Colorado state Reps. Cole Wist and Alec Garnett successfully convinced their legislative colleagues to approve daily fantasy sports in 2016. Now they’re seeking approval for placing on the November 2019 ballot a proposal for legalized sports betting, effective January 2020.
The referendum actually isn’t necessary, according to Colorado Attorney General Cynthia Coffman. Lawmakers simply could change Title 18 in the Colorado Revised Statutes, which defines sports gambling as an illegal activity. Coffman issued an opinion in August that the state’s constitutional regulations on gambling don’t apply to sports betting. But, Wist said, “I think it’s important to go back to the voters and make sure it’s something that they want. I think there are reasons legally why we don’t have to, but we have to be respectful of that history.”
Gambling wasn’t legal in Colorado until 1991, and since then it has been restricted to Black Hawk, Central City and Cripple Creek. In 2014, 70 percent of voters opposed an amendment that would have expanded gambling to certain racetracks.
Garnett said sports betting should include both in-person and mobile platforms. “I think it’s unrealistic we create a system that doesn’t include a mobile platform,” Garnett said. He noted if it starts snowing or a player gets injured during a game, gamblers want to be able to adjust their bets without driving back to one of three mountain towns. “Moving the line” is a major feature of sports betting, Garnett noted.
Peggi O’Keefe, executive director of the Colorado Gaming Association, said casinos and the Colorado Division of Gaming should be able to manage digital sports betting. She added casinos should control any mobile betting apps and decide if they want to partner with third-party companies such as FanDuel or DraftKings. To avoid underage gambling, O’Keefe recommended requiring players to establish an account in-person at a casino, as it’s done in Nevada. Opponents of that plan noted casinos only are located in three Colorado towns.
Racetracks also are interested in operating their own sportsbooks. Arapahoe Park Executive Director Bruce Seymore said, “We definitely want to be one of the players. I don’t want the casinos to do something that eliminates me from doing that.”Colorado casino operators led the expensive fight against expanding gambling to racetracks in 2014. However, Seymore thinks voter attitudes have changed and they might approve sports betting that’s similar to parimutuel wagering.
If Garnett and Wist can get casinos and racetracks to compromise, next they’d have to work with other legislators to work out a sports betting tax structure. Nevada taxes sports betting gross revenue at 6.75 percent, Delaware and New Jersey at around 10 percent. However, Pennsylvania set a tax rate of 36 percent on gross wagering plus a $10 million licensing fee, which is keeping several national and international sports betting operations away. O’Keefe said, “We’re doing a lot of research right now to try to find that sweet spot on a tax rate that pulls people from the black market and puts them into a transparent process.”
Still, officials agree sports betting is not a significant money-maker. Republican gubernatorial candidate Walker Stapleton said sports wagering could generate about $150 million annually, to be used to pay off a loan of up to $2 billion for transportation projects. Garnett, Wist and O’Keefe have all commented Stapleton’s numbers are too high.
Garnett said he’s not sure transportation is the best place to direct sports betting revenue. “It could turn into quite a fight. Cole and I would like to avoid a fight.” O’Keefe added, “This is going to have a lot of intricacies. I’m just not sure they’ll be able to get this done in one session.”
