Rhode Island Gov. Daniel McKee has two bills on his desk that would legalize online casino gaming in his state.
Should Rhode Island become the seventh state with legal online casino games, it may force Massachusetts lawmakers to look at efforts to do the same.
The launch of online sports betting in Massachusetts has been a success, and online casino gaming could be next.
That is, if a neighboring state like Rhode Island first legalizes the activity and puts pressure on Massachusetts legislators.
Sports betting down, online casinos up next?
McKee has previously publicly supported online casinos, but has not made a statement regarding either of the current bills from the Rhode Island General Assembly. State legislators adjourned their session last week, but the governor can still sign one of the bills into law.
Massachusetts focused on quickly legalizing and implementing its sports betting market in recent months. Retail sportsbooks launched in January of this year, and online sportsbooks debuted on March 10.
Those efforts gave state legislators cover from tackling the controversial subject of online casino gaming.
But with Rhode Island poised to become the second neighboring state to have legal online slots (Connecticut is the other), pressure could build for Massachusetts to legalize. The reason? It comes down to tax revenue.
Potential online casino revenue in Rhode Island
Though only six states have online casino gaming currently, there is data to suggest how much tax revenue Massachusetts may gather from the activity. In total, tax revenue from Rhode Island online casinos could be as much as $42 million per year.
In April, Bally’s Corporation, which owns Bally’s Casino, reported that it expected to generate as much as $210 million in the first five years of an online casino market in Rhode Island. That’s $42 million in tax revenue to the state annually.
Massachusetts could generate far more than that. Rhode Island’s population is about 1.1 million, whereas Massachusetts has more than six times that number, at nearly 7 million.
The Commonwealth has also exhibited a desire to tax gambling activity at a high rate. Sports betting operators pay 20% on online adjusted revenue, and retail sportsbooks pay at a rate of 15%. It’s possible that lawmakers in Massachusetts would set a high tax rate on online casino, poker and table game play.
So far, Massachusetts online sports betting has brought in $32.7 million in tax revenue for the state.
Jurisdictions don’t like leaving money on the table
With Rhode Island raking in tax money next door, how long before lawmakers in Massachusetts are clamoring for a law to make online casino gaming legal?
In Rhode Island, Bally’s will pay 85% of slot revenue and 51.5% of table game revenue via a revenue-sharing arrangement with the state. If the governor signs the bill into law, Bally’s would be the only online casino gaming operator in Rhode Island, at least at first.
The timeline that Rhode Island followed may be encouraging for those in Massachusetts who want to play online slots and table games. The Rhode Island bills only took a few weeks to go from committee to a vote, and both passed.
Crossing state lines to play online slots
For the consumer in Massachusetts, a legal online casino gaming market in a state next door provides an opportunity. Customers could drive into Rhode Island, download the Bally’s Casino app, and play online poker or slots games, and more.
We have seen sports fans travel across state lines to place legal bets. Folks may hop in their cars and cross into Rhode Island to play Lady Robin Hood online slots on their mobile device, too. That, in turn, will be Massachusetts residents sending their money to Rhode Island’s coffers.
Residents sending their money out of state — sounds like one of the reasons Massachusetts legalized sports betting, doesn’t it?
Rhode Island legislators and Bally’s representatives believe a legal online casino market could be in place by early 2024. That could nudge Massachusetts (as well as Maine and New Hampshire) to take similar action.