Earlier this week, Colorado governor Jared Polis signed a ‘bipartisan bill’ to legalize sports betting in the state. The future of sports betting in Colorado is now in the hands of voters and will be on the ballot this November. The vote isn’t on sports betting itself but on the tax proposed by the legislature (10%). Colorado’s constitution requires all tax increases to go to a vote.
FIRST THE BAD NEWS….
It’s actually not the worst sports betting regulation that I’ve seen since PASPA was overturned. Then again, the bar is set so low you can trip over it. The 10% tax is a bit higher than I would have liked though compared to others states–like Pennsylvania’s usurious 36% tax rate–it could be a lot worse. What’s tough to understand is why states don’t look to Nevada since, you know, they’ve been booking billions of dollars worth of action for decades. Nevada has a 6.75% tax on sports betting revenue and it would be nice to see a state start there.
The other bad thing about the bill signed by Governor Polis is the monopoly it gives the ‘brick and mortar’ casino industry on sports betting. There was a lot of enthusiasm for sports betting from a number of sectors–the Broncos and Rockies were interested in sports betting kiosks at their venues which would have been a great precedent to set. Then again, they also wanted to use ‘official league data’ and fortunately that nonsense didn’t fly. The Arapahoe Park horse racing track also wanted to offer sports betting but they fell victim to the casino monopoly. The highly dubious rationale was that there was a ‘precedent’ set to not have casino games in the Denver metro area, whatever that means. It’s worth noting that there are already a half dozen off track betting facilities in the Denver metro area and sports betting has more in common with horse race betting than it does with ‘casino games’. Of course, they had to come up with some rationale no matter how flimsy since they weren’t going to say they were essentially paid to give the casino industry a monopoly.
The naivety about sports betting remains staggering even though Colorado’s regulatory framework is better than most. For example, government agencies that get a cut of casino game revenue have a process to ‘offset the loss’ if their revenue decreases because of sports betting. Anyone with a modicum of knowledge about the gambling business knows that the more likely scenario is that sports betting will boost casino traffic and that will boost slots and table game revenues. Fortunately, casinos are free to set their own limits on sports betting. For some reason, table games are capped at $100 in Colorado. There was some hand wringing by ‘lawmakers’ about the lack of limits–another silly concern based on ignorance about the gaming industry.
AND NOW THE GOOD NEWS….
Even with these liabilities there are some very good things to come out of Colorado’s sports betting regulations. The most significant–casinos will have a lot of autonomy in how they set up sports betting. The law says that local casinos can contract with ‘brick and mortar and/or internet sports betting operators to provide sports betting in Colorado’. This means that an actual competitive marketplace could be created something. A competitive marketplace is something that most states have gone out of their way to prevent. There are 40 or so casinos in Colorado–there’s obviously some common ownership of multiple casinos such as Golden Gaming. Golden Gaming is the parent company of the ubiquitous PT’s Pub chain in Southern Nevada (one of the best 24/7 hamburgers in Las Vegas, BTW) and they own three properties in Black Hawk. Given their relationship with William Hill in Nevada you have to think that they’ll run their bookmaking operation in Colorado. Even a half dozen different ‘outs’ in Colorado would be incredible. Combine that with the beautiful mountain scenery and abundant recreation opportunities in Colorado–Central City has already been mentioned in our ‘7 Best Casinos for Outdoor Adventure Enthusiasts‘ list–and this could be a very good thing.
The other good news–casinos can develop mobile betting apps that can be used anywhere in Colorado. Given the huge market beyond the mountain town this would be not only a great source of revenue for the casino properties but a boon for Colorado sports bettors. Maybe they caught a clue after seeing Montana’s boneheaded decision to limit mobile betting to the pubs that house physical sportsbooks which completely defeats the purpose of mobile access in the first place. Assuming that Colorado voters don’t throw a monkey wrench into the works you could see the state quickly become a player in the US sports betting marketplace.
Stay tuned for more in-depth coverage of Colorado sports betting and keep your fingers crossed…..I’d totally move to Colorado if everything shapes up like I’m hoping it will.