After Failed Repeal Push, Vermont Lawmaker Proposes Per-Bet Fee to Cripple Sports Betting Market

Per-wager fee could prompt operator exits, eliminating Vermont's $7.2M annual betting tax revenue.

A new bill in the Vermont House of Representatives would fundamentally change how the state taxes sports betting, shifting from a system that taxes operator profits to one that charges bettors a flat fee every time they place a wager, regardless of whether they win or lose.

House Bill 913, introduced in February 2026, proposes charging a 50-cent fee on every sports bet placed through Vermont’s three licensed mobile platforms: DraftKings, FanDuel, and Fanatics. The legislation also seeks to ban prediction market platforms like Kalshi and Polymarket from operating in the state.

The bill was referred to the House Committee on Government Operations and Military Affairs and is currently categorized as a “short-form” bill, meaning it outlines primary goals but lacks the detailed regulatory language typically required for final passage.

How the Per-Wager Fee Works

Unlike Vermont’s current tax system, which takes approximately 31-32% of the revenue operators keep after paying out winners, the proposed 50-cent fee would be charged at the moment a bet is placed.

This “transaction tax” model means bettors would pay the fee whether their wager results in a win, a loss, or a push. Industry observers point to Illinois as a precedent, where major operators implemented similar fees in 2025 by passing the cost directly to customers as a surcharge on their bet slips.

The fee structure would impact different types of bettors unevenly. For someone placing a $5 wager on a single play, the 50-cent fee represents a 10% surcharge. For a $500 bet, it’s only 0.1%. This means recreational gamblers making small, frequent bets would face a proportionally higher cost than high-stakes bettors.

The Illinois Experience

Vermont’s proposal mirrors legislation already implemented in Illinois, though with key differences. Illinois uses a tiered system: operators pay 25 cents on the first 20 million bets placed annually, then 50 cents on subsequent wagers. Vermont’s bill would charge a flat 50 cents from the first bet, providing no lower-tier relief.

The population disparity between the two states is significant. Illinois has approximately 12.7 million residents, while Vermont has roughly 650,000 — about 20 times smaller.

Early results from Illinois suggest the fee has changed betting behavior. According to reports from the state, the number of individual bets placed dropped 15% year-over-year in September 2025, representing about 5 million fewer wagers. At the same time, the average bet size increased 28%, suggesting casual bettors making small wagers were the primary group affected.

Illinois operators responded to the fee by either adding direct surcharges or increasing minimum bet requirements to as high as $10 in some cases.

Who’s Behind the Bill

The legislation is sponsored by Rep. Thomas Stevens, along with 12 co-sponsors. Understanding the sponsor’s history provides important context for the bill’s intent.

In February 2025, Stevens, along with co-sponsors Troy Headrick and Michael Mrowicki, introduced House Bill 133, which sought to completely repeal legalized sports betting and the state lottery. That bill would have re-criminalized all wagering activities and subjected operators to fines and potential imprisonment.

When H.133 failed to advance, industry analysts interpreted the current per-wager fee proposal as an alternative strategy to make Vermont’s betting market economically unsustainable for operators rather than banning it outright.

Prediction Market Ban

Beyond sports betting taxation, H.913 also targets prediction markets — platforms where users can bet on the outcomes of real-world events beyond traditional sports.

The bill would amend Vermont’s criminal code to explicitly prohibit offering prediction market securities or commodities. This targets platforms like Kalshi and Polymarket, which operate under federal commodities regulations but face increasing scrutiny from state gaming regulators.

The proposed ban would cover a wide range of events: sports outcomes, political elections, natural disasters, international conflicts, and even mortality-based contracts sometimes called “death pools.” The bill would also void any contracts related to these markets and allow Vermonters to pursue civil action to recover money lost through such agreements.

This puts Vermont in the middle of an ongoing jurisdictional battle. Prediction markets are currently overseen by the Commodity Futures Trading Commission (CFTC) at the federal level, which classifies them as “Designated Contract Markets.” The platforms argue that federal law preempts state gambling regulations. However, state regulators in Nevada, Michigan, and New York contend these platforms are functionally identical to sports betting and should be subject to state gaming laws.

Vermont’s Betting Market

Vermont launched mobile-only sports betting in January 2024 through a competitive bidding process that selected three operators. During its first year, the market generated $7.2 million in tax revenue, close to the state’s $7 million projection.

The state’s total betting “handle” — the total amount wagered — reached approximately $198.8 million in the first year. However, reports indicate that less than 15% of collected tax revenue has been allocated to problem gambling programs.

Approximately 30-38% of Vermont’s betting activity comes from out-of-state residents who use Vermont’s digital platforms, meaning the proposed per-wager fee would largely tax non-Vermonters.

Industry Warnings About Market Viability

Gaming industry groups have raised concerns about Vermont’s ability to sustain a regulated betting market under the proposed fee structure. The Sports Betting Alliance, which represents major operators, argues that per-wager fees drive recreational bettors toward unregulated offshore sites that don’t charge such fees.

Vermont is one of the smallest betting markets in the United States. Industry analysts warn that the combination of a 50-cent per-bet fee on top of the existing 31-32% revenue tax could prompt one or more of the state’s three operators to exit the market entirely. If even one operator leaves, the loss of competition could reduce the user base and result in permanent revenue losses for the state.

There is currently no official fiscal note or revenue projection from the Vermont General Assembly showing how much money the per-wager fee might generate or how it might affect overall tax collections.

What Happens Next

As a short-form bill introduced late in the legislative session, H.913 faces significant procedural hurdles. Bills in Vermont must pass their chamber of origin by the “crossover deadline” to remain viable for the current session. With no recorded committee testimony or fiscal analysis yet completed, passage in 2026 appears unlikely.

However, the bill signals ongoing legislative intent and could serve as a template for future sessions. The broader jurisdictional conflict between federal commodities oversight and state gambling regulation is expected to continue escalating, with legal scholars predicting the issue may eventually reach the U.S. Supreme Court.

If similar legislation eventually becomes law in Vermont, several outcomes are possible: operators might withdraw from the small market, bettors could see immediate surcharges added to every wager, minimum bet requirements might increase to $5 or $10, or price-sensitive recreational bettors might shift to offshore sites that lack the age verification and responsible gaming protections of the regulated market.