It’s a tough time for both the sports leagues and the sports betting industry, but that’s not stopping the launch of Colorado’s market on May 1.
The Centennial State is currently one of four jurisdictions in the U.S. that has legalized sports wagering but has yet to see a first legal bet. The others are Washington State, Tennessee, and Washington, D.C.
Virginia lawmakers have approved sports betting, and legislation is currently waiting for Gov. Ralph Northam’s signature.
Referendum was a close call
Colorado was able to cross the finish line for sports betting authorization last year under a referendum. Despite extensive lobbying and media efforts, it was a nail biter for the industry, with 51.4% of those voting signing off on legal sports wagering in the state.
As they say in sports, a win is a win.
Under the legislation to establish the statutory structure of the industry ahead of the question being put to voters, Colorado sports wagering was set to start on May 1. Of course, that was well before the COVID-19 pandemic put the sports world at a standstill.
Friday’s launch is a positive sign for the industry, as the meager menu of sports available for wagering isn’t stopping several online/mobile sportsbooks from beginning to accept customers and build their respective databases. FanDuel, currently the top online/mobile sportsbook in the nascent U.S. industry in terms of market share, is one of those mobile sportsbooks.
According to FanDuel, the Colorado market is an attractive one for the sports wagering industry.
Colorado operators will pay a 10% tax on sports wagering revenue, which is in the middle-lower range of tax rates across the U.S. It’s not as low as Nevada’s 6.75%, but it’s far better than Pennsylvania’s 36%.
Friday Colorado joins a growing number of states to legalize #sportsbetting. Since most major leagues are on indefinite hiatus, the industry's launch will look much different than expected. But fans can still anticipate getting in on the action via apps. https://t.co/PUjZhtZRnm
— Tiney Ricciardi (@tineywristwatch) April 27, 2020
Additionally, sports bettors can download and register for an online/mobile account remotely, a key component of a state-of-the-art market for the industry. Iowa, for example, doesn’t currently allow remote registration. Furthermore, Colorado allows betting on in-state collegiate teams.
In the eyes of the sports betting industry, Colorado’s market resembles the high quality of Indiana’s, which kicked off in the fall of last year. The Hoosier State also has a 9.5% tax.
FanDuel will go live this week alongside competitors DraftKings, BetMGM, and BetRivers. More than a dozen other sports gambling apps will eventually call Colorado home, but their launches aren’t yet scheduled. The floodgates could open once the major professional sports return.
“FanDuel will be one of many operators driving a competitive marketplace,” FanDuel Chief Marketing Officer Mike Raffensperger told COBets. “We are the No. 1 sportsbook in America now, and so we’re really excited [about] Colorado.”
Raffensperger called the Colorado sports betting tax rate “sustainable” and said that it creates an attractive environment for FanDuel’s investment in the state. Unlike in other markets, FanDuel, which partnered with Twin River Worldwide Holdings, will not have a retail sportsbook in the Centennial State.
Additionally, he called Colorado a “phenomenal market” from the standpoint that the state has teams in all four major North American sports leagues — Major League Baseball, the National Football League, the National Hockey League, and the National Basketball Association.
UFC event on May 9
Of course, those aformentioned major pro sports leagues are indefinitely postponed, so it’s slim pickings in the world of sports right now. In this challenging environment, FanDuel has made strides to bolster its offerings and serve its customers.
Latest on UFC 249, which will be moving ahead in Jacksonville, Florida. https://t.co/9NIqwSUWuu
— Brett Okamoto (@bokamotoESPN) April 24, 2020
“The plan prior to COVID-19 was May 1 being the day that a lot of operators had circled on their calendars,” Raffensperger said. “That remains the date that we plan on. The timing of our launch plans haven’t changed. I think we recognize that we’re launching at a time with limited sports content available. … We’ve done things like securing more streaming rights for the sports that are on, things like table tennis and Eastern European soccer, or darts, where you can watch those events right within the sportsbook while you bet them. We have leaned into that.”
Still, those sports pale in comparison to the ones on temporary hiatus.
On May 9, the UFC plans to hold an event in Florida, its first since March 14 in Brazil. The ESPN+ pay-per-view event consists of a relatively stacked card of fights, headlined by the barnburner lightweight bout featuring Tony Ferguson vs. Justin Gaethje. FanDuel expects huge betting on the only U.S live sports event that weekend.
“I think the country is really missing sports,” Raffensperger said with regards to the MMA fights. “I think it will be a very high-volume event.”
The May 9 event follows the last-minute cancellation of the card on April 18.
“We actually had a big promotional plan the last time Dana [White] was going to do this a few weeks ago,” Raffensperger said. “We’re supportive of all the leagues’ decisions to put the safety of athletes and fans first. If this [card] goes forward, I think we will celebrate it as kind of the return of sports.”
The UFC was actually the last major American pro sports organization to postpone its events as the pandemic was increasing in severity in mid-March. As mentioned, the UFC held a Fight Night card on March 14. FanDuel said betting activity on that event was up 32% compared to the last Fight Night card.