- Colorado sportsbooks kept $32.95 million in August, down 30.7%, but state taxes fell only 14.9% to $3.15 million.
- With HB25-1311 ending the free bet deduction July 1, 97.1% of sportsbook revenue was taxable compared to 81.4% a year ago.
- Fiscal year taxes are up 20.2% to $7.72 million, all heading to the Colorado Water Plan.
DENVER – Colorado sportsbooks kept nearly a third less money in August, but the state barely felt it. The Colorado Division of Gaming’s August 2026 sports betting report shows sportsbooks kept $32.95 million, down 30.7% from August 2025. Yet tax collections only dropped 14.9% to $3.15 million.
No More Deductions
Colorado taxes 10% of net sports betting proceeds, which is revenue after paying winners, federal excise taxes and, until this summer, a share of promotional free bets. Signed in May 2025, HB25-1311 cut the free bet deduction to 1% on Jan. 1, 2026, and eliminated it on July 1, 2026.
August was the second month without it, and the difference is clear. Last August, the gap between revenue and taxable proceeds was $8.86 million. This August, it was just $967,516 – roughly the 0.25% federal excise tax on $388 million in bets.
That means 97.1% of sports betting revenue was taxable in August, up from 81.4% a year ago. Had sportsbooks deducted at last year’s rate, Colorado would have collected about $470,000 less.
The amount of money bet on sports dropped 7% to $388.1 million, but blame the calendar. The NFL only played preseason games in August, with the regular season kicking off Sept. 10.
College football also lost Labor Day weekend to September this year compared to last. So, NCAA football bets fell from $20.5 million to $3.1 million, accounting for 60% of Colorado’s $29.1 million drop.
Without football, Colorado bettors spread out across the legal sports betting board:
- Baseball: $97.1 million
- Basketball: $47.6 million
- Tennis: $34.8 million
- NFL: $25.9 million
- Table tennis: $25.7 million
Table tennis came within $194,000 of the NFL. Esports bets jumped 369% to $4.5 million, while golf bettors beat the books, collecting $215,000 more than they wagered.
Water Plan Wins
Through two months of the fiscal year, Colorado has collected $7.72 million in taxes, up 20.2%, as a World Cup-fueled July pushed fiscal year wagers up 13.6% to $874.5 million.
According to the HB25-1311 fiscal note, ending the free bet deduction should add $12.9 million this fiscal year, pushing collections to $52 million.
That money heads to the Colorado Water Plan, funding grants like the San Miguel Watershed Coalition’s wildfire plan covering 1,500 square miles of southwestern Colorado. After a record year topping $47 million in taxes, legal Colorado sports betting is on pace to send even more money to the state’s water.
