A pair of sports betting operating fees for Fiscal Year 2022 went into effect July 1, weeks after the Colorado Limited Gaming Control Commission approved a measure for a fee increase for the new fiscal year.
At last month’s meeting, the Colorado LGCC set Internet Sports Betting Operator fees at $73,000 for the current fiscal year, up from $54,000 per operator in FY 2021. During the previous fiscal year, the state collected $159,704 in license and application fees from sportsbook operators. The increased operating fees partially reflect the amount subtracted last year from initial background checks and associated fees from the application process. The LGCC also set Sports Betting Operator fees at $12,300 per licensee, a slight decline of $200 from the previous year.
As of April 30, the Colorado Department of Revenue collected operating fees from 38 sportsbook operators — 22 for internet operations and 16 for on-site operations, according to a memo from Colorado Deputy Gaming Controller Eric Shannon.
The Department of Revenue collected $1.98 million from sports betting operating fees through the end of April, Shannon wrote in the memo. The last fiscal year began on July 1, 2020, during the peak of the COVID-19 pandemic, and concluded on June 30. Colorado went live with online sports betting on May 1, 2020, when four sportsbooks — DraftKings, FanDuel, BetMGM, and BetRivers — launched operations in the Centennial State.
During the fee-setting process in 2020, the department devised a structure in line with assumptions nationwide that projected an 85/15 split between online and retail sportsbook revenues. But at the height of the pandemic, after casino properties closed in the spring of 2020, virtually the entire U.S. sports betting handle derived from wagers placed online. In Colorado, the state collected $6.6 million in tax revenue over the first year of legal sports betting, representing more than 370% of the amount budgeted, Shannon wrote.
Through May, mobile sports betting represented about 99% of the state’s overall sports betting handle, according to the department.
Colorado cleared $2 billion in handle in its first 12 months of legal sports betting, joining Indiana, Iowa, Nevada, New Jersey and Pennsylvania in the $2 billion club. Jill Dorson with some stats from the first year: https://t.co/eCctviQi0i pic.twitter.com/i0jROymf2P
— COBets (@BetsColorado) May 11, 2021
During the 2021 calendar year, Colorado has consistently ranked in the Top 10 nationwide among online sports betting gross gaming revenue on a monthly basis. With an operator-friendly 10% tax rate on a sportsbook’s monthly net sports betting proceeds, Colorado has established a robust market while generating funding for the state’s Water Plan Implementation Cash Fund.
The fees must be paid prior to July 31, 2021, according to the Department of Revenue.