First Prop DD Ads Focus on Water, but Financed by Gaming Industry

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A river of money runs through Colorado's campaign season. The first ads for Proposition DD, a ballot initiative designed to legalize sports betting in the state, are now on the air, and while they focus on water, they're financed by the green of the gaming industry.

Proposition DD's proponents took a cue from Great Outdoors Colorado, the 1992 ballot initiative that redirected lottery revenue collected by the state toward Colorado's parks and open space, in packaging their proposal, which would help fund the Colorado Water Plan.

"GOCO is a Colorado success story. Just like GOCO, DD is a down payment to protect our Colorado way of life," Dan Grossman, a former Colorado state legislator now with the Environmental Defense Fund, says in one of the pro-DD ads, which shows him standing in front of a gorgeous lake and mountain landscape.

Despite the focus on water in these DD spots, money for the campaign is barely trickling in from water-industry stakeholders. Instead, 97.5 percent of the $403,000 donated to the Yes on Proposition DD campaign in the first eleven days of September has come from the gaming industry, though betting is largely an afterthought in these commercials.

"We’re trying to give voters a sense of why they should vote yes. If they care about water in Colorado, voting yes to legalize sports betting is a way to do it," says Curtis Hubbard, a political consultant working on the initiative's campaign.

The Proposition DD ballot question reads: "Shall state taxes be increased by twenty-nine million dollars annually to fund state water projects and commitments and to pay for the regulation of sports betting through licensed casinos by authorizing a tax on sports betting of ten percent of net sports betting proceeds, and to impose the tax on persons licensed to conduct sports betting?"

Asked why the ads focus on the water plan, Hubbard says that the commercials are designed to help make up for what he considers confusing wording on the ballot proposal. "One of the challenges we’ve seen is that it’s unclear if you just read the ballot language that this is a tax that casinos pay and that the vast majority of the money raised goes to fund Colorado’s water plan. That’s what we’re trying to highlight for people," Hubbard notes.

Although the ballot language may be a bit convoluted, it's clear where the Yes on Proposition DD campaign money is coming from.

FanDuel, one of the sports-betting mobile applications that would become a mainstay in the Colorado market, contributed $250,000 to the campaign this month. Another $5,000 came from Kirchoff Group, Inc., a lobbying firm that lists FanDuel and its main rival, DraftKings, as clients. And $138,000 came from casinos in Black Hawk and Central City, two of the three cities where in-person sports betting will become legal if voters approve the initiative. (Cripple Creek is the third city.)

Only $10,000 came from water industry stakeholders, including the advocacy arm of the Environmental Defense Fund.

The ads do note that the casinos will be taxed for sports betting. In fact, house winnings from sports bets will be taxed at 10 percent; most of that revenue will go toward the state's water plan, and much of the rest will pay for enforcement of a legal sports-betting industry in the state. Under the initiative, the maximum tax revenue that can be collected by Colorado is $29 million a year.

It's precisely because the state's water plan is the designated recipient of sports-betting tax revenue that the proposal has been a bipartisan issue in Colorado, say Republican lawmakers.

“We actually know where the revenue is going,” Representative Patrick Neville, a Republican who co-sponsored the bill, told Westword. “This can’t be a honey pot for politicians to steal money from.”

In one of the other new TV ads, Terry Fankhauser of the Colorado Cattlemen's Association says that "DD is a win for Colorado's water."

Why are more conservative-leaning groups like the CCA supporting DD? According to Josh Penry, another campaign consultant, "They say, 'I could take or leave the sports betting, but this water plan is important. All things being equal, it's better to put a tax on casinos than on the rest of us."

The current stats reflect donations from September 1 through September 11; Hubbard says that the next campaign finance report for the initiative will show more financial support from non-gaming stakeholders. "We’re beginning to get support from the conservation community, the agriculture community," he notes.

Will those communities match what the gaming industry is putting in? Hubbard declines to bet. "Supporters are giving what they can afford to give," he says.

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