Colorado lawmakers could make a change to require sports betting operators to pay taxes on promotional bets.
Colorado sports betting tax revenue has long provided money for water programs in the Rocky Mountain State, and now it could be looking for more. A group of lawmakers has introduced House Bill 1311, which could generate $12 million for water conservation efforts.
Colorado does not tax promotional bets. If passed, the change would go into effect Sept. 1.
Colorado sports betting water money
Sen. Dylan Roberts, Speaker of the House Julie McCluskie and Rep. Matt Soper are the sponsors of the bill. The bill would change state sports betting law to include revenue from promotional bets in taxable revenue.
Colorado voters approved sports betting in 2019, and lawmakers included a $29 million cap on the 10% tax on sports betting revenue. Coloradans voted to remove that cap in November.
Both moves are part of a broader search for more money for water projects. HB 1311’s fiscal note estimates an increase of nearly $12 million in fiscal year 2025-26.
“The thought with this bill is that it’s time to make this change. It’s a great way to generate more funding,” Roberts told The Colorado Sun.
No tax hike in Colorado
Colorado has one of the lowest tax rates on sports betting platforms in the nation at 10%. The state’s sportsbooks have generated $1.7 billion in revenue, while Colorado has collected just $101.5 million in taxes since the launch of legal betting in May 2020.
While various lawmakers are considering raising taxes to increase revenue from sports betting in their states, Colorado’s legislators are taking a different approach with HB 1311.
Multiple states, including Colorado, allow sportsbooks to deduct promotional bets. Other such states include:
- Arizona
- Connecticut
- Kansas
- Lousiana
- Maryland
- Michigan
- North Carolina
- Pennsylvania
An LSR analysis found that Colorado’s promotional rate is 2.1%, behind Maryland and Louisiana for the lowest over the last 12 months. Most comparable markets have rates higher than 3%.
