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Vermont regulators have approved sports-betting regulations that include demands for officials to review marketing plans, despite the protests of operators.
Republican Governor Phil Scott signed House Bill 127 into law in June to permit up to six operators to offer mobile betting through the state.
The tax rate would be set through a request for proposal process (RFP) where operators competitively bid for the right to offer betting in the state, which boasts the second-smallest population of any U.S. state of almost 650,000 people, trailing only Wyoming.
However, bids must be above a minimum 20 percent revenue share for the state.
The Vermont Department of Liquor and Lottery, which will regulate sports betting, held two meetings last week to approve the regulations.
The approved regulations incorporated some changes after receiving comments from four potentially interested operators — FanDuel, DraftKings, BetMGM, and Caesars Sportsbook, as well as geolocation provider GeoComply.
However, some of the requested changes from operators were not addressed in the adopted regulations.
One of the biggest was surrounding a requirement for operators to submit an advertising and marketing plan to the regulator “which shall include strategies to limit unwanted advertising, and advertising and marketing aimed at underage persons.”
The legislation included a requirement for regulators to include such a plan in any contract with each operator, but companies still took issue with including the requirement in regulations.
DraftKings would be willing to discuss its strategies to limit unwanted advertising and preventative measures regarding advertising and underage persons, but the submission of “an advertising and marketing plan” is a novel requirement among regulated jurisdictions, the company said in its submitted comments.
“Further, through the RFP process in conjunction with the department, operators selected to offer their sportsbook product in Vermont will have submitted marketing plans and coordinate with the lottery on marketing strategies, including, but not limited to, avoiding targeting minors.”
“We believe that this is an unnecessary constraint on sportsbooks to adjust their marketing plans routinely as dictated by the market,” FanDuel added in its comments. “Further, this is unnecessary when coupled with the regulatory prohibitions around advertising contained within this part.”
FanDuel and Caesars also took issue with another advertising provision that says “no promotional inducement, bonus or credit shall exceed a value set by the department.”
"This is a significant concern for two reasons,” FanDuel wrote. “First, this will result in the department dictating marketing strategies to sportsbooks, likely resulting in a less attractive offering than can be found in either bordering states or the illegal market.”
“Second, VIP players for sportsbooks may receive significant promotional credits or bonuses due to their player activity that significantly exceed standard promotions.”
"This sort of value is not typically set by the regulatory body in the jurisdictions in which we currently operate,” added Caesars in its comments. “We recommend removal of this language.”
However, both the advertising plan language and the language capping the promotional offerings remained in the version of the language that was adopted on Wednesday.
The state also issued its request for proposal to select operators on Wednesday, with questions related to the RFP due by July 31 and responses to the RFP due by August 28.
Following the selection of operators, sports betting is expected to launch in the state in either late 2023 or early 2024.
“It is the DLL’s intent to begin offering sports wagering as soon as practical after execution of the contract(s),” the Vermont Department of Liquor and Lottery writes in the RFP.
