Colorado voters’ gamble may have quickly paid off after all.
Sports betting got off to a hot start, meaning enough tax revenue has already been collected to start benefiting Colorado’s Water Plan projects. That’s despite projections from Gov. Jared Polis’ administration warning that the wagering would start slowly and that money wouldn’t flow to water projects until at least the second full year of sports betting.
Colorado had already collected more than $3.4 million in sports betting tax revenue through the end of December, more than enough to cover the roughly $2 million in startup costs that had to be paid off before wagering dollars could start being directed to the water plan projects, including increasing storage capacity.
Sports betting began in Colorado in May, after voters passed Proposition DD in November 2019. More than $1 billion has been wagered so far.
“It’s a sign that we built a healthy, competitive, regulated marketplace,” said state House Speaker Alec Garnett, a Denver Democrat who championed legislation that put Proposition DD on the ballot.
Proposition DD was pitched to voters as a way to direct money to the state’s water plan, which could have a price tag as large as $40 billion. But in December 2019, Polis’ Department of Revenue warned state lawmakers that it would possibly take until the 2021-22 fiscal year before enough tax revenue came in for the water plan to benefit.
The sports betting tax revenue is still far lower than the Colorado General Assembly’s fiscal analysts projected. But the upshot is that there’s already plenty of sports betting tax dollars — which are generated by a 10% tax on casinos’ net proceeds — to turn on the water-plan-funding spigot.
In other words: Colorado gamblers lost a lot of money last year and state water projects will benefit.
It’s not totally clear how coronavirus has affected sports wagering, but officials are pleased with how much betting there has been.
Suzanne Karrer, a spokeswoman for Colorado’s Division of Gaming, which is housed under the Department of Revenue, said payments to the water plan are made at the end of the fiscal year.
“The division is happy with the revenues exceeding expectations and how positive the impact will be in the fall for the water plan,” Karrer said.
Garnett said that the sports betting tax revenue is just a drop in the bucket when it comes to the water plan’s needs, but it’s a good start. Critics of Proposition DD complained it did too little to make an impact.
Gamblers have placed more than $1.1 billion in wagers since sports betting began in Colorado last year.
American football saw the most bets in December, with $88.1 million in wagers placed with retail and online operators, followed by basketball at $42.8 million. Coloradans continue to show interest in betting on table tennis, with $10.9 million in bets coming in for the sport last month.