The committee studying whether and how to legalize sports betting in Vermont has put the finishing touches on its recommendations, including the suggestion that lawmakers may want to adopt a model similar to the high-tax jurisdictions of New Hampshire and New York.
After meeting throughout the fall, Vermont’s Sports Betting Study Committee met again briefly this week to finalize its report to the legislature, which recommends the New England state legalize and authorize online sports betting sites.
Doing so would help convert the state's existing, illegal market for sports betting into a "robust, regulated market," the report says, in addition to providing consumers with more protection and generating tax revenue for the state.
Back in the New York groove
The final report to the legislature recommends a minimum of two but not more than six online sportsbook operators for Vermont, the only New England state that has not yet legalized sports betting.
Moreover, the report prescribes a "state-control" model that will select those operators through a competitive bidding process for "exclusive contracts" to offer sports wagering in the state.
And, while the committee agreed that a state-controlled model would be best for legal sports betting in Vermont, which has no casinos or racetracks, the members also agreed that the state shouldn't offer its own wagering platform via the lottery. Instead, the committee members want something more along the lines of what some other nearby jurisdictions have done.
“The Committee recommends that a sports wagering bill should establish a competitive bidding process for the selection of the State’s sports wagering operators,” the report said. “The competitive bidding process may be structured to be similar to New Hampshire or New York.”
Both New York and New Hampshire have a 51% tax rate on online sportsbooks, and for New Hampshire that only applies to the state's sole operator, DraftKings. Furthermore, in New York, the relatively high tax rate has prompted some operators to pare back their spending, even in a competitive market populated by nine mobile bookmakers.
Nevertheless, Vermont’s study committee, which was formed by legislation passed earlier this year, said it took “extensive testimony” on tax rates and revenue shares and decided against a formal recommendation for a minimum level. That was despite testimony from the industry that pushed for a statutory rate, as it was argued that would provide predictability and spur competition in the state.
Instead, the committee decided to side with arguments in favor of an undefined revenue share, such as that it would provide more revenue for the state.
Going mobile
The final report from Vermont’s sports betting committee now puts the ball in the court of lawmakers in the state when they return to Montpelier in early January. Vermont remains the lone holdout when it comes to legal sports betting in New England, but Gov. Phil Scott still supports regulation and was recently reelected.
In addition to a recommendation to adopt "comprehensive" measures to address problem gambling, the committee also settled on a purely online model for sports betting in the sparsely-populated state. There will be, however, some investigation into whether brick-and-mortar gaming would work as well.
“Based on the testimony and evidence presented by experts and regulators, the Committee has found that the best option for Vermont is to first open the sports wagering market with mobile and online wagering,” the report says. “The Committee then recommends that the Department of Liquor and Lottery could conduct a feasibility study to determine whether retail wagering could be viable in certain locations.”
