The post Vermont Regulators Aiming For Go-Live By End Of Year In Competitive Market appeared first on SportsHandle.

When New Hampshire lawmakers legalized sports betting in 2019, it appeared the intent was for bettors to have a choice of who they would bet with. But after the state lottery reviewed bids, it granted DraftKings a monopoly on both retail and digital betting in exchange for a 51% cut of revenue.

While those in neighboring Vermont would like to see a similar take of revenue, Division of Lottery Commissioner Wendy Knight said revenue is one of three key priorities for her agency, which has a goal to make sure those in Vermont are protected, educated, and have options.

The plan is to have wagering live by the end of this year.

“It’s been the intention all along to have competition. The sports betting committee recommended that, governor talked about that, and the legislature wants that,” Knight told Sports Handle Friday. “That’s the intent. The legislature was really clear, that maximizing revenue is not the top priority. … It’s consumer protections and moving off the illicit market. So there are really three top priorities, and maximizing revenue doesn’t top any of them.”

Knight’s agency has created the Request for Proposals that operators will complete in their quest to win one of up to six wagering platforms in Vermont. The Division of Lottery Board of Directors last week approved the evaluation criteria that will be included in the RFP and plans to approve the “enhanced procedures” that will also be included in the RFP at a July 17 meeting.

The enhanced procedures are Vermont’s version of wagering regulations — Knight said the process for enhanced procedures is nimbler and quicker than developing regulations, making it a better fit for rules around a new offering in the state.

The proposed enhanced procedures are currently posted on the lottery website, and the public comment period on them closes July 14 — 30 days after Gov. Phil Scott signed sports betting into law.

High revenue share or tax a deterrent

Vermont’s new law allows for a minimum of two digital platforms and a maximum of six. Retail wagering is not legal. The legislation does allow for the state to have a single operator, but only if all others don’t meet the criteria to operate in the state.

What will make the bid process most interesting — as it did in New Hampshire — is that the legislature did not set a firm revenue-share rate, meaning that operators will have to include what they will offer the state in their bids, and that number could be negotiated. The legislature set the minimum revenue share at 20%, which is on the higher side of tax or revenue shares across the country.

Of the 39 U.S. jurisdictions where wagering is legal, eight have tax rates of 20% or more and five have rates of 50% or more. In Delaware, New Hampshire, and Rhode Island, one operator has a monopoly and all are managed by the state lottery.

In New York, the biggest legal and live state in the nation, nine mobile sportsbooks operate at a 51% tax rate, but there have been proposals to bring the rate down to help operators from a business standpoint. In Arkansas, major operators took a pass as the state is too small to merit paying a 51% tax. Arkansas’ population is about 3 million, compared to Vermont’s 647,000.

Regulators in Vermont aren’t blind to the small size of their state. In a Division of Lottery board meeting last week, there was discussion about how the size of the state could be a challenge for operators, but that the goal was to make it attractive enough that those betting have choices.

Running Top 20 #SportsBetting handles for May (1/2)

1 New York $1.36B
2 New Jersey $778.85M
3 Pennsylvania $495.59M
4 Massachusetts ~$455M
5 Maryland $320.2M
6 Michigan $305.28M
7 Indiana $283.44M
8 Tennessee $279.79M
9 Louisiana $193.59M
10 Iowa $147.72M#GamblingTwitter

— Chris Altruda (@AlTruda73) June 22, 2023

Regulator got ahead of the game

Knight said her group started work on the RFP and enhanced procedures long before the legislature approved wagering, in an effort to make it sure it would be ready for launch by the end of the year. From here, she expects the RFP to be open for bids by the end of July.

The lottery hasn’t settled on how long the RFP will be open, but since Knight is calling the timeline “aggressive,” it will likely be in the 30-60 day range, which would then give the regulator time to review and negotiate bids and vet potential operators.

The RFP will include two key sections: technology and revenue. Applicants will be graded on responsible gambling programs, integrity, ethics, compliance history, strength of sports betting program, and more. Some sections will be weighted more than others. On the revenue side, the higher the share, the more points are available.

Vermont has already contracted with Gaming Laboratories International and sister company Bulletproof to help it move through the regulatory process. GLI consults with more than half of all legal U.S. jurisdictions.

Vermont just legalized sports betting, so we put together this handy Q&A to walk you through how it’s going to work –> https://t.co/nLERnLnyjF #vtpoli

— April McCullum (@april_mccullum) June 16, 2023

Multiple operators followed the legislative process, testifying at hearings and offering input. Despite the size of the state, it’s not unreasonable to think that there will be plenty of interest. Thirteen operators submitted bids in New Hampshire, including DraftKings (the ultimate winner), FanDuel, and PENN Entertainment (Barstool Sportsbook), while four national operators are live in Wyoming, the least populated state in the nation.

Since Vermont is on the back slope of the legalization curve, stakeholders there have had lots of opportunity to study and learn from other jurisdictions’ experiences. Lawmakers meticulously crafted a law that they thought fit the state, placing a premium on consumer protections and education programs. They also gave the regulator the ability to be agile and respond quickly, with Knight heavily engaged in the legislative process.

“I think the message I got loud and clear is to make sure you put the intent and framework into statute and you have as much flexibility in regulation as possible,” Knight said. “I think we benefited immensely by having such tri-partisan support for this.”

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