Sports betting may be gone in Vermont

In a surprising turn of events, Vermont's legislature is now grappling with a proposal that could potentially reverse the state's stance on sports betting. House Bill 133, introduced by Democratic Representative Thomas Stevens, seeks to abolish the recently established sports wagering framework in the Green Mountain State. This legislative initiative has sent ripples through the gambling industry and sparked intense debate among policymakers and citizens alike.

The bill's introduction comes at a pivotal moment, barely a year after Vermont embraced legal sports betting. As the last New England state to regulate this form of gambling, Vermont's decision to potentially backtrack raises questions about the sustainability and social impact of sports wagering in smaller markets.

Vermont's Brief History with Licensed and Regulated Sports Betting

Vermont's journey with legal sports betting has been relatively short-lived. The state legislature passed a bill to authorize sports wagering in mid-2023, with Governor Phil Scott signing it into law shortly thereafter. This decision positioned Vermont as the final New England state to embrace the burgeoning industry. 

The launch of legal sports betting in Vermont took place in January 2024, marking a significant milestone in the state's gambling landscape. Initially, three major players in the sports betting industry were granted licenses to operate within Vermont's borders: DraftKings, FanDuel, and Fanatics. These operators were chosen from a pool of applicants, with notable names like BetMGM and ESPN Bet being turned down in the initial selection process.

The regulatory framework established by Vermont included stringent requirements for operators. A 20% tax on gross gaming revenue was implemented, alongside substantial fees for market entry. Prospective bookmakers were required to pay a $500,000 application fee and commit to annual payments of $366,666 to maintain their operating licenses.

Despite its late entry into the sports betting arena, Vermont's market showed promising signs during its inaugural year, with an impressive sports wagering handle of $198.7 million in 2024. And, the economic benefits for Vermont were notable, albeit slightly below initial projections. The state coffers received over $6 million in tax revenue from sports betting operations in 2024. 

The Rationale Behind the Repeal Effort

The push to repeal Vermont's sports betting legislation stems from a complex web of concerns and ideological positions. One of the primary motivations behind the repeal effort is the belief that gambling, particularly sports betting, disproportionately affects lower-income individuals. Proponents of the bill argue that the accessibility of online sports betting platforms has made it easier for vulnerable populations to engage in potentially harmful gambling behaviors. They contend that the convenience of mobile betting apps may lead to increased rates of problem gambling and associated social issues. Another factor driving the repeal movement is concern over the long-term societal costs of expanded gambling. Critics of sports betting point to potential increases in addiction rates, financial distress among families, and the strain on mental health services as reasons to reconsider the state's position on legal wagering.

Potential Implications of a Successful Repeal

If House Bill 133 were to pass and be signed into law, the implications for Vermont and the broader sports betting industry would be far-reaching. As the first state to potentially roll back legal sports betting since the 2018 PASPA repeal, Vermont would set a precedent that could influence policy discussions in other jurisdictions.

A successful repeal would mean forfeiting the tax revenue generated by sports betting operations and the licensed operators currently active in Vermont's market would face significant disruption. DraftKings, FanDuel, and Fanatics would be forced to cease operations within the state, potentially leading to job losses and economic ripple effects in related industries.

The Legislative Journey Ahead

As House Bill 133 begins its journey through Vermont's legislative process, it faces several hurdles before potentially becoming law. The bill's first stop is the House Committee on Government Operations and Military Affairs, where it will undergo scrutiny and possibly amendments. Should the bill successfully navigate the committee stage, it would then need to secure approval from both the House of Representatives and the Senate.

Assuming the bill clears both chambers of the legislature, the final step would be to obtain Governor Phil Scott's signature. Given that Governor Scott signed the original sports betting legislation into law, his stance on a potential repeal will be crucial in determining the bill's ultimate fate.

Throughout this process, various stakeholders are likely to weigh in on the debate. Industry representatives, responsible gambling advocates, economic analysts, and concerned citizens are expected to provide testimony and lobby legislators regarding their positions on the proposed repeal.

The timeline for this legislative journey remains uncertain, as bills can move through the system at varying speeds depending on prioritization and the level of controversy they generate. Observers of sports betting will be closely watching the progress of House Bill 133 as it makes its way through these legislative stages.