Sportsbooks Warn Rhode Island Duopoly Will Leave Tens of Millions in Tax Revenue Untapped
Rhode Island ends its sports betting monopoly Nov. 25 with Bally Bet launch, creating a duopoly. Sportsbooks and the SBA warn a **51%** tax and limited licenses will leave tens of millions in revenue untapped, with bettors crossing to neighboring states. Spectrum Gaming recommended four to six licenses and **20%-25%** tax.
SCCG Take — The duopoly sustains revenue leakage despite the state's affluent demographics. Regulators should adopt the Spectrum study to enable competition and capture full market potential.
Rhode Island will soon expand online sports betting from a single operator to two. The Rhode Island Lottery monopoly with IGT ends Nov. 25, after which Bally Bet launches. Major sportsbooks contend this duopoly still falls short, leaving tens of millions of tax dollars on the table as bettors head to neighboring states.
The Sports Betting Alliance, supported by DraftKings, FanDuel, BetMGM, Fanatics and bet365, urges the state to add more operators and cut its tax on gross revenue. Lawmakers legalized sports betting in 2018 through a conservative lottery model. A 2025 Spectrum Gaming study recommended four to six additional licenses.
Limited Operators and High Taxes Limit Potential
The state tax stands at 51% on gross sports betting revenue. Spectrum Gaming advised lowering it to 20%-25% to enable better odds and promotions that would expand the market and ultimately increase state revenue. Only two applicants bid for the single new license: Bally Bet and BetRivers. Higher-profile operators cited the tax as a deterrent.
Cory Fox, senior vice president of public policy and sustainability at FanDuel, told NBC 10 that competition drives improvement. "When you have competition amongst really strong products, we have to compete with each other, we compete on promotions, and it becomes a much more competitive market, which ultimately benefits the customer." A competitive market also pulls customers from the illegal market and retains bettors who otherwise cross into Massachusetts, Connecticut or New York, where millions of Rhode Island bets occur each year, according to Casino.org News.
Small but Prosperous State Faces Revenue Leakage
Rhode Island has a population of about 1.1 million and ranks as the smallest by land area. Its real median household income reaches $96,880, above the national average of $87,460. These attributes point to untapped market strength under a more open framework. The General Assembly convenes Jan. 5 for its 2027 session.
Where the Revenue Risk Lies
Without further expansion, Rhode Island will continue to lose taxable activity to bordering states with seven or more operators. The Spectrum recommendations offer a direct path to stronger consumer products, reduced illegal betting and higher net tax intake. The legislative session provides a clear opportunity to adjust the model before the duopoly pattern hardens.
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