Colorado Explores Hiking Tax Rates on Sports Betting

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00:00And, you know, one of the topics that's really been, you know, picking up steam is the idea

00:07that some states want to tax more on sports betting because they're seeing some other

00:12states do it.

00:13So it's like one does it and the next and the next.

00:16And I'm reading about this over at Legal Sports Report, it looks like Colorado and they've

00:20had a very fluid tax situation there and done very well with sports betting.

00:25Is there a chance that we see a hike in the tax rate in that state on sports betting?

00:29So, yeah, Colorado is a really interesting kind of case in this situation.

00:34Like you said, we've seen several states, Ohio, Illinois, hike their tax rates because

00:40they've seen states like New York, for example, come in hot with 51 percent.

00:44And so they're saying, well, wait, we can get a little bit more than we're getting now.

00:48But in Colorado, which to your point has been a very fluid sports betting market, we've

00:52seen lots of operators.

00:54It's fairly easy to get in there.

00:56A lot of operators come in place, you know, sports books we haven't seen in other markets

01:00have popped up in Colorado.

01:01But now we are also seeing sports books in Colorado say, well, maybe this wasn't so smart.

01:06We're going to get out now.

01:08So again, very fluid situation in Colorado in that sense.

01:11But what's interesting is voters went ahead and approved sports betting back in 2019.

01:17Now in Colorado, there's a weird act that was passed some time ago.

01:20I'm not an expert in Colorado amendments and whatnot, but some time ago that they put

01:27a ceiling on their tax, the amount of tax they can collect based on the legislative

01:33analysis and projections.

01:35So back in 2019, they said, well, hey, we think we can make about twenty nine million

01:40dollars a year in tax revenue.

01:43Well, you know, some things went and it was fine.

01:48They weren't making twenty nine million dollars in tax revenue.

01:51So it was all good.

01:52Well, then a couple of years ago, they came back and they said, let's get rid of the ability

01:57for sports books to deduct their promotional spends, you know, all those bonuses that they

02:03give out and everything.

02:04Once they couldn't deduct those, the tax revenue jumped through the roof and this year would

02:09be the first year that the tax revenue has gone over twenty nine million dollars.

02:15So the legislators earlier this year went ahead and put on the ballot and in a couple

02:21weeks for the voters to say, hey, you can actually collect more tax revenue from sports

02:26betting than the original analysis.

02:30And if it passes, the state gets to keep it.

02:32And we know that in Colorado, the state funds a lot of water projects with the sports betting

02:39tax revenue.

02:41But if it doesn't pass, then they have to give that.

02:44I think it's about six hundred thousand dollars back to operators and casinos, because that's

02:49what the Constitution says now that gap is going to continue to grow.

02:53I think it was in two years it'll be up to two point five million dollars that they would

02:57have to refund.

02:59So it'll be interesting to watch to our intro point.

03:03What's happening in Colorado here?

03:05Voters say, hey, this is great.

03:06Let's keep funding more water projects with our tax revenue from sports betting or, you

03:11know what?

03:12This is good.

03:13It's up to operators.

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