Vermont sportsbook RFP wants plans on converting offshore customers

Blocks conveying customer conversion
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Vermont has put out its request for proposals for sports betting operators. The document gives an idea of not only what information potential operators will need to supply to the state but also how it will be weighed by the Vermont Lottery, which will select from 2-6 operators to offer sports betting in the state.

Operators have until July 31 to submit questions about the proposal. The final date of submissions for RFPs form operators will be Aug. 18.

If selected, operators will enter into a three-year contract with the state with the possibility of two one-year extensions. Those contracts would take effect on Jan. 1, 2024.

Operators will need to offer up estimates on adjusted gross revenue as well as a bid of what percentage of AGR they would be willing to give the state.

Other elements of the RFP include:

  • How many branded sites they intend to bring into the state
  • A responsible gambling plan
  • A list of current jurisdictions they operate in
  • How long it will take to mobilize and launch in the state
  • A marketing and acquisition plan
  • Explanation of integrity monitoring systems
  • As part of the marketing and acquisition plans, operators need to specifically explain how they plan to convert Vermont residents using offshore sites into customers on regulated sportsbooks.

Additionally, operators will need to provide information regarding their commitment to climate change and affirm their solidarity with Ukraine by not working with Russian suppliers.

The lottery will use a rubric, grading applicants on a 1,000-point scale. Up to 800 points are determined by technical criteria while the other 200 are based on the proposed revenue share agreement.

Operators can earn up to 100 points on rev share with the following points assigned to the following percentage rates:

  • 20-30% – 25 points
  • 31-40% – 50 points
  • 41-50% – 75 points
  • 51% and higher – 100 points

While operators did sign up for a 51% tax rate in New York, they have since spoken out that it is not a sustainable rate and not something they are keen to repeat in other markets.

On the technical side, responsible gambling, the platform itself, and “sports betting services” are the categories where operators can earn the most points, valued at 140 each. App design is also a category with a high point value of 120.

The RFP does not stipulate how many points an operator needs to score in order to land a bid, but it does stipulate that should the lottery believe there are no viable candidates, they can choose to not move forward with sports betting at all.