence College Accounting Professor, Researches Gambling
During a July 31 quarterly earnings call, Bally’s officials blamed the continued closure of the westbound Washington Bridge for $500,000 in lost monthly revenue due to decreased foot traffic at Lincoln Casino. he claimed.
Patrick Kelly, professor of accounting at Providence College; (Photo provided)
In an effort to attract customers to Bally’s Twin River Lincoln and Bally’s Tiverton Casino and Hotel, state leaders are doubling the maximum credit line Bally’s can offer customers from $50,000 to $100,000. passed the bill. Casinos in Connecticut and Massachusetts do not have credit limits.
Mr Furcolo said the introduction of online gambling earlier this year also contributed to the decline in revenue for the cities of Lincoln and Tiverton, but in a statement on Monday he said: “iGaming has been a key factor in recent VLT performance. It is too early to tell whether there is.”
iGaming has had relatively modest results since its founding in March, ending the year with $3.6 million in net profits to Rhode Island’s general fund. Since July, virtual gambling has generated $5.6 million in net gaming revenue, according to data submitted to the Rhode Island Lottery. ).
Before passing, online gambling cost Rhode Island $160 million in its first five years, according to a 2023 report from Christiansen Capital Advisors LLC, a consultant hired by the Rhode Island Department of Revenue. was expected to bring in additional tax revenue.
Bally spokeswoman Patty Doyle declined to say whether those numbers have changed.
“With only five months of data available, it is premature to comment on full-year projections,” Doyle said in an emailed statement Monday.
Kelly said he expects iGaming to further take away revenue from physical casinos over time.
If you or someone you know is dealing with a gambling problem, please contact Problem Gambling Services 24/7 at (401) 499-2472.
Get your morning headlines.
Subscribe
