Former Top Mob Bookie Says RI’s Sports Betting Numbers Are Fraudulent

Sunday, April 28, 2019

GoLocalProv News Team

 

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One of Rhode Island’s former top bookmakers says Rhode Island’s sports betting numbers are flawed and that the state can never realize the revenue it has projected.

“Their numbers are fraudulent,” said the former bookie.

The individual, who GoLocal agreed to refer to as “Carmine,” which is not his real name, was part of a major organized crime-backed illegal betting group that was busted in the mid-2000s by the Rhode Island State Police and local law enforcement.

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GoLocal has confirmed his identity and his role in the mob-tied gambling group through conversations with former top law enforcement officers, a lawyer involved in the matter, and press reports at the time.

“Carmine” spoke with GoLocalProv under an agreement of confidentiality. He says he is no longer involved with bookmaking.

Rhode Island Numbers are Screwed

“It is a game of numbers, and (Governor Gina Raimondo) can’t get there,” said Carmine.

Raimondo proposed and pushed for the approval of legalized sports betting. She attested that in the first year, the new expansion of gambling would generate $23.5 million in new revenue.

Through the end of March, the program should have generated approximately $16 million in this fiscal year -- the program has generated about $900,000. There are only three more months in the fiscal year. The program is likely to leave a $20 million hole in this fiscal year and a potential $20 million in next year's budget.

SEE CHART BELOW

According to Carmine's analysis as a former bookie, “Rhode Island would have to win more than a million a week — never lose a bet to get to their projections. It is not going to happen.”

In the early 2000s, Carmine says that his group took in as much as $3 million a month.

Carmine says the Rhode Island Lottery and State Revenue office’s claims that Rhode Island’s sports betting take is down in part due to the Patriots’ Super Bowl win with local gamblers betting for the home team may be true, but it unveils one of the many flaws in the structure.

He says that if Rhode Island’s sports betting had gone off as budgeted in September, revenues would be much lower due to the Red Sox run through the playoff and the World Series win.

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Leading bookie says RI's numbers would have been worse if sports betting had launched on time last fall -- and Rhode Islanders had bet on the Sox.

“Rhode Island is lucky to have missed the Red Sox run. All the money would have been on the Sox and Rhode Island would have gotten killed,” said Carmine.

He warns that the March numbers -- sports betting’s best revenue to date -- are inflated because it reflects the revenues primarily from the NCAA basketball tournament. “March Madness" -- everyone loses,” says Carmine.

Carmine’s critique of the state’s assumptions is similar to those offered to GoLocal by the American Gaming Association (AGA).

"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.

"Further, our estimate is based on a fully stabilized market (not the first four months of operation), a tax rate of 15% (Rhode Island’s is about 50%) and a legal framework that does not include any 'unusual restrictions' (like Rhode Island’s prohibition on in-state college sports bets). All of these factors point to expected 2019 sports betting tax revenue of well below even our modest and reasonable projections," added Ponseti.

In a conference call with Sara Slane, senior vice president of public affairs of the AGA, and top researcher for the group David Foreman, the two told GoLocal that the numbers used by the state were based on a fully mature market and not a startup initiative.

“A mature market is 3 to 5 years,” said Foreman.

Bookie Says Warnings Ahead

Rhode Island’s sports betting program faces numerous other challenges. Carmine said that like the Patriots, local bettors are likely to bet both the Celtics and Bruins and both teams are likely to go deep in the playoffs.

Carmine says that many bookies only operate during the NFL football season.”Football is when all the money is bet,” said Carmine.

He also warns that Rhode Island's revenue is likely to decline as Massachusetts and Connecticut come on-line.  In January, Massachusetts Governor Charlie Baker announced his initiative to push sports betting.

“Expanding Massachusetts’ developing gaming industry to include wagering on professional sports is an opportunity for Massachusetts to invest in local aid while remaining competitive with many other states pursuing similar regulations. Our legislation puts forth a series of commonsense proposals to ensure potential licensees are thoroughly vetted and safeguards are in place to protect against problem gambling and illegal activity. We look forward to working with our colleagues in the Legislature to pass this bill into law,” said Baker.

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This story was first published 4/27/19 2:30 AM

 

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