Sports Betting in Colorado Sees Record Tax Revenue
Posted on: August 8, 2023, 12:22h.
Last updated on: August 8, 2023, 12:22h.
Since the start of legal sports betting in May 2020, more than $13 billion has been wagered on sports in Colorado. However, it was a recent change in legislation that is causing a surge in tax revenue for the state.
Starting in January 2023, Colorado implemented restrictions on the number of free bets that sports betting operators could offer. This change has resulted in a significant increase in tax revenue for the state, with tax collection more than doubling.
In the fiscal year ending in June 2023, sports betting tax revenues reached $25.6 million, compared to $12.4 million the previous year.
The Governor’s Office of State Planning and Budgeting predicted revenue of about $24 million, but the actual results exceeded those expectations. Colorado collects a 10% tax on net sports betting proceeds from casinos, and no tax is collected on free bets.
The additional tax revenue will be allocated to state water projects, as mandated by the ballot measure that initially legalized sports betting. The funds will support the Colorado Water Plan, which aims to address the state’s growing population and the challenges posed by climate change.
Basketball Bets Impact Sports Betting Operators
Basketball has emerged as the most popular sport among bettors in Colorado since the legalization of sports betting. However, the success of the Denver Nuggets in winning the NBA championship has caused significant losses for sports betting operators in the state.
During June, as the Denver Nuggets contended for the NBA championship, sports betting operators in Colorado incurred losses of $10.8 million on basketball bets. It was the team’s first NBA title in 47 years.
Throughout the month, sportsbooks accepted $57.9 million in basketball bets, both online and in-person. However, operators paid out $68.7 million in winning basketball wagers, according to data from the Colorado Department of Revenue.
Basketball bets accounted for approximately 19% of all betting in June. Baseball had a 34% share, followed by tennis at 8%, and soccer at 4%.
Overall, sports betting operators experienced a 3% win rate for the month of June, well below their average of 6.7%. Total sports betting revenue for the month reached $9.2 million, a 71% decline from May. This figure was the lowest total for the past 12 months.
Colorado Football Sees High Betting Activity
Despite a poor record last year, the Colorado Buffaloes are attracting significant betting action due to the appointment of Deion Sanders as head coach. The team’s season opener on September 2 has generated the most bets in college football at DraftKings.
Colorado is considered a 19.5-point underdog against TCU, but the Buffaloes have garnered 67% of the handle from gamblers.
Sanders, still a draw years after his successful career, has attracted talented players to the team and bettors to wager on their success.
This trend is reflected in the national championship betting market. Last year, Colorado ranked 44th in total money wagered and 41st in total bets. However, this year, DraftKings, BetMGM, and Caesars Sportsbook report that Colorado is among the top 10 most popular teams for bettors to win the national championship. This presents an attractive opportunity for gamblers seeking a high payoff with long odds.
However, there are also skeptics who doubt Colorado’s chances of winning the national championship, especially professional gamblers.
“We are seeing a lot of professional action betting on the under 3.5 wins for a couple of reasons, the first being their schedule,” said Joey Feazel, the college football lead at Caesars Sportsbook. Colorado’s first two games are against TCU and Nebraska.