Sports gaming has created a mega industry; Civil servants seek more revenue
Trevor Phipps and Rick Langenberg
As Cripple Creek, Black Hawk and Central City celebrate the 31st anniversary of legal gambling this month, the subject of sports betting is still generating mixed reviews.
Fans love the added excitement it brings to gaming communities, the only areas where it is allowed through physical outlets and related apps, provided by casinos, which primarily outsource sports betting. for this entertainment. The green light for betting on professional sports games was given by an earlier Supreme Court ruling, which removed the monopoly Las Vegas and Nevada enjoyed, and a subsequent affirmative vote by the citizens of Colorado.
It’s a huge industry, having garnered nearly $8 billion in wagers since its inception. But politically, local leaders are still crying foul, as the affected towns receive no revenue. They are currently pushing to change this cast. Currently, the State is the big winner, and especially the funds for a global water plan. According to city officials and Cripple Creek lobbyist Salomon Malick, money that could have gone to gambling cities was siphoned off in an 11-hour move.
Malick is working on plans to change this diversion, so that gaming towns get a piece of the revenue pie. Cripple Creek is actively working with Black Hawk on legislative projects to change the current funding system.
Regardless of concerns over the allocation of sports betting dollars, local officials admit it brings added excitement, especially with a sports-crazed state like Colorado. Plans are even in the works to increase the stake even further with bets wagered on individual games.
Here are some pros and cons, based on insider reports.
Once sports betting was made legal in Colorado in 2020, the industry seemed to grow instantly. Advertisements for local casinos and major national sports betting companies could be seen everywhere, from billboards to social media to television commercials.
In fact, as soon as the industry arrived in the state, casinos saw their revenues increase and sports betting already hit record numbers. But, many have questioned whether the legalization of sports betting has helped or hurt the state.
The truth is that, like most new things, the addition of sports betting has brought both good, bad and bad. The state gained significant tax revenue, but the number might not be as large as many had originally thought. And, some have said that adding a new type of game has created other problems that tax revenue hasn’t helped, such as increased gambling addiction issues.
Do all sports betting companies pay taxes in Colorado?
According to the Colorado General Assembly website, every business that operates a gaming or sports betting business is required to obtain a license from the state and pay taxes if the business does not fall under the exemptions. gambling taxes. “Casinos operating on the Ute Mountain, Ute, and Southern Ute Indian Reservations in Archuleta, La Plata, and Montezuma counties are exempt from gambling tax,” the state website reported.
When sports betting first became legal, anyone wishing to get involved in the industry had to apply for onsite sports betting, mobile sports betting or both. According to an article by Colorado Public Radio, all 33 casinos in Colorado have primary licenses for sports betting and two-thirds of them are licensed for mobile betting. All national sports betting companies like Draft Kings or Fan Duel must apply for a Colorado gaming license in order to do business in the state.
How Sports Betting Tax Revenue Works
The CPR News article also reported that in the first year of sports betting, the state collected $6.6 million in tax revenue. However, that number is relatively small compared to the more than $2.3 billion Colorado sports bettors wagered in the first year of its legality. According to the Sports Betting Dime website, the state generated more than $17 million in taxes between May 2020 and March 2022 of the $6.5 billion spent on sports betting.
According to state law, Colorado only taxes profits that casinos make on sports betting. So when the house wins, the state collects a 10% tax on those profits. When punters win at sports betting, they still have to pay taxes on their winnings, but these figures are not counted in sports betting tax revenue reports.
How is taxpayers’ money spent?
CPR News explained that the program first had to pay back more than $1.7 million that lawmakers had allocated to cover start-up costs to regulate sports betting. Then, six percent of the taxpayer money received goes into an “exemption fund” which is intended to compensate for the loss of tax revenue from traditional gambling. “Entities that can apply for this money include the state historical fund, counties and cities with casinos, and community colleges,” CPR reported.
According to the DD proposal passed by voters in 2019, the majority of sports betting tax revenue goes to water conservation and storage projects. And some of the money (about $130,000 in the first year) goes directly to gambling addiction services, such as counseling and crisis hotlines.
Sports betting causes an increase in gambling addiction
Since sports betting became legal in Colorado, several news outlets have reported an increase in gambling addiction issues in the state. Many have said that since mobile sports betting is much easier than other forms of gambling, the chances of addiction are significantly higher.
Peggy Brown, chair of the board of the Problem Gambling Coalition of Colorado, told the Colorado Sun that calls and texts to Colorado’s gambling addiction hotline have increased 45% from 2020 to 2021. “Sports betting is, at a minimum, twice as addictive as any of the other forms of gambling,” Brown said. “It’s taxing resources.”
And, while the addition of sports betting has caused addiction issues to skyrocket, many said the problem is not new to the state. “Colorado has never prioritized problem gambling,” Colorado State House Speaker Alec Garnett told the Colorado Sun. “And so, it’s not just about sports betting. It’s a problem with gambling and ensuring that people have access to the resources they need, whether it’s sports betting, table games, slots or other forms of play. So it’s time for Colorado to take the lead in this position.
Many experts said the state had underestimated how quickly sports betting would spread because mobile betting removes the barriers of traveling to a casino like other forms of legal gambling. Even though sports betting is still relatively new, many players in the addiction counseling industry have already called on the state to provide more funding to help people with gambling addiction issues.
Portions of this article first appeared in The Maverick Observer