Despite the sports world being indefinitely shuttered in response to the COVID-19 pandemic, regulators in Colorado are still preparing for a May 1 launch of online and retail sports betting, making Colorado the 18th state to have some form of legal sports betting.
And the Centennial State has a bright future, capable at maturity of generating as much as $6bn in sports bets annually, $400 million in gross operator revenue annually, and $40m in annual tax revenue, according to PlayColorado projections.
“With a significant base of existing land-based casinos, a regulatory framework that will be attractive to operators, and one of the largest metropolitan markets in the country to draw from, Colorado is well-positioned to capitalise on sports betting,” said Dustin Gouker, chief analyst for PlayColorado.com. “But assuming the industry does launch on May 1, it will be doing so in unprecedented circumstances with almost no sports to wager on. There are some advantages to a forced soft opening, but it also means that it will be some time before we learn with confidence just how Colorado’s bettors will respond to legal sports betting.”
Colorado regulators have been deliberate in creating a regulatory framework for casinos, opting for a later start date to ensure that the state gets sports betting right. Its 10% tax on net revenue is comparable to some of the most successful sports betting markets. New Jersey, which is neck and neck with Nevada as the nation’s largest sports betting market, levies a 9.75 per cent tax on revenue from retail sportsbooks and 13 per cent on online sports betting revenue. Indiana, the No. 4 sports betting market in the US, taxes sports betting at a 9.5 per cent rate.
In addition, Colorado has avoided some of the pitfalls of earlier adopters, such as imposing maximum bet limits, a decision state regulators left to operators.
“Colorado legislators and regulators have made many smart, measured decisions based on input from casinos, operators, and bettors, and that has led to the adoption of an excellent collection of rules and restrictions,” Mr. Gouker said. “They have also had the undeniable benefit of seeing what has worked in other states. Colorado’s methodical approach might have been frustrating to bettors by slowing the launch, but there is plenty to be encouraged about. Sports betting operators have inked partnerships and regulators are listening to stakeholders. That will serve Colorado well.”
Until the COVID-19 pandemic subsides, bettors will largely have to wait to wager on anything other than futures for pro sports and a handful of international sports.
In other states, legal online casino and poker wagering has meant millions in additional revenue for operators and states, helping to bolster bottom lines during a difficult time in the gaming industry.
“There is no question that the revenue from online casinos and poker rooms has helped operators in states such as New Jersey and Pennsylvania weather the shutdowns of land-based casinos and essentially all sports,” Mr. Gouker said. “Coloradoans will likely someday decide if and when the time is right to legalise online casino wagering. In the meantime, it has put the right framework in place for its sports betting industry to thrive once sports are played again.”