A bipartisan bill, HB 1327, that would authorize 17 sportsbooks in casinos in Colorado’s three gambling towns and 17 more licenses online, and be taxed at 10 percent, was approved last week in the House Finance Committee 9-1 and now heads to the House Appropriations Committee.
If it passes there it would still require passage in the House and Senate, and the signature of Governor Jared Polis, before going to the voters in November. Voter approval is required for any tax increase. The governor has not yet taken a position on the bill.
The pace is brisk, as the Colorado’s legislative year calendar ends May 3.
If the voters give their approval, sports book could be operating in the mountain towns Black Hawk, Central City and Cripple Creek by May 2020. There are currently 33 casinos in the state. Not included would be the state’s one racetrack, Arapahoe Park in Aurora, whose elected leaders said they preferred not to host sports betting, although the owner of the track had pressed for it.
This is in keeping with the voters’ intent in 1990 of allowing gambling in the state, but limiting it to the three towns. Five years ago voters turned down an effort to expand casino games to Arapahoe Park.
Taxes raised would mainly go to help fund the Colorado Water Plan. Supporters estimate this would be as much as $20 million annually. That agency works to protect the state’s water supply in the face of both an “historic drought,” and rising population.
The Colorado Department of Revenue, which regulates casino gaming in the state, would oversee sports betting.
The bill is sponsored by House Majority Leader Alec Garnett and House Republican Leader Patrick Neville. Garnett said the purpose of the bill is to “eliminate the black market, which we know exists, and to create a competitive marketplace, but one that’s not too big that it can’t be effectively regulated by the Department of Revenue.”
“Finding a steady funding source for the Colorado Water Plan has been a priority of mine,” said Senator Kerry Donovan, who is the bill’s sponsor in the Senate. “The potential that the revenue from sports betting can start to fund the concepts in the water plan is why I am committed to getting this bill passed that will allow legal sports betting to happen in Colorado.”
If the bill becomes law Colorado would become the tenth state to legalize sports betting, although before November that number will probably be larger. This became possible about a year ago when the U.S. Supreme Court struck down the federal ban on sports betting.
Not everyone is completely on board, including some of the state’s professional sports teams, including the Broncos, Rockies, Nuggets, Avalanche, Colorado Mammoth and Colorado Rapids, who sent a letter to lawmakers with suggestions for protecting the integrity of their sports. One option is to allow the leagues to opt out of having bets placed on them.
The letter said, “With the appropriate integrity provisions, the teams would support legalized sports betting in the state; as currently drafted, we do not believe that bill provides sufficient protections for the sports or consumers or fans.”
The sports leagues did not get the so-called “integrity fee” that they sought, or extending betting kiosks to sports stadiums, or a requirement that sports books use official league data.
During the opening hearings, legislators appeared to be well-informed about aspects of sports betting such as royalties, “official league data,” and “vig,” the difference between what is wagered and what is won. Rep. Tom Sullivan, a self-described “avowed gambler,” closely questioned Colorado Gaming Association President David Farahi, whose organization represents the state’s casinos.
“So can you guarantee to us that you aren’t going to mess around with the lines on this and actually give players out there an even shot to win their bets on a regular basis?” he asked.
Farahi responded “I think Rep. Garnett was very thoughtful in drafting this legislation.” He added, “If this passes, there will be multiple sportsbooks. There will be choice. The consumer will have the choice where they want to bet. All sportsbooks operators will have to compete. Not all sports bettors are as savvy as you are in knowing the difference between the lines, but the ones who are will have choice. Just like anything else, the smart ones will pick the place with the lowest vig.”
Also testifying before lawmakers was a representative of DraftKings, which would like to offer sports book in Colorado as it currently does in New Jersey.
Problem Gambling Coalition of Colorado also testified, not in favor or against the bill, but to advocate more than the $130,000 in funding for problem gambling treatment that the bill currently calls for.
