Colorado Sports Betting Coming Soon, Lawmakers Believe

Colorado Sports Betting Coming Soon, Lawmakers Believe

One of the national incubators of progressive policy changes like marijuana legalization, Colorado has historically been skeptical toward gambling expansion. But as more states explore sports betting legalization, a bipartisan pair of lawmakers believe the state will now support the most significant gambling extension measure in decades.

Republican State Rep. Cole Wist and Democrat Alec Garnett are pushing for sports betting legalization in Colorado ahead of the 2019 session, the Denver Post reports. Though there wasn’t any bill introduced in the 2018 session, lawmakers are increasingly optimistic sports betting could break past Coloradans’ longstanding skepticism in the coming years.

While sports betting is far from a sure bet in the Centennial State, merely introducing a bill would be a key first step for a state that has long resisted gambling even as national attitudes shifted.

Long Resistant, Colorado Ponders Gambling Expansion

The motif of the “Wild West” is replete with rowdy poker games and widespread gambling. That image has not represented Colorado for most of its recent history.

Colorado approved its first casinos in 1991 and confined it only to three rural former mining towns that sought gambling and tourism as means to stay solvent. Voters overwhelmingly rejected a proposal to expand gambling at the state’s lone horse track near Denver in 2014, and further gambling measures by and large have received little support.

Despite that history, lawmakers like Wist and Garnett have touted the potential revenue increases in a state that is already recording millions in tax revenue annually as the pioneer of the legalized recreationally marijuana industry. The duo’s efforts helped Colorado become one of the first wave of states to legalize daily fantasy sports in 2016.

They believe a similarly proactive sports betting legalization push could have a far greater impact for the state.

Optimistically, officials believe sports betting could garner $150 million annually. A small fraction of the state’s multi-billion budget calculus, the uptick is nevertheless a way to bolster state coffers, including potentially a $2 billion loan for transportation projects. If elected in the upcoming midterm election, Republican gubernatorial nominee Walker Stapleton has already laid out his plans for the new sports betting tax revenue, the Post reports.

If done early enough, sports betting could spark further out-of-state tourism visits, which would in turn contribute further revenue streams for tangential industries like hotels and restaurants.

Even with the new revenue prospect laid out before a state that has been among the most willing to legalize and regulate “vice” industries, sports betting has major hurdles to clear before legalization.

How Regulation, Availability Will Shape Colorado Sports Betting

Sports betting legalization has seldom been a straightforward process even in states that have most proactively pursued it.

Several states positioned themselves to take bets after the Supreme Court announced it had struck down the federal ban on sports betting in May of this year. Though some even had legalization bills on their books, it most cases it has taken several months (or longer) to take a wager.

The five states to take bets after the ban was struck down (Delaware, New Jersey, Mississippi, West Virginia and New Mexico) have taken between one and six months to formalize regulations (New Mexico didn’t technically legalize sports betting, but a Native American casino has started taking wagers based on an interpretation of its gaming compact with the state government.)

All states with legalization bills have had to work out a multitude of issues, but the main sticking points have typically revolved around accessibility, eligibility and taxation.

New Jersey as well as Nevada, which had legal sports betting even before the federal ban was enacted, allow mobile sports betting through approved, regulated online providers (West Virginia is expected to take online bets sometime early next year).

Conversely, Mississippi, Delaware and New Mexico only allow sports betting within the confines of licensed facilities like casinos or horse tracks, ostensibly to direct more foot traffic (and revenue) to these locations.

But this approach restricts betting opportunities, and possible tax revenues, as an increasing portion of the betting public looks to place a bet from the comfort of home and with the convenience of a mobile device. The majority of bets in New Jersey are already placed online.

In Colorado, lawmakers believe mobile access is essential. One of the nation’s largest states by land area, much of the population outside the Denver metro area is scattered in small towns, some hundreds of miles away from the nearest casino. Gambling legislation supporters argue any bill must include mobile access.

The roster of eligible betting providers will also likely be a major point of contention for legislators. States have taken varying approaches to which types of facilities can host in-person and/or online betting.

The state’s three casinos would be likely candidates to host betting operations, but they may seek to prevent any other competitors. The casinos bankrolled much of the campaign against gambling expansion at the Denver-area horse track and may wield a similar influence when it comes to sports betting.

Officials from the Arapahoe Park track in the Denver suburb of Aurora have already sought sports betting access. Other gambling entities like daily fantasy providers DraftKings and FanDuel may also seek licensing approval.

These decisions may pale in comparison to the ramifications involving taxation.

Nevada, long the epicenter of legalized gambling in America, has thrived in part due to its comparatively low gambling tax rate. Its 6.75 percent rate on revenue is still the lowest in the nation. New Jersey, Delaware, Mississippi and West Virginia all have approved rates around 10 percent, which has also fostered interest from gambling stakeholders.

Conversely, exorbitant rates have derailed sports betting in other markets.

Pennsylvania approved sports betting back in October 2017, but has not taken a single bet a year later. It’s 36 percent tax rate on revenue is among the highest gambling tax of any jurisdiction in the world, and has dissuaded potential partners.

Sports betting could likewise be stalled in Colorado by a similarly inordinate tax rate.

That doesn’t include other regulatory and legislative minutia that could derail legislation, along with the possibly daunting challenge of winning over the rest of the legislature as well as the public about the merits of legal betting.

Despite that, supporters have touted a sanguine timeframe for legalization and implementation.

When Could Colorado Take a Bet?

Though lawmakers haven’t even taken up a bill, some supporters believe Coloradoans could take a bet on the Rockies in time for Opening Day 2020.

Sports betting backers believe lawmakers will warm to their proposals and approve a bill during the 2019 legislative session, which begins in January and typically runs through April. Once approved, the legalization effort would go before voters as a legislative referral in November 2019. If approved, betting possibly taking place as early as January 2020.

Early 2020 is realistically a best-case scenario, but the aggressive timeline is bolstered by a ruling from the state’s attorney general’s office. Attorney General Cynthia Coffman argued earlier this year that sports betting simply requires a law change and not a constitutional amendment, which is a far more rigorous hurdle to clear.

A gambling bill, like any legislative effort, is fraught with obstacles before passage. Though the 2020 launch date is objectively optimistic, the continued support from high-profile advocates positions Colorado as one of the leading candidates to join the growing contingent of states with legal sports betting.

In a state that has long resisted any form of gambling expansion, sports betting here could have far-reaching implications on other states considering sports betting.

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