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Vermont lowers online sports wagering forecast to $6.1 million for FY25 after higher-than-expected payouts
Summary
The Department of Liquor and Lottery told the Senate Appropriations Committee it is revising its FY25 online sports wagering revenue estimate from $7 million to $6.1 million after operators reported a rising share of winning payouts that reduced adjusted gross wagering revenue.
At a Senate Appropriations Committee meeting, Wendy Knight, commissioner of the Department of Liquor and Lottery, told legislators the department will revise its FY25 online sports wagering revenue projection to $6,100,000 from an initial $7,000,000 estimate.
Knight said the department derived the original estimate by annualizing the first six months of revenue after the program launched (January'June FY24), when the state realized about $3,500,000. But starting in July the department observed that the share of wagers paid out to winning bettors was increasing, which reduced the adjusted gross wagering revenue on which the state's operator-share is calculated. Knight said operator shares vary by vendor (about 33%, 31% and 31% for the three operators) and that the composite share to the state is roughly 32 percent.
The department reported that during the program's first six months the percentage of gross receipts paid as winning payouts was about 88%; in the subsequent six months that rose to nearly 90 percent. Knight said the increase of one to two percentage points in payout rates materially reduces state revenue and prompted the more conservative FY25 projection.
Knight described the product as seasonally driven, with revenue concentrated around NFL season, playoffs and the Super Bowl; she and staff said they do not yet have a full 12 months of data to complete a season-over-season comparison. Committee members asked whether Vermont could be compared to other new states that launched online sports wagering; staff said comparative analysis will be possible once a full fiscal year of data exists.
Knight said the department will provide a platform for sharing comparative data once available and noted that higher player payouts could imply increased income-taxed winnings circulating in the economy if winners spend proceeds locally.
Ending
The committee did not take formal action on the revenue projection during the excerpted session. Members requested comparative season-over-season data when the department can produce a full year of operations.
