Proposition DD, the legalization and taxation of sports betting in Colorado, is the result of a May 2018 Supreme Court ruling that repealed the federal government ban on sports gambling. Since then, 11 states have legalized sports gambling.
Proposition DD taxes net sports proceeds for those Colorado casinos that are granted a license, with the vast majority of that money going toward a plan to preserve Colorado’s water future. If passed, tax revenues are projected to ramp up from a partial first year revenue of about $1.4 million to at most $10.4 million in fiscal year 2020-21. Which we think is a rosy forecast based on the projection that up to $1.5 billion will be wagered on sports in Colorado for 2020-21. The $29 million stated on the ballot is simply a maximum amount of annual revenue generated before the need arises to go back to the taxpayers to keep the overage and not the revenue projections.
Net sports proceeds for that $1.5 billion are estimated at 7% of bets, which is the difference between those bettors losing and those winning. It’s tricky here. The casinos win when the bettor loses. So for the 7% to come true, more bettors have to lose than win.
Once one gets beyond regulating and allowing Colorado sports gambling, the question becomes what to do with the tax revenues. First, as of this writing, no casinos oppose DD. Second, the first fiscal year tax projections of $10.4 million is not a lot of money for most state needs. But, everyone can get behind protecting our water future. It’s why this passed the Colorado House of Representatives with 90% voting yes and the Colorado State Senate with 77% voting yes. In today’s partisan politics, this is a strong endorsement. It is also important to note this money is not a fix, but rather a small offset against water needs.
We think it’s time to regulate sports gambling and allow Colorado’s 40 casinos the option of providing sports gambling. It will drive more traffic to our casino towns. It keeps the money in-state. It provides small grants toward water projects and some additional gambling-addiction treatment funds.
Only winning casinos, not the gamblers themselves pay the tax, and casinos don’t oppose. Vote yes on Proposition DD.
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