All Eyes In Rhode Island On Delaware Sportsbook Opening Day
When Delaware opens the first legal sports betting shop outside Las Vegas on Tuesday, the entire sports betting world will be watching, but no state quite as closely as Rhode Island will.
At any rate, there won’t be any Rhode Island governmental officials on hand at the Dover Downs sportsbook grand opening festivities, but you can bet they will be watching closely right across the border.
That is because, out of all the states located near Delaware, Rhode Island – the smallest state in the nation – has the most to gain by observing how the First State rolls out is sports betting product and implementing the lessons learned. Rhode Island is looking to open its own casino sportsbook by October, but the state’s governor Gina Raimondo has already accounted for $23.5 million as coming from sports betting tax revenues in next fiscal year’s budget. She reportedly arrived at those projections by basing them on the figures Delaware is looking to rake in after its sportsbook opens for business at Dover Downs following its June 5 debut.
“…We talked to the guys at Twin River [casino], had them look at our numbers, and [they] said, under these assumptions if you do roughly what Delaware does, this [amount in tax revenue] what it will produce for you,” Raimondo told local reporters at the Providence Journal the day before Delaware’s sportsbook started taking action.
The governor said the main thing for Rhode Islanders interested in the subject to do is not to oversell the concept of sports betting in the state, as nobody – not in Rhode Island and not in Delaware either – will likely have “a really terrific estimate until a year from now.” Delaware Lottery Director Vernon Kirk proactively backed up Raimondo’s claim when he told reporters in his state Friday that the brains in his organization “really don’t know” exactly what kind of revenues Delaware will be taking in, and it won’t know until all the action starts coming in. Revenues could be substantial, and that is largely due to Delaware’s strategic location right in the midst of New England, the Atlantic Coast states, and even some inland competitors, but also due to Delaware’s sportsbooks offering betting lines on all major professional sports, plus collegiate and amateur sports, plus the US PGA Tour and even auto racing events.
That being said, Kirk was not even remotely interested in hazarding a guess about revenues when local reporters kept pressing him on the issue.
“We’d just be guessing,” he said. “A lot is going to depend on some neighboring competition and how fast they get going. I think New Jersey will quickly be joining the fray. Everyone is excited, but we’re trying to put a lid on expectations. We don’t want to people to think this is a silver bullet that’s going to solve all our economic problems, because it’s not.”
New Jersey tried to launch its own racetrack-based sportsbook at Monmouth Park in time for Memorial Day, but those plans ground to a halt before it could be put into practice. The upper house of the Garden State legislature introduced a competing sports betting regulatory bill that would have made it impossible for operators to obtain a sportsbook license if they open a ‘book before regulations are in place. Needless to say, those regs are not yet finalized, so Monmouth Park’s sportsbook – which is being run by UK sports betting company William Hill – remains unopened, while Delaware’s Dover Downs sportsbook is all set to go.
Delaware owes its success as an early adopter of legalized sports betting in the wake of the May 14 decision by the US Supreme Court to overturn the Professional and Amateur Sports Protection Act of 1992 (PASPA) to the fact that is was actually partially exempted from its prohibitions. PASPA banned 46 of 50 states from passing legislation to legalize and regulate wagering on sports – a ban that technically did not interfere with Delaware’s ability to offer sports betting – but, even so, the state only offered parlay bets on NFL contests. Now that PASPA is dead and buried courtesy of the Supreme Court decision, Delaware evidently feels confident that it does not need any further laws or even any amendments to start offering full-on sportsbooks.
That stands in stark contrast to the fact that federal courts shut down that aforementioned NFL parlay that was offered through the state lottery after just two years on the market. With long odds being the norm for the three-game parlays stipulated by the Delaware betting system, the state did quite well for itself to get reported profits of upward of 30 percent on those parlays. However, single-game sports betting will not bring in profits nearly that high, Kirk said, and for proof you need only to look to Las Vegas, which only gets about 5 percent in profit from its sportsbooks even though Nevada’s were the only legal option for at least 25 years since PASPA was passed.
The key to Delaware’s good numbers – and the good numbers that Rhode Island’s budget office derived from them – is how the tax scheme breaks down. The process for taxing sports betting in the First State goes basically like this: winning bettors get paid first and foremost, then Scientific Games (which provides equipment for an even runs the Delaware state lottery) gets 15.66 percent of the revenue, next, of the remainder, the state gets half while the casino that hosts the sportsbook gets 40 percent. The last 10 percent is put up for horse racing purses.
As for how things will eventually shake out in Rhode Island, nobody can say with any degree of certainty. But SportsBettingRhodeIsland.com knows a successful sportsbook launch in Delaware on Tuesday will go a long way toward giving the nation’s smallest state the confidence it needs to go forward with its near-term plans to roll out its own sports betting product, Rhode Island style. Look for RI’s first sportsbook to open by the middle of the summer at the Twin Rivers Casino.
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