Close to a year after sports betting became legal in Colorado, some of the largest sports-betting companies operating in the state are launching a campaign to highlight how the industry is helping fund the Colorado Water Plan.
“Let's make this the Colorado joke: It’s a bummer the Broncos lost, but Colorado water wins. It's not all bad,” says Brian Jackson of the Environmental Defense Fund.
Jackson, together with Terry Fankhauser of the Colorado Cattlemen's Association, have partnered with BetMGM, DraftKings, FanDuel and PointsBet on the “Colorado Water Wins” campaign, which calls for the four sports-betting companies to feature a “Colorado Water Wins” badge on billboards, television commercials and other advertisements. The campaign is designed to show how a portion of sports-betting tax revenue benefits the Colorado Water Plan, which aims to ensure that Colorado will have water for decades to come.
In November 2019, Colorado voters approved Proposition DD, which legalized sports betting on mobile apps and in casinos in Black Hawk, Central City and Cripple Creek, with a 10 percent state tax on sportsbook and casino winnings from sports wagers. The vast majority of the tax revenue generated from sports betting is earmarked for the Colorado Water Plan, established in 2015 by then-Governor John Hickenlooper's administration. The plan focuses on river health, drinking water, agriculture and recreation assets, and is structured to both keep up with Colorado's population boom and balance the needs of the more heavily populated Front Range and the Western Slope.
In its first ten months, nineteen companies have been licensed for mobile applications in the state. The Colorado Division of Gaming has issued retail sportsbooks licenses to seventeen outlets.
From May 2020, when the legal market opened, through February 2021, sports bettors have wagered $1.78 billion in Colorado, with the vast majority of those bets placed via mobile apps. The state has collected $4.49 million in taxes during that same period. Prop DD proponents had anticipated that Colorado would collect between $5 million and $15 million in taxes annually during the early years of legal sports betting; the maximum that can be collected by the state under the statute is $29 million. With two months left to go, the state will come in above the $5 million mark for the first round, but not by much — which isn't a surprise, given that major sports leagues were shut down by COVID for much of 2020.
The tax revenue collected has fluctuated from month to month, in part because of mobile apps offering bonuses to hook in new customers. In September 2020, for example, sportsbooks paid just under $70,000 in taxes, despite bettors wagering over $200 million. That month marked the start of the NFL season, so apps were dishing out generous promotional bets that allowed new users to wager small amounts of money for huge winnings, with minimal risk involved.
Since the state generates taxes only from sportsbook winnings and not from player winnings, Colorado saw little in the way of tax revenue in September 2020. The next month, bettors wagered $210 million, but sportsbooks paid $824,000 in taxes, since there were far fewer promotional bets.
In the coming months, sports-betting billboards and television commercials — which are already almost omnipresent — will start to feature the "Colorado Water Wins" badge, which shows a red 'C' for Colorado, plus a sun and flowing turquoise water. Jackson and Fankhauser are modeling the campaign on Great Outdoors Colorado promotions, which show how buying a Colorado Lottery ticket helps "preserve and enhance the state's parks, trails, wildlife, rivers and open spaces."
"We're taking a page out of their book and reminding Coloradans that sports betting benefits Colorado water," Jackson says. "The more that those ads remind folks that water is incredibly important to this state and we don't have a lot of it and we need to invest more in it, all the better."
“We’re proud to help lead this effort to rally Coloradans to understand the connection between placing a bet on a sporting event and protecting water in Colorado,” Matt Prevost, chief revenue officer for BetMGM, says in a statement announcing the campaign.
The Colorado Water Conservation Board will be able to use the money generated from sports betting starting in summer 2022.
“It's a really good down payment,” says Jackson, who notes that the Colorado Water Plan has been funded by a “roller-coaster” revenue stream over the past five years. But it's just a start: Jackson estimates that the Colorado Water Plan will need around $100 million in funding annually in order to fully meet its mission.