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The increased funds will be dedicated to water conservation projects.
By
John Brennan
&
RJ White
November 14, 2024 at 5:05 p.m. ET
2 minutes of reading
When Colorado voters chose in 2019 to allow legal, regulated sports betting in the state, they did so by supporting a limit of $29 million in annual tax revenue. If sportsbooks collectively ended up owing more than that, the state would then redistribute the excess among these gaming operators.
In the current budget year, that would mean about $900,000 in refunds to sports betting, with that figure expected to rise to $1.2 million in 2024-25 and $2.5 million in 2025-26.
As sports betting revenues continue to rise, lawmakers this year put on the November ballot (after approval by a nearly unanimous vote of lawmakers) a measure to remove the revenue cap. And last week, voters supported the policy by a margin of just over 75% to 25%.
While many states direct their new tax revenue to the general budget or education, environmentally conscious Colorado residents distribute most of those funds to the Water Plan Implementation Fund. (A modest portion of this tax revenue goes to the Colorado Department of Revenue’s Gaming Division.)
“This is an exciting and important day for the future of Colorado’s water,” Sen. Dylan Roberts said after the results were announced. “I am very grateful that Colorado voters have agreed that we must continue to invest as much as possible in this important effort.”
Nevada effectively had a monopoly on sports betting in the United States until May 2018, when the Supreme Court struck down a 26-year-old federal law and cleared the way for any state to legalize betting. Colorado was among the first wave of what, as of last week (Missouri residents approving sports betting), became 39-state support for such wagering.
With little outside information available at the time to accurately estimate the amount of revenue likely to be generated each year, the state ballot question set a modest tax rate of 10 percent and an annual limit of $29 million.
But in just five years, sports betting in Colorado has become so popular that the amount of taxes collected is now expected to exceed that figure every year for the foreseeable future.
About half of Colorado’s funding for initiatives like water conservation since 2019 has come from sports betting taxes.
Canal upgrades, measures to preserve endangered fish populations and allocation of funds to alleviate drought issues are among the projects that will be supported by sports betting tax revenue.
