Colorado limits free bets, doubles sports betting tax
Since legal sports betting began in May 2020, sports betting in Colorado has exceeded $13 billion. But it’s a change to the 2022 sports betting legislation, which comes into effect in 2023, that now works in the country’s favour.
Starting in January 2023, Colorado will limit the number of free bets sportsbooks can offer. The result is a bigger bottom line for the country. In fact, tax revenue from sports betting in Colorado more than doubled.
Tax revenue for the fiscal year ending June 2023 is $25.6 million. The state’s sports betting tax revenue last year was $12.4 million.
The results even exceeded projections from the Governor’s Office of State Planning and Budget, which projected approximately $24 million. Colorado imposes a 10% tax on net sports betting revenue at the state’s casinos. There is no tax on free bets.
The larger tax cuts would benefit state water projects, which were mandated by the original ballot measure authorizing sports betting. Nearly all of the tax dollars are spent on Colorado's water plan, which includes projects designed to prepare the state for population growth and a dry and warming climate.
Sports betting providers hit
In the first three years after legalization, basketball topped the sports betting charts in Colorado. The NBA championship game in Denver paid off for sports betting fans, but sportsbooks in Colorado were in the red.
In June, sportsbooks in the state lost $10.8 million on basketball bets as the Denver Nuggets made a run for the NBA title. It was the first championship in the franchise's 47-year history.
Sportsbooks placed $57.9 million in online and in-person basketball bets in June. Operators paid $68.7 million for winning basketball bets, according to Colorado Department of Revenue
Basketball bets accounted for approximately 19% of all bets placed in June. Baseball betting accounted for 34%, followed by tennis at 8% and football at 4%.
Operators reported a 3% win rate across all sports in June, well below the 6.7% average win rate. Total sports betting revenue for the month was $9.2 million, down 71% from May. The $9.2 million amount is the lowest total in the past 12 months.
Colorado football attracts big betting action
Even though the Colorado Buffaloes went 1-11 last year, they saw some big sports betting activity. In short, the reason is Deion Sanders. Buffalo signed Sanders last December, and the team's season opener on Sept. 2 gave DraftKings the most drafted pick in college football to date.
Colorado is 19.5 points under TCU, but Buffalo has received 67 percent of bets.
Sanders, 55, remains a major draw years after his days as a two-time sports star and Pro Football Hall of Famer. Fame attracts players to the team and gamblers to the gaming tables.
National championship betting markets reflect this. Last year Colorado ranked 44th in total bets and 41st in total bets, according to DraftKings. This year, DraftKings, BetMGM and Caesars Sportsbook rank Colorado as one of the top ten teams among bettors to win the national championship - for those looking for big payouts with high odds and little risk. An attractive gamble.
Those skeptical of Colorado's chances are also on the rise, and those doubters tend to be pros.
“We’re seeing a lot of pro bettors betting on wins under 3.5 for a few reasons, starting with their schedule,” said Joey Feazel, director of college football at Caesars Sportsbook. Colorado’s The first two games were against TCU and Nebraska.
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Source: www.casino.org
