As of May 1, 2020, Coloradans can finally cast their first legal sports bets in the state. But as the 19th state to legalize sports betting, how did it overcome the barriers that keep sports betting out most of the country? It all goes back to New Jersey’s vote to legalize sports betting in 2011.
How New Jersey Took Sports Betting to the Supreme Court
In 2011, New Jersey decided that it wanted to legalize sports betting, and voters had a clear opinion. 64% of the voters in the 2011 referendum voted ‘yes’ to legalized sports betting. With clear direction from the voters, New Jersey’s state legislature drafted a new law called the Sports Wagering Act that went into effect in 2012. This new law got New Jersey sued for the first time. Five sports leagues sued New Jersey 2over the attempt to legalize sports gambling. These leagues didn’t want the disrepute for sports that could accompany sports betting. It was a fight for the ages. The courts ruled against New Jersey, prompting the state legislature to draft a different law in 2014. Instead of saying, “yes, we allow sports betting,” New Jersey said, “we don’t disallow sports betting.” It sounds like snarky semantics, but this new 2014 law took New Jersey to the Supreme Court.
Murphy v. NCAA
Once the Supreme Court reviewed the case, it wasn’t about New Jersey’s conflict with various sports leagues anymore. It was about the older law from the 1990’s that the leagues sued under. The law that kept sports betting out of 46 states (and heavily regulated in four) made it illegal for states to authorize sports gambling schemes. New Jersey argued that the governing body enforcing that old 1990’s law forced the states to adhere to a federal program. That turned the case’s question into a 10th Amendment issue. Does this old law violate states rights? In a 6-3 decision, the Supreme Court decided that it did. In May 2018, the Supreme Court’s ruling on Murphy v. NCAA cleared the way for Coloradans to cast their bets on sports in May 2020.
A Fierce Battle Over Tax Increases
By March 2019, two more states had legalized sports betting. By the end of the year, Colorado would wage a fierce debate that would make it number 19. But Colorado legislators didn’t just face the standard pros, cons, and mudslinging debates accompanying votes. They faced a unique challenge from an unexpected source: the required language on the ballot. Colorado has a Taxpayers Bill of Rights (TABOR) Amendment that prevents the legislature from increasing taxes without a popular vote. Because the law legalizing sports betting included a tax on casinos and sports betters, it had to be introduced as a tax law. As a result, every tax increase ballot measure must begin with the words “Shall state taxes be increased.” Passing a controversial bill is hard enough. But beginning it with an explicit declaration of a tax increase? A bill like that would need strong bi-partisan support.
How Did Democrats And Republicans Agree?
It’s counter-intuitive, but Proposition DD, the law that would legalize Colorado sports betting, bound Democrats and Republicans together. Democrats got on board because the new tax revenue went toward increased water storage, drought preparations, and conservation grants. A few (but just enough) Republicans supported it because it increased individual rights to place sports bets. They were able to swallow the new tax because the tax would not be borne by individual citizens. These factors allowed Democrat Alec Garnett and Republican Patrick Neville to co-sponsor Proposition DD. Even with political unity, the voters still had to decide how they felt about a new tax. Would it be clear that individual citizens were not the ones being taxed? The numbers speak for themselves.
A Slim 51-49% Victory
With over 1.5 million ballots cast, legalization won by just over 44,000 votes. It was a tight race with groups strenuously against any tax increases – and gambling in general – but sports betting won the day. The only thing standing between Coloradans and their winnings are the ability of casinos and online sportsbook platforms to receive state approval for their new Rocky Mountain operations.