Rhode Island Sports Betting Bill Puts Bally’s Deal at Risk

Rhode Island’s Senate is scheduled to vote on June 4 on S3118, a bill that would open the state’s online sports betting market to between three and five operators. The bill cleared committee and was placed on the Senate calendar on Monday.

Should the Senate approve it, the measure moves to the House, where a similar bill died last year. At stake is the structure of the state’s online sports betting model and the fate of a tentative deal the Rhode Island Lottery struck with Bally’s less than a month ago.

S3118 Targets Rhode Island’s 51% Revenue Model

Democratic Senators Frank Ciccone, John Burke, Stefano Famiglietti, and Todd Patalano introduced S3118 on March 13. Ciccone has led every version of the bill since at least 2024.

S3118 would require the Rhode Island Lottery to award between three and five online sports betting contracts through a competitive bidding process, timed to begin once IGT’s exclusive contract expires in November 2026. It would also restructure how revenue is divided.

Rhode Island currently takes 51% of online sports betting revenue, the highest rate in the country. The remaining 49% is split between Bally’s, which holds 17% as the retail partner, and the online operator, which holds 32%.

FanDuel and DraftKings have submitted testimony in support of the bill. Both argue the 32% operator allocation has held major sportsbooks out of Rhode Island, a claim backed by recent application data: when the Lottery opened a second operator slot in late 2025, only Bally’s and BetRivers applied. DraftKings, FanDuel, BetMGM, Caesars, Fanatics, and bet365 all declined to participate.

Bally’s Award Creates a Timing Problem

On May 8, the Rhode Island Lottery tentatively awarded Bally’s a five-year contract to operate the state’s second online sportsbook once IGT’s exclusivity ends. S3118 now sits directly in the path of that deal.

If the bill becomes law before November 2026, the Bally’s award may need renegotiation to fit a three-to-five-operator model. The state could also void the award entirely and run a fresh competitive process.

No public statement from the Lottery has addressed how the Bally’s contract would interact with S3118 if both advance. The most likely outcome is that Bally’s retains one licence but competes against new entrants on a restructured revenue split.

For Bally’s, the financial difference is material. Under the existing model, the company would add the 32% operator share to the 17% retail share it already holds. Under S3118, it becomes one of several competitors, likely including DraftKings and FanDuel.

House Remains the Main Obstacle

The Senate vote is not the hardest step. In 2025, SB 748 passed the Senate 30-2 and then died in the House committee.

Speaker K. Joseph Shekarchi argued last year that the bill was unnecessary, because IGT’s contract was already close to expiry and the state could address market structure during the next negotiation cycle. His reasoning is harder to sustain now.

The Lottery has already moved to add Bally’s as a second operator under the existing rules, while Spectrum Gaming Group has recommended a four-to-six operator model. Without a new statute, the window to restructure the market is closing.

Rhode Island’s session closes on June 30. If S3118 clears the Senate and House, Rhode Island would be on course for a restructured market before year-end. Another House defeat leaves the Bally’s contract to proceed under current terms, which would keep the restrictive revenue model in place for another five years.

Prediction Markets Add Pressure

The bill also arrives amid active litigation on prediction markets. Kalshi is suing Rhode Island in federal court; Rhode Island, through Attorney General Peter Neronha, is suing Kalshi and Polymarket in state court; and the Commodity Futures Trading Commission is separately suing the state.

Rhode Island’s core argument is that prediction markets operate as unlicensed sports betting and compete with the state’s regulated model. That position becomes harder to defend if the state simultaneously protects a narrow, low-competition structure.

💡TGJ Take

Rhode Island’s problem is no longer just operator count. It is timing. If the state locks Bally’s into a five-year second-sportsbook contract before lawmakers resolve S3118, it may preserve the same economics that kept major brands away. For DraftKings, FanDuel, and other national operators, the bill only matters if the revised revenue split justifies entry. For affiliates, Rhode Island stays a small market until the House shows it is ready to move past the IGT-Bally’s structure.