The legislation needed to get online sports betting sites off the ground in Vermont is officially law, but now begins the work to implement the blueprint lawmakers have laid down.
H.127, signed by Gov. Phil Scott on Wednesday, authorizes the state's Department of Liquor and Lottery (DLL) to conduct legal sports betting by signing contracts with mobile operators, such as DraftKings or FanDuel.
“I first proposed Vermont legalize sports betting several years ago and I’m happy the Legislature has come to an agreement, as well,” Scott said in a press release. “We know many Vermonters already participate in the marketplace and bringing it above board provides important resources and consumer protections.”
Vermont Gov. Phil Scott has signed H.127, an online sports betting bill, into law. The state's Department of Liquor and Lottery will now run a competitive bidding process to determine the (ideally) two to six mobile operators that will take bets:https://t.co/VWxnTHmnjv pic.twitter.com/ZSd8GYLXw5
— Geoff Zochodne (@GeoffZochodne) June 14, 2023
DLL will act as the regulator of Vermont sports betting and develop a competitive-bidding process to decide which operators will take action in the state. The legislation envisions the selection of two to six operators that will turn over at least 20% of their revenue to Vermont, in addition to a $550,000 fee they will not need to pay again for at least three years.
In determining which bids are best, the department must look to maximize revenues for the state, reduce the illegal market, and protect Vermonters from problem gambling. The DLL's board will set criteria for choosing operators with some mandatory requirements, such as ensuring applicants provide estimates of their possible wagering revenue and the percentage of those receipts they will pay to the state if chosen.
That said, the new wagering law does not force the department to choose two or more operators if there are not that many qualified applications. If the bidding process fails to produce the desired results, the regulator can select one operator, or none at all.
Residents will have to be 21 or older to wager when the state's mobile sportsbooks launch, which is expected to happen early next year. The types of wagering available to Vermonters will be plentiful, including single-game bets, parlays, props, and in-play options.
There will be a wide variety of events to wager on as well, except for high school sports and college games played in Vermont or involving state schools unless the team is playing in a tournament like March Madness. Bettors can't use credit cards to fund their accounts or place wagers.
Rules and revenue
DLL will oversee the implementation of a statewide voluntary self-exclusion program for players to ban themselves from wagering for a certain amount of time. Residents concerned about their gambling can put themselves on the list, after which they can no longer wager with the state’s authorized operators.
Operators are banned from advertising products chiefly aimed at people under 21 years old. Bookmakers are also prohibited from offering "risk-free" bonuses if they require players to risk their money.
Additional advertising restrictions include a ban on targeting residents under the age of 21 and a prohibition against promoting sports betting on a college campus.
Licensing fees and revenue received by the state will flow to a "Sports Wagering Enterprise Fund," from which will come $250,000 for the Department of Mental Health to establish a problem-gambling program and $550,000 for the DLL to cover its costs.
How much revenue the state will receive will depend on the split agreed to with operators.
The Vermont Legislative Joint Fiscal Office (JFO) estimated that a 20% revenue share could produce $1.3 million in revenue in the first year of wagering, while a 50% cut could be good for around $2 million. That could grow to around $4.6 million or $10.6 million in the second year, again, depending on the share of revenue for the state.
“Funds in the account will be transferred to the General Fund… via a direct application annually, similar to the process followed for proceeds from liquor sales carried out by DLL," a recent note from the JFO stated.
