The state will take 51% of the revenue from sports betting - the highest percentage of revenue in the nation for sports wagering - with 32% going to vendor International Game Technology (IGT) and the remaining 17% earmarked for two casinos.
Sports wagering is set to go live 1 October at two Twin Rivers Casinos, in Lincoln and Tiverton. Rhode Island won't allow online betting just yet.
Governor Gina Raimondo signed the $9.6 billion budget for the state’s fiscal year on Friday.
The move is expected to provide the state with $23.5 million up to July 2019. Lincoln and Tiverton expect to collect $100,000 each in annual “compensation for serving as the host communities for sports wagering”.
IGT, the sole bidder, will be the sports betting technology vendor for Rhode Island. The group has a long-standing relationship with the state, providing its land-based and electronic lottery platforms since 2003, and it also has an office in the state capital of Providence.
Wagers will only be allowed from land-based sources, with no provision in place for online betting in the current law, which could put Rhode Island at a disadvantage if neighboring Massachusetts and Connecticut allow customers to place bets through the Internet. Massachusetts is gearing up for sports betting by the end of 2018.
“It could create a flight of customers,” Daniel Wallach, an expert in gaming and sports law, told Reuters.
Paul Grimaldi, a spokesman for the Rhode Island Department of Revenue, said: “We wanted to start small and make sure we have the operational system down pat in the casinos before we explore online or mobile.”
States across the US are considering how best to legalise sports betting after the US Supreme Court in May overturned a 1992 law that banned it in most places outside of Las Vegas.
Rhode Island's decision to take 51% share of sports betting revenues has been met with surprise from some quarters.
If a player loses $100 on a bet, RI will get $51, IGT will get $32 and Twin River will take $17, but those rates do not sit well with some critics.
“High tax rates hinder the legal market’s ability to compete with shady, illegal operators that don’t pay taxes back to the state,” American Gaming Association spokeswoman Sara Slane told Reuters.
Experts suggest illegal betting in the United States is a $50 billion to $150 billion industry.
