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Summary:
- Massachusetts recorded its second-highest net profit in September.
- The result caused Rhode Island’s Lottery transfer to the General Fund to drop 1.8% compared to 2023 while table games revenue fell 4.1% over the last fiscal year.
- Rhode Island’s video lottery sales also dropped 1.8%, causing the market to shrink almost 24.2%.
A recent report from the Rhode Island Office of the Auditor General has revealed that the Rhode Island Lottery transferred $426.4 million to the General Fund for the fiscal year ending June 30, 2024.
This figure reflected a decrease of $8.2 million, or 1.8%, compared to fiscal year 2023.
The report, released just days after Massachusetts announced a record net profit for its state lottery, attributed the decline to increased competition from neighboring states Connecticut and Massachusetts.
“The Rhode Island Market Has Gotten Smaller”
Patrick Kelly, a professor of accountancy at Providence College who studies gambling, stated in an interview.
In the overall scheme of things, that’s not a large percentage. But long term, it shows that the Rhode Island market has gotten smaller
This contraction is particularly evident in the Rhode Island‘s sportsbook, which generated $458.8 million in total revenue for fiscal 2024, down from $509.5 million in the previous year.
Of the total for fiscal year 2024, only $19.2 million reached the general fund.
The rise in competition from Massachusetts and Connecticut was anticipated after Rhode Island became the first New England state to legalize sports wagering in 2018.
Kelly noted,
If you’re the first to market, you’re going to benefit for a while until the other states decide if they’re going to match you. Everybody is trying to gain an advantage and get tax revenue.
Connecticut, which legalized sports betting in 2021, reported $177.2 million in gross revenue last year, while Massachusetts, which launched online sports betting in March 2023, generated $506.7 million from September 2022 through June 30, 2024.
With increased competition, Rhode Island will be challenged to maintain this important revenue source
Kelly cautioned, adding that once a market is matched by a competitor one, more of the revenue will come out of the pockets of the affected market’s residents.
In response, state leaders passed legislation in 2023 allowing bets on Rhode Island’s collegiate teams in certain tournaments. Senate President Dominick Ruggerio, who has been active in expanding the sportsbook, remarked that he will
continue to work collaboratively to position Rhode Island as strongly as possible in the highly competitive gaming market
The Impact of Sports Performance, Economy, and Traffic Issues
Another factor contributing to the decline in sportsbook revenue may be the performance of professional New England sports teams like the Red Sox and Patriots.
During the Tom Brady era, the Pats were doing well and people were betting on football in the region
Kelly explained.
As for physical gaming, the Auditor General’s report noted a decline in revenue from table games (down 4.1%) and video lottery sales (down 1.8%).
Director Marc Furcolo cited a combination of economic factors and “issues with traffic” affecting slot machine revenue.
In response to the revenue challenges, officials at Bally’s Corp. attributed a monthly loss of $500,000 at its Lincoln casino to decreased traffic from the ongoing closure of the westbound Washington Bridge.
To attract patrons, state leaders doubled the maximum line of credit that Bally’s can offer customers, raising it from $50,000 to $100,000.
Furcolo noted that the introduction of online gambling also impacted revenue, stating,
It’s too soon to tell whether iGaming is a significant component of the recent VLT performance.
Since launching in March, iGaming has generated a net profit of $3.6 million for Rhode Island’s general fund.
Kelly predicts that iGaming will continue to take a larger share of revenue from physical casinos as it gains traction.
