A bill framed as putting responsible gambling guardrails around the Colorado sports betting industry, including banning all prop bets, passed its first committee.
SB 26-131 advanced out of the Senate Finance Committee last week after hours of testimony that revealed a growing divide between consumer protection and industry survival.
The bill now needs to pass the Senate Appropriations Committee before heading to the full chamber. The committee meets on Fridays.
Multiple responsible gambling upgrades
The legislation tightens restrictions for the Colorado sports betting market:
- Prohibit credit card deposits for betting
- Limit users to five deposits within a 24-hour period
- Ban push notifications and texts that encourage betting
- Restrict sports betting ads, including daytime and live-game broadcasts
- Require operators to submit data for state reporting
- Ensure water plan funding does not fall below prior-year levels
Lawmakers framed the proposal as a response to mounting concerns around addiction, particularly among younger bettors.
Concerns over youth gambling exposure
The hearing quickly turned into a tug of war between two competing realities.
Supporters of the bill argued that sports betting has evolved into something far more aggressive than voters envisioned.
“Right now, we’ve effectively placed a casino in every young man’s pocket without adequate safeguards,” said Jeff Hunt, former director of the Centennial Institute, a “public policy think tank” at Colorado Christian University.
Others pointed to the mechanics of addiction. One lawmaker raised concerns about push notifications, questioning whether users could simply turn them off.
“You’re talking about people who are addicts, who are not going to turn that feature off,” Sponsor Sen. Dylan Roberts said. “… It’s like having someone constantly offering you a drink if you’re addicted to alcohol.”
Industry says Colorado needs prop bets
Operators, however, painted a different picture, one where the big risks undercutting a regulated system that already funds public programs.
DraftKings‘ Chief Legal Officer Stanton Dodge told lawmakers prop bets account for 30% to 45% of operator revenue, warning that eliminating them could cut state tax revenue, including funding for Colorado’s water plan, by as much as half.
“This is a genuine growing industry… generating meaningful tax revenue for the state,” added Jennifer Anderson of FanDuel, warning the bill could cause “significant unintended harm.”
Industry representatives also pointed out that these restrictions would not stop prop betting but simply push it to unregulated offshore operators.
“You shut down one, one appears overnight,” said Christopher Schroeder, director of the Colorado Division of Gaming, describing the difficulty of policing illegal operators.
