First state to potentially fold on the lottery

By Kate Northrop

Three Vermont lawmakers proposed a one-page bill that would repeal both the Vermont Lottery and sports betting last month.

Vermont could become the first state in the nation to repeal its lottery if House Bill H.133 passes.

The passing of the bill, co-sponsored by Representative Tom Stevens, Representative Michael Mrowicki, and Representative Troy Headrick, would mean that legal gaming would essentially come to an end in Vermont.

Anyone "offering a lottery or sports wagering is subject to criminal provisions," according to the language in the bill.

Since the Supreme Court repealed the Professional and Amateur Sports Protection Act in 2018, regulated sports betting surged in dozens of states and has developed into a formidable competitor for state lotteries.

H.133 would also mean a quick end to the brief stint sports betting has had in the state so far. Sports betting was legalized in Vermont in 2023 and was only launched in the state just last year.

The motivation behind the repeal stems from the perception of regulated gaming as a "predatory" and "regressive" tax on low-income residents.

"State-sanctioned gaming functions as a camouflaged form of regressive taxation," Headrick told PlayUSA. "It disproportionately harms low-income and working families who are forced into desperate financial decisions."

In Fiscal Year 2023 alone, the Vermont Lottery brought in about $159 million in revenue and paid out nearly $105 million in prizes to players. After operating expenses and prize payouts, the Lottery transferred $33.56 million to the state, a 7.8% increase from the previous year.

"I would hope that just-minded legislators in other states take a hard look at how these predatory contracts extract wealth from their most vulnerable residents," Headrick continued. "The losses are predictable, and the harm is measurable. No state should rely on a funding mechanism that depends on its people losing."

Last July, the Vermont Department of Mental Health launched a responsible gambling website that offers residents access to resources for gambling addiction, a 24-hour live chat, and a helpline, with the goal of serving more than 11,000 residents with a gambling disorder.

"We obviously had lottery and scratch-offs, which there are people that become addicted to those as well," Department of Mental Health Medical Director Dr. Kelley Klein had said. "But we knew that when online sports betting went live, we would have a rise in individuals that were at least at risk for problem gambling or gambling addiction."

While the introduction of the bill may seem alarming for fans of the Vermont Lottery and sports betting alike, residents might not have much to worry about. Even the co-sponsors of the bill themselves are skeptical that the bill will get very far.

"I won't pretend to know how the Governor thinks, but given his refusal to consider progressive tax reforms and his reliance on austerity measures that cut deepest into the lives of the most vulnerable, I doubt he'd be eager to give up the financial buffer that state-sanctioned gaming provides," Headrick said to PlayUSA.

For it to become law, it would have to pass in both the House and the Senate before making its way to Governor Phil Scott's desk to be signed. The bill was referred to the Committee on Government Operations and Military Affairs for further discussion.