Sports Betting May Be Coming to Colorado

This November, Colorado voters will be asked to approve a referendum that, if it passes, will bring sports betting to the state. The public referendum will allow the state to license both physical and online sportsbooks. Existing land-based casinos will be able to obtain a master license which will allow them to partner with one operator for retail sportsbook operations and another operator who will run the online sportsbook activities - sure to come complete with casino sign up bonus perks.

There will also be options for an exclusively land-based sports betting operator license and a license for online sports betting. 

The legislation has already been approved by the state legislature and been signed by Governor Jared Polis. Since presently, the state constitution does not permit sports betting, a voter referendum will be needed to make the process legal in the state. 

Revenues from sports betting in Colorado are expected to reach $6.5 million per year. The funds are to be earmarked towards managing water resources in Colorado. If the new bill passes the referendum, sports betting could be allowable in Colorado by May 2020. 

Regional Divide

The U.S. Supreme Court cleared the way for states to legalize sports betting in May 2018. Since then, a regional divide has evolved as each individual state decides whether or not to bring sports betting to the state. Most of the states that have legalized sports betting thus far, or are expected to legalize it by the end of the year, are in the northeast and Midwest.

For the most part though, states in the Deep South and far West are adopting a wait-and-see attitude.

Throughout the country, lawmakers are weighing the benefits of an increase in state revenue against concerns about gambling. Sorting out the various interests, including the interests of casino operators and daily fantasy sports companies, as well as opposition from anti-gambling activists and casino-operating tribes, is creating more of a challenge in the western and southern regions than in other parts of the country.

States in the Deep South have been resistant to legalizing sports betting. In Louisiana, where a bill passed the State Senate but died in the state House, Republican state Sen. Danny Martiny explains that Louisianans already are betting on sports through offshore sites, at casinos in neighboring Mississippi and at bookies. Martiny believes that Louisiana should move ahead and regulate sport betting so that they can tax the revenues. “We have all of the ills of gaming,” Martiny said during a committee hearing, “but none of the benefits.”

In Louisiana the issue was further complicated by a debate over whether sports betting should be limited to the state’s 4 racetracks and 16 casinos, or whether it should be made available at locations that already have video poker terminals, such as at the state’s 2,800 truck stops.

Operations

Currently, sports betting is operating in 7 states. Sports betting has also been approved in another 5 states, plus the District of Columbia, but the infrastructure to operate sports betting in those locals is not yet functioning.

Increasing numbers of states are considering legalization. Sports betting legislation was defeated in 18 states this year, though lawmakers in almost all of those states have plans to reintroduce legislation next year. 

Expansion

One gambling industry strategist sees the movement to allow sports betting to spread. Chris Grove of Eilers & Krejcik, a research firm that specializes in the casino industry, says that he expects movement among states in the Northeast and upper Midwest to legalize sports betting in the next year. He believes that opposition to gambling and tribal influence will slow the adoption of sports betting among new states but that, eventually, the resistant states will adopt sports betting, allowing for its expansion.

“As you move farther west, the more complex the stakeholder picture and the harder it is to get anything done,” he said.

That jives with the observation of many industry insiders who say that states are going to find it increasingly difficult to maintain a ban on sports betting when it’s legal to bet on sports in neighboring states.

Florida, Texas and California are three of the nation’s most populous states and the absence of sports betting in those states, which are home to more than a quarter of the teams in the four major professional sports, is not going to be tolerated for long by local sports fans.  It’s only in states like Utah and South Carolina, where it’s hard to sell any form of gambling, where sports betting will not be welcomed any time soon.  

Revenues

Proponents of sports betting often point to the financial benefits for the states which collect taxes and licensing fees from sports betting operators. Over the past year, states with legal sportsbooks reported about $9 billion in bets. But since sportsbooks are a low-margin business and the operators only pay taxes on their profits, the income from sports betting is not as lucrative as could be hoped.

New Jersey, which has developed a vibrant sports betting business over the last year, taxes from sports betting amount to less than 1% of all state revenue.

One thing is certain – sports betting is growing, and will continue to grow, throughout the United States.

 

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