Colorado shaping up to be the most innovative US sports betting market

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Colorado became the sixth state to surpass the $1bn mark for wagers in a single year as sportsbooks closed 2020 with yet another record month. It was a significant accomplishment considering the industry launched in May with no major US sports in action, according to PlayColorado, which provides news and analysis of the state’s gaming industry.

Colorado’s online and retail sportsbooks tallied their eighth consecutive month of record wagering with $284.6m in December, up 23.1% from the previous record of $231.2m set in November.

Gross gaming revenue fell just short of a state record in December, hitting $17.2m. That was down from the high of $18.4m in gross gaming revenue set in November. Meanwhile, net sports betting proceeds fell to $5.7m, down from $9m in November. Sports betting produced $531,490 in state taxes in December.

“Colorado’s launch in the heart of a pandemic has, perhaps inadvertently, spawned what could be the most innovative market in the country,” said Ian St Clair, analyst for PlayColorado.com. “It’s not just that table tennis remains a popular draw in the state, even months after the return of major US sports. It’s also the way operators are using unique betting markets to help connect with customers. The unusual recipe has unquestionably been a success.”

For all of 2020, Colorado’s retail and online sportsbooks produced $1.2bn in wagers, of which $1.17bn were made online; $75.8m in gross gaming revenue; $28.3m in net betting proceeds; and $3m in state taxes, including $2.2m in the last three months.

“After a slow start as sportsbooks ramped up, the last three months prove that sports betting will be a reliable revenue generator for the state,” said Jessica Welman, analyst for PlayColorado.com. “Revenue ebbs and flows in every sports betting market, typically peaking at the height of the football season. In that way, Colorado’s pattern is on par with what we see most everywhere in the US.”

With heavy action in December on pro football ($88.2m), pro basketball ($42.9m), and college basketball ($35.2m), Colorado will likely place sixth in the US, behind only New Jersey, presumably Nevada and Illinois, Pennsylvania, and Indiana.

But the Centennial State did not take a conventional route to become one of the largest US markets. Table tennis has generated $63.5m in bets this year, including $11m in December. Only football, baseball and basketball have generated more.

And sportsbooks have been creative in drumming up interest. FanDuel offered a promotion in December in which it shifted the line one point in the University of Colorado’s favor for every 500 fans who placed a bet on the Buffaloes. And sportsbooks have increasingly offered unique proposition bets, like where star quarterback Deshaun Watson could eventually land.

“Colorado’s books are offering bets that are simply not available in other states,” Welman said. “There are myriad reasons why, but one of them is that table tennis has been so lucrative that state regulators and sportsbooks themselves have been inspired to take chances on more unconventional offerings.”

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