Vermont Receives Five Bids for Sports Betting Licenses

After receiving five bids for operator licenses, Vermont took a step closer to launching its online sports betting market last week. The bids were received in response to a Request for Proposal sent out by the Vermont Department of Liquor and Lottery (VDLL), the top regulator for sports betting in Green Mountain State. DraftKings, FanDuel, BetMGM, Fanatics, and ESPN Bet all submitted bids for the state’s six licenses. The small market has prevented smaller operators from getting involved, especially now that three of the country’s top four sportsbooks will likely operate there.

The VDLL will now review the bids to determine if they will award each a license. They will be rating the proposals on a scale of 0-1,000, with much of the rating depending on how much revenue the operator is willing to share. While Vermont is allowed to have up to six sports betting operators, the law requires a minimum of two. That allows the state to keep these five operators bidding against each other, maximizing their tax revenue.

All approved operators will be taxed at 20% and pay $550,000 for a three-year license to operate in the state. DraftKings, FanDuel, BetMGM, and Fanatics have been operating in several other states, meaning they should not have a problem getting approval. While ESPN Bet is new, parent company Penn Interactive has run several iGaming platforms, including Barstool Sportsbook.

Smaller Operators Being Blocked Out of Smaller Markets

The most telling part of the announcement of the bids is that all five are major brands. It represents a trend we have seen nationwide, with smaller sportsbooks struggling to capture enough market share to break even. While states like Vermont should be perfect for local or more niche operators, it is clear that no market is too small for the power players. 

In the five years since the US Supreme Court opened the door for legal sports betting, FanDuel and DraftKings combine to own 70% of the market share nationally. BetMGM is third at 11.1%, which doesn’t leave much for the dozens of other operators to capture. Barring an issue with the VDLL, it seems this trend will be set to continue in Vermont.