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 decent-sized gaming market whose economic impact is estimated at $1.05 billion.
The tiny state currently has 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 are also legal in the Ocean State.
In 2018, Rhode Island became the eighth state to legalize sports wagering, which 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 is also an early adopter of daily fantasy sports as it declared them legal in 2016.
Lawmakers mulled over authorizing online lottery sales in the past but nothing came out of those discussions. Remote casino-style gaming goes unregulated at the moment, 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 allow for various forms of gambling. Pari-mutuel betting on thoroughbred horse races became legal in 1934 when state residents approved it with a referendum vote. Rhode Island’s now-defunct Narragansett Park welcomed many legendary thoroughbred horses on its track, including champions like 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 witnessed a decline in pari-mutuel betting handle in the early 1990s when the tribal Foxwoods Casino commenced operations in neighboring Connecticut. Little Rhode’s General Assembly subsequently passed legislation to authorize video lottery terminals (VLTs) at two pari-mutuel wagering facilities. By doing so, the lawmakers effectively bypassed a statute that called for a referendum in the municipalities where the terminals would be hosted.
VTL opponents pushed to add the referendum requirement to the State Constitution so that the General Assembly could not bypass it again. The rule was added in early November 1994 as Article VI, Section 22. It states that no legislative act on gambling expansion can take effect before the majority of residents approve it via a statewide referendum. The voters in the host municipalities must also okay gambling prior to any legislative changes.
Rhode Islanders approved 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. Apart from slot machines, the two venues can offer everything from baccarat and craps to 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, more commonly known as slot machines. All slots require approval and must undergo obligatory audits by third-party testing agencies. The same section allowed the conduct of casino-style gaming at licensed facilities after the General Assembly determined the introduction of such games can significantly enhance state revenue and boost the local economy.
The State Lottery Division has the sole authority to decide the number of gaming tables and slot machines in each facility. Licensed operators must maintain annual balance sheets with their revenues and losses and report them to the regulatory authorities. Each operator must provide written information about the available 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 whose task is to ensure the integrity of all casino gambling activities. The unit has various responsibilities, including investigating possible criminal activities and ejecting excluded individuals from the gaming facilities.
Unit members can access the premises of licensed gambling operators at any time for inspections and audits of their ledgers, computer systems, and surveillance recordings. Using cheating devices and cheating, in general, are unlawful under §42-61.3-2 (b). Persons found guilty of this violation may serve imprisonment sentences of up to ten years and/or pay maximum fines of $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 as part of the Department of Revenue and supervises state-sanctioned lotteries in the Ocean State. It also grants licenses to approved lottery ticket sales agents. The entity carries out thorough checks on all applicants to determine their financial suitability and probity.
The volume of the expected lottery ticket sales by the candidates also bears consideration. Licensees must sell the tickets at fixed prices determined by the regulatory body. The direct sale of tickets to individuals under 18 is unlawful but adult customers can buy tickets and gift them to minors.
Winners have one year to claim their prizes or else they will automatically revert to the State Lottery Fund. Forging and counterfeiting state lottery tickets is a felony punishable by maximum fines of $1,000 and/or up to ten years in prison.
Gambling Offenses in Rhode Island
R.I. Gen. Laws Title 11, Chapter 11-19 details unlawful gambling activities in the state and the penalties for their unauthorized provision. Keeping unauthorized gambling houses or acting as a dealer or a banker in one such house is punishable with up to two years in prison and maximum fines ranging from $500 to $5,000. Renting one’s property to be used as an illegal gambling facility carries maximum fines of $500.
Those who frequent such illegal gambling houses may end up in jail for a maximum period of thirty days. Instigating another person to visit one such place and engage in gambling there is also unlawful under §11-19-20. People convicted of this transgression suffer minimum fines of $500 and risk spending one year behind bars.
Gambling Licenses in Rhode Island
Two commercial casinos call the Ocean State their home, Bally’s Twin River and Bally’s Tiverton Casino. Both service Rhode Islanders legally with permits granted 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. Table game retailer licenses are needed for the legal provision of casino games like roulette, craps, baccarat, and blackjack. The operating fees imposed on the gaming venues are pursuant to the agreements between the state and the operators.
The companies that lease, distribute, or manufacture slot machines in Rhode Island must file applications for supplier licenses. Approved suppliers are chosen via a Request for Proposal and Quotation process (RFP/Q). The applicants must provide information about their shareholders, former and present trustees, and past criminal records (if any). The supplier licenses expire after three years from the issuance date. Application and renewal come at the expense of $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 will last until the end of June 2043.
Under the deal’s terms, the international gaming company must provide 1,100 well-paid job positions to residents and invest $155 million in Rhode Island before the contract expires. Governor Daniel McKee authorized the exclusive contract in 2021 when he signed Senate Bill 40 into law.
Gambling Taxes in Rhode Island
The taxes imposed on licensed slot machines in Rhode Island are some of the heaviest in the United States. The rates are based on a sliding scale and depend 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 on top of a fixed fee of $767,687. Slot revenue at Tiverton Casino Hotel is taxed at rates from 68.85% to 74% plus $384,996. Licensees can use 10% of the prior year’s net income from slot machines for tax-free bonus play.
Table Games Revenue Taxes
Table games proceeds are also subject to sliding-scale taxes, with rates ranging from 17% to 19%. The exact percentage depends on the overall net revenue the operators have generated in the prior fiscal year. The rate increases by 2% in case the proceeds exceed those for the previous year. A significant portion of the taxes is deposited into the Rhode Island General Fund. Each year, the money is allocated between different healthcare, public safety, and education services.
Responsible Gambling Measures
Rhode Island law requires the two licensed commercial casinos in Lincoln and Tiverton to aggregately 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 exclude problem gamblers forcefully. For the exclusion period’s duration, gamblers are unable to participate in any promotional incentives and 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 offering assistance to problem gamblers. Said numbers should 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 gained legislative approval by then-Governor Gina Raimondo. The two casinos in Lincoln and Tiverton initially received authorization to accept in-person wagers on their premises only. 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 via Sportsbook Rhode Island in September of the same year. Punters physically located in the state initially had to sign up for the online platform in-person at a retail location. Thankfully, this changed in 2020 with the passage of HB097 and S2919. Bettors are now able to set up their online wagering accounts remotely.
Geolocation and Minimum Age
Rhode Islanders can experiment with a nice variety of wager types, including straight bets, parlays, totals, moneyline, and exchange betting, among others. The minimum legal age requirement for sports wagering is again 18. All registrants undergo obligatory age and identity checks to ensure compliance with this condition. The state-sanctioned lottery operator relies on geolocation technology to pinpoint the whereabouts of registered online punters.
Rhode Island statutes do not contain provisions about making integrity fee payments to professional sports leagues. The law does not mandate the implementation of official league data, either. A wide range of sports and events are available to punters, including those that involve collegiate athletes as long as the teams are based outside the Ocean State.
Tax Model
When it comes to taxes, Rhode Island has adopted a revenue-sharing framework 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 the betting systems and software gets a 32% cut, while the host facilities receive 17%. The two host cities, Tiverton and Lincoln, collect annual flat fees of $100,000 each.
Legal Forms of Online Gambling
Rhode Islanders can legally engage in two forms of interactive gambling, the first one 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 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 outcome of some daily fantasy games was purely based on chance, skill was a dominant factor for winning in others. According to Attorney General Kilmartin, DFS did not constitute illegal gambling because they involved a mixture of both 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 restrictions enforcement. 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 due to their unconventional religious beliefs. Nonetheless, gambling laws here are not as stringent as one would expect. Rhode Island has adopted a relatively relaxed attitude to 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.
