Despite the unprecedented challenges brought about by the spread of COVID-19, a host of prominent sportsbook operators have forged ahead with plans to launch in Colorado.
The Colorado Limited Gaming Control Commission (LGCC) approved a wave of license applications at an April 2 meeting, including temporary operator licenses for Circa Sports Colorado LLC, Rush Street Interactive Colorado, LLC, American Wagering Inc. (William Hill US), Penn Sports Interactive, LLC and Smarkets USA. The group joins a list of household names such as DraftKings Sportsbook, FanDuel Sportsbook and PointsBet USA Sportsbook among a contingent of books chomping at the bit to debut in Colorado.
Both DraftKings and FanDuel confirmed earlier this week that they are still planning May 1 launches.
A potential audible
The majority of operators have spent months designing creative strategies for tailoring their wagering menus to Colorado bettors. But the coronavirus has triggered a lengthy global sports freeze, has prompted a nationwide closure of retail casinos, and has placed a targeted May 1 launch of Colorado sports betting in doubt.
Of the sportsbook operators to recently gain licensing approval, Circa Sports presents one of the most intriguing cases. A three-story, state-of-the-art facility under construction inside the Circa Resort & Casino in Downtown Las Vegas is expected to become the world’s largest sportsbook upon its scheduled completion in the coming months. Across Sin City, Circa has already drawn rave reviews among sharp bettors for its attractive pricing and proclivity for accepting large, six-figure bets.
Now, months after Circa Sports’ Las Vegas debut, the company’s foray into Colorado will mark the opening of its first sportsbook outside Nevada. Circa reached a deal with Century Casinos, Inc. in February to become one of the casino’s internet sports betting partners in Colorado.
“While the original plan was to launch on May 1st, the lack of sports to bet on has forced us to call an audible,” Circa Sports Strategic Operations Manager Mike Van Ermen wrote in an email. “We look forward to launching our app at a time when the people of Colorado are fully able to enjoy the product that Circa Sports has to offer.”
Colorado continues to move toward a May 1 launch with the approval of more than a dozen sports betting licenses Thursday. @MattRybaltowski on the state's progress despite coronavirus concerns: https://t.co/qxE2hRdCvE pic.twitter.com/5u7GqD9rQk
— COBets (@CentennialBets) March 19, 2020
In many respects, Circa will try to bring a large portion of its Nevada wagering menu to Colorado, Van Ermen explained, with one notable exception. Colorado sports betting regulations preclude operators from offering proposition bets on wagers featuring collegiate athletes.
Circa has yet to determine whether it will modify pricing or risk management strategies for Denver-area based teams. The strategies could be applied when Denver Nuggets’ or Broncos’ fans back the local team at a disproportionate rate, leaving area sportsbooks susceptible to a considerable regional bias.
Operators embrace remote registration
Circa is also encouraged by a provision in the state’s sports betting regulations that enables customers to open a mobile account through remote registration. Colorado’s 33 licensed casinos are located in three historic mining settlements — Black Hawk, Central City and Cripple Creek. The mountain communities present a long commute for residents on the Kansas border, as well as numerous other locations throughout the state.
“The Colorado market is a perfect launching point for Circa Sports’ non-Nevada ambitions, specifically because of remote registration,” Van Ermen said. “Remote registration is a great equalizer; customers can make decisions based on the value and product offered by the sportsbook, not just based on which book is closest to them. In this regard, we think we have a tremendous advantage.”
Account requirements. In order to establish a sports wagering account, a sports wagering operation shall: (a) Create an electronic patron file, which shall include at a minimum:
i. The patron’s legal name;
ii. The patron’s date of birth
iii. The patron’s Social Security number, or the last four digits thereof, or an equivalent identification number for a noncitizen patron, such as a passport or taxpayer identification number;
iv. The patron’s sports wagering account number or username;
v. The patron’s residential address, a post office box is not acceptable;
vi. The patron’s electronic mail address;
vii. The patron’s telephone number;
viii. Any other information collected from the patron used to verify his or her identity;
ix. The method used to verify the patron’s identity;
x. The date of verification.
— Colorado Sports Betting Regulations, Rule 7.11 Sports wagering accounts, subsection 4
Circa also plans on bringing a “low hold/high volume model,” to Colorado, similar to the one it employs in Nevada. A sportsbook’s hold takes into account its sports betting revenues (based on wins minus losses) as a percentage of its handle. A book with a 5% hold percentage on an event with a handle of $1 million will hold $50,000. Historically, Nevada sportsbooks have maintained a hold percentage in the range of 4% to 7% over the last 20 years, according to statistics compiled by the UNLV Center For Gaming Research.
The higher percentage a book holds, the less it will pay back to its customers.
“For Circa Sports, the exciting part of our expansion in terms of risk management and pricing strategies is bringing our low hold/high volume model to another state as we believe this is the most beneficial way to run a sportsbook operation,” said Jeff Benson, sportsbook operations manager at Circa Sports.
Penn will test new technology in Colorado
William Hill gained entry to the Colorado market through partnerships with Eldorado Resorts’ Lady Luck Casino Black Hawk and Isle Casino Hotel Black Hawk. A partnership completed between the companies in January 2019 gave William Hill exclusivity to serve as Eldorado Resorts’ sports betting operator for a period of 25 years. William Hill will expand its sports betting offerings to nine U.S. states once it goes live in Colorado.
When Penn National expands into Colorado, the operator will be able to showcase its in-house sports betting technology platform, powered by Kambi Group plc. Under a comprehensive 2019 deal, Penn National selected Kambi to provide a customized sports betting product across more than a dozen states. Colorado will become one of the first where Penn National tests out the technology.
Rush Street, meanwhile, plans to launch its BetRivers.com site and app in Colorado as soon as it receives approval from the Colorado Limited Gaming Control Commission (LGCC), the company told COBets.
“Our bettors in other states have expanded their horizons and are betting on a wide range of sports leagues that are active at the moment, including table tennis, soccer and international basketball,” Rush Street Interactive President Richard Schwartz said in an email. “Table tennis, in particular, has really taken off.”
Law mandates state be ready for operators to launch May 1
A couple of industry heavyweights, DraftKings and FanDuel, both intend to launch in Colorado at the start of next month in spite of concerns from the pandemic. The companies gained market access into Colorado in January through separate partnerships with Twin River Worldwide Holdings, Inc. While both partnerships provide the companies with mobile betting access, DraftKings also inked a deal to power a retail sportsbook at the Mardi Gras Casino in Black Hawk.
“As of now we are on track and look forward to providing Coloradans with our mobile and online Sportsbook on May 1,” a DraftKings spokesman told COBets, via email earlier this week.
FanDuel also intends to go live by May 1st, a company spokesman confirmed.
PointsBet, which is building its Western hub in downtown Denver, has plans to employ up to 200 workers at the office upon completion later this year. PointsBet VP of Customer and Insights Ron Shell implied the company is using the down period in sports as an opportunity to innovate.
“We have a great team to do that so when things slowly come back to normal, we’ll be able to hit the ground running,” Shell told COBets.
Although many books have been forced to overcome strong headwinds from the closures, there are some signs of optimism. Earlier this week, MLB discussed plans to resume training camp in May, ESPN reported.
NEWS: Major League Baseball and the MLBPA are focusing on a plan backed by federal health officials that could have players in training camps by May and games soon thereafter.
Details at ESPN on how MLB may return — and the difficulty in doing so: https://t.co/zDoNa3k4pm
— Jeff Passan (@JeffPassan) April 7, 2020
At PointsBet, the Rockies have odds of 100/1 to win the World Series. The Rockies made their lone World Series appearance in 2007 when they were swept in four games by the Red Sox.