Rhode Island is the smallest state in the US by total area, bordering Massachusetts to the north and east, Connecticut to the west, and the Atlantic Ocean to the south. Despite its modest size (3,144 km2), Little Rhode is home to a sizable gaming market whose economic impact is estimated at $1.05 billion.
The tiny state currently hosts two commercial casinos operated by Bally’s Corporation: Tiverton Casino Hotel and Twin River Casino Hotel. Both venues are legally permitted to offer table games and slot machines, also known as video lottery terminals (VLTs). Pari-mutuel wagering on horse races, bingo, lotteries, and pull-tabs is also legal in the Ocean State.
In 2018, Rhode Island became the eighth state to legalize sports wagering. Sports betting was originally limited to retail locations at the two commercial casinos. The following year, lawmakers amended the existing legislation to add remote betting via mobile devices. Rhode Island was also an early adopter of daily fantasy sports, declaring them legal in 2016.
Lawmakers have considered authorizing online lottery sales in the past, but nothing has come of these discussions. At the moment, remote casino-style gaming remains unregulated, but the recent sports betting expansion has rekindled the hopes of online casino fans in Rhode Island.
Landbased Gambling Laws in Rhode Island
Rhode Island statutes permit various forms of gambling. Pari-mutuel betting on thoroughbred horse races became legal in 1934 after state residents approved it via referendum. The now-defunct Narragansett Park welcomed many legendary thoroughbred horses, including champions such as War Admiral, Seabiscuit, and Whirlaway.
VTL Laws and Regulation
Rhode Island General Laws §42-61.2
Rhode Island General Laws §42.61.3
Rhode Island General Laws §42-61
Gambling Offenses in Rhode Island
VTL Laws and Regulation
Rhode Island racetracks saw their pari-mutuel betting handle decline in the early 1990s after the tribal Foxwoods Casino opened in neighboring Connecticut. Rhode Island’s General Assembly subsequently passed legislation to authorize video lottery terminals (VLTs) at two pari-mutuel wagering facilities. In doing so, lawmakers effectively bypassed a statute that required a referendum in the municipalities that would host the terminals.
Opponents of VLTs sought to add the referendum requirement to the State Constitution so the General Assembly could not sidestep it again. The rule was added in early November 1994 as Article VI, Section 22. It states that no legislative act expanding gambling can take effect until a majority of residents approve it in a statewide referendum. Voters in the host municipalities must also approve gambling before any legislative changes.
Rhode Islanders endorsed live table games during one such referendum in November 2012. Lincoln and Tiverton residents voted in favor of introducing live table games at Twin River Casino and Bally’s Tiverton Casino. In addition to slot machines, the two venues can now spread baccarat, craps, blackjack, roulette, and house-banked poker.
Rhode Island General Laws §42-61.2
Rhode Island General Laws §42-61.2 authorizes the Division of State Lottery to operate video lottery terminals, which are more commonly known as slot machines. All machines require approval and must undergo mandatory audits by third-party testing agencies. The same section authorizes casino-style gaming at licensed facilities after the General Assembly determined that introducing such games could significantly increase state revenue and strengthen the local economy.
The State Lottery Division has sole authority to determine the number of gaming tables and slot machines at each facility. Licensed operators must maintain annual balance sheets detailing their revenues and losses and submit them to the regulators. Each operator must also provide written information about the games’ payouts and rules.
Rhode Island General Laws §42.61.3
This section of the General Laws created a gambling enforcement unit within the Rhode Island State Police tasked with ensuring the integrity of all casino gaming activities. The unit’s responsibilities include investigating potential criminal activity and removing excluded individuals from gaming facilities.
Unit members may enter the premises of licensed gambling operators at any time to inspect ledgers, computer systems, and surveillance recordings. Using cheating devices, or cheating in general, is unlawful under §42-61.3-2 (b). Individuals found guilty of this offense may face prison sentences of up to ten years and/or fines of up to $100,000. Convicted cheaters may also be barred from entering any Rhode Island gaming facility for life.
Rhode Island General Laws §42-61
R.I. Gen. Laws §42-61 established the Division of State Lottery, which operates within the Department of Revenue and oversees state-sanctioned lotteries in the Ocean State. It also issues licenses to approved lottery ticket sales agents. The agency conducts thorough background checks on all applicants to evaluate their financial suitability and integrity.
The projected volume of ticket sales is also considered. Licensees must sell tickets at fixed prices set by the regulator. Selling tickets directly to individuals under 18 is unlawful, although adults may purchase tickets and gift them to minors.
Winners have one year to claim their prizes, after which the funds automatically revert to the State Lottery Fund. Forging or counterfeiting state lottery tickets is a felony punishable by fines of up to $1,000 and/or up to ten years in prison.
Gambling Offenses in Rhode Island
R.I. Gen. Laws Title 11, Chapter 11-19 outlines unlawful gambling activities in the state and the penalties for providing them without authorization. Keeping unauthorized gambling houses or acting as a dealer or banker in such a house is punishable by up to two years in prison and fines ranging from $500 to $5,000. Renting one’s property for use as an illegal gambling facility carries a maximum fine of $500.
Individuals who frequent illegal gambling houses may be jailed for up to thirty days. Encouraging another person to visit such a place and gamble is also unlawful under §11-19-20. Those convicted face a minimum fine of $500 and risk up to one year behind bars.
Gambling Licenses in Rhode Island
Two commercial casinos call the Ocean State home: Bally’s Twin River and Bally’s Tiverton Casino. Both operate legally under permits issued by the Division of Commercial Licenses, Racing and Athletics within the State Department of Business Regulation.
License Types
IGT’s Contract with the State Lottery
License Types
The operation of slot machines requires video lottery retailer licenses, while table game retailer licenses are needed to offer casino games such as roulette, craps, baccarat, and blackjack legally. Operating fees imposed on gaming venues are set by agreements between the state and the operators.
Companies that lease, distribute, or manufacture slot machines in Rhode Island must apply for supplier licenses. Approved suppliers are selected through a Request for Proposal and Quotation process (RFP/Q). Applicants must provide information on their shareholders, past and present trustees, and any criminal records. Supplier licenses expire three years after issuance. Both application and renewal cost $750.
IGT’s Contract with the State Lottery
In February 2022, IGT (International Game Technology) secured an exclusive twenty-year deal with the Rhode Island Lottery, becoming its sole provider of video lottery terminals. The contract takes effect at the beginning of 2023 and runs through the end of June 2043.
Under the deal’s terms, the company must create 1,100 well-paid jobs for residents and invest $155 million in Rhode Island before the contract expires. Governor Daniel McKee approved the agreement in 2021 when he signed Senate Bill 40 into law.
Gambling Taxes in Rhode Island
Rhode Island imposes some of the highest taxes on licensed slot machines in the United States. The rates follow a sliding scale that depends on the total slot revenue generated by the licensed operators.
Slot Revenue Taxes
Table Games Revenue Taxes
Slot Revenue Taxes
Bally’s Twin River Casino in Lincoln shares between 71.15% and 74% of its slot revenue with the state, plus a fixed fee of $767,687. Slot revenue at Tiverton Casino Hotel is taxed at rates of 68.85% to 74%, along with an additional $384,996. Licensees may earmark 10% of the prior year’s net slot income for tax-free bonus play.
Table Games Revenue Taxes
Table game proceeds are also subject to sliding-scale taxes, with rates ranging from 17% to 19%. The exact percentage depends on the net revenue generated in the prior fiscal year. The rate increases by 2% if current proceeds surpass those of the previous year. A significant portion of the taxes is deposited into the Rhode Island General Fund, which allocates the money each year to healthcare, public safety, and education services.
Responsible Gambling Measures
Rhode Island law requires the two licensed commercial casinos in Lincoln and Tiverton to collectively allocate a minimum of $200,000 of their revenue to various responsible gambling programs across the state. Under §42-61-2-14 of the Rhode Island Code, the two casinos must provide gambling awareness training to their employees. Problem gamblers have the option to exclude themselves voluntarily from sports betting and gaming.
Players can opt to self-exclude permanently or temporarily for one or five years. Those looking to restrict themselves from gambling at the licensed properties must submit their applications in person. Mailing the applications is not an option. Family members cannot forcefully exclude problem gamblers. During the exclusion period, gamblers cannot participate in any promotional incentives or giveaways. They are removed from the casinos’ correspondence lists as well.
Gambling advertising is permitted as long as the marketing materials feature the numbers of helplines that assist problem gamblers. These numbers must also be conspicuously displayed in the gaming areas. Rhode Island is among the few states where people have access to the gaming floor as long as they are at least 18 years old. Inducing people below this age to gamble is against the law.
Sports Betting Regulations in Rhode Island
Sports betting has been legal in Rhode Island since June 2018, when it received legislative approval from then-Governor Gina Raimondo. The two casinos in Lincoln and Tiverton were initially authorized to accept only in-person wagers on their premises. Legal online wagering became possible after Gov. Raimondo signed S0037 into law in 2019.
Remote Registration Is Now Possible
Geolocation and Minimum Age
Tax Model
Remote Registration Is Now Possible
The state-sanctioned lottery launched online wagering through Sportsbook Rhode Island in September of the same year. Players located in the state initially had to register for the platform in person at a retail location. This requirement changed in 2020 with the passage of HB097 and S2919. Bettors can now create their online wagering accounts remotely.
Geolocation and Minimum Age
Rhode Islanders can place a wide variety of wagers, including straight bets, parlays, totals, moneylines, and exchange betting, among others. The minimum legal age for sports wagering is 18. All registrants undergo mandatory age and identity checks to verify compliance. The state-sanctioned lottery operator relies on geolocation technology to confirm the location of online bettors.
Rhode Island statutes do not require integrity fee payments to professional sports leagues, nor do they mandate the use of official league data. Bettors can wager on a broad range of sports and events, including contests involving collegiate athletes, provided the teams are based outside the Ocean State.
Tax Model
Rhode Island uses a revenue-sharing model with the commercial casino operators. The state receives 51% of the sports betting revenue generated online or at retail locations. The state-sanctioned supplier of betting systems and software receives 32%, while the host facilities get 17%. The host cities, Tiverton and Lincoln, each collect an annual flat fee of $100,000.
Legal Forms of Online Gambling
Rhode Islanders can legally engage in two forms of interactive gambling, the first being online sports betting at the state-authorized platform Sportsbook Rhode Island. Betting on daily fantasy sports (DFS) is the only other legal option available here. In 2016, Attorney General Peter Kilmartin determined that these paid-entry contests do not violate local laws.
Kilmartin expressed his opinion in a letter to then-Governor Gina Raimondo. He said that while the outcomes of some daily fantasy games were purely based on chance, skill was the dominant factor for winning in others. According to Attorney General Kilmartin, the contests did not constitute illegal gambling because they involved a mixture of skill and luck. Nonetheless, he strongly recommended the enactment of a statute to govern and regulate DFS operations in Rhode Island.
Online casino games are not yet legal, but state authorities are not particularly strict when it comes to enforcing restrictions. Some residents of the state frequent online casinos licensed in foreign jurisdictions that accept registrations from Rhode Island. There are no examples of players suffering any legal repercussions for gambling on such offshore websites.
Conclusion
Rhode Island started as a colony of Puritan settlers driven out of neighboring Massachusetts because of their unconventional religious beliefs. Nonetheless, gambling laws here are not as stringent as one might expect. Rhode Island has adopted a relatively relaxed attitude toward such activities, offering legal sports betting, commercial casino games, lotteries, and daily fantasy sports. The only thing missing is legal online casino-style gaming, but this may change in the future once state legislators recognize the profitability of regulating it.
