Colorado voters are likely to be asked in November to legalize sports betting and approve a 10 percent tax on net proceeds from the wagering that would mainly go toward paying for the state’s water plan.
House Bill 1327 was introduced Thursday afternoon with bipartisan sponsorship. It asks lawmakers to send the legalization and taxation questions to voters and would allow for wagers on Colorado’s professional and collegiate teams.
“What we’re trying to capture is, essentially, the father of three in Highlands Ranch that is on one of these (black market) apps that is betting on sports that’s going through Shanghai,” said House Majority Leader Alec Garnett, a Denver Democrat who is leading the push for the measure. “We don’t know if he’s being fairly treated. We don’t know if he’s getting his money back. The money is definitely not being taxed in Colorado.”
Garnett believes there could be $4 million to $10 million in annual tax revenue from sports betting in Colorado.
Other prime sponsors of the bill include Democratic Sen. Kerry Donovan, of Vail, and Republicans Rep. Patrick Neville, of Castle Rock, and Sen. John Cooke, of Greeley. Neville and Cooke are in their party’s leadership in their respective chambers.
Under the measure, sports betting could be offered by the 17 companies in Colorado that already have gambling licenses and operate 33 casinos.
“If you are one of those 17 companies, then you can apply for a master license which allows you to have one physical sportsbook license in one of your casinos and then it allows you an opportunity to contract with an online sports operator,” Garnett said. “I think that’s the right size. I think you maintain the voter intent of keeping the operation of gaming in the three gaming communities (Cripple Creek, Black Hawk and Central City).”
The online operator would have to go before state regulators to be approved for operation.
Garnett says the bill follows models from other states that have legalized sports gambling since the U.S. Supreme Court opened the door on sports betting across the nation last year. He expects it could be live in Colorado by May 1, 2020.
There would be no limit on bets under the bill. It would, however, not allow prop bets on collegiate players, which are wagers on individual performances (like points scored or home runs hit) of individual players. Betting on high school athletics would also be barred.
The Colorado Water Plan, which would be the main beneficiary of the sports betting tax revenue, was created by former Colorado Gov. John Hickenlooper as a way to prepare the state for its future water needs amid drought and a growing population.
Where the sports betting tax revenue goes could be a point of contention in the legislature with groups battling for money to pay for transportation and education. Walker Stapleton, the Republican nominee for governor in 2018 who lost to Gov. Jared Polis in November, campaigned on a plan to use the money to cover infrastructure needs.
“The money is not going to be that much,” Garnett said. “I think people are sensitive to the messaging issue that this is not going to solve the two highest priorities in Colorado in terms of revenue, both transportation and K through 12 education.”
He said a sustainable revenue stream for the water plan is a neutral, statewide issue where the money can make a real difference. “It’s not rural, it’s not urban,” he said.