Vermont Legislature SmartTranscripts:

[Rep. Tom Stevens]: Alright. We're live.

[Matthew Birong (Chair)]: Alright. Good afternoon, everyone. It is 01:40 on Tuesday, April 14, and we are doing an introduction walkthrough on two bills. We are starting off with h one three three, an act relating to repealing the status excuse me, statutes, that authorize the state lottery and sports wagering. We have with us representative Stevens, sponsor of the bill. How are you doing, sir?

[Rep. Tom Stevens]: I'm doing great. It's so weird to be outside of Room 9, you know, the former coat room. Right? Right. Still has the feng shui of a coat room.

[Matthew Birong (Chair)]: I remember being fortunate enough to have one of the big walkers back in the day.

[Rep. Philip Jay Hooper (Member)]: Yeah. Education was in there a while. Yeah.

[Rep. Tom Stevens]: No. It's it's weird to be out into the rest of the world. It's kinda like, you know, those animals that get rehabilitated and then gets put back out, and I feel like I'll get eaten alive if I'm not careful.

[Matthew Birong (Chair)]: Like reintroducing a catamount perhaps.

[Rep. Tom Stevens]: Exactly. Thank you for having me. This I'm representative Tom Stevens. I live in Waterbury and represent the Washington Chittenden District, which is Waterbury, Bolton, Huntington, and Beales Gorge. Mister chair, pleasure. One bill at a time or one bill at a time and then a larger conversation because they're kind of connected.

[Matthew Birong (Chair)]: What would you prefer? Was kinda wrestling with the same thought. I

[Rep. Tom Stevens]: think I think, let me introduce the Bills one at a time, and then we can have a larger conversation because it's the the the gambling conversation, the sports betting is not pro form a, but it's pretty I have some pretty concise thoughts about it and but it's part of the larger conversation about wagering and money. The table is yours. Money.

[Matthew Birong (Chair)]: So Yeah. No. I think that makes sense.

[Rep. Tom Stevens]: Yeah. So h one thirty three, proposes in its short form to repeal the state lottery, the sports wagering bills, and and to ensure that any person offering a lottery or sports wagering is subject to the criminal provisions in our statutes. And the reason for this, as a bit of a back history when, I both sat on and chaired the house general committee, Gambling was part of our portfolio, and it moved over to government operations a biennium ago, and we dealt with these issues in different ways prior to that, and then sports wagering was approved. I am just, as full disclosure, anti gambling personally, and felt like the work that we did on these issues when I was in a general housing were based on control and trying to limit access to what I felt, and not just me, but people who were on the committee who discussed this or other advocates felt like gambling is a particularly, potentially poisonous activity for a number of people and without state control. We we if we give away our oversight of these things, what does it do to the society as a whole? And so we had lots of long conversations as this committee did when when sports wagering was approved, I believe, in 2023. It was That sounds right. 2023, went into effect in 2024. And so I listened to some of the conversations that have come from the Department of Liquor and Lottery who oversees sports wagering in particular. The the lottery itself was, you had a bill this year that proposed to put the sale of tickets on your phone, which I know I personally am opposed to because the whole point of gambling to me is, impulse. And the whole point of control is if you wanted to buy if you still wanna buy a lottery ticket, you need to get up out of your house, get in your car, walk down or walk down to your store, and purchase it with cash. So there's a lot of steps along the way that can help you moderate what you're doing with your lottery ticket purchases. When you put it on a phone, you reduce those hoops to jump through, and you end up with somebody who can just impulsively, obviously, you would have to have your card available, which is something that we haven't really done much of. And so that bill to me was was a step, which to be fair to this iteration of the DLL, happens on a regular happen has happened on a regular basis. People who, when the when the state is in search of revenue, they are in search of any revenue that they can find, and they they think that the at home sales of lottery tickets would be more beneficial from a revenue basis. My argument when I'm when I stand against gambling is that is not the moral issue at hand, and those two things don't really work together very well. And so I just wanna lay that out on the table as if I sound like I'm totally offended. I also understand that gambling across the globe is the largest business in the world, and we gamble more money than we spend on, just about anything, including, movies, sports events, and any other entertainment that we have. So it's a large, large industry. So by and I've I've put bills similar to this forward, and it's received. Oh, it's still here. Bringing it forward. So, but to me, the state lottery, and and I think what state lottery has shown to you this year when we had a when we have a surplus of a 100 plus million dollars in general fund dollars to apply to, the state education fund, we all know that the state lottery, only puts in about 30,000,000. And so one could argue on one hand, what's the point? And the point, of course, is that $30,000,000 is 3¢ on the statewide tax rate, and we know that that's important, and we don't necessarily wanna see the loss of that. But we are playing some shell games with the money that's available to be put back into the education fund. But at least the lottery for the 160 some odd million dollars of sales that are, made from lottery, we do get roughly $30,000,000 back, which is which is okay. We do we do well with that, and it makes an impact. Sports wagering, on the other hand, Vermonters spent Vermonters looking at the VL website, Vermonters had spent a $160,000,000 on sports wagering in the calendar year 2025. And from that, our net was $7,200,000. So we're sending out people are sending out a 160 at a time when everybody thinks and claims that money's tight, the Vermonters, and I'll get to the number in a bit, are sending out a 100 and over a $160,000,000 of their hard earned money, and the state only sees in return 7,200,000.0. So to me, that's not a great exchange rate on the vice that we're offering that's supposed to be controlled. And, of course, we've given away to control the sports wagering to the companies, three companies that run the games for us. I have a no. Yeah.

[Matthew Birong (Chair)]: I have a quick question with that. Was that 160, you said? Mhmm. Is that this total handle with, like, wins and losses? Or is that losses at

[Rep. Tom Stevens]: No. That's the total handle of Vermonters. I I'm excluding $73,000,000 from out of state or so. This is the money that gets put forward regardless of whether you win a bet or lose it.

[Rep. Lisa Hango (Vice Chair)]: This is just this is just for what's wagering a 165,000,000?

[Matthew Birong (Chair)]: Yes. You have, like, total wagering activity.

[Rep. Lisa Hango (Vice Chair)]: Lottery purchasing for it.

[Rep. Tom Stevens]: Lottery purchase is another $160,000,000 or so. Different $160,000,000

[Chea Waters Evans (Ranking Member)]: When we So, this way, the state makes money when people lose money on gambling, right? Is that how it works?

[Rep. Tom Stevens]: Yeah, that's how everybody makes money.

[Chea Waters Evans (Ranking Member)]: Okay. So It's kind of good that we only made $7,000,000 of it in a way, you know what I mean? If they're spending 160, it must mean that it's not as. I'm just thinking through it, you know what I'm saying? Like, it would be worse if we made like $50,000,000 that would be really bad because the 160,000,000 or whatever that figure is, that big figure that people are spending, that's not what they're losing. That's just what they're gambling. Yes. Yes.

[Rep. Tom Stevens]: And that that that goes into the next chunk of conversation about when the state comes and talks about gambling, it said that out of the two out of state and in state gambling, you're talking about $235,000,000 was wagered within the state lines. So the the out of staters who come and visit wagered at a slightly higher rate than, than we did. But the way that the way that this gets talked about is, out of the $235,000,000 that's taken out of the wallet, put on the table, and then there's winnings. And somebody, you know, the the, you know, DLL will say, well, you know, there's only this much that came back that that that are we had a lot of winnings. Right? And then our cut they take their cut, they're vigorous, and then they then what's left over is ours. So the 7.2 is a function of what we signed a contract with those companies for. It was negotiated to be this level that it's at because they felt like this is a small market. It is very small market comparatively speaking, but the operations make a lot of money. And so just to give you an idea, though so the idea that, the state puts on its on its little summary sheet that the average bet was $25, just under $25 A ish. Average bet. And that's taking so who's betting? Right? It's not all Vermonters. There's 11,000 or so accounts that are made. So there's three companies. So so the state doesn't get and doesn't they either don't get or don't provide the kind of information that we would want to know how many Vermonters actually wager. So if we say there's 11,000 accounts, that's the best we can do for in state gamblers, and that's with three companies. I don't know how many of those are with one company, two companies, or three companies. But if you just if you just level it down to an average, it's a different number. Says, so out of 11,000 people, out of 11,000 accounts, you're talking about if they're if they all sign up for each betting service, that's 3,700. Right? 11,000 by three is 3,700 roughly. So out of that, let's just talk about if there's 11,000 separate accounts. Each one of those accounts, divide that into the 160 some odd million dollars, that's $14,000 per account if we just level it across the field. And that's they make a total of 6,600,000.0 bets between those 14,000. So it's not a small thing, even though the numbers are a little bit smaller than all Vermonters. The other thing to keep in mind is that that equals about 600 bets per year, which given the way that if you watch a football game, you watch all the advertising that's on a football game, you know, with the parlays, with points score, with spreads, with the you know, there's there's a there's a way to have 50 bets in a day just watching football. Never mind that we allow betting on things like ping pong, oops, table tennis, electronic basketball, which is like betting on League of Legends or some kind of games that people play on their computers with other people. So it's not even betting on real people. And then there's a sport called Bandy that I believe is in our catalog. I'm not sure whether we're allowed to vote on it. But does anybody know what Bandy is? Bandy is field hockey on ice. It's got a shaped stick. You play it with a ball. It's on ice. It's a very Scandinavian type game. Sounds like broomball in there as well. Yeah. It's broomball except it's with one of those field hockey sticks that hurts. And it's on ice. So it's just like playing field hockey except on skates. And hockey is kind of like that except it's a different it's a different stick. So that's what people can bet on, and they bet this much money. They bet each account bets, on average, $14,000 a year. So much money. And so I get and I get that some people feel like you know, I feel like this is a poison, personally. I And know that people feel like property taxes is a poison. But there are plenty of people who are being asked to spend $14,000 on property taxes or any taxes. So it's a weird situation. Yes. There are winners and losers. So to your to your point, we don't have state statistics. So we rely on national statistics, or we can rely on national statistics. Three to 5% of all gambling make money on a consistent basis, which means 95 to 97% of the people don't. In studies that have been done, the non gamblers or I'm sorry, the non winners claim they lose about seven and a half percent year end, which is self reported. But, again, ninety seven percent of the players don't win, and the the the this it's stacked against you. You're playing in a casino. So it's not fifty fifty. It's not flipping a coin. The sports betting companies take what's called a vigorous. They take a fee. It says so that you might have to bet a $110 to win $500 in the online betting, which means that the company gets the $10 no matter what, and you have to win, I think the number nationally is close to 53% of your coin flips in order to break even. Those are the federal statistics. We don't know what it's like here in Vermont with those 3,700 to 11,000 people. So, you know, again, this is a losing battle or a losing game. It's a losing battle to be against gambling. Okay. It's but it is definitely, to me, it for the state to be sponsoring this kind of this kind of gaming, it it borders on it puts a question of responsibility, not just play responsibly, but the responsibility. The same thing with lottery. One of the issues I'll go back to lottery for a second. One of the issues that I've had for every lottery director was and the alcohol piece of it is that if you sell alcohol in a convenience store, you need to be licensed. And if you sell me a six pack of Budweiser, and I go out of my car and I drink it in an hour, and I walk back in and I ask for another six pack, you say no because I'll be drunk. If I go up into your store and I buy $200 worth of lottery tickets and I go out to my car and I scratch them in a half an hour and come back in and want to buy more, you can sell me them. You can continue to feed my dopamine rush. And the reasons I've been given is because, well, it's not a public safety issue. You're not jumping in your car and possibly driving it to somebody else if you were drunk. So there's a weird disconnect. There's always been a weird disconnect for me, which is why I keep bringing it up because gambling is an addiction. Gambling is a rush. Apparently, most people seem to be okay with it, or they can handle it, or they claim to handle it. But for the for the percentage of people that are affected by it, it destroys families. It bankrupts people, and that's what we make when we allow gambling. So that's why h one thirty three was introduced. It's kind of an annual rite of passage for me.

[Rep. Lisa Hango (Vice Chair)]: With

[Rep. Tom Stevens]: the exception of representative Birong, no one of you served with me on that committee. And so In absence of Rebecca. Yeah. And so it's so you've been spared my annual or biennial rants and raves about gambling and now sports betting. So I think I'm gonna leave that here. And, Lisa, do you want me to go over about how against gambling I am again? Do

[Rep. Lisa Hango (Vice Chair)]: you No. Thank you. I think I'm really familiar with that.

[Rep. Tom Stevens]: I thought so. So, Rutland, Rutland, did you have a

[Rep. Philip Jay Hooper (Member)]: hand before Yeah. But I don't I was gonna say, I mean, nobody's gonna make that $100 bet, $110 bet to make a $100. You know?

[Rep. Tom Stevens]: That's They all do.

[Rep. Lisa Hango (Vice Chair)]: Like

[Rep. Tom Stevens]: That's what you that's what you do.

[Rep. Lisa Hango (Vice Chair)]: You haven't bet my sister, Lisa.

[Rep. Tom Stevens]: It depends on the spread. If you win, you get your $110 back plus your 100.

[Rep. Philip Jay Hooper (Member)]: Oh, I see what you're saying. Okay. So it'd be $2.10 total.

[Rep. Tom Stevens]: Yes. But you're betting a 110. That's and that's the whole thing about any kind of point spreads or any kind of betting whenever you see whenever you see, on ESPN, not the sports network, but the the betting assistant. You know, it's like they give you all the betting odds that you could ever possibly want, you know, in lieu of sports. And, actually, this is the final thing I'll say about sports betting. We have seen it long enough to know that when we see Kevin Hart and LeBron James and other people advertising this on television, and they kind of cut in the word Vermont because it's legal in Vermont now. What they've created is a culture where people go to games now, and you have to be rich enough to go to games, and they bet on their phones at the games, and they yell at the athletes when the athletes don't make their prop bets or their parlays. Athletes are being threatened from every level that where it's where it's allowed, including college basketball. And families are being threatened, and it's a cultural change that is hard. I'm not gonna say get off my lawn quite yet. I'm not that old. Mhmm. But I'm close when it comes to this. When I see how athletes who are, by all accounts, wealthy individuals, but they're humans and they and they're all on social media and they respond to what's happening. And it's just added a layer of vitriol that I find hard to feel like we're doing a good thing by allowing it. Off that soapbox.

[Rep. Lisa Hango (Vice Chair)]: Repentance. This also include the ripped tickets?

[Rep. Tom Stevens]: No. K. No. That conversation was had over with in almost every year that we've talked about gambling and and the tickets and church bingos and certain what's the word for it? Begins to see people when people just have, like, a one night of betting at the golf club to raise money,

[Matthew Birong (Chair)]: and ask them that.

[Rep. Tom Stevens]: No. No. No. What? Yeah. I wanna talk about it. Yeah. It's just like a one night

[Rep. Lisa Hango (Vice Chair)]: I wanna know. Oh, I know what it is.

[Rep. Tom Stevens]: Google it. What's sounds like

[Rep. Lisa Hango (Vice Chair)]: BMWs do it all the time.

[Rep. Tom Stevens]: Yes. It's not catamount nights. It's

[Rep. Lisa Hango (Vice Chair)]: I'll get the snot. Yes.

[Rep. Tom Stevens]: There you go.

[Matthew Birong (Chair)]: There we

[Rep. Philip Jay Hooper (Member)]: go. I wouldn't have gotten that.

[Matthew Birong (Chair)]: 15 effort. For the win. On the books

[Rep. Tom Stevens]: as legal gambling. But, again, the legal gambling stuff, because we love sports betting, sports betting, you know, legal gambling gambling used to be completely illegal in the state. And things like the pull tabs or, you know I mean, churches, of course, have raised a lot of money over time. The Calcutta's raised money for nonprofits. They each have their own little quirky thing, and they are all the exceptions that we make in Vermont because we make exceptions. And to go even further back, if you remember the name Cola Hudson, this was one of his things way back when. And he, you know, made sure that that the churches and and the and the nonprofits would be protected from this kind of well, it's not I mean, bingo. If you've gone to a bingo hall, it's a blood sport at times. But it's

[Rep. Lisa Hango (Vice Chair)]: And is.

[Rep. Tom Stevens]: But it is definitely something that is a is a cultural thing that is, that existed long before even the lottery. And senator, governor Snelling signed the lottery bill in the closet because he was embarrassed that and it was the last bill that got passed by public referendum. That bill killed public referendums in Vermont. I was aware of that.

[Matthew Birong (Chair)]: Thank you for this short book. No. Remember? I got Nugent, then I got Hooper.

[Rep. Philip Jay Hooper (Member)]: On that, please.

[Rep. Lisa Hango (Vice Chair)]: I was wondering if you're aware of any effort to track some of this a little bit more closely. The person that goes and buys two sets of spends money two times, and there's no reason that we can cut them off. But then maybe they can't pay their mortgage or their health gets impacted. Are we tracking that in any way?

[Rep. Tom Stevens]: No, but there's no way. There's no way to track it. I mean, it's the cash only business, so you couldn't even subpoena, credit cards. And, you know, we've made, you know, the short answer is no. We don't train people to keep track, because it's cash. Then the way the cash is taken into the store, there's not a separate container, so you can't even track that. Then you'd know by the ticket sales, which you sold, but you don't know who bought it.

[Rep. Philip Jay Hooper (Member)]: What what year were you first elected? 1892.

[Matthew Birong (Chair)]: Yeah.

[Rep. Tom Stevens]: I just won an award. 2008. I started serving 2009.

[Rep. Philip Jay Hooper (Member)]: The last referendum? I didn't realize that we ever

[Rep. Tom Stevens]: It's we used to do but I don't know how many public referendums we ever did, but I do know that So that It was a nonbinding referendum. Sorry. It was a nonbinding referendum that was overwhelmingly in favor of the lottery when it started. It was not for education. That happened later. It was for the general fund. And, but it was there the the the amount of money and this was in the seventies. And so the amount of the vote, it was, like, 75, 25, or whatever. You can you can hear the lit, but it's just, like, it was so overwhelming that politicians at the time were like,

[Rep. Philip Jay Hooper (Member)]: I guess we have to pass that. So Are you familiar with Doncie Billups and, say, Terry Rozier? And so so can I'm curious. Have you you give a lesson on all that? And that's that sounds

[Rep. Tom Stevens]: like It's not so much a lesson, but it is a it's an indication of the of how deep when you have athletes who are making in in the case of Chauncey Billups or or Roger, they have made or are making or were making millions of dollars a year. And I can't say how many how much money of that went to taxes and fees and everything else like that. But what it it points to and in the baseball thing, there was a baseball thing where there was a pitcher who was notoriously accurate who when he hit the playoffs, all of a sudden, wasn't accurate. You

[Matthew Birong (Chair)]: know, like

[Rep. Philip Jay Hooper (Member)]: Isn't Ohtani even wrapped up in some

[Rep. Tom Stevens]: of this? Maybe. But the people who have been arrested and are gonna go on trial sometime next year, one was making 6 or $7,000,000 a year, and one was making 800,000 making the minimum, the major league minimum. And they were getting paid to tell bettors when they were going to throw a wild pitch so that when you have a prop bet

[Rep. Philip Jay Hooper (Member)]: Yep.

[Rep. Tom Stevens]: Jay Hooper's gonna throw wild pitch on the fourth pitch in the third inning.

[Rep. Philip Jay Hooper (Member)]: Yep.

[Rep. Tom Stevens]: People are gonna make that bet because they're stupid or they know the inside information, but but the prop bets are

[Rep. Lisa Hango (Vice Chair)]: It's a good bet, Sandra.

[Rep. Tom Stevens]: I was Only if you know. Only if you've been told. You know? But to the cultural point, you know, I was watching a football game just like anybody else, and, you know, there was a guy in the team that backed up against the goal line, and Hunter got the ball and kicked the ball and it bounced off the butt of the person in front of him. And the announcer's response to that before he said fumble or it was recovered or whatever was Right. Right. I bet nobody had that as a prop bet. It's changing the way we look at individual instances even within a game. Any other questions on this one? Because it gets worse with predictive markets.

[Matthew Birong (Chair)]: Yes. Maybe yes. No, it's definitely shipped over there. But I think I would say, because I ask questions with ELL and other folks within the regulatory space and folks who represent the contract entities. Right? Like, when we were talking about those bigger, higher profile national situations, marketing, like, shipping points and whatnot. They would actually say that their their cases, that's the regulated market working. And those things were still occurring in the dark market

[Rep. Philip Jay Hooper (Member)]: Yeah. Yeah.

[Rep. Tom Stevens]: With

[Matthew Birong (Chair)]: the underworld. And the regulated market and their systems within the structure of their apps are what actually flagged the weird bet, which resulted in the investigation that resulted in the pipeline task. I was just curious,

[Rep. Philip Jay Hooper (Member)]: and I know he knows. I know too much.

[Matthew Birong (Chair)]: That kind of cuts both ways on the regulated markets and the nefarious market, right? Like, which one's easier to regulate and catch the bank? So it's a broadly open ended question that has been debated.

[Rep. Tom Stevens]: And the big difference between the regulated markets and the unregulated markets is that and I'm being very stereotypical here. And then in the unregulated, in the regulated markets, if you did that and you lost all your money, you would, there's no further penalty except that which you might experience between those of who care about whether you lose the money to pay the rent or anything like that. The unregulated market, you might lose a finger.

[Rep. Philip Jay Hooper (Member)]: Fair. Yeah. Fair

[Rep. Tom Stevens]: point. Point. So predictive markets. Great segue. Predictive markets are as far worse than sports betting, and it has a lot more potential danger to, let's make believe actually, let's not believe. Let's just know that sports betting is here and it's unlikely to go away. And so budgets are being made on guessing or predicting how much money we're going to make from sports. That's now just like cigarettes or lottery tickets or alcohol. We're going to make estimates, and we're gonna know what our income is no matter how Tom feels about it. And the so that's we'll set that aside. This bill proposes this is h nine thirteen, and it proposes three things. It proposes to add to our gambling law, wagering activities that include prediction market securities, or commodities that are contingent on the outcome of events relating to sports, contests, natural persons, politics, and campaigns, disasters, war, all hazards, or death. Does does anybody said this do you know what predictive markets are? No. K. So predictive markets are in some countries slash laws considered commodities. They are you have an idea. I think that John Doe is gonna win this election, and it gets put out. And then you have access to betting on that or to make to joining the predictive market. I too think that John Doe is gonna win that election. Put your money on it, and then it sits there until the decision is made. It's gambling. But here in The United States at least, there's at least one company that it's considered a commodity. Futures contract. Which is supposedly enforced by the Commodity Futures Trade Commission, which as of today has two commissioners on it, so it doesn't have a quorum out of five. So it's not legal, or actions taken by that commission are not legal. And the chair of that commission is suing states to try to prevent them from regulating this market. You may have seen this mark. I saw it on television the day that the primaries opened in Texas for the senatorial primary between Jasmine Crockett and the gentleman who won, whose name I escapes me. And on CNN, there was a big old visual behind the announcer that didn't say that so and so had in polls that so and so had 62% of the vote and Jasmine Crockett had 38% of the vote. It said the prediction market says that 75% of the people betting on this felt that that what was his name? In the win, and 25% said that Jasmine Crockett. In other words, they were reporting or putting up a bet, a wager of body politic. Body politic felt that, Talarico was gonna win, and he did, but it wasn't by 75 to 25. So they were taking the amount of people betting on him was 75%. Oh. So this happened in the twenty twenty four election. This basically did not exist as anything more than an intellectual exercise for college professors or people who were involved with, but people figured out how to monetize it. There's one company that is can only be based offshore because it's it's not going through the commodities system. And then there's one that's that's established that is onshore and is being extensively regulated by the federal government, both though that's not in place. And then there's gonna be a third one run by the family of the president. So those are the major players in this. And what this so this bill would, and before you say this again, there is a third circuit decision that claims to prohibit the state's ability to regulate these markets. That's the headline. It's not exactly correct. But it's in the third circuit. A decision was made. The thing about predictive markets for your knowledge is that they are the one that's run offshore is crypto bulling. The one that's onshore is you can build cash accounts. And the other key thing which I will get back to is that there are no age restrictions or the age restriction in participating in commodity trading is 18. We set our sports betting at 21. So there's a real and these these predictive markets are betting on sports. So one of the keys that many states are reacting to that have sports betting are saying, oh, wait. Will this cannibalize my well, some of that $160,000,000 or $7,000,000 of profit go to predictive markets? Because and will it either cannibalize the 21 or will it suck in people from 18 to 21?

[Matthew Birong (Chair)]: That's just out there. But within that age range, right, that is the same age range that's allowed to engage with crypto apps and other apps in and around generally traded securities. Which are also SEC regulated pyramid schemes. But yes. No. No. No. Sure. But I'm just speaking to, like, the the structure in life.

[Rep. Tom Stevens]: Once you're 18, you can you can buy a commodity account and

[Matthew Birong (Chair)]: you can start day trading.

[Rep. Tom Stevens]: You're an adult.

[Matthew Birong (Chair)]: You can do crypto. You can do Right. Mean, I don't wanna I don't wanna plug plug entities here, but you you could do the same thing in and around any SEC regulated.

[Rep. Tom Stevens]: So you you have access to that. Absolutely. And so the the other piece the other piece in this, which is important to know. So the third circuit is saying is trying to do is trying to prohibit states from regulating the commodities portion of the market, and this says you should try to do it. But it also says, it proposes to amend title nine BSA chapter one zero one to ensure that the agreements for these contingent securities or commodities are deemed void and subject to civil action for recovery of lost money, which is a state allowed function. So that, in essence, would say that if if you make if you join in predictive markets, you're federally, it's there, but we can say, that we would be able to say that you can recover the lost money. And the third piece of this bill, also to go back to sports betting, also proposes to amend those statutes to add a per wager fee of 50¢ for all wagers made through the state's sports wagering operators. This is something that happened in Chicago or in Illinois. And it's been successful in lowering the usage rate of sports wagering without reducing the amount of money that the state has taken in. So the $7,200,000 that we take in on $6,600,000 bets just means that we make a dollar 10 on each bet, essentially. And, this would up that, of course. So that's the simplest part of the deal, but predictive markets, just to me, they are far worse than, sports betting because they can be corrupted by insider information. If you look back over the last several months of the news, you can read about how, the bombing in Iran when will the bombing in Iran start, and will the regime change? And some of the markets actually so the regime changed, but it changed by killing someone. And so those companies had to go back and say, oh, that's not what we meant. We just meant regime change. But the idea that people were betting, according to the research I was able to get done, Right now, there's approximately, according to the information I found, approximately 850,000 Americans who generate well over $50,000,000,000 worth of betting just in the last year. And they are I guess, some of that's crypto, some of that's cash. The market is expected to explode to be a trillion dollars by 2030. And the again, without the regulatory enforcement in place, it will be the Wild West. People will be able to set up predictive markets for just about anything and everything. And so the basic line here from an attorney I talked to who worked in this field said that the market is moving faster than the statutes that exist, which is not what happened with sports betting because we took our you know, I could say we took our time, but we took time to go through everything so that by the time it became law, this body that that committee at this time in the body accepted the work that had been done on it and felt that there were controls that were put in place. This has no controls, and the fear here is that with the expansion to with the lack of regulation, with the fact that the sports companies that we contract with now, Drop Kings and FanDuel and whoever, already have applied or have CFTC approved predictive markets set up. And from our perspective, the effective tax rate and the effective amount of income that we would raise from it would drop. So it it was just it would drop precipitously. And so counting on $7,200,000, whatever we decide, that's for its bettings for the lottery would would go up, and we wouldn't have any control over

[Matthew Birong (Chair)]: Rev Hooper.

[Rep. Philip Jay Hooper (Member)]: What are the implications of the emergence of artificial intelligence at all? Or do we

[Rep. Tom Stevens]: In the case of predictive markets, when you are trading stocks, for instance, how fast you get the information is what's important. Right. That's the first. Yeah. So if you're a millisecond behind somebody, you can't buy that particular product, you lose. And if your computer if their computer is faster than yours every time, they will win. And so in predictive markets, there's information that claims that upwards of 30% of the market is now being run by AI bots, which is a lot faster than humans. So, again, if gambling is stacked against you, if only 3% of the population is going to be a consistent winner, Of that other 97% I mean, this happened with fantasy sports. This happened with, it's happening with crypto. It's happening, it happened years ago with mortgages with the Great Recession, and it happened even further back with with stock trading, bond trading back in the nineteen eighties with it was all

[Matthew Birong (Chair)]: AI fueled analytics for the purposes of securities hedging is just a day at the office these days, whether it's Citadel, FanDuel, or Robin Hood. It's just how those institutions operate their And there's anecdotal information that a

[Rep. Tom Stevens]: lot of these companies are moving closer and closer and closer to this the pod of to to be closer to ground zero, which is essentially Wall Street, and where you know, so that they so that the information doesn't travel as far as it would if you were going to if you were trading out of Chicago, where you're a millisecond behind. Sure. So it's predict the problem with predictive markets, because regulatory things are theoretically in place, but enforcement is not, is that you have, the real possibilities of creating a system that is going to take from and it's going to say all of the work that we did on gambling is gonna go away because this won't be considered gambling. This will be considered commodity trading if everything works out in the next five years. And so it is the game is essentially about, like, every other gambling type operations about exploitation. Oh my god. This is so cool. I could do this at my computer. I could just sit here and do this. And are you really that good of a trader? Are you really that good of a guesser? You know, coin flipper. And so that's really it it it's taking advantage. And if you see the press, if you read the press about it, you'll read what's good about it. It's supposed to be transparent. It's supposed to be, you know, a market based system that we all think we should believe in, but it's also wide open for corruption with insider trading and people making and we've seen plenty of anecdotal information over the last three months of where lots of vetting goes on in the hours where, say, the president makes a comment or somebody else makes a comment that changes the market. And that's considered insider trading in what its stocks.

[Matthew Birong (Chair)]: Thank you for that, representative.

[Rep. Philip Jay Hooper (Member)]: Two quick ones.

[Rep. Tom Stevens]: Or

[Matthew Birong (Chair)]: Yeah. Go ahead. But we got, we got another item coming up, and we still would like to get to counsel, and the counsel for the other thing just walked in

[Rep. Philip Jay Hooper (Member)]: the door. Did cancel the it's her what's it called?

[Matthew Birong (Chair)]: Or I don't

[Rep. Tom Stevens]: you can it. It was just announced last week.

[Rep. Philip Jay Hooper (Member)]: What other states are doing?

[Rep. Tom Stevens]: Massachusetts just had a law that would slow down the markets. There are other states that can Pennsylvania, I think. Actually, pencil I I don't know where the third circuit lays. Third circuit, I think, is Nevada. Over it. Yeah. And out no. Third circuit's Pennsylvania.

[Sophie Sedatley (Office of Legislative Counsel)]: Oh, Jesse.

[Rep. Tom Stevens]: So it's Hi, Jersey. Thanks for saying hello.

[Matthew Birong (Chair)]: Yeah. There's if you wanna go back in the time machine of how this all started, let's talk about the the supreme court decision with Jersey. Yeah.

[Rep. Tom Stevens]: A lot more

[Matthew Birong (Chair)]: information That list. That already

[Rep. Tom Stevens]: arrived long. You've been certainly listening. Listen to the podcast done by Michael Lewis on gambling, and then WGBH had one about all the gambling in their state and town. One thing that we've prevented so far is Keno, which, is the Betamax of gambling influence, I think, was my tagline. Like, Keno but Keno eradicated the pull tab market in Massachusetts to the tune of $800,000,000 as of ten years ago. And if you don't know what Keno is, it's like you go sit in an old man bar someplace and they have a video screen, And they have pick 20 numbers out of these 64 numbers

[Matthew Birong (Chair)]: and just sit there see breezes.

[Rep. Tom Stevens]: Take it basically. Take your wallet and slide it to the bartender till you're ready to leave because it's just lottery every five minutes. There's a new game every five minutes.

[Rep. Philip Jay Hooper (Member)]: Sounds like fun.

[Matthew Birong (Chair)]: You have been fun how convenience stores. The quality

[Rep. Tom Stevens]: of the junior training. Anyway, thank you for hearing me out. It is, you know, again, I I when I read about sports betting, at least my eyes are attuned to every negative article that's being written. I don't see any positive articles with the exception of there was a gambling industry magazine downstairs in the lounge. And that, if you need a positive side of it, you can go find that and read it because it's like, excellent. We've done you know, it's it's a visceral it's a visceral and intellectual thing for me just to just to be able to have to say, and and I appreciate the time you've given me to, for some, say my piece on this. It's it's not just about raising money. It affects our society from top to bottom, and it's getting worse with sports betting, and predictive markets are knocking on the door to the tune of so much money that when we complain about not being able to educate our kids, I just it's like, I know the money's there, but it's not there in the way that we raise the money and you know? But that's this has just been my

[Matthew Birong (Chair)]: my bug for eighteen years. Thank you very much. You're welcome, sir. Right. Do afford you the time. Mhmm.

[Rep. Tom Stevens]: Now I'll go here about education funding.

[Matthew Birong (Chair)]: Go get it, sir.

[Rep. Lisa Hango (Vice Chair)]: Cancel. Thank you.

[Sophie Sedatley (Office of Legislative Counsel)]: Good afternoon. Sophie Sedatley for the Office of Legislative Counsel. As you are aware, I'm filling in for Tucker. So I'm happy to run through the bills. But any detailed questions, I will we'll take note and follow-up with Tucker. And

[Matthew Birong (Chair)]: they're both short forms.

[Sophie Sedatley (Office of Legislative Counsel)]: They're both short forms, and again, I think representative Stevens pretty much gave you the flavor for each of them. So, yeah, so H-one 133 is with, again, proposes to repeal the chapters on the state lottery and sports wagering, and then would ensure that any person offering a lottery or sports wagering is subject to the criminal provisions of title 13 dealing with gambling and lottery. So that's each 133. And then nine thirteen is the one that's dealing with these predictive markets. This one's got a little bit more meat to it.

[Matthew Birong (Chair)]: Mhmm.

[Sophie Sedatley (Office of Legislative Counsel)]: And this would propose to amend, again, the same chapter, to ensure that the criminal prohibition of wagering activities includes offering prediction market securities or commodities that are contingent on the outcome of events related to sports, contests, natural persons, politics and campaigns, disasters, war, all hazards, or death. It also proposes amending Title IX to ensure that agreements for these contingent securities or commodities are deemed void and subject to civil action for recovery of lost money. And then the third thing is h nine one three would proposes to amend Vermont's sports wagering statutes to add a per wager fee of 50¢ for all wages made to sports wagering operators. I did take a quick look on the predictive marketing, and there is a lot of activity that's going on in different states. I would say that the Commodities and Futures Trading Commission has recently launched three federal lawsuits against states, Arizona, Connecticut and Illinois, allowing them to cease and desist. Well, they're not cease and desist letters, they've been doing that as well. These are actual lawsuits requiring them to stop attempting to regulate the predictive markets, that they are trying to carve that out, that that is preempted at the federal level, and only the federal government can regulate the predictive markets.

[Rep. Lisa Hango (Vice Chair)]: In the bills, did either of them differentiate between the operator and the individual person who's engaging with the patron.

[Sophie Sedatley (Office of Legislative Counsel)]: In what's proposed by representative Stevens?

[Matthew Birong (Chair)]: He's referring to nine thirteen? Yes. The sports wagering operators with the 50¢ fee that we're That's

[Rep. Lisa Hango (Vice Chair)]: on the bearing glass.

[Matthew Birong (Chair)]: Yeah.

[Rep. Tom Stevens]: Yeah.

[Matthew Birong (Chair)]: Yeah. That is that is on the operators, but

[Rep. Tom Stevens]: we all know

[Matthew Birong (Chair)]: cost or fee applied to the operators is typically to the person who is engaging with whatever the function is.

[Rep. Tom Stevens]: Anything else? Thank

[Matthew Birong (Chair)]: you very much for your time, counsel.

[Rep. Tom Stevens]: You're very welcome. Alright, team.

[Matthew Birong (Chair)]: We got one order of business left. Shall we just shift over, or do people want a five minute bio break?

[Rep. Lisa Hango (Vice Chair)]: We don't need a break.

[Matthew Birong (Chair)]: Seeing no objections, we shall grind. Alright. He is not gonna be here today, but he is comfortable with the proposed language, and it will still be the reporter

[Rep. Lisa Hango (Vice Chair)]: of I the wasn't sure if he

[Matthew Birong (Chair)]: Nope. I checked in with him. He had a lead for a personal thing. Yep. Alright. Shall we just shift to counsel and you shift gears to our senate bills. Yeah. No. I gotta be

[Rep. Tom Stevens]: is it not like yeah.

[Sophie Sedatley (Office of Legislative Counsel)]: It's so warm.

[Matthew Birong (Chair)]: Dude, I ditched the tweed and rolled up the slots from in here.

[Rep. Tom Stevens]: I mean, we could pop a window. We're gonna And we're just, like,

[Matthew Birong (Chair)]: breaking we're not allowed to pop up windows?

[Sophie Sedatley (Office of Legislative Counsel)]: No. What? Just Any joke. What? Yes. Not a joke.

[Matthew Birong (Chair)]: What? How did I miss a memo on that combo? Okay. Redbox says live. Counsel, how are you, sir?

[Rep. Philip Jay Hooper (Member)]: Yeah. You all.

[Rep. Lisa Hango (Vice Chair)]: Jay did it. He's part of the.

[Matthew Birong (Chair)]: Nothing. I know nothing. I report nothing. Right. Alright, team. Let's, Let's do this. Look at this draft language that we requested last week. So, table is yours, sir.

[Tim Devlin (Legislative Counsel)]: For the record, Tim Devlin, legislative council. Committee members, you should have draft 1.2 of a just, really one instance of amendment offered up by this committee to senate bill number two five five, an act relating to the establishing a pilot law enforcement governance council in Wyndham County. We have here is, essentially a insertion of an additional, report back from the council to this committee and its sister committee in the senate before, or I should say, the as passed by senate version, which just has the kind of at the conclusion of the pilot program, the council reporting to these committees. This will insert, let's say one on 09/30/2030, and then again, as originally contemplated on 12/31/2030. And just to refresh everybody's memory, what will be in that report back will be an assessment, cost effectiveness compared to alternative service delivery models, analysis of service quality improvements, evaluation of the governance model's effectiveness, recommendations regarding continuation, modification, or expansion of the program, and a proposed framework for statewide replication if warranted.

[Matthew Birong (Chair)]: I know we discussed this last week. The language was sent to everybody over the weekend. And I guess I'm just gauging the comfortability with this proposal of amendment right now.

[Rep. Lisa Hango (Vice Chair)]: It's been suggested by representing the vote.

[Rep. Philip Jay Hooper (Member)]: Yeah, by concurment. Yes. Yes.

[Rep. Tom Stevens]: So

[Matthew Birong (Chair)]: what I'm sensing is we find this language amendable to be included with or to amend the bill? Yes. Cool. So thumbs? Doing

[Rep. Tom Stevens]: an actual vote

[Matthew Birong (Chair)]: or We're just finding it favorable right now, I guess. Do we need to vote on this formally as the amendment? Yes. Yes. Okay. Yeah. You're right.

[Rep. Tom Stevens]: You're

[Rep. Philip Jay Hooper (Member)]: right. So we don't even need to amend it.

[Matthew Birong (Chair)]: Yeah. Okay. So

[Rep. Lisa Hango (Vice Chair)]: just trying to see if

[Matthew Birong (Chair)]: it on the rails here. So, so we do need to take a formal vote on the proposal of amendment. Thank you for

[Rep. Lisa Hango (Vice Chair)]: Remind me, have we voted on a bill?

[Matthew Birong (Chair)]: No. We gotta vote on this amendment to then be included in the bill, then we will vote on the bill, in theory.

[Rep. Lisa Hango (Vice Chair)]: No. I think we're just voting on our proposal of amendment to the Senate. Yes. Yes.

[Rep. Tom Stevens]: Was trying

[Rep. Lisa Hango (Vice Chair)]: to We're proposing to find it favorable. With amendment. Correct. So, we're only taking one vote and this is it? Yes. Okay.

[Matthew Birong (Chair)]: I concur.

[Sophie Sedatley (Office of Legislative Counsel)]: Lisa, is that your motion?

[Rep. Lisa Hango (Vice Chair)]: If I make that motion.

[Rep. Philip Jay Hooper (Member)]: So it was a great month at all. We don't need such.

[Matthew Birong (Chair)]: This is

[Rep. Tom Stevens]: both formally, formal.

[Sophie Sedatley (Office of Legislative Counsel)]: We're all melting. This

[Rep. Tom Stevens]: heat

[Rep. Philip Jay Hooper (Member)]: is so

[Matthew Birong (Chair)]: getting to

[Rep. Tom Stevens]: me. Yeah,

[Matthew Birong (Chair)]: yeah, yeah. I was about to get to that part. Yes. Okay. So everybody is clear. We are voting on this proposal of amendment to amend the senate bill.

[Rep. Lisa Hango (Vice Chair)]: I think.

[Matthew Birong (Chair)]: It's so, with that, everybody understands that we are voting on this to be as a proposal of amendment to the bill. Are any further further discussion or commentary? Seeing no hands,

[Matthew Birong (Chair)]: madam clerk will call the roll.

[Rep. Lucy Boyden (Clerk)]: Representative Boyden, yes. Representative Coffin?

[VL Coffin IV (Member)]: Yes.

[Rep. Lucy Boyden (Clerk)]: Representative Hooper? Yes. Morgan? Yes. Nugent? Yes. Representative Pinsonault? Yes. Representative Stone? Yes.

[Rep. Philip Jay Hooper (Member)]: That's Kelly in St. House.

[Rep. Tom Stevens]: Okay. And

[Matthew Birong (Chair)]: represent Morgan, although he is absent, is familiar with this language and will be reporting the bill on behalf of our committee. So, I guess I will send the information up to the clerk's office.

[Rep. Lisa Hango (Vice Chair)]: Yeah. Don't know if

[Matthew Birong (Chair)]: I can do that either. Like, last time, I'll ask the

[Rep. Tom Stevens]: clerk how we handle this one. You're fired and told.

[Matthew Birong (Chair)]: Yeah. Right. Okay. But with that, I believe we are done with formal business for the day. Correct, committee? Yes. Yes? Okay. Thank you, counsel.

[Rep. Philip Jay Hooper (Member)]: Batting or something.

[Matthew Birong (Chair)]: Jay, Wayne's, we're staying in them. We're staying in the lanes.

[Rep. Lisa Hango (Vice Chair)]: Jay,