The timeline for the start of legal online sports betting in Vermont is now clearer. Additionally, thanks to the recent actions of the state’s Department of Liquor and Lottery (DLL), Vermonters could soon have some idea of what their options could be when that start happens.
The DLL on July 19 issued a request for proposals (RFP) regarding contracts which would allow sportsbooks to accept bets in Vermont. The RFP clarifies a target date for when that could commence provided everything goes smoothly.
RFP sets deadlines and targets for sports betting
Within the language of the RFP itself, the DLL lays out many specifics like deadlines and how interested parties should respond. Additionally, there are targets, which while tentative, could be necessary for sports betting to start on time in Vermont.
When Vermont legalized sports betting last month, it left many matters to the DLL to decide. Among those are which sportsbook operators and how many of them will receive contracts enabling them to take bets in the state.
The law expresses a preference for the DLL to select between two and six partners. However, it does give the DLL the discretion to select fewer than two if it finds that just one or even none of the parties that submit responses to the RFP are qualified. There is no flexibility on the cap of six.
The RFP is to make those decisions of how many and who based on what is in the best interest of the state. The RFP lays out a scoring system by which the DLL will make that judgment.
How the DLL will decide which sportsbooks are coming to Vermont
The DLL’s evaluation criteria for bids has two parts; revenue and technical.
For the revenue portion, there is a maximum of 200 points. Bidders can earn half of that by submitting a required estimate of the revenue they will make in Vermont and why they believe that number is accurate. The other 100 points are dependent on what percentage of revenue each bidder commits to sharing with the state.
In that regard, the minimum the law sets is 20%. A bid can earn the full 100 points in this section if it commits to pay the state at least 51% of adjusted revenue. Another 800 points is available in the technical criteria.
The strongest considerations there are given to a bidder’s:
- Hardware and software that the online sportsbook runs on
- Services that the sportsbook utilizes like age verification and payment processing
- Responsible gambling plan
Thus, a perfect score would be 1,000 points. From a certain point of view, it could be said that the bidders, not the DLL, will decide which sports betting apps will be available in Vermont. However, the RFP says certain bidders could have a leg up on the competition regardless of their score.
The RFP says the DLL will give preference to bidders that represent Vermont residents and/or “products raised or manufactured in the state.” Besides that, advantages will go to “bidders who have practices that promote clean energy and address climate change.”
While this process ideally creates heavy competition for a contract, it’s possible that the competition might not be that tense. In fact, there are reasons why the DLL might not take long to review bids.
Why the review process might go quite quickly
On Friday, DLL Commissioner Wendy Knight told Rebecca Hanchett of Gaming Today that the agency wants to notify winning bidders of their selection less than a month after the deadline for submission. That’s very realistic given the circumstances that Knight is very aware of.
There are many factors that could characterize the competition to get a contract with the DLL as more tepid than blazing hot. Most importantly, Vermont has the second-smallest population of any state. Additionally, just about 18% of that population is within the 25-39 age bracket that sportsbooks target, according to the Vermont Legislative Joint Fiscal Office’s 2021 estimate.
Therefore, the potential to capture revenue in Vermont will be small in comparison to other US markets. Sportsbook operators there know they will have to monitor their operating costs tightly in order to actually turn a profit in Vermont.
Another factor to consider is that sportsbook operators could team up on joint bids as they did in neighboring New York in 2021. There might be some risk that the DLL could reject such a bid in an attempt to get the sportsbooks to compete against each other instead.
However, the potential effect of joint bids could be leaving regulators few other options. If the sportsbooks collaborate instead of compete, that could give them an upper hand in securing more favorable terms like a lower revenue sharing percentage.
At this time, none of the notable operators have publicly confirmed or denied any interest in Vermont. It could be weeks before there is any such confirmation. But if everything goes according to plan, Vermonters will be ringing in 2024 with new legal options to bet on sports.