Colorado Sports Betting Could Cost State Money This Year
Posted on: May 7, 2020, 01:54h.
Last updated on: May 7, 2020, 06:37h.
On May 1, Colorado joined the legal sports wagering party, becoming the 18th state to do so. But state officials are already speculating that revenue generated from the activity will fall well short of expectations this year, providing little help to the water budget it aims to bolster.
Last November, Centennial State voters narrowly passed Proposition DD, the proposal pitching sports wagering. Under Colorado’s constitution, voters had to approve the measure because taxes are involved, and any new levies in the state must be put to voters for consideration.
Backers of the plan said it would help the state plug a $100 million annual gap in the water budget. But it looks like sports betting revenue won’t come anywhere close to that in year one.
Now, gaming officials estimate annual revenue will be as little as $1.5 million, far below the original $9.6 million, which itself was far below the estimated $100 million a year needed to pay for the plan in full,” reports Colorado Politics.
Assuming that $1.5 million figure proves accurate, it implies that legalizing sports wagering will actually cost the Centennial State money this year. That’s because a bill passed by state legislators last year authorized $1.8 million in spending to get the activity off the ground.
From the outset, the May 1 launch date was viewed by some critics as potentially troublesome. In order for Colorado sports betting to burst out of the gates at this time of year, the assumption arguably was that one or both of the NHL’s Colorado Avalanche and the NBA’s Denver Nuggets would be making deep playoff runs and that there would be immediate enthusiasm for betting on MLB’s Colorado Rockies because football – the most wagered-on American sport – is still months away.
However, the coronavirus situation hit, sparking not only a temporary shutdown of all gaming properties in the state, but cancellations, postponements, and suspensions of a variety of marquee sporting events and leagues. On the bright side for Colorado is historical data confirming the May through July period is typically the most sluggish for US sports betting.
Still, there’s no getting around the impact COVID-19 is having on the state’s sports betting ambitions. The Colorado Division of Gaming recently forecast a scant $1.5 million to $1.7 million in sports wagering revenue for the state for the fiscal year starting July 1, according to Colorado Politics.
Colorado’s foray into sports betting, thanks to the coronavirus, is clearly inauspicious. But some analysts and operators remain undaunted, speculating that the state could eventually become one of the sports wagering meccas of the Western US.
Additionally, some estimates indicate that when the sports wagering market in Colorado reaches maturity, it could be taking $6 billion in bets per year while generating $40 million in receipts for the state — a meaningful number for the water budget. At that level, the state would be the second-largest for sports betting in the West after Nevada, assuming California doesn’t come online.