Colorado’s Department of Revenue is assessing the sports betting options that are available to the state. The department has released a new item of public policy information to the public in document form.

The document discusses the different options for the make-up of the sector and what its management could look like. It also discusses how there would be a statutory amendment, rather than a constitutional one, which will allow the legal framework to be brought in.

This was a previous sticking point for those looking to introduce sports betting in the state.

Tradition of Colorado gambling

Colorado certainly has a winding history with regards to gambling. It was a popular destination for immigrants when they were heading west throughout the 19th century, and they brought with them many different games to the region.

The first casino in the United States was the Brown Saloon in Colorado, which opened its doors in 1822. It was in ideal location on the borders connecting Colorado with Utah and Wyoming.

Casino gambling officially became legal in 1991,and only in certain historic towns in the state – Black Hawk, Cripple Creek and Central City. The state lottery did not open until 1993.

There are also restrictions in place on gambling activities in the casinos. The original rules have been loosened somewhat in recent times, with the maximum wager per bet being increased to $100 from $5.

The curfew of 2am has been completely lifted. Nowadays, casinos can open their doors around the clock if they wish to do so.

A number of tribes in the state operate their own casinos as a result of the state compacts made in 1995.

Progress of sports betting to date

Colorado is often seen as being a very progressive state when it comes to legalization of various matters. A number of sports betting bills have been put forward in recent times; the main sticking point has been what legal implementation would look like.

Currently, as per the state’s criminal code, sports betting is illegal and thus not part of the state’s constitution. It will be the legislature rather than the public who will have the final say on the outcome of any given bill on the issue.

For those in favor of widening the gambling laws, it is ideal from their viewpoint that the public would not be allowed to vote on the issue. The Colorado public has historically voted against other measures to expand gambling in the state.

Many different such proposals over the years have met defeat from the public. However, other existing issues still stand in the way of a successful bill and progress is expected to be long drawn out.

Constituents will be making their views known to their assembly members who represent their interests. In addition, much of the state infrastructures need updating, which the money derived from sports betting taxes could go towards.

Most recent developments

As per the Department of Revenue’s document on the sports betting issue, there are still many points up for discussion.

The department says: “Within DOR there are four options for organizational management and oversight of the Colorado sports betting industry: incorporate sports betting under the enforcement and regulatory duties of the Division of Racing; the Division of Gaming; the Colorado Lottery; or create an entirely new division dedicated to the regulation of sports betting.”

Each of these options would entail a mobile part, as well as a licensing section to help the regulators. There would need to be a consensus among each of the divisions and respective industries for successful implementation.

With regards to taxing sports betting, the department is proposing a rate of somewhere between 6.5% and 16%, either upon the adjusted gross proceeds or upon the net revenue. They note that if the tax rate is set too high, there is a risk of driving players away and into the arms of the black market.

Funds deriving from these taxes would go towards education or transportation in the state.

There will be a limit on the mobile licenses for gaming business license holders and for those with Class B racetrack licenses. All of the respective servers need to be in Colorado and player accounts have to be opened initially inside of one of the physical facilities in the region.