Colorado Sports Bettors Wagered $2.3 Billion in First Year of Legal Market

Despite major shutdowns, bettors wagered over $2.3 billion during Colorado's inaugural year of sports betting.

“The first year of sports betting exceeded our expectations, especially after we launched amid a worldwide pandemic that shuttered the casinos, the industry and Colorado,” Dan Hartman, director of the Colorado Division of Gaming, says in a statement announcing the numbers.

Led by Representative Alec Garnett, a Denver Democratic who now serves as House speaker, Colorado lawmakers placed a proposal on the November 2019 ballot to legalize sports betting. Under Proposition DD, the state would offer sports betting through mobile applications and at casinos in Black Hawk, Central City and Cripple Creek; any mobile app would have to partner with a casino in order to operate in the state. The measure also called for a 10 percent tax on sportsbook winnings, with the vast majority of that revenue earmarked for the Colorado Water Plan.

A thin majority of voters approved Proposition DD, and the state's legal sports-betting market went live on May 1, 2020...just as the pandemic shut down much of Colorado.  "The policymakers did a good job of taking it from an idea to implementation. The things that I look for in a good-sports betting law are moderate fees and taxes and robust provisions for online betting," says Eric Ramsey, a data analyst with PlayUSA.com.

Before COVID-19 hit Colorado, casino operators had anticipated hosting big sports-betting celebrations in Colorado's historic gambling towns. But health authorities shut down casinos in the early months of the pandemic, so the parties never took place. Instead, sports fans were able to bet online.

But bet on what? Last May, the NBA was on pause and the MLB had delayed its season; many other sports events had been canceled or postponed.

In Colorado, table tennis helped filled the vacuum. In the first year of legal sports betting in the state, table tennis was the fifth-most-popular sport to bet on in Colorado. While falling behind pro basketball, pro football, college basketball and baseball for total money wagered, table tennis checked in ahead of hockey, soccer, college football, golf and tennis.

Aside from that unusual stat, Colorado's sports-betting market is operating as anticipated.

“It’s great to see sports betting is off to a roaring start in Colorado," Garnett says. "Coloradans were clearly eager to start placing bets, and this year has proven that our regulatory structure is working. It has allowed Coloradans to safely place bets and eliminated the unregulated black markets that existed before we had this system in place."

Sportsbook operators have generally praised Colorado's regulatory environment.

"Because of the thoughtful approach the Colorado Legislature took in legalizing sports betting, Coloradans have no shortage of options when it comes to placing a bet, and many did, as evidenced by the $2.3 billion in bets placed," says David Farahi, chief operating officer of the Monarch Casino and Resort in Black Hawk, which offers sports betting through its BetMonarch app.

Colorado currently boasts 21 licensed mobile app operators and 17 licensed retail sportsbook operators. "It's a market that everyone wants to be in, for sure," Ramsey says.

While the state has calculated the total amount wagered, it's still calculating the sports-betting tax revenues for April. Through March 2021, the market had generated over $5.5 million in tax revenue for Colorado. That figure comes in just above the estimated $5 million in tax revenue that Prop DD proponents had predicted as the minimum for the first year of legal gaming in the run-up to the November 2019 election. DD allows the state to collect up to $29 million in sports-betting taxes every year.

Most of the tax money collected will go to the Colorado Water Plan, which was created by then-Governor John Hickenlooper's gubernatorial administration to ensure that the state has water to meet future needs for agriculture, drinking and recreation.