Colorado Sports Betting Ballot Measure Could Increase Tax Haul


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Colorado sports betting

A November ballot question could lead to Colorado keeping more taxes from sports betting.

Earlier this year, the Colorado legislature referred Proposition JJ to the November ballot. If approved, the question would remove an existing $29 million tax cap on how much money the state can collect from Colorado sports betting.

The latest fiscal year, which ended in June, was the first to exceed the cap. If the question fails, money collected over the $29 million is refunded to operators.

Colorado sports betting question

Colorado sportsbooks launched in May 2020 with a 10% tax, as well as tax deductions for promotional play. Fiscal analysts projected the industry would generate up to $29 million annually in tax revenue.

A 1992 constitutional amendment requires tax dollars collected above the state’s projection be refunded, unless voters allow the government to keep the excess. In 2022, the legislature passed a bill phasing out promo deductions for sportsbooks.

The deduction change helped push the tax revenue over $29 million in the most recent fiscal year. The tax revenue largely goes toward Colorado Water Plan projects.

Colorado sports betting performance

Since 2020, Colorado sportsbooks have taken more than $19.1 billion in wagers, generating $1.3 billion in sports betting revenue. The state has collected $79.3 million in taxes.

Colorado collected $6.6 million in taxes during its first full year of sports betting.

The state collected $29.9 million in the 2023-24 fiscal year that ended June 30. If Proposition JJ passes, the additional $900,000 can be kept by the state and spent; otherwise, it will go back to casinos and sportsbooks.

Legislative projections suggest the refunds could grow to $1.2 million in 2024-25 and $2.5 million in 2025-26.

Tax change proponents 

Yes on JJ is the committee supporting the ballot question. According to filings with the Secretary of State, Yes on JJ has raised $490,000 from groups like the Environmental Defense Action Fund and Conscience Bay Research.

The Colorado Cattlemen’s Association and the American Rivers Action Fund also contributed to the committee.

There is no organized opposition campaign registered with the state.

Photo by Shutterstock/John Couture