A bipartisan bill that would legalize sports betting in Colorado was brought before the state’s House of Representatives on April 18, giving lawmakers two weeks to pass the bill before the legislative session concludes.
Democratic House Majority Leader Alec Garnett and Republican Minority Leader Patrick Neville introduced the bill. If both chambers pass it, voters will decide this November whether Colorado should become the latest state to legalize sports betting.
”We want to eliminate the black market,” Garnett said, according to a Colorado Public Radio report.
As HB 19-1327 is written by Garnett and Neville, the 17 companies that own the 33 casinos in the state could apply for a license to open a sportsbook at its respective gaming facility. One restriction in the bill prohibits horse tracks from opening sportsbooks at their facilities.
But wagering on sports online would be permissible, as the 17 companies would also be allowed to contract with an outside party to operate a sportsbook that could be accessed via a computer or a mobile app. It has not been determined what requirements Colorado’s Division of Gaming, which would oversee regulating the state’s sports gaming industry, would mandate for online betting.
Some proponents of legalized sports betting in Colorado contend that the DOG should require a person to register in person at a licensed gaming facility before they can wager online. But Colorado is America’s eighth-largest state by land area. Such a restriction could limit the revenue generated in the Centennial State because most gaming facilities are far from population centers. making in-person registration difficult.
Online wagering without requiring in-person registration at a gaming facility has proven quite successful in New Jersey, which is second behind Nevada in revenue generated through legalized sports betting. More than 80 percent of the money wagered in New Jersey on sports in each month of the first quarter in 2019 was collected online.
Colorado’s sports gaming industry would also be subject to a 10 percent tax on net proceeds under the bill, starting in May 2020. This is roughly the same tax rate as Delaware, Mississippi, New Jersey and West Virginia instituted when each legalized sports betting last year. Nevada’s 6.75 percent tax on gross revenue is the lowest in the nation.
Because of that 10 percent tax, Colorado’s constitution mandates that voters must approve sports wagering even if both chambers of the legislature pass it.
“It’s not a huge margin on sports betting,” Peggi O’Keefe, a lobbyist for Colorado’s casinos, told The Denver Post. “This is a number we can live with and still make a profit.”
Colorado is one of many states where lawmakers are deciding whether to legalize sports betting in the aftermath of the Supreme Court’s decision last May to overturn the Professional and Amateur Sports Protection Act of 1992. That act had banned legalized sports betting outside of Nevada.
Seven states have opened operational sportsbooks since the Supreme Court’s decision, with several more expected to follow suit in 2019.