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Vermont lawmakers advanced an online sports betting bill Friday, bringing legal wagering one key step closer in the region’s last holdout.

The Vermont House of Representatives Friday approved a bill that would allow statewide mobile wagering. It now heads to the Senate, where an identical version of the bill must also pass.

If approved by both chambers in the Democratic-controlled legislature it goes to the desk of Republican Gov. Phil Scott.

Vermont betting bill details

The current proposal would require the state lottery to pick between two and six operators to run mobile sports betting in the state as part of a competitive bidding process. The Vermont Lottery could pick one operator if not enough qualified companies apply.

This system mirrors the sports betting structure in neighboring New Hampshire, which likewise received bids and selected operators. Though many top operators applied, Boston-based DraftKings won a de facto monopoly after it agreed to a drastically higher tax rate than any other sportsbook in exchange for exclusive market access. No such exemption exists in Vermont’s bill.

DraftKings would again be among the likeliest candidates to bid for a Vermont license. Other market share leaders including FanDuel, Caesars and BetMGM will also likely bid. MGM operates a casino in Springfield in western Massachusetts, not far from the Vermont border.

A host of brands with smaller national footprints that operate sportsbooks in neighboring New York could also apply, including PointsBet, BetRivers, WynnBet, Bally Bet and Resorts World Bet. However, these brands have been less aggressive with state expansions in recent years and it remains unclear if they’d pursue a small market such as Vermont.

Barstool, who lost its New York sports betting license bid and whose parent company operates a casino in Massachusetts, could also be a leading candidate. Fanatics and Betr, which both have announced aggressive nationwide expansion plans and are set to launch digital sportsbooks in Massachusetts, are also potential applicants.

Last sports betting holdout

If sports betting is approved in Vermont, the entire Northeastern US, from the Virginia-North Carolina border to Canada, would have approved statewide mobile wagering. That could extend south to South Carolina and Georgia if North Carolina passes mobile legislation this year.

Vermont’s historic apathy toward sports betting and small population have helped stall sports betting legalization efforts in the state.

Though the opening of the massive Foxwoods and Mohegan Sun casinos on tribal lands in Connecticut helped spark a commercial gaming expansion through the rest of New York and New England beginning in the 1990’s, Vermont has so far resisted any notable gaming venture beyond a state lottery. It is one of the few remaining states without any tribal or commercial casinos.

Vermont is the nation’s second-least populated state, after Wyoming, which has further dissuaded substantial lobbying efforts from the gaming industry.

Still, as national attitudes have shifted – and the Northeast becomes an epicenter of legal sports betting – Vermont lawmakers have steadily warmed up to legal wagering. Lawmakers have considered bills in previous legislative sessions and with Friday’s vote, legal wagering is now closer to reality than ever.

Vermont lawmakers discussed a sports betting legalization bill Thursday, taking the first step toward legalizing sportsbooks in the last state in the region without a regulated wagering option.

A House committee Thursday heard testimony about legalizing mobile sportsbooks in the state. Both the full House and Senate would have to pass legislation before it can become law, but Thursday’s hearing gave lawmakers a first glimpse into what legal sports betting would look like in Vermont.

If a bill is passed, Vermont could be the 36th state, plus Washington DC and Puerto Rico, to start taking bets. It is the last remaining state in the Northeast that hasn’t approved legal sports betting.

Vermont sports betting details

Vermont’s current sports betting proposal resembles the structure passed in neighboring New Hampshire.

All sportsbooks would be under the purview of the state lottery. Mobile sportsbook licenses would be awarded based on a competitive bidding process.

In New Hampshire, nearly a dozen mobile sportsbook bid for licenses, each submitting a tax rate. Boston, Massachusetts-based DraftKings agreed to a 51% rate, the highest of any legal market in the country, in exchange for a de facto monopoly and was awarded the state’s lone license.

It remains to be seen if DraftKings, or any other operator, would agree to such a deal in Vermont. The nation’s second-least populated state, Vermont may not attract many operator bids. Wyoming, the nation’s least populated state, only offers DraftKings, FanDuel and BetMGM even though the state has some of the nation’s lowest tax rates and no cap on the number of permitted sportsbooks.

Vermont is one of the few remaining states – and the only one in New England – without any commercial casinos or horse tracks.

Regional market overview

Legal Vermont sports betting would close the remaining piece of the region’s sports betting puzzle. The five other New England states are either taking sports bets or have passed bills to do so.

Rhode Island was the first state in the region to approve legal sports betting. It still has only one legal mobile sports betting option, Sportsbook RI.

Connecticut has three mobile sportsbooks: DraftKings, FanDuel and Rush Street Interactive’s PlaySugarHouse. Maine is set to have between one and four mobile sportsbooks, but it’s too early to see which, if any, national operators seek to enter the market.

Massachusetts is New England’s largest market by both population and number of operators. Eleven sportsbooks are set to launch in the state, with most expected to do so in March. Massachusetts’ first three retail books, at the state’s three casinos, opened Jan. 31.

New York, Vermont’s western neighbor, is the nation’s largest sports betting market by handle. US market share leaders FanDuel, DraftKings, BetMGM and Caesars are all live in New York, along with BetRivers, PointsBet, Bally Bet, WynnBet and Resorts World Bet.

Further south, all Mid-Atlantic states have legal betting options. Pennsylvania, New Jersey, Maryland, Virginia and West Virginia all have statewide mobile sports betting. Delaware was the first state outside Nevada to take a legal single-game bet but still only permits in-person betting.

Vermont lawmakers are gearing up to consider sports betting legislation during next year’s legislative session following a recommendation from state policymakers.

A nine-member panel formally recommended the state legalize mobile sports betting in a report presented earlier this week, according to a report from Seven Days, a Vermont-based media publication. The recommendation is the culmination of months of work and is the firmest step yet toward legalizing sports betting in the state.

Vermont is the last remaining Northeastern state without a legal sports betting option or that has passed a bill to do so.

Northeast sports betting market takes shape

The nation’s second-least populated state, Vermont’s push for sports betting legalization would be perhaps more notable for filling in the US sports betting map than it would be for impacting the national wagering landscape overall. More than 30 states have at least one legal retail or online betting option.

Despite the proliferation of regulated wagering in the region, Vermont lawmakers have approached sports betting more cautiously. Vermont has typically shied away from any form of legal gambling, a trend that continues with sports betting; lawmakers in the overwhelming Democratic-controlled legislature have feared gambling prays on the economically disadvantaged, a concern that continues with sports betting.

Per reports, the committee’s recommendation has tried to alleviate these concerns by prohibiting bets with credit cards as well as daily and weekly betting limits. These restrictions could help the bill pass politically, but would potentially further handicap handle potential.

The structure of the market could be even more significant.

Vermont’s neighbors have a wide range of sports betting license structures, ranging from a competitive 15-operator market to a de facto government-controlled monopoly. Lawmakers are reportedly considering a government-bid limited structure of between two-to-six operators, but it’s still too early to tell what legislators will consider.

This would seem to echo the set up of New York, the nation’s largest sports betting market by handle, which has nine operators, each of which was approved through a complex government-led bidding process. All nine operators pay 51% of gross gaming revenue without deductions for promotions, a structure that has been criticized by most of these operators and many industry stakeholders, but has nevertheless generated more per capita tax revenue than any other state.

Vermont’s eastern neighbor, New Hampshire, has a similar structure, though it has become a single-operator market thanks to a dramatic bid by DraftKings. The Boston, Massachusetts-based operator agreed to a 51% tax rate in exchange for keeping out all other operators from the state.

Rhode Island likewise has only one operator. Connecticut has three – DraftKings, FanDuel and Betrivers – which comes from a multifaceted agreement between the state’s two major gaming tribes, lottery and off-track betting facilities, among other stakeholders.

With 14 sportsbooks, Massachusetts is set to have more online sports betting operators than all other New England states combined when wagering goes live sometime next year. Maine is set to have a handful of sportsbooks, all of which will be affiliated with the state’s Native American gaming tribes, when its first mobile platforms start taking bets in 2023 or 2024.

Likely sportsbooks and next steps

With its large US market share and New England roots, DraftKings would appear to be among the leading sportsbooks to apply for a Vermont sports betting license no matter the structure. FanDuel, the US leader by gross gaming revenue, as well as other market leaders including Caesars and BetMGM would also likely pursue licensure.

No matter the structure, it is no sure bet Vermont approves sports betting.

Despite the support of Republican Gov. Phil Scott, many Democrats in the legislature reportedly remain skeptical about legal wagering. Vermont lawmakers also have to consider hundreds of other issues when the legislature convenes next year, leaving limited political oxygen for issues such as sports betting.

Vermont’s small population could also dissuade sportsbooks and other advocates from sending lobbying or other resources to Montpellier, particularly when more high-profile states such as Texas, Georgia, Missouri, Minnesota and North Carolina are all poised to consider sports betting in their upcoming respective legislative sessions.