Bally’s Got Rhode Island’s Second Sportsbook License Mostly Because Almost No One Else Wanted It
Rhode Island awarded its second online sportsbook license to Bally’s. The reasoning choice tells you why there wasn’t more competition.
The Rhode Island Lottery confirmed on May 8 that Bally’s Corporation has been tentatively awarded a five-year contract to operate the state’s second online sportsbook. The deal would end a seven-year period in which Sportsbook Rhode Island, powered by IGT, has been the only legal online sports betting option in the state. Bally’s could go live as early as November 26, when IGT’s exclusivity period expires.
The selection has been widely covered since Rhode Island finally opened its sports betting market. That framing is technically accurate. It could also be tabbed as a bit misleading.
The Rhode Island Lottery opened its application window for a second operator in late 2025. Submissions closed on February 19, 2026. By all accounts, only two companies applied. Bally’s, the operator of Rhode Island’s only land-based casinos in Lincoln and Tiverton, was one. Rush Street Interactive’s BetRivers was the other. None of the larger US sportsbooks seems to have bothered. DraftKings did not apply. FanDuel has not been confirmed to have officially applied. BetMGM, Caesars, Fanatics, and bet365 did not apply. The state ended up choosing between the two operators willing to operate under the existing revenue structure, and it picked the one that already had a retail presence in Rhode Island.
The choice does less to open the market than it might appear.
The Revenue Split System Is the Whole Story
Rhode Island’s sports betting framework, established when the state legalized sports betting in 2019, divides online revenue using a formula unique among US jurisdictions. The state collects 51 percent. The operator running the platform collects 32 percent. Bally’s, as the retail sportsbook partner, collects 17 percent regardless of whether it is the platform operator.
The 51 percent state share is by some distance the highest in the country. Pennsylvania’s 36 percent is the next highest among major markets. New York’s 51 percent applies to online sports betting, but the state has 16 operators competing for it. Rhode Island has one operator and a much smaller market. It appears the math has not worked for any sportsbook outside of the few that already had ancillary reasons to be in Rhode Island.
This is why the application pool was effectively limited to Bally’s and BetRivers. Bally’s was already collecting the 17 percent retail share. Adding the 32 percent operator share essentially means the company captures the entire non-state portion of digital revenue. It is a doubling of Bally’s economics in Rhode Island without requiring the company to compete for market share against anyone new. For BetRivers, a smaller operator with regional focus and a lower cost structure, the Rhode Island math could work even at the standard 32 percent share. For DraftKings or FanDuel, the same numbers do not move the needle.
Does FanDuel Have Interest in Rhode Island?
The interesting parallel development is what FanDuel is doing about it. Cory Fox, FanDuel’s senior director of public affairs, has publicly endorsed legislation in both the Rhode Island House and Senate that would restructure the revenue formula. The proposed bills would raise the operator share to roughly 79 percent, while gradually reducing the state’s share once total annual revenue reaches $18.6 million, the fiscal year 2025 baseline.
The mechanism is worth understanding for the state’s future. Under the bills, the state would continue to collect 51 percent of revenue up to the existing baseline, but any additional revenue beyond that threshold would flow to operators. The argument FanDuel is making is that this structure incentivizes operators to grow the overall pie rather than fight over a fixed slice. The argument the Rhode Island Lottery implicitly makes is that the existing structure protects guaranteed revenue, whereas the proposed one introduces some volatility.
If the legislation passes, Rhode Island goes from a state-controlled two-operator market to a true open competitive market essentially overnight. FanDuel knows this, as does DraftKings. The Boston Globe reported on May 28 that FanDuel is actively lobbying for the bills. The Bally’s selection, in that context, is a procedural action that the larger operators are watching but not really competing in. They are competing for the next law and the future of Rhode Island’s sports betting revenue.
The State Is Fighting on Three Fronts at Once
The Bally’s selection is happening alongside two other Rhode Island actions that are part of the same underlying picture. On May 21, Attorney General Peter Neronha sued Kalshi and Polymarket in the state Superior Court, alleging that the platforms’ sports-event contracts constitute unlicensed sports betting under Rhode Island law. Neronha’s filing cited an 8 percent decline in Rhode Island Lottery sports betting revenue between 2024 and 2025, which the state attributes to migration to prediction markets.
Hours before Neronha’s filing, Kalshi sued Rhode Island in federal court, seeking to preempt state enforcement under the CFTC’s federal authority. On May 28, the Commodity Futures Trading Commission itself sued Rhode Island, joining the cases the agency has already filed against Minnesota, Connecticut, and Illinois. Rhode Island is now the fourth state to be simultaneously sued by the federal government for trying to enforce its gambling laws against prediction markets.
The pattern across these actions is consistent. Rhode Island is trying to protect a sports betting model that generates $2.8 billion in lifetime revenue and funds, by the Attorney General’s own description, “the State’s third largest revenue stream.” The state’s strategy involves defending the existing single-operator framework, suing prediction markets that take customers out of it, and selecting a second operator who reinforces the existing arrangement rather than disrupting it.
Whether the Strategy Works Depends on the Math
The initial read is that Rhode Island’s approach is internally coherent in the short term and structurally fragile over a longer runway. The 51 percent tax rate generates more state revenue per betting dollar than any other US jurisdiction. Adding Bally’s as a second operator marginally increases competition without changing the underlying economics. Suing Kalshi and Polymarket gives the state a tool to defend against revenue erosion caused by prediction markets. None of these moves requires the state to give up the high-tax model.
The fragility is that each piece of the strategy depends on the other pieces holding. If the CFTC wins its preemption case against Rhode Island, the state loses the legal basis to enforce against prediction markets, and customer migration will most likely accelerate. If FanDuel’s lobbyed legislation passes, the high-tax model collapses, and the existing operator arrangement loses its rationale. If neither of those things happens, Massachusetts and Connecticut will continue to attract cross-border Rhode Island bettors seeking products and prices that the state-controlled platform does not offer.
Bally’s going live in November is the story’s headline, no doubt. The legislative session in Providence, the federal courts in Washington, and cross-border traffic in southeastern New England will determine what the Rhode Island sports betting market looks like in 2027 and beyond.
Players trust our reporting due to our commitment to unbiased and professional evaluations of the iGaming sector. We track hundreds of platforms and industry updates daily to ensure our news feed and leaderboards reflect the most recent market shifts. With nearly two decades of experience within iGaming, our team provides a wealth of expert knowledge. This long-standing expertise enables us to deliver thorough, reliable news and guidance to our readers.
Latest News
