Colorado Electors to Determine Use of Sports Betting Tax for Water Initiatives
In November, Colorado residents will vote on a new law that aims to increase the $29 million cap on sports betting taxes, which are currently allocated to water projects in the state.
This decision comes after Governor Jared Polis (D) signed House Bill 24-1436 into law, a bipartisan legislation that establishes a 10% tax rate on sports wagering activities in Colorado. The law states that some of this revenue is used for operator oversight, while the rest is directed towards water projects. However, the current limit is set at $29 million.
Prior to this, in 2020, Colorado voters approved Proposition DD, a ballot initiative that legalized sports betting to fund water projects. Ever since then, the sports betting industry has generated more than $65 million for the state.
These funds have helped finance a wide range of water conservation projects, ensuring that the state will have enough water to meet its needs by 2050. A social media post by ConservationColorado reads, "This bill increases funding for these crucial water conservation projects instead of enriching the casinos and sports betting operators."
If voters agree with the proposal, then the money collected from sports wagering taxes above the $29 million limit will be channeled into the Water Plan Implementation Cash Fund. If the initiative is rejected, the excess revenue will be returned to gaming operators.
The State Has Gained from Sports Betting So Far
Compared to other states, Colorado's 10% tax on sports betting is relatively low and a far cry from the 51% rate in New York and the 36% rate in Pennsylvania.
Additionally, unlike certain other western states such as Oregon, New Mexico, and Washington, Colorado has adopted a competitive, open system for sports gambling that has embraced a multi-operator mobile model. According to the Colorado Gaming Association, this approach has led to considerable benefits for the state.
Data shows that Colorado's sports betting generated nearly five times more money for statewide water projects than initially anticipated in its first year. Initially, the projected funding for 2020-2021 was between $1.5 and $1.7 million. However, recent reports indicate that the gaming industry has provided more than $11.4 million for the Colorado Water Conservation Board. As the sports gambling industry becomes more lucrative, so will Colorado's potential for a secure water future.
However, there hasn't been a fiscal year in which sports betting tax revenues have surpassed the $29 million limit that consumers will vote on removing.
Water Funding Matters for Colorado
According to a statement from Democrats in the Colorado General Assembly, HB 24-1436 "supports water projects across the state, including water storage and supply, agricultural projects, and watershed health and recreation projects."
If the bill is approved and the sports wagering industry continues to thrive in Colorado, the state could profit from its increased population, as it's one of the fastest-growing states in the nation. By the end of 2022, Colorado had 5.84 million residents, up from 4.43 million at the turn of the century, and predictions estimate that the state's population could almost double by 2060, leading to a significant increase in water demand.
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Source: www.casino.org
