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RI Senate Passes Amended iGaming Bill

ri_senate_passes_amended-igaming_billLawmakers in the Rhode Island Senate passed a bill allowing the state to open one or more online casinos. The target opening date is January 1, 2024. Gaming would be regulated by the state lottery agency (RILOT) and game servers would be located in one or both of the state’s VLT (video lottery terminal) and table game casinos in Lincoln and Tiverton.

Final changes to the bill (S-0948 Sub. A), included the removal of digital casino games such as blackjack, roulette, craps, and baccarat and replacing them with live-dealer games only as well as a change in the state’s share of revenues from a proposed near the industry-high level of 50% of revenues for slots to 61% and a decrease on table game revenues take from 18% to 15.5%.

Age Raised to 21 for Table Games

Responsible gambling language was added and the minimum age to gamble at the online live dealer tables was raised from 18 to 21.

A few things make this story perhaps more interesting than it might be otherwise, although it is always news when a US state liberalizes online gambling.

Rhode Island is home to Bally’s Corp. and global casino and lottery giant International Game Technology (IGT), which has more than $4.2 Billion in annual revenue. It is also the smallest state in the US but the most densely populated. The two companies have entered into a partnership for the online casino(s) continuing an agreement to provide sportsbetting services and tech to the state.

In January this year, Bally’s Corp. announced it would cut 15% of its North American Interactive workforce and in February announced it had drafted and introduced legislation to authorize iGaming in RI.

While online casino measures have failed recently in Illinois, Indiana, New Hampshire, and New York, the one in Rhode Island appears on a track to success despite some questions of constitutionality from RILOT as well as potential competitors who were not happy with sports betting services being effectively restricted to s single provider choice.

The measure was approved in short order on a 30-4 vote Thursday, June 8, 2023. A Senate Special Legislation and Veterans Affairs Committee made changes to the original bill sent up from the House on Tuesday – those changes addressed perceived constitutional issues with the original measure.

One question revolved around a form of live dealer casino gaming that is conducted from a studio rather than directly from a live-action casino floor. Lottery representatives feared that the constitutional definition of “table games” which was used in a voter-approved referendum allowing tables at the state’s land-based casinos, could be violated. While top lawmakers disagreed with the assertion they felt that accommodating a simple language change would be worth the effort.

New language in the bill states: “(30) “Online table game” means a casino-style table game authorized by the Division within the scope of the term iGaming, where such, games are conducted by one or more live persons and made available to players through use of the Internet…”

The bill is now headed back to the House of Representatives for any further debate or final adjustments – barring any change in language it is expected to be passed and sent to the Governor for his signature. The RI House passed a budget bill (2023-H 5200Aaa) on Friday, June 9 with revenue numbers from the iGaming bill baked in. That bill is now set to go to the Senate, whose Finance Committee is expected to consider it Tuesday at 3 p.m.

More Cautious Revenue Estimates

If erring on revenue numbers, the newest bill allows lawmakers to err on the side of caution and uses a more conservative estimate of $162.6 million directed into state coffers during the first five years of online casino operations rather than the original $210 million estimate provided by Bally’s in the original proposal. That number game from an industry study and report done by Spectrum Gaming for IGT/Bally’s. Many lawmakers quietly doubted the number while relying on the more conservative estimate.

“This legislation provides an added convenience to Rhode Islanders who would like to play the existing table games offered at Twin River via their mobile devices,” said Senate Dominick J. Ruggiero, who introduced the bill to the chambers.

“It helps ensure the continued strength of the state facilities in the competitive regional gaming market, and in so doing protects an important revenue stream that provides funding for vital state programs and investments.”

This is an important consideration considering the political fallout surrounding the original sportsbetting legislation that relied on numbers provided by the American trade association and industry watchdog, the American Gaming Association (AGA). Former Governor Gina Raimondo’s administration caught political flak when the industry numbers didn’t shake out right away. However, the state lost several months of revenue during peak sportsbetting season due to lagging approvals and ongoing tussles over the pending legislation.

In that launch, the state was counting on $23 million in revenue during the first year of operations but missed September, October, and November – important football betting months, especially in a small state with a fiercely loyal fanbase for its “local team”, the New England Patriots. The state’s biggest month to date for sportsbetting revenue was $6,703,144 (circa $80m annualized) for Nov. ’21 and the state’s greatest handle of sports bets was $62,317,384 in Jan. ’23. There are two physical sports books in the state (Bally’s Lincoln and Bally’s Tiverton) and one mobile app operated by IGT/Will Hill and Bally’s casinos. Retail sportsbetting has been legal there since May 2018 and active since Sept. 4, 2019.

Source:

Senate passes iGaming bill, State of Rhode Island General Assembly News, June 9, 2023

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Kentucky House Passes Sports Betting Bill By Nearly 2-to-1 Margin

The Kentucky House passed a bill to legalize sports betting in the state early Monday evening.

Meredith
State Rep. Michael Meredith discusses House Bill 551, which would legalize sports betting in the state, on the House floor Monday. The bill passed by a nearly 2-to-1 margin and now heads to the Senate. (Image: Casino.org)

The 62-34 vote on House Bill 551 cleared the three-fifths majority supporters needed to get since the bill generates revenue and makes appropriations in a non-budget year.

The bill would allow Kentucky’s nine racetracks to offer retail sportsbooks at its tracks and simulcasting facilities. It also would allow tracks to partner with up to three mobile operators each.

Tracks would pay $500,000 for a license, with an annual renewal fee of $50,000. Operators would pay a $50,000 license fee and an annual renewal fee of $10,000.

Retail sports betting revenues would be taxed at 9.75% of adjusted gross revenues, while online operators would pay a 14.25% tax. The only deductions allowed would be for the .25% federal excise tax the federal government places on each wager.

It’s the second straight year the House has passed a bill. Once again, the bill now heads to the Senate, where last year’s bill died after failing to get a committee hearing or a floor vote before the session ended. This year, the bill will need 23 yes votes to pass in the 37-member Senate.

However, supporters are expressing optimism for this year’s bill, even as just five legislative days remain in the session.

State Rep. Michael Meredith, R-Oakland, the bill’s primary sponsor, believes they are about a couple of votes away from the 23 they need to pass the bill in the Senate this year.

Problem Gaming Fund Added to Bill

One reason for Meredith’s optimism is what was included in a House floor amendment Monday. That bill included a provision for a problem gaming fund, with that fund receiving 2.5% of the tax revenue generated annually.

That was explicitly added, Meredith said, because a couple of senators requested it.

Hopefully, that’ll shore up those (votes), and we’ll narrow it down,” Meredith told Casino.org after the bill’s passage.

The problem gaming fund was one that state Rep. Al Gentry had championed, D-Louisville, who has been the primary co-sponsor on sports betting legislation in the House.

Gentry had filed a bill earlier in the session that would have created a problem gaming fund that would have received money from all sectors of legal gaming in Kentucky. While this fund would only be covered by sports betting tax revenue, he told Casino.org he was still delighted to see it inserted.

Kentucky is one of a few states that does not have a problem gambling fund.

“I put a lot of work into pushing that for a few years now and glad to see it’s in there,” he said.

In addition, both Meredith and state Rep. Matt Koch, R-Paris, have talked about bringing up a more comprehensive problem gaming fund for next year’s session.

The problem gaming fund was the second significant positive change for the bill. Last week, the House Licensing, Occupations, and Administrative Regulations Committee approved a substitute bill that removed a 12-month, in-person licensing requirement for mobile account registrations.

While the House passed Meredith’s floor amendment, two others brought by a bill opponent failed.

State Rep. Josh Calloway, R-Irvington, sought to ban the use of credit cards for sports betting deposits and raise the minimum age to place a wager on a sporting event from 18 to 21. Both failed, with the age change falling by a 39-48 vote.

Calloway, after his amendments were defeated, said on the floor that he would not stop fighting for Kentuckians, especially against things that can “destroy people’s lives permanently.”

Time Running Out in Kentucky General Assembly

Supporters of the sports betting bill received good news last week when an advanced agenda for Tuesday’s Senate Licensing and Occupations Committee hearing included HB 551. However, Meredith said , after Monday’s vote, the committee may not take up his bill until possibly Wednesday. The Senate L&O Committee is also expected to take up the gray/skill games bill that passed the House last week and a bill that would legalize medical marijuana.

While Meredith and other supporters express optimism about the bill’s chances, the clock is running out on this year’s session.

After Monday, there are just five legislative days remaining. Three of them take place this week, with lawmakers recessing starting on Thursday for Gov. Andy Beshear’s veto consideration period.

The session will conclude on March 29-30.

Another thing the bill has in its favor is Beshear’s support. He campaigned four years ago on legalizing sports betting and reiterated that support earlier this year in his State of the Commonwealth address.

“I don’t think you’re going to see a veto,” Meredith said. “So, I think everybody’s pretty comfortable sitting it down until after the veto period.”

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