NEW: Sports Book Gross Profit Totaled Just $3 Million in FY19 — $20M Below Raimondo Projection
GoLocalProv News Team
NEW: Sports Book Gross Profit Totaled Just $3 Million in FY19 — $20M Below Raimondo Projection
According to the yearly report released by the Office of the Auditor General on Monday, the Rhode Island Lottery paid $397.3 million to the State’s General Fund for the year ended June 30, 2019, an increase of $32.3 million over the prior year.
However, the gross profit to the state from the sports book totaled $3.0 million, after commissions, payouts and marketing expenses — more than $20 million off what the Administration had touted.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTIn November, the state had even downgraded its expected take, saying that it would realize $11 million.
Total revenue for the program in fiscal year 2019 was just $6,867,769 or 29 percent of what was promised.
Now, gross revenue comes in at half that amount.
AGA Called Out Numbers in Spring
As GoLocal reported in April, the American Gaming Association called out the Raimondo administration for using the wrong numbers for projections — and actually predicted what the state would ultimately report in revenue — just over $6 million.
According to top staff at the American Gaming Association (AGA), the projections used by Governor Gina Raimondo’s administration were fundamentally flawed and that Rhode Island misunderstood and used incorrect data from a study.
The AGA says, “We prove the value of the gaming industry through compelling research that supports best-in-class communications tools to inform policymakers and regulators. In addition, we elevate responsible gaming as a signature industry priority."
"Our research presented several possible combinations of tax rates and sports betting availability. Under the scenario closest to what Rhode Island implemented, we estimated that Rhode Island would generate $6.4 million in sports betting gaming tax revenue, $17.1 million less than the state projected," said AGA's Caroline Ponseti, the director, media relations in a statement to GoLocal.
More on Yearly Audit
The Lottery’s gross profit from gaming operations before operating expenses totaled $408.4 million for the fiscal year ended June 30, 2019. Video lottery accounted for $314.5 million or 77.0% of total gross profit.
Net video lottery revenue increased approximately 8.6% compared to the prior year. On-line revenue increased 0.4% and Instant Ticket revenue increased 4.3% over prior year amounts. The Lottery’s operating expenses totaled approximately $11.7 million for the year ended June 30, 2019.
Net revenue from table games totaled $163.4 million for the year ended June 30, 2019. After commissions paid to Twin River and the Towns of Lincoln and Tiverton, and related operating expenses, the State’s share of net table game revenue was $21.9 million. Net table game revenue increased 12.1% in 2019 due to table games newly offered at Twin River – Tiverton and the implementation of hybrid stadium electronic table gaming.