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Colorado’s Sports Betting Exceeds The Expectations Generating US$3.4 Million In Taxes In 2020

Article by : Helen Feb 8, 2021

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Gambling has been prohibited in Colorado for many decades, but the state has already made the first steps towards legalizing it, with sports betting whitelisted. In November 2019, the Colorado state gave the green light to sports betting, but the activities launched only a couple of months later, in May 2020. The decision to launch sports betting was made because the state’s water plan requires funding. Thus, when all operating costs are covered and US$130,000 is provided to gambling addiction services, the water fund will receive the tax revenue from sports betting.

Spring 2020 turned out to be not the most suitable time for launching new gambling activities. When the COVID-19 pandemic burst out, most US sports were put on hold, and most US gambling venues were closed at all. Gov. Jared Polis’ administration warned that sports wagering would get off to a slow start, and Colorado’s Water Plan projects would not receive their funds from gambling taxes until the second full year of sports betting. However, even despite the still-ongoing pandemic, the industry continued to garner enthusiasm. Now, when it’s been less than a year after launching sports wagering, there seems to be enough tax revenue to start funding the state’s water projects.

During 8 months of 2020, the state managed to collect more than US$3.4 million in taxes from sports betting, which far exceeded the initial expectations. It’s more than enough to cover US$2 million in start-up costs that should be paid off first before any funds can be transferred to the water fund. Despite the suspension of many US sports, Colorado residents have made millions of wagers on other sports such as European table tennis and Asian baseball. So far, Coloradans wagered more than US$1 billion on different sports events.

Alec Garnett, state House Speaker who was one of the initiators of legalizing sports betting in Colorado, believes that the latest figures indicate that they managed to build a healthy and competitive marketplace. Director of the Colorado Division of Gaming Den Hartman is also confident that the state’s gambling industry is on the right way: “Hitting the $1 billion mark is a milestone event for the department, leading us to believe that the trust and competition in the industry are leading bettors from the black market to the regulated market.”

According to the figures revealed by the Colorado Department of Revenue, December turned out to be the most productive month in terms of sports betting handle. During the month, consumer spending reached US$284.6 million, which is 21.3% more than the previous record set in November 2020. Around US$88.2 million was placed on American football, and professional basketball was the runner-up, with US$42.9 million being placed in wagers. The top-five sports also included NCAA basketball, table tennis, and NCAA football.

Another interesting fact is that online sportsbooks accounted for almost 99% of all wagers placed on sports. More than a dozen online applications received US$280.4 million in bets in December, while the retail sportsbook located in the land-based gambling venues accounted for only US$4.1 million. Digital apps enable Colorado residents and state visitors to make wagers on sports at any time from any spot of the state. While the brick-and-mortar gambling properties may be closed due to the pandemic, online apps can be easily accessed in any case. It’s not totally clear how COVID-19 has affected sports betting in the state, but local officials are pleased with how much wagering there has been.