Exclusive: SBA Urges Rhode Island Lawmakers to Create a Competitive iGaming Market

Introduced late in April, Senate Bill 948 (SB 948) calls for the legalization of online gambling, or iGaming, for eligible customers located in Rhode Island. The proposal, if greenlighted, calls to come into effect as of January 1, 2024.

During a Wednesday hearing on SB 948, the Sports Betting Alliance (SBA), a coalition consisting of leading gambling and entertainment companies, voiced support for the creation of a competitive online gambling market in the state, an exclusive statement reveals that was obtained GamblingNews. The group, which includes FanDuel, DraftKings, Fanatics and BetMGM, recommended lawmakers in Rhode Island consider changing the text of the proposed legislation to create a competitive iGaming market.

Jon Mandel, an attorney with Orrick, Herrington & Sutcliffe, a famous law firm that serves as national public policy counsel to the SBA, presented data that supports the creation of a competitive market in the state and the benefits such market can deliver. He explained that although SBA’s coalition members are competitors when it comes to different markets, all members “are aligned in working with policymakers and stakeholders to create safe and successful gaming markets through sound legislation and regulation.”

“We recommend the legislature amend Senate Bill 948 to allow for a competitive iGaming market for two main reasons,“

explained the Sports Betting Alliance during SB 948’s recent hearing

A Competitive Market Brings Benefits

According to Mandel, there are two main reasons why Rhode Island needs to establish a competitive iGaming market by amending the legislative text within SB 948. He outlined that healthy competition, which means having multiple operators, can deliver more tax proceeds.

At the same time, Mandel said that a competitive iGaming market in Rhode Island can provide plenty of different options for online gambling for the residents. This, in turn, is expected to reduce the share of consumers engaging in iGaming activities via illegal operators.

“Legalizing a framework with multiple operators will help Rhode Island reach its full potential and support important public initiatives by providing a safe and convenient way for consumers to engage in iGaming, deploying critical responsible gaming tools and generating significant tax revenue each year to the State.“

added the SBA

Supporting each of the statements, Mandel cited Light & Wonder data from a 2022 study that predicted the state can collect some $24 million in tax after its first year of legal online gambling, given a 20% tax rate is set. The same study acknowledged that Delaware, where there’s an iGaming monopoly, “materially underperforms other iGaming states from a revenue perspective.”

On the other hand, healthy competition with multiple online gambling operators “is critical to pull users from the rampant illegal, offshore market,” added Mandel. He explained that customers that have a chance to select different legal iGaming operators enjoy benefits. This is because licensed and legal gambling operators adhere to regulations, pay taxes and also provide responsible gambling options, things that certainly do not apply to the illegal gambling market.