Vermont is the latest state to be investigating what is becoming a growing trend in the U.S. legal and regulated sports betting marketplace. Adding a per-bet tax to all sports wagers in the state is an idea being floated by state lawmakers.
House Bill
H193
would do just that: add a per-bet tax to every sports bet placed in the state. Sponsored by Rep. Thomas Stevens, this bill also proposes to amend Vermont’s sports wagering statutes to add a per-wager fee of $0.50 for all wagers made through the state’s sports wagering operators.
Vermont taxes its three online sportsbooks - DraftKings, FanDuel, and Fanatics - at a rate between 31-32% on adjusted revenue. The
per-bet tax would be charged
the moment a bet is placed. For example, on a $5 bet, the $0.50 surcharge would be a 10% increase on a player’s bet.
Bill H193 was referred to the House Committee on Government Operations and Military Affairs.
Along with the new tax rate, Bill H193 would also prohibit prediction markets operating in Vermont from offering event contracts on sports, natural persons, politics and campaigns, disasters, war, all-hazards, or death.
Vermont is the latest state to consider a per-bet tax on sports betting
Several states are looking for new sources of revenue to offset recent cuts in federal funding. And states with legal and regulated sports betting are eyeing that entity as an ideal source of additional revenue.
Illinois was the first state to implement this game plan. Last July, the state added a 25-cent tax on every sportsbook bet placed in the state, up to the first 20 million bets. Beyond that threshold, every wager is taxed at 50 cents per bet.
This per-bet tax is having a negative impact on Illinois sports betting. Betting sites responded to the tax increase by passing on the costs to bettors. This was done through setting higher minimum bets.
The per bet tax is also hurting the bottom line when it comes to revenue earned from sports betting. Illinois is showing a 25% year over year decrease in sports betting revenue since the new tax rate was instituted. There’s already a bill in front of the state legislature in Springfield calling for the per bet tax to be rescinded.
“It is 100% affecting behavior, and how do we know this? Because it’s only happening in Illinois and nowhere else in the country,” said Joe Maloney, President of the Sports Betting Alliance, a lobby group representing several of the major sportsbooks in the U.S. marketplace.
Nonetheless, Michigan is proposing to follow suit. In her budget for the 2027 fiscal year, Michigan Governor Gretchen Whitmer proposed a per-bet tax system in her state that is identical to the Illinois system.
Vermont’s plan would ratchet up the tax rate even further. The state is planning to go directly to a $0.50 per-bet tax. In a tiny state like Vermont, that level of tax increase could make a major impact on sports betting’s bottom line.
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