Maybe legalized gambling won’t be the easy money that most state governments think it will be.
Via the Associated Press, Rhode Island lost $900,000 on sports betting in February.
Since adopting wagering in November 2018, Rhode Island has turned a profit of only $150,000, putting the state far behind its $11.5 million projection through June 30.
With the Patriots being the local betting option of choice and the local team covering the spread in Super Bowl LIII, it’s no surprise that Rhode Island took a bath in February. It’s one of the basic realities of state-by-state betting, where hearts tend to rule wallets and, consequently, the bets skew the action toward the geographically favored team. Adjusting the betting lines to reflect that reality, however, will open the door for more dispassionate gamblers to load up on the non-local team, creating potentially easy money.
That’s why sports books in every state that legalizes gambling ultimately will loathe the nearby teams and love their rivals. And if/when a local team develops a consistent ability to cover, the state in question will have a very hard time making as much money as it could from wagering.
Over time, the house tends to win. But there will be short-term pain for every state-turned-house when the home team ends up being better than expected, allowing folks whose assessment of the betting line is skewed by their rooting interests to win money that otherwise would make its way into the governmental coffers.
Short of taking local teams off the board entirely, it’s a risk that most states that choose to embrace gambling will have to bear.