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Vermont legalizes sports betting: What you should know.

A person holds a smartphone displaying four different sports betting apps
Jeff Chiu
Associated Press
FanDuel, DraftKings and other online gambling apps are displayed on a phone in San Francisco, Sept. 26, 2022. Vermont legalized sports betting on June 14, 2023 and observers expect the system to go live in 2024.

Legal online sports betting is coming to Vermont.

That's because Gov. Phil Scott has signed a bill that authorizes the state Department of Liquor and Lottery to set up a betting system with as many as six national companies.

What is sports betting?

Online sports betting allows you to bet on the outcome of a game or possible outcomes in a game. The majority of bets are proposition bets, which are made on possible outcomes, for instance, how many strikeouts there will be in an inning.

Online betting was prohibited in every state except Nevada until 2018, when the U.S. Supreme Court struck down a law banning this activity – that law was known as the Professional and Amateur Sports Protection Act, and it was passed in 1992. The ruling opened the floodgates for states to adopt their own sports betting legislation.

Why did Vermont lawmakers legalize sports betting this year? 

Thousands of Vermonters already engage in legal sports betting by going to another state. Since betting relies on the location of your phone, a Vermonter can place a bet if they are physically in a state that allows betting, like New Hampshire. People do travel for sports betting! The practice of blocking or allowing sports betting depending on your physical location is known as geofencing.

It is also believed that many Vermonters currently place online bets with illegal companies set up outside of the United States, and there are no consumer protections associated with these operations. This bill is viewed by its supporters as an important consumer protection measure.

More fromFresh Air:The story behind the sports betting boom

What kinds of sports will you be able to bet on? 

A person can place a bet on almost any national or regional professional or college sporting event, but high school and middle school events are specifically prohibited.

In addition, a Vermonter cannot place a bet on a collegiate sporting event involving a “primarily located” Vermont institution, unless that college is playing in a national sports tournament – like the University of Vermont playing in the NCAA basketball tournament.

Where will you be able to place bets? Will there be any physical locations, or is it all done electronically?  

Everything will be done electronically – the bill specifically does not allow any physical betting sites in Vermont. And, credit cards cannot be used for betting purposes, which is also true for all Vermont lottery games at this time. You need to use a debit card to reflect that there is cash in the bank to pay for the bet.

Is there an age minimum to place bets? 

The minimum age is 21 – just as it is for any of the lottery’s other games.

How soon can you make bets? 

The goal is to have the system up and operating in January. It will take some time for the Department of Liquor and Lottery to take bids from the national companies and then negotiate what share of the company’s profit will be sent to the state. The bill does limit the number of national companies to no more than six at the outset.

What kind of safeguards exist to prevent cheating? 

Cheating is something that could happen right now with the large illegal sports betting market. National companies should have an algorithm in place to alert people if unusual betting activity occurs.

For instance, if the UVM basketball team is expected to play a very close game in the NCAA basketball tournament, in which case betting on a publicly-funded Vermont institution would be allowed, and the betting line shows a lot of money for UVM to win by more than 20 points – the system will pick up this unexpected behavior.

More from NPR: Suspicious sports bets involving University of Alabama

The memory of the betting scandal in the 1919 World Series, where players on the Chicago White Sox were paid to throw the games, gets mentioned all the time. The players were seeking a salary raise and the owner refused to pay them. So gamblers placed lots of money on the other team and paid some of the White Sox players to lose on purpose! And there are other examples of sports players receiving bribes to try to affect the “point spread” in games – so their team might still win – but not by the point spread that gamblers had established for the game.

Are your betting earnings taxed? How much? 

All lottery winnings must be declared as “income” to the state and the federal government, and sports betting follows this model.

How much money is the state going to get from this, and where is it going to go? 

It is estimated that the plan could raise between $2 and $3 million a year at the start. However, once the system is fully operational – which could take a few years – it could increase to between $10 and $15 million dollars a year.

The money will be deposited in a special Sports Wagering Enterprise Fund. This fund will be used to pay the additional administrative costs for the Liquor and Lottery Department, which are expected to be around half a million dollars a year at the outset.

The bill also calls for the state’s problem gambling fund to receive $250,000 a year. Lawmakers were told this was needed because it is estimated that addiction rates for online sports gambling are roughly twice as big as for other types of gambling, like poker or horse racing.

What other states have legalized sports betting, and how has it worked elsewhere?

Most U.S. states, including every other state in the Northeast, have authorized online sports betting. Massachusetts is the most recent, starting on April 1. How individual states administer this program varies – some have taken the so-called “state control” model, like Vermont, while others allow the national betting companies to mostly regulate the system. Vermont will be watching the experience of these states to avoid potential problems in the future.

Bob Kinzel has been covering the Vermont Statehouse since 1981 — longer than any continuously serving member of the Legislature. With his wealth of institutional knowledge, he answers your questions on our series, "Ask Bob."

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