SBA Urges Rhode Island Lawmakers to Create a Competitive iGaming Market
LISTEN TO THIS ARTICLE:The Sports Betting Alliance (SBA), a coalition of top gambling and entertainment companies, has urged Rhode Island lawmakers to create a competitive online gambling market.
The SBA's call to action came during a recent hearing on Senate Bill 948 (SB 948), which proposes the legalization of online gambling for eligible customers located in the state, effective from January 1, 2024.
The SBA, which includes industry leaders like FanDuel, Fanatics, DraftKings, and BetMGM, recommended that lawmakers in Rhode Island consider amending the proposed legislation to create a more competitive iGaming market.
During the hearing, Jon Mandel, an attorney with Orrick, Herrington & Sutcliffe and national public policy counsel to the SBA, presented data supporting the creation of a competitive market in Rhode Island.
Mandel cited two primary reasons why a competitive iGaming market is needed. Firstly, healthy competition, with multiple operators, can deliver more tax proceeds to the state. Secondly, a competitive iGaming market can provide multiple options for online gambling for residents, which is expected to reduce the share of consumers engaging in iGaming activities via illegal operators.
Mandel highlighted that a competitive iGaming market could help Rhode Island reach its full potential and support important public initiatives. It could provide 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.
Supporting each of these statements, Mandel cited data from a 2022 study by Light & Wonder, which predicted that Rhode Island could collect around $24 million in tax after its first year of legal online gambling if a 20% tax rate is set. The same study also acknowledged that Delaware, where there is an iGaming monopoly, "materially underperforms other iGaming states from a revenue perspective."
Moreover, healthy competition with multiple online gambling operators "is critical to pull users from the rampant illegal, offshore market," said Mandel. Customers that have a chance to select different legal iGaming operators enjoy benefits, as licensed and legal gambling operators adhere to regulations, pay taxes, and provide responsible gambling options, unlike illegal gambling operators.
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