Colorado voters overwhelmingly voted to retain excess sports betting tax revenue at the ballot Tuesday.
With more than 75% of the votes, Coloradans approved Proposition JJ, a change that will allow the Rocky Mountain State to retain more than the previous limit of $29 million in Colorado sports betting tax revenue. Had the measure not passed, the government would need to return any excess tax revenue to sportsbooks and their partner casinos.
Because of a 1992 amendment to the Colorado Constitution, tax collection is limited to the legislative projections when a bill passes. To circumvent that rule, the legislature referred Proposition JJ to Tuesday’s ballot.
Colorado sports betting tax quirk
When sportsbooks launched in 2020 with a 10% tax, legislative projections set potential sports betting tax revenue at $29 million.
In 2022, the legislature passed a bill phasing out promotional deductions for sportsbook operators.
With that change, the latest fiscal year, which ended in June, was the first to exceed the $29 million cap with $29.9 million. Without Tuesday’s change, Colorado was due to return the excess $900,000 tax revenue to sportsbooks and casinos.
Colorado performance
Colorado sportsbooks have contributed more than $79 million in tax revenue since launching in 2020. The tax revenue largely goes toward Colorado Water Plan projects.
During the first full year of sports betting, sportsbooks paid $6.6 million in taxes. With the deduction change made in 2022, sports betting tax revenue jumped to $29.9 million in the fiscal year ending in June.
Legislative projections suggest that $900,000 excess could grow to $1.2 million in 2024-25 and $2.5 million in 2025-26.
Little pushback
The strong ballot performance faced no opposition campaign, according to state registrations.
Yes on JJ, the committee supporting the proposition, raised nearly $500,000 from groups like the Environmental Defense Action Fund and Conscience Bay Research.
The Colorado Cattlemen’s Association and the American Rivers Action Fund also added to the committee’s coffers.
