The Colorado Limited Gaming Control Commission (LGCC) approved the distribution of $8.5 million in sports betting tax revenue on Thursday, marking the first allocation of funds to the Colorado Water Plan since the state launched legal sports wagering in May 2020.
The distribution to designated beneficiaries includes the disbursement of $7.9 million to the Colorado Water Implementation Cash Fund, which received 92.8% of the total. The distribution was warmly received by Colorado Water Conservation Board Chief Operating Officer Anna Mauss, who indicated at Thursday’s meeting that the total eclipsed the board’s expectations for the first full year of legal sports betting in Colorado.
Although the Legislative Council Staff, a nonpartisan services group for the Colorado Legislature, projected annual tax revenue of around $16 million annually in each of the first five years of legal sports betting, the figures were adjusted downward due to the impact of COVID-19.
In total, the Colorado Division of Gaming saw sports betting revenue of $10.6 million for the recently completed fiscal year from July 1, 2020, to June 30, 2021.
In 2019, the nonpartisan legislative group had projected a FY 2020-21 distribution of $6.4 million to the water fund, which was created under HB 19-1327. Colorado Gov. Jared Polis signed the sports betting bill into law in May 2019.
“The fact that it is more than we expected the first year is extra reason for us to celebrate,” Mauss said in a presentation before the LGCC.
🚨 After the first full fiscal year of legalized sport betting in Colorado, more than $8.5 million is distributed to the designated beneficiaries, including the Colorado Water Plan! Learn more by visiting https://t.co/TdU9Q7pRhn pic.twitter.com/eRzrLS3z7x
— CO Dept. of Revenue (@CO_Revenue) September 23, 2021
Also from sports betting revenue, $488,782 was disbursed to a Hold Harmless Fund that supports entities such as the state’s casino cities that receive tax revenue from traditional gambling activities. State law requires 6% of sports betting tax revenue to be distributed to the fund.
In addition, the Colorado Office of Behavioral Health received an annual distribution of $130,000, of which Rocky Mountain Crisis Partners, a Colorado nonprofit group, received $30,000 to operate a problem gambling hotline.
Peggy Brown, a board member of the Problem Gambling Coalition of Colorado, urged the LGCC to take a closer look at responsible gaming issues in advertising. Brown suggested Thursday that regulations should require a 1-800 hotline number for assisting compulsive gamblers to be posted during the full duration of any gambling commercial. While a hotline number currently appears on all gambling commercials, it is not on screen long enough, Brown contended.
The Water Plan
Oddly enough, the structure of the 2019 legislative bill on sports betting encouraged the water conservation board to root against hometown teams like the Denver Broncos. Founded more than 80 years ago, the 15-member board is responsible for the protection of the state’s major water basins, as well as conducting watershed restoration, stream restoration, drought planning, water supply planning, and flood mitigation efforts, among other concerns.
Launched in 2015, the Colorado Water Plan contains the state’s framework for polices aimed at combating Colorado’s water difficulties. Language in Proposition DD, a referendum passed in November 2019, enabled the water conservation board to direct tax revenue for grant funding to help meet its water plan goals. The board’s staff is in the process of updating the Colorado Water Plan, with a target completion date of December 2022, Mauss said.
The permanent stream of funding from sports betting will support the plan well into the future, she added. At least four prominent sportsbooks — BetMGM, DraftKings, FanDuel, and PointsBet — took part in the “Colorado Water Wins” project this spring, an initiative that pushed Coloradans to support the state’s water resources. At the time, the Colorado Department of Revenue set a goal of disbursing at least $5 million to the water conservation board.
Colorado takes a statewide approach to water planning to ensure our planning is comprehensive and consistently improving. The @CWCB_DNR is charged with implementing the goals of CO's water plan. Here's a look at water in CO today. #DMCCPolicy pic.twitter.com/SH8g0fVc5a
— Denver Metro Chamber (@DenChamber) September 17, 2021
Since the launch of sports betting in Colorado, sportsbook customers have wagered more than $3 billion on the legal market, according to the Colorado Division of Gaming, placing the Centennial State in the Top 10 nationwide in handle since May 2020. With bettors’ considerable regional bias toward backing the Broncos and other local teams, water conservationists are placed in the awkward position of cheering for the house to win when Denver-area teams appear on the board.
Over the first full weekend of the NFL regular season, Colorado books handled about $44 million in bets on the NFL, the Denver Post reported, citing figures provided by Colorado Gaming Division Director Dan Hartman.
“We are constantly amazed and impressed with the continued growth we see in our state and how Coloradans have embraced this new form of legalized entertainment,” Hartman said in a statement.
Other developments from the meeting
The LGCC also approved amended regulations on a handful of rules governing table games at Thursday’s meeting. In total, the LGCC approved nine new rules for table games, listed below:
- Rule 3: Applications, Investigations and Licensure
- Rule 8: Rules for Blackjack
- Rule 10: Rules for Poker
- Rule 14: Gaming Tax
- Rule 22: Rules for Roulette
- Rule 23: Rules for Craps
- Rule 26: Rules for Pai Gow Tiles
- Rule 27: Rules for Big 6 Wheel
- Rule 28: Rules for Baccarat
In terms of licensing, the LGCC issued 10 sports betting-related licenses to companies in the first vendor minor category. Notable licensees include Upper 9 Media LLC, the International Betting Integrity Association, and Hedge Inc.
Hedge, a DFS startup company, bills itself as the first U.S. company that allows users to convert digital “loose change” into entries on fantasy sports. In May, the Pittsburgh-area startup captured the inaugural Ifrah Pitch competition.
The LGCC’s next scheduled meeting is on Oct. 21.