• House Bill 1327 would decriminalize sports wagering in the state pending voter approval of an associated tax scheme.
  • Sportsbooks would be taxed at 10% of gross revenue.
  • The proposal would legalize both land-based and statewide online betting.

DENVER – On Monday, Colorado House Bill 1327 passed through the state’s House Finance Committee by a 9-1 vote, but it is still being considered in the House Appropriations Committee. If it clears the latter, the bill will head to the House floor or a vote.

The proposal concerns the legalization of sports betting – or, more aptly, the decriminalization of it. HB 1327 would make betting on sporting events legal at both established in-state casino venues and via licensed online websites and mobile apps.

Vendors would have to pay a licensing fee of $125,000 in order to offer their sports wagering products to the public. Revenue would be taxed at 10% of the total book hold.

Once passed and signed by the governor (if it makes it that far during the current session), HB 1327 will then head to the voters on the November ballot.

By Colorado law, any new application of or increase in taxation – regardless of the industry to which said levy or increase is applied – must be affirmatively consented to by a majority of the public at large.

Because HB 1327 would levy a tax on sports betting providers, it must be approved via referendum.

There is tremendous support in the Colorado legislature for legalized sports wagering, as can be seen in the makeup of HB 1327’s primary sponsors. These include Rep. Alec Garnett (D, House Majority Leader), Rep. Patrick Neville (R, House Minority Leader), Sen. Kerry Donovan (D, Majority Whip), and Sen. John Cooke (R, Assistant Minority Leader).

Executive Support

In addition to legal sports betting’s legislative support in the state chambers, there is also support for the movement within Colorado’s executive branch.

Former Attorney General Cynthia Coffman (R) last year issued a departmental legal opinion that sports wagering is not banned under Colorado’s constitution.

“While [the state constitution] imposes various restrictions on ‘lotteries,’ commercial sports betting does not qualify as a lottery. The Colorado Supreme Court has ruled that betting on horse and dog races is not a lottery, and there is no material difference between betting on horse and dog races and betting on other types of sporting events.”

To date, this opinion has not been overridden by the current Attorney General.

While Colorado Gov. Jared Polis (D) has remained publicly non-committal about the proposal, indications are that he would sign any such legislation that came across his desk.

This is due in part to his advocacy for Colorado’s water plan.

One of the ways that Colorado legislators have made HB 1327 palatable to the wider government is in how it proposes to use the tax revenue generated by legal sports wagering in the state.

Unlike most states, Colorado would not divert sports betting taxes to educational or gambling industry initiatives. Instead, this money would go to the Colorado Water Plan Implementation Fund.

In a state deeply concerned about preserving its natural aura and tourist attractions, this earmark is essentially the opposite of a legislative poison pill.

As such, it may be just what the doctor ordered for legal Colorado sports betting.

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