Pot, Sports Betting, at Center of R.I. Budget Debate

Rhode Island’s state government has long relied on taxes from casino gaming. Now its governor, Gina Raimondo, hopes to add revenues from sports betting.

Rhode Island Governor Gina Raimondo is hoping to milk money out of sports betting, Medicaid cuts and expanded medical marijuana sales from “compassion centers,” among many other fiscal remedies to help balance the budget.

Her just released $9.38-billion state budget includes revenue from sports betting, even though it isn’t currently known if the U.S. Supreme Court will life the existing federal ban. Her proposal was made as senators were introducing legislation that would legalize sports betting but excluding wagers on collegiate teams based in Rhode Island.

The Ocean State already relies heavily on gaming: it is the third largest source of state government revenue. That industry generates more money per resident than in any other state. In 2017 the state lottery system, which includes the state’s two casinos, made $872 million or $823 for each resident. That compares to $741 for neighboring Massachusetts.

Legalizing sports betting could bring in as much as $23.5 million annually, assuming $815 million in wagering, according to the state’s Department of Revenue.

Under the governor’s proposal wagers could be placed on collegiate or professional sports at both of the casinos operated by Twin River, including its new casino in Tiverton, which is being built now.

Although the state constitution requires that gaming expansion be approved by the voters, a companion bill introduced by Senate President Dominick Ruggerio would stipulate that previous ballot measures that allowed the Twin River casinos to offer gaming would allow sports betting as long as it is limited to those locations.

Lawmakers recognize that online sports gambling would require a separate approval by the voters.

The budget also proposes allowing the two casinos to add “stadium gaming,” something many casinos are deploying to attract millennials. Department of Revenue officials estimate this will bring in another $ 4.1 million a year in taxes.

None of this will happen if the Supremes uphold 1992’s PAPSA (Professional and Amateur Sports Protection Act) against the challenge by New Jersey (Christie v. NCAA) which argues that the law violates the 10th Amendment to the U.S. Constitution by requiring that state law enforcement enforce a federal law. The law is also peculiar in that it exempts four states.

Rhode Island’s attorney general is one of 18 other attorneys general who have filed amicus briefs with the high court.

The Twin River Tiverton is looking at an October 1 opening. Its building has been delayed by various factors, which led to Twin River agreeing to pay the state $2 million in compensation for lost revenue.

Tiverton city officials said last week that if the state allows sports betting at the new casino that they want a percentage of that increase. Sports betting is classified as Class III gaming.

City officials are still working out details of their operational host agreement with Twin River. Some outstanding items include whether the hotel will be open 24/7.

The Tiverton casino, which will have 1000 slot machines and 32 gaming tables, is being built a few hundred feet from the Massachusetts state line. Its license is being transferred there from the Newport Grand. It is only about a quarter the size of the Newport Grand but is expected to generate the same amount of revenue, $11 million, annually, and to pay the city $3 million and $1 million in taxes.

When Tiverton council President Denise deMedeiros asked if the town would get a share of sports betting money, she was told by the town’s attorney that the state hasn’t worked out the details of who gets what yet.

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