Colorado Sports Betting Revenue and Impacts on State Funding Initiatives

9 min read
Dec 11, 2024, 6:07 PM

Overview of Colorado Sports Betting

Under Proposition DD, tax revenue generated from sports betting taxes is directed to the Colorado Water Plan to support water conservation and infrastructure projects. As of 2023, $27,423,432 in sports betting tax revenue was collected, with an overwhelming majority allocated for water initiatives such as improving watershed health and ensuring the long-term sustainability of Colorado’s water supply. (Yogonet, 2024)

In November 2023, voters approved Proposition JJ, allowing the state to retain excess revenue from sports betting taxes for additional projects, ensuring more funding for critical initiatives without refunding the money to taxpayers. This approval highlights the broad support among Colorado voters for expanding the impact of sports betting proceeds. (Colorado General Assembly, 2023)

Key uses of sports betting tax revenue:

  • Watershed health improvement projects
  • Recreational infrastructure enhancements
  • Addressing problem gambling through state-funded programs

As of 2024, Colorado remains one of the biggest sports betting markets in the U.S., with a handle of $5,560,232,285 in 2023. This market is supported by a competitive regulatory framework and the participation of 15 major sports betting operators, such as DraftKings, BetRivers, FanDuel, BetMGM, and Bet365.

The state's sports culture further drives its sports betting market. Colorado is home to several professional teams, including the Denver Broncos (NFL), Colorado Rockies (MLB), Denver Nuggets (NBA), and Colorado Avalanche (NHL). Additionally, the state boasts strong NCAA programs such as the University of Colorado Buffaloes and the Colorado State Rams.

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Annual Sports Betting Growth in Colorado

Monthly Sports Betting Growth in Colorado

2023

Colorado Sports Betting Revenue

As per the Colorado Department of Revenues Annual Reports, Colorado’s gross gaming revenue (GGR) has grown since the state launched sports betting in May 2020. In its inaugural year, GGR reached $75.8 million, an incredible achievement considering the market had less than a full year of operation. The following year, 2021, brought a surge in popularity as online sports betting apps became widely adopted, driving GGR to $250 million, more than triple the revenue from 2020.

This upward trajectory continued in 2022, with GGR climbing to $351.9 million, reflecting the state's strong sports culture and increased participation of bettors across various sports. By 2023, Colorado’s GGR reached an impressive $391.9 million.

In 2024, Colorado continued to see strong performance in its sports betting market. The state recorded an annual handle of $5.36 billion, generating $407.7 million in GGR. Monthly hold percentages fluctuated, averaging 8.99%, with peak revenue months in March and September 2024 coinciding with key sporting events such as March Madness and the start of the NFL season.

The state also collected $60.2 million in tax revenue from sports betting in 2024, ensuring continued contributions to the state's public projects and highlighting the market's importance to Colorado's economy. With this continued growth, the Centennial State remains one of the leading sports betting markets in the U.S., fueled by a strong regulatory framework, competitive operators, and the state’s deep sports culture.

Latest Updates in Colorado Sports Wagering

  • Nov. 27, 2024: Colorado’s October sports betting revenue drops to $39.3M, down 16.2% year-over-year.
  • Oct. 30, 2024: The return of the NFL boosts September’s handle, with football accounting for over 30% of wagers.
  • Oct. 24, 2024: Bet365 partners with Kroenke Sports for streaming direct-to-consumer Denver Nuggets and Colorado Avalanche games.
  • Sept. 30, 2024: Bet365 hires 1,000 employees for its Colorado-based U.S. headquarters.
  • Sept. 19, 2024: SI Sportsbook exits Colorado, leaving 14 active online sports betting operators in the state.

Impact on State Funding Initiatives

The success of Colorado sportsbooks has translated directly into significant contributions to state funding. For instance:

  • Over $29 million in tax revenue in fiscal year 2024 supported projects ranging from water conservation to recreational development.
  • Funding has bolstered the Colorado Water Plan, which aims to address long-term water challenges in the state.
  • The inclusion of funds for problem gambling awareness and treatment programs ensures a balanced approach to the gaming industry's impact. (CPRNews, 2024)

Future of Sports Betting in Colorado

The future of sports betting in Colorado is bright, driven by innovative partnerships like the one between Bet365 and Kroenke Sports. Continued investment by sports betting operators in local infrastructure, such as new headquarters and streaming services, ensures the state remains a hub for online sports gambling. However, challenges such as market saturation and the exit of some operators, like SI Sportsbook, among others, highlight the importance of maintaining a competitive yet sustainable market.

As of October 2024, Colorado reported:

  • $391.9M in revenue.
  • $5.56B in total handle.

Colorado Snapshot

Key AspectDetails
PopulationApproximately 5.9 million residents as of 2024. (World Population Review, 2024)
Political AffiliationColorado is a consistently blue-leaning state with a Democratic governor and a Democratic-controlled legislature. It has reliably voted Democratic in recent presidential elections. (270towin.com, 2024)
Year Sports Betting LegalizedIn 2019, Colorado voters narrowly approved Proposition DD (51.4% to 48.6%), legalizing sports betting. In May 2020, amid COVID-19 lockdowns, sports betting, including online, launched statewide. (Colorado Legisource, 2024)
Number of Sportsbooks OperatingThere are 15 online sportsbooks: Bally Bet, Bet365, betMGM, BetMonarch, BetRivers, Caesars Sportsbook, Circa Sports, ClutchBet, DraftKings, ESPN BET, Fanatics Sportsbook, FanDuel, Golden Nugget, Hard Rock, and TwinSpires
Gross Gaming Revenue (GGR) 2023$391,946,267.00
Sports Betting Handle 2023$5,560,232,285.00
Professional Sports TeamsColorado has a big pro sports scene. The Denver Broncos (NFL), Colorado Avalanche (NHL), Denver Nuggets (NBA), Colorado Rockies (MLB), and Colorado Rapids (MLS) are all based in the Centennial State.

FAQs on Colorado Sports Betting Revenue

General Questions About Colorado Sports Betting

When did Colorado legalize sports betting?

Colorado legalized sports betting on May 1, 2020, following the passage of Proposition DD in November 2019.

What types of sports betting are allowed in Colorado?

Both retail sports betting at licensed casinos and online sports betting via mobile apps are permitted statewide.

Which organizations oversee sports betting in Colorado?

The Colorado Division of Gaming and the Department of Revenue regulate sports betting activities to ensure compliance with state laws.

Colorado Sports Betting Revenue

How much revenue does Colorado generate from sports betting?

In 2023, Colorado sportsbooks generated $391.9 million in gross gaming revenue (GGR), contributing significantly to state tax revenue.

What is the tax rate on sports betting revenue in Colorado?

Colorado imposes a 10% tax on net sports betting proceeds, with operators allowed to deduct free bets, player payouts, and federal excise taxes.

Where does the tax revenue from sports betting go?

Most sports betting tax revenue is directed to the Colorado Water Conservation Board to fund projects under the Colorado Water Plan, including watershed health and water infrastructure improvements.

Funding and State Initiatives

How does Colorado allocate sports betting tax revenue?

Revenue is primarily allocated to:

  • Water conservation projects.
  • Recreational infrastructure development.
  • Problem gambling awareness and treatment programs.
What is Proposition JJ, and how does it impact funding?

Proposition JJ allows the state to retain excess revenue from sports betting taxes, ensuring more funding for critical projects like Colorado's water initiatives without refunding money to taxpayers.

How much funding was collected for the Colorado Water Plan in 2023?

In fiscal year 2023, $27.4 million in tax revenue was collected, with most of it allocated to the Colorado Water Plan.

Sports Betting Operators and Market

How many sports betting operators are active in Colorado?

As of 2024, there are 14 active online sports betting operators, including major players like DraftKings, FanDuel, BetMGM, and Bet365.

Are tribal casinos involved in Colorado sports betting?

Yes, the Ute Mountain Ute Tribe and Southern Ute Indian Tribe can offer sports betting under their tribal-state gaming compacts.

What fees are associated with sports betting licenses in Colorado?

The initial licensing fee is $2,000, and the renewal fee is $2,000 every two years.

Impact of Colorado’s Sports Culture on Betting

Which professional teams drive sports betting in Colorado?

Popular teams include the Denver Broncos (NFL), Colorado Rockies (MLB), Denver Nuggets (NBA), and Colorado Avalanche (NHL), all of which contribute to a thriving sports betting culture.

Are college sports included in Colorado sports betting?

Yes, betting on NCAA events is allowed, but there are restrictions on proposition bets involving collegiate sports.

What other sports drive betting activity in Colorado?

Beyond the major leagues, sports like tennis and basketball and niche options like table tennis are popular among bettors.

Future of Sports Betting in Colorado

What is the outlook for Colorado’s sports betting market?

The market is expected to continue growing, supported by partnerships like Bet365 and Kroenke Sports and further investment in the state’s sports infrastructure.

What challenges does Colorado face in maintaining its sports betting market?

Challenges include market saturation, the exit of smaller operators, and ensuring sustainable growth while addressing problem gambling concerns.

How does Colorado plan to use additional revenue from sports betting taxes?

The state aims to fund more water projects, enhance recreation infrastructure, and increase resources for problem gambling programs.