Vermont Liquor and Lottery projects FY26 sports-wagering gain, seeks $1.82M Microsoft D365 upgrade to support B2B site

Wendy Knight, commissioner of the Department of Liquor and Lottery, told the House Appropriations Committee on Feb. 10 that the agency is projecting $14.8 million in net revenue from the Liquor Control Fund and $7.6 million from sports wagering in fiscal 2026, and is requesting a one-time $1,820,000 upgrade to its Microsoft Dynamics 365 (D365) inventory system to support a new business-to-business (B2B) ordering website.

Knight summarized the department’s mission at the hearing: “we basically, have 2, a dual mission. We generate revenue ... And then we have an equally important, if not more important mission, which is to do that in a responsible and safe manner,” she said, describing the agency’s role running three enterprise funds — liquor control, the Vermont Lottery and sports wagering — while enforcing licensing and public-safety rules.

The B2B site is intended to let bars and restaurants order inventory online, create shopping carts and pick up or arrange delivery, Knight said. The department signed a contract with Provi to operate the website, but agency staff and the Agency of Digital Services (ADS) determined Provi’s platform must connect to an upgraded D365 inventory system. Knight said the $1.82 million is a one-time expense to upgrade that inventory platform, and that the upgrade cost was not known when the FY25 budget was prepared.

“That is a one-time expense,” Knight said of the D365 upgrade; she said ongoing B2B operating costs would be substantially smaller and can be detailed later. Lisa, the department’s finance director, confirmed that the related Salesforce hosting and ADS support items are ongoing costs.

Knight also discussed retail operations and outreach. The department operates roughly 80 802 Spirit stores and a network of 581 licensed lottery agents, she said, and aims to expand smaller “kiosk” stores in tourist areas and add lottery vending machines to ease pressure on agents who face staffing shortages. Knight said kiosks focus on Vermont-made products and top-selling items and that additional vending-machine deployments are complete except for one remaining unit.

On gaming and sports wagering, Knight told the committee the department downgraded its FY25 sports-wagering projection to about $6.1 million and is projecting $7.6 million for FY26. She attributed the year-to-year change in part to how bettors wagered during the NFL season — betting favorites that paid out more — and to the market maturing. “Because normally increase in the sports wagering, revenue as the market matures,” Knight said when asked why the FY26 projection rose above the revised FY25 figure.

Committee members asked about data the agency receives from operators. Knight said the department collects composite totals for events — amounts wagered, payouts and revenue share — and that the monthly reports posted on the department website typically appear by the 15th of the following month. She also said the available operator data counts user accounts and bets rather than unique people, so the department cannot directly report a consolidated number of distinct winners without further processing.

The department funds responsible-gaming services through a memorandum of understanding with the Department of Mental Health. Knight said the budget allocates $250,000 from the Vermont Lottery Fund and $250,000 from the sports-wagering enterprise fund — $500,000 total — to support a 1-800 helpline, provider training and public-awareness work; the Department of Mental Health tracks calls and referrals under the MOU.

Knight and staff answered other operational questions about delivery options, software contracts and staffing. She said the Provi B2B contract will include ongoing maintenance terms, that the D365 upgrade should remove unexpected inventory platform issues, and that the department expects no new permanent positions in the FY26 request. She also noted turnover in finance leadership and named Tracy Badeau as the finance director-designate who will take the role in March.

The committee did not take a vote during the presentation. Members asked the department to follow up with details on underage protections for self‑service lottery vending machines, delivery limits for licensed businesses, and a fuller breakdown of ongoing versus one-time costs for the B2B and D365 work.

Knight and staff provided the information in response to questions from Representatives on the Appropriations Committee during the Feb. 10 budget hearing.