Following a razor thin electoral win for Proposition DD, the legalization of sports betting referendum, 51.4 percent to 48.6 percent, Colorado is not wasting time in adopting rules for licensing.
The Colorado Division of Gaming is working to create emergency licensing rules to present to the Limited Gaming Control Commission. Once it approves the new rules the state can begin accepting license applications with the goal of licensed operators offering sports betting by next May.
Despite the obvious speed, the Division of Gaming promised applicants would be vetted with “the highest standards.”
Licenses are offered under three classifications: a master license, for existing casinos; a sports betting operator license for brick and mortar partners and an internet sports betting license. Only the 33 existing casinos in the state’s three gaming towns of Cripple Creek, Black Hawk and Central City may apply for a master license.
Ron Shell, vice president of customer and insights at PointsBet USA, spent a nail biter on election night. His Australia-based company recently established a new hub in Denver. He moved there in anticipation of the state approving sports betting. His company has been expanding in the U.S. as state after state has legalized sports betting. However, he emphasized the Colorado connection, telling CDC Gaming Reports: “We want to be synonymous with Colorado.”
PointsBet will undoubtedly be one of the companies competing for market share in the new sportsbook landscape in the Centennial state. It plans to take advantage of the fact that Denver is one of four cities with franchises of all four major sports. From there it can also serve the other three: Los Angeles, Phoenix and San Francisco.
This strategic placement could allow Colorado to play the same sports betting role for the Western states New Jersey has played for the Eastern seaboard.
Like New Jersey, and unlike Oregon, which has limited itself to one mobile sports betting provider, SBTech, Colorado could play host to as many as a dozen mobile operators. Some states have been hesitant to enter mobile sports betting, although New Jersey presents a sterling example of a state that has dived in and achieved great success. Nearly 85 percent of its monthly handle of $487.9 in October came from mobile/online sports betting. Its total so far this year is $3.46 billion with $2.85 billion coming from online.
Colorado doesn’t expect anything like those numbers, but some state economists project sportsbook could rake in about $11 million in FY from the 10 percent tax rate. Most of that is earmarked for the state’s water project.
FanDuel issued this statement: “Colorado is a model state for sports betting, and will likely be the first state in the West, outside Nevada, with mobile sports betting,” FanDuel Sportsbook said in a statement. “We look forward to bringing America’s favorite sportsbook to the great sports fans of Colorado pending licensure.”
FanDuel and its archrival DraftKings between them spent in excess of $1.5 million in lobbying and advertising to push Prop. DD, according to the AP.
A spokesman for DraftKings acknowledged that cooperation in a statement issued after the results of the election were known: “The Yes on DD coalition did an outstanding job educating voters but it was the broad bipartisan, diverse cross-section of support throughout Colorado that ultimately won the day,” adding, “DraftKings looks forward to working in collaboration with the Division of Gaming to take the next step towards bringing our best-in-class mobile and online Sportsbook to Colorado’s sports fans.”
Nevada has offered mobile sports betting for ten years, but its experience is tilted by the fact that Las Vegas is unique in that many tourists visit there just to put down sports wagers. So it’s probably not a good predictor of Colorado’s future as a sports betting hub, say experts.
Colorado is also an ideal location for mobile sports betting since the three casino cities are far from urban centers. Denver, where PointsBet will operate from, is 100 miles from Cripple Creek, where PointsBet has partnered with the Double Eagle Hotel and Casino. That partnership will include mobile sportsbook and retail wagering in the casino. Black Hawk and Central City are 30 miles from Denver.
