Liquor and lottery revenues rise in FY24 but commissioner flags long-term decline; online sports wagering yields mixed results

Wendy, commissioner of the Department of Liquor and Lottery, told the Senate Economic Development, Housing & General Affairs Committee that fiscal 2024 lottery sales totaled about $169,000,000, allowing a $35,000,000 transfer to the education fund, and liquor-control receipts reached roughly $103,000,000 with $21,200,000 transferred to the general fund.

The department’s liquor revenues come largely from the state-branded 802 Spirit stores, licensing fees and enforcement penalties; lottery receipts reflect ticket sales less prize payouts, operating expenses and long-term liabilities such as pensions and OPEB. “We are running businesses,” Wendy said. “We are not in the business. The department does not promote the consumption of alcohol. We just make it alcohol available.”

Why it matters: The transfers fund core state services and education; policymakers and committee members pressed the department to explain trends that could alter future transfers.

Key details and trends

- Liquor and spirit-store sales: Commissioner Wendy said the “bulk” of liquor-control revenue is sales through the 802 Spirit stores, supplemented by licensing and fee income. For FY24, the department reported roughly $103 million in liquor-control receipts and $21.2 million transferred to the general fund.

- Lottery: The department reported nearly $169 million in ticket sales in FY24 and a $35 million transfer to the education fund. Wendy explained that large portions of lottery receipts are paid out as prizes and that the state receives the remainder after operating costs and long-term liabilities are covered.

- Liquor demand: Wendy warned the committee that liquor consumption and sales are declining and that the department projects a roughly 1% drop in liquor revenues for FY25. She cited inflation, legalized cannabis in other states, changing younger-demographic drinking patterns and the growing quality and availability of nonalcoholic alternatives as drivers behind that trend.

- Nonalcoholic products and retail impact: The commissioner said nonalcoholic beer, wine and spirit alternatives have improved in quality and that the department has no regulatory jurisdiction over nonalcoholic products sold by private retailers; those sales do not generate revenue for the department itself.

Sports wagering and responsible-gaming funding

- Launch and first-year data: Vermont launched online sports wagering about a year prior to the briefing. Wendy described the first calendar year as an “infrastructure” year and said the market is highly cyclical (NFL season, playoffs, other sporting events and tourism patterns affect monthly activity). She reported about $6.3 million in calendar-year revenue and said the department’s FY25 sports-wagering revenue projection was reduced from $7.0 million to $6.1 million based on month-to-month trends.

- Payouts reduce state share: The department reported that winning payouts represent a large share of gross receipts (88–89% in the first year), which depresses adjusted gross wagering revenue and reduces the amount available to the state. “The irony is as players win more money, the state earns less,” Wendy said.

- Responsible gaming: The committee heard that the department moved from a reactive problem-gambling arrangement to a jointly funded, ongoing responsible-gaming program supported by online sports wagering and lottery revenue. The Department of Mental Health and other providers now participate in outreach, a self-exclusion list and a centralized help line; Wendy said calls have increased and that outreach (radio, social media and other channels) is ongoing.

iLottery and retail strategy

- Online lottery plan: The commissioner said the department is preparing legislation and materials for an “iLottery” product that would allow online purchases of instant and draw tickets, in addition to existing retail and subscription options. She noted about 15 other states operate iLottery programs and committed to provide demographic and subscription data to the committee when the department returns with a fuller presentation.

- Retail footprint: Wendy said the department is considering smaller kiosk-style spirit stores in tourist areas to broaden access to retail purchasers while emphasizing that the department will not promote alcohol consumption.

Quotes from the meeting

- “We are running businesses,” Wendy said, explaining revenue components and administrative costs.

- “This is a year of infrastructure,” Wendy said of the first year of regulated online sports wagering, describing the launch and the need for several months of data to form comparisons.

What the committee asked for and next steps

Committee members asked for more detailed breakdowns of prize payouts versus gross sales for lottery and sports wagering, demographic data for proposed iLottery customers, and additional information on the outreach and responsible-gaming program. Wendy agreed to return with a fuller presentation on iLottery, subscription counts and responsible-gaming metrics.