Vermont Considers Bill to Add Wager Fee and Ban Predictions

The Green Mountain State is considering some big changes to its sports betting market.

The Vermont House is currently considering bill H913, which would ban sports event contracts offered by prediction markets. Prediction platforms would also be banned from offering markets on controversial events, including death and politics.

The bill would also impose a $0.50-per-wager tax on mobile sportsbooks, helping increase state tax revenue. Illinois passed a similar tax last year, using a tiered system that began at $0.25.

Fanatics, FanDuel, and DraftKings are the only three mobile sportsbooks currently operating in Vermont. All three also have prediction platforms, which include sports contracts.

Vermont Effort Led by Anti-Gambling Lawmaker

The new proposal was introduced into the Vermont House by Rep. Thomas Stevens. The Democrat has a reputation for opposing all forms of regulated gambling. He introduced a bill last year to re-enact the ban on gambling, but it failed to even get a hearing before a House committee.

While Stevens seems to have put his quest aside for now, H913 would still help protect bettors. 

Removing sports contracts, which are largely unregulated, would keep bettors in the state’s traditional market where problem gambling protocols are far stricter. This will make it easier for Stevens to find allies, shown by his bill’s 12 co-sponsors. 

Controversial Markets Under Fire

While states have been fighting to stop the spread of sports contracts, their focus has been expanding to controversial markets. Those involving death or political battles have raised moral questions and fears of insider trading. 

The section of H913 involving these markets states the following markets would be affected by the change:

“Criminal prohibition of wagering activities includes offering prediction market securities or commodities that are contingent on the outcome of events related to sports, contests, natural persons, politics and campaigns, disasters, war, all-hazards, or death.” 

Per-Wager Tax Will Face Strong Opposition

Illinois sent a shockwave through the industry when it added a per-wager fee for operators. The change came just a year after it raised annual tax rates, moving to a tiered system. While it helped tax revenue jump significantly, the opposition has been fierce.

The sports betting industry fought hard to stop the Illinois tax, and continues to do so. Mobile operators in the state have been passing on the costs to bettors through new fees and higher minimum bet requirements. While the market’s numbers remain strong, it is too early to tell the extent of the damage.

Vermont doesn’t have the same negotiating power as Illinois, which hosts one of the largest sports betting markets in the US. If they attempt to impose an even higher per-wager tax, sportsbooks could opt to leave the state and launch their prediction platforms instead. That would be a massive financial hit for the state, while also adding to the growing problem gambling crisis.