Vermont Liquor & Lottery warns of declining spirits sales, adjusts sports‑wagering revenue forecast

Wendy Knight, commissioner of the Vermont Department of Liquor and Lottery, briefed the House Committee on Government Operations & Military Affairs on the department’s structure, recent revenue figures and the first months of the state’s online sports‑wagering program.

The department “runs enterprise funds,” Knight said, explaining the agency manages the Vermont Lottery enterprise fund and the Division of Liquor Control enterprise fund and recently became the regulatory agency for online sports wagering. She told the committee the Vermont Lottery ended fiscal year 2024 with about $169 million in ticket sales and that roughly $35 million was transferred to the state education fund. On the liquor side, Knight reported roughly “102,000,000 816,000” in liquor‑control revenues as stated to the committee; she said most of that amount derives from sales at the state’s spirit stores (referred to in testimony as “802 spirit stores”).

Why it matters: the department has a dual mission—generate revenue that supports the general and education funds while overseeing public‑safety work including enforcement and responsible‑gaming programs. Knight described a multiyear shift away from the elevated alcohol consumption seen during the COVID‑19 pandemic and told lawmakers that younger legal‑age cohorts are drinking less and shifting toward lower‑alcohol products. “People are becoming more health conscious, and consuming, less alcohol,” she said, noting inflation and changing consumer preferences as contributing factors.

Knight also reviewed the state’s new online sports‑wagering contracts and early results. Vermont launched its online program in January with three contracted operators—FanDuel, DraftKings and Fanatics—and a negotiated revenue‑share model (Knight reported 33% for FanDuel and roughly 31% for DraftKings and Fanatics). For fiscal 2024 the department had projected $3.2 million in wagering revenue and instead reported about $3.5 million from the January start through June; based on July–December data the department adjusted its fiscal 2025 projection to $6.1 million, with calendar‑year receipts through the reporting period at about $6.3 million.

Knight emphasized a key reason for narrowing revenue: higher player payouts reduce the adjusted gross wagering revenue subject to the state’s revenue share. “We are actually seeing a reduced estimate accrual, but the players are actually Winning more. Better than anticipated,” one lawmaker observed during the discussion.

The department is directing money from wagering and lottery to responsible‑gaming services. Knight said the department allocates about $250,000 a year from sports‑wagering revenue to the Vermont Department of Mental Health; the lottery also transfers $250,000, creating a combined $500,000 problem‑gambling fund to expand outreach, a hotline and other services. Knight said some responsible‑gaming tools are already in use—deposit limits, bet limits, account pauses and a self‑exclusion program—and that four people had signed a self‑exclusion request as of the briefing. She cautioned that early data are limited and that some metrics represent usage events rather than unique individuals.

Committee members pressed Knight on the department’s relationships with in‑state manufacturers and retailers, inflation’s effect on spirit prices, and technical details of how wagering revenue is calculated. Knight said the department holds quarterly stakeholder meetings with distillers, brewers and winemakers and that regulators are considering ways to reduce licensing burdens and improve processes for small businesses. She agreed to provide additional price‑inflation data on spirits when available.

The committee and Knight agreed to return for a follow‑up session on the department’s legislative priorities, including a planned briefing on iLottery (an online lottery subscription/service proposal Knight said she would present in more detail at a later date). The commissioner noted that the current year is one of building infrastructure and benchmarks for responsible gaming and that comparative problem‑gaming data will become more meaningful as the hotline and services take root.

Ending: Knight closed by stressing the department’s dual responsibilities—to maximize revenue that supports state funds while building responsible‑gaming safeguards—and invited further questions and a return visit focused on iLottery and other priorities.