Colorado’s sports betting market could be one of the most lucrative in the Western US, assuming there are events for gamblers to bet on May 1 when sports wagering will officially be permitted in the state.
Last November, Centennial State voters narrowly approved Proposition DD – the ballot initiative setting the stage for legalized sports betting. Backers of the plan sold it as a way of plugging shortfalls in the state’s water budget, an increasingly vital issue, as Colorado’s population is expected to swell over the next several decades.
The Centennial State has a bright future, capable at maturity of annually generating as much as $6 billion in bets, $400 million in gross operator revenue, and $40 million in tax revenue,” according to forecasts from PlayColorado.
Those projections are well above some estimates floated around prior to the Prop DD, which said the state’s sports betting market could be worth $2 billion while generating, at the high end, $20 million in tax receipts.
Plenty of Advantages
Assuming Colorado opens sports wagering on May 1, even if there’s nothing to gamble on besides futures and a small smattering of international competitions, it will be the 18th state to legalize sports betting.
If the $6 billion in bets forecast is proven accurate at some point, that would likely make the Centennial State the second-largest in the West in terms of annual handle behind Nevada. Down the road, California could have some say in the competition. But because of the COVID-19 outbreak, it be may difficult for Golden State sports betting backers to get enough signatures to place the issue before voters on the November ballot.
Colorado also has a geographic advantage in luring bettors. It borders seven other states, only one of which – New Mexico – currently allows sports wagering. Several of the others, such as Arizona and Utah, are unlikely to sign-off on the endeavor anytime soon.
Plenty of Enthusiasm
Colorado has 5.69 million residents and is one of the fastest-growing states in the region. The state is also home to teams from all four of the major professional athletic leagues and three universities that play both Division I football and basketball, making it a potentially lucrative market for sportsbook operators.
The Centennial State’s sports betting tax structure, which is in line with some of the largest sports wagering states, is also seen as an advantage.
“Colorado regulators have been deliberate, opting for a later start date to ensure it gets its regulatory framework right,” said PlayColorado. “Its 10% tax on net revenue is comparable to some of the most successful sports betting markets. New Jersey, which is neck and neck with Nevada as the nation’s largest sports betting market, levies a 9.75% tax on revenue from retail sportsbooks and 13% on online sports betting revenue.”
The favorable tax rate, coupled with what’s expected to be a robust online market, is helping Colorado attract big name sportsbook operators, including Circa Sports, Roar Digital and William Hill, among others.