Rhode Island To Explore Online Gambling Options

Home » Poker News » Rhode Island To Explore Online Gambling Options

Wednesday, March 12th, 2014 | Written by Charles Washington

As other states in the US consider opening up their markets to online gaming, Rhode Island, too, is now considering moving into the digital realm in order to protect its indispensable gambling industry.

History of gambling In Rhode Island

Situated in the northeastern corner of the United States, Rhode Island is the smallest of the country’s states in terms of territory, and relies heavily on gambling to provide it with its third biggest source of revenue.

After the state welcomed a lottery in 1974, and gaming machines in 1992, racetracks were then permitted to offer slots, and in 2012 Twin River Casino, previously called Lincoln Greyhound Park, successfully pushed to have casino table games added to its gambling mix.

Currently, Rhode Island receives gambling revenues via lottery ticket sales, the Twin River Casino, the Newport Grand slot parlor, as well as various other gambling outlets. According to the Rhode Island Department of Revenue, the state’s two gambling venues, the Twin River and Newport Grand, generated $527.3 million in net revenues in the fiscal year ending June, 2012,with around $320.6 million of that total going to the state in the form of taxes.

Looking ahead, in fiscal 2014 the Twin River is expected to generate $303.7 million in taxes for the state, and the Newport Grand around $26.4 million, with lottery, scratch tickets, Keno and other numbers games contributing a further $64.1 million towards state funds.

Increasing competition from neighboring state

Nevertheless, the spread of casino gambling across the US has harmed some traditional gambling locations, such as New Jersey, which has seen its revenues halve from $5.9 billion in 2005 to just under $3 billion in 2013. Likewise, Rhode Island has been affected by new casinos and slots parlors opening up in nearby Maryland, Maine, New York and Ohio, while Massachusetts now threatens further erosion of its gambling industry after approving licensing for three casinos and one slots parlor in 2011.

Currently, Massachusetts operates a state lottery which generated a massive $955 million profit in 2013, although slightly down on the $983.7 million profit it generated in 2012. Interestingly, around 50% of Rhode Island’s gambling revenue are derived from Bay State residents, and with Massachusetts now expecting the first of its gambling venues to open by the end of this year, Rhode Island officials estimate Massachusetts gambling alone will shrink its gambling revenue by $422 million over a five years period, starting in fiscal 2016.

Rhode Island exploring new frontier of igaming

At the end of last year, New Jersey joined Delaware and Nevada in offering online gambling, with another eight states seriously considering introducing Internet gambling legislation by the end of 2014. The historic situation came about after the U.S. Department of Justice reversed its previous anti-online gambling stance back in December 2011, paving the way for a domestic online gambling industry.

At the time Rhode Island officials said they would explore internet gaming possibilities for the state, and last week R.I. Lottery Director Gerald S. Aubin, said it was his “fiduciary responsibility” to research all potential aspects of its impact on revenues.

According to the Rhode Island Lottery, the state could consider allowing internet versions of games it already offers, such as Bingo and Keno, or even compact with other states, such as Delaware, Ohio and West Virginia, in offering a progressive jackpot.

However, others warn that the state’s bricks-and-mortar gambling venues and convenience stores could suffer as a result, with online gambling possibly cannibalizing and dooming many such outlets. Picking up the point, Stephen Ryan, the executive director of the New England Convenience Store Association, stated:

“We are opposed to the lottery taking customers out of our stores and creating what we potentially see as jobless casinos online, and turn potentially every home computer, laptop, and smartphone into a lottery machine. We think it’s clearly a step in the wrong direction.”

Rhode Island faces even greater technical hurdles when contemplating expanding into casino games and online poker, however, as these igaming options would be viewed a new form of gambling and as such would require a statewide voter approval. As Gerald S. Aubin, explains:

“We wouldn’t pursue it without statewide approval. To venture into online poker and online gaming would take constitution approval.”

Needless to say, Rhode Island is right at the beginning of its internet gambling exploratory stage, and has a long way to go before igaming ever forms an integral part of its vital gambling industry.