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Three major U.S. sports betting operators are pushing back on the Vermont Department of Liquor and Lottery’s proposed regulations, known as “enhanced procedures” in the state.

Though none chose to speak at Wednesday’s board meeting, representatives from Caesars Sportsbook, DraftKings, and FanDuel all submitted written comments questioning proposed rules, from how sign-up forms should be crafted, to how know-your-customer protocols should be handled, to how to offer responsible gambling tools and what 800 helpline number should be included on websites and in advertising.

FanDuel’s 24-page letter was the most comprehensive, though the company’s two competitors echoed many of the comments.

Among the most unusual items included in the proposed enhanced procedures were requirements that operators provide their source code to an independent testing lab — which will be GLI — and that bettors would be able via chat to request to be restricted.

Source code is what proprietary wagering platforms are built on — as an example, Fanatics last year shared that it had purchased source code from Amelco to develop its in-house platform — and sharing such information could be considered divulging trade secrets and could potentially put operators at risk. As written, the proposed procedure would require that the source code be shared and and be “identical to that in the software submitted” for approval.

FanDuel Director of Regulatory Affairs Andrew Winchell proposed a reworked version of the rule that is more in line with other U.S. jurisdictions and does not require that a sportsbook reveal its source code:

If the Mobile Sports Wagering Platform meets or exceeds the specifications set forth in these Procedures or other technical specifications as prescribed by the Department, the independent testing laboratory approved by the Department shall certify the Mobile Sports Wagering Platform. Sportsbooks are prohibited from offering Sports Wagering in Vermont without such certification.

The proposed procedures also require “integration testing,” which Winchell called “overboard” and pointed out could result in sportsbooks being forced to integrate technology with suppliers and providers that are “not critical” to operations. Rather, FanDuel suggests a reworking of the rule to put the onus on operators to ensure that integration, where needed, is properly working.

DraftKings: 1-800-GAMBLER OK?

All three operators submitted comments surrounding responsible gambling, in large part related to advertising.

DraftKings asked that instead of using a Vermont-specific hotline, operators be allowed to use the 1-800-GAMBLER number used by many operators, particularly those that operate nationwide. It also pointed out that allowing players to request restrictions on their account via chat could lead to myriad complications, including misunderstandings or manual errors. The company suggested that, instead, Vermont institute the industry standard, which is for a player to make a request via a form on an operator website or in an app.

Among the other issues related to responsible gambling, operators suggested that bets placed before a player self-excludes should be allowed to settle, that the requirement to reaffirm player limits be removed as it could frustrate players and cause them not to use a “timeout” feature in the future, and that the department clarify some wording in the procedure that dictates marketing and advertising requirements.

Vermont lawmakers in May approved legal digital wagering in the state, where a minimum of two and a maximum of six platforms will be permitted. Operators will be chosen through a Request for Proposal process, which is set to open in August.

Department of Lottery Director Wendy Knight stated at Wednesday’s meeting that there would be two public hearings on the proposed enhanced procedures, followed by 30 days of comment review before the department issues its RFP that includes the enhanced procedures. The second public comment hearing is set for Monday, and the hope is to launch at the end of 2023.

Also on Wednesday, the board approved Sports Wagering Criminal Background Procedures.

Comments on sign-up process, promotional caps

Among the other issues brought forward by operators:

• The current rules require operators to indicate “required field” during the sign-up process, which several operators wrote is out of the ordinary and would cause them to rework existing forms.
• Both DraftKings and FanDuel pointed out that the proposed procedures would require players to individually acknowledge a series of items that are covered under sportsbook terms and conditions. Both suggest the rule (Part IV, Section 1.3(c)-(g)) be struck and that potential players acknowledge the information as a whole in the terms and conditions section, as is the industry standard.
• FanDuel requested the removal of two sections related to the sign-up process, one that currently requires an “exact match” vs. a “flexible match” during the KYC process and another that requires a player authentication process above and beyond the norm. Both requirements, according to Winchell’s comments, could frustrate customers and send them back to the black market.
• All three operators asked for the revision or removal of Section 6.2, which would allow the lottery to set limits on promotional play. Caesars’ Lisa Rankin wrote that “this sort of value is not typically set” by a regulator, and Winchell wrote that such caps could result in “less attractive offerings” than those made in neighboring states. He pointed out that VIP promotions often exceed more traditional promotional offers.

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