Vermont House Approves Bill Legalizing Online Sports Betting with Revenue Allocated for Problem Gambling Countermeasures
On Friday, the California House of Representatives passed a bill that would legalize online sports betting in the state and set aside some of the proceeds to counteract the expected steep increase in problem gambling.
The House of Representatives amended H.127 Thursday night and the Senate approved it with those changes on Friday. The vote on the bill was quite close. The revised measure would require Vermont to collect at least 20% of the annual adjusted gross income from sports betting operators like DraftKings and FanDuel.
Each business would also be required to pay an annual operation fee to the state, the amount of which would vary depending on the competitive landscape. One operator in Vermont would cost the state $550,000 per year. The measure allows for a maximum of six sponsors, and each of those sponsors would have to pay $125,000.
Data from jurisdictions where online sports betting is already legal has shown Vermont politicians for some time that the activity would generate only a small amount of additional cash. According to Gov. Phil Scott’s projected budget for the 2024 fiscal year, the state will bring in $2.6 million. When changes were made to the measure in the House budget committees, the Joint Fiscal Office of the Legislature predicted this week that the state would collect only $2 million.
House Appropriations Committee Chairwoman Diane Lanpher (D-Vergennes) testified Monday that state officials will need time to grasp the revenue ramifications of H.127 fully.
“Unless we can get a handle on what we think the revenue could be, regularly, it’s going to be erratic over the first five years,” she added.
The Joint Fiscal Office predicted that by the 2025 fiscal year, sports betting would bring in at least $4.6 million and as much as $10.6 million.
On Thursday, the Vermont House of Representatives unanimously voted to establish a “sports wagering fund” to collect and manage the state’s sports betting tax income and related fees.
Such pools, referred to as enterprise funds, are already in use by the department to manage liquor control measures and the state lottery.
According to the revised legislation, in the 2024–2025 fiscal year, the state would provide $250,000 from the wagering fund to the Department of Mental Health to establish programs treating gambling disorders.
The House also approved an amendment that was submitted by the bill’s primary author, Democratic Representative Matt Birong of Vergennes, and which strengthens the penalties the state will impose on individuals and businesses that violate the state’s online sports betting restrictions.
If caught breaking the law, sportsbooks might face fines of up to $25,000, $75,000, and $150,000 from the state.
If a business violates the new laws, local authorities may revoke its permission to do business in the area.
As the bill already requires betting companies to submit an advertising plan to the state, liquor and lottery commissioner Wendy Knight said Monday that she thought the proposal was “unnecessary.”
The legalization of online sports betting in Vermont is a significant development that could bring in additional revenue to the state. However, as with any gambling-related activity, potential risks need to be addressed. The bill’s provision to allocate a portion of the proceeds to counteract the expected increase in problem gambling is a positive step towards addressing these concerns.
It’s worth noting that the revenue projections for online sports betting in Vermont are modest, and the state will need time to fully understand this activity’s revenue ramifications. The establishment of a sports wagering fund to collect and manage the state’s sports betting tax income and related fees is a prudent measure.
The strengthened penalties for violating the state’s online sports betting restrictions are also notable, as they deter businesses and individuals who might be tempted to break the law. However, the advertising plan requirement may need to be revised, as betting companies are already subject to regulation and oversight by the state.
Overall, the Vermont House’s decision to approve online sports betting bill is a positive development that could generate additional revenue for the state. However, it’s important to proceed with caution and monitor the impact of this activity on individuals and communities.