By any measure, Colorado sports betting has been a rousing success, taking in more than $250 million in wagers from May to August, even though US pro sports were on hiatus for more than half of that time.
Revenue numbers have been strong as well, with Colorado taking more than $7 million in net proceeds so far.
Last week, on the heels of August’s eye-popping $128 million in sports betting handle, Colorado Sharp sat down with Colorado Division of Gaming Director Dan Hartman for a wide-ranging discussion about the Colorado sports betting market’s present and future.
On Success Of The Colorado Market So Far
Colorado Sharp: How has the market’s performance so far aligned with your hopes and expectations ahead of the May launch?
Dan Hartman: I think back to last November when we really started the process. We were thinking we were going to start, and grow, and find our stride, and then COVID threw a wrench in the opening with no sports, certainly. We had a great first month and then it just led to kind of exponential growth.
I knew August would be good because we were coming into a month where we saw a return of pro sports. You don’t usually have the kind of activity like playoff basketball, playoff hockey, and an accelerated baseball schedule, so with all that excitement it was going to be big.
I’m not sure when we’re really going to settle into what our expectations are because everything is so different, you’ve got college football looking like it might start up on different schedules, pro football just started again this month as well. So I think it’s going to take a year or so until we settle back into a kind of traditional sports calendar before we know what normal is going to be.
[Legal sports betting] is producing a positive gain for the state. I hope that goes on for a while until we find out where the market is going to be in Colorado. It’s nice to have positive news, and I’m sure there will be moments where it kind of goes back a little bit or we don’t see the same gains. I don’t think this market is going to just keep going up and up 100% every month, but you’re certainly going to see months like that.
It’s good to be in a positive market and seeing the state and the players in the state are really embracing the entertainment that is sports betting.
CS: 98.5% of sports bets placed in Colorado in August were online. What do you make of the near-total dominance of online sports betting so far in Colorado?
DH: I’ve actually been encouraged a bit by the numbers we’re seeing now that we’re getting retail sportsbooks coming online. I still think there’s a lot of folks out there that are kind of cautious, it’s certainly easier and safer to do be using the app in your home than going out to a venue. We’re seeing increased traffic in the venues for gaming and for sports betting and I think that’s going to continue. I think in this market we’ll see the numbers settle in, but I think that even with the mountain towns having the gaming and the retail space it’s set up for 90 or more percent internet betting anyway.
We saw the same thing pre-pandemic in New Jersey and other places and have been comparing things to that same kind of market. I think in Colorado it’s going to be 90-93% internet going forward, it’s just how the market is set up.
CS: Do you eventually see the market plateauing and the monthly numbers becoming more predictable over time?
DH: I think we’re going to see more predictability, but New Jersey has been continuing to see record numbers even after a year and a half. There’s also a lot to be said for the amount of people moving into the market, and what they say the population is going to be like in 10 years. As people move in, some of those people are certainly going to be comfortable with sports betting, so I think we’re always going to have a positive market. We have a positive growth outlook just from the fact that Colorado is growing.
On Colorado Sports Betting Market Growth
CS: At last week’s meeting you said you expect the number of sportsbook operators in the state could double by year’s end. How realistic a possibility is that?
DH: We have folks waiting and going through their processes to go online. We know where we are now and where they are, and we see most of them coming on by the first part of the year and maybe a couple more later on. We have 33 master licenses, and a lot of folks are already partnered with them and working on making their products work for the Colorado market before they launch. We see them coming online by the end of this year or the first part of next.
CS: At which point all available licenses will be spoken for?
DH: There are deals for most all of them right now. Thirty-three is what we have now, but it doesn’t mean somebody can’t open a casino in Black Hawk or Central City and have a new master license. There are still places in both towns that casinos could come on board as a brick and mortar casino and enter the market. I don’t see that happening by the end of the year, and probably not within a year or two, but the possibility is out there because there is still more property that’s available to game in Colorado.
CS: So it’s possible that a company could open a land casino in Colorado specifically looking to be able to offer sports betting?
DH: Well, it would have to be a viable casino, and with that comes the availability of a master license that they could then open sports betting. They can’t just open a brick and mortar operation to offer sports betting, they have to be a casino, a going concern, not just one slot machine.
On The Possibility For Online Casinos In Colorado
CS: Lastly I wanted to ask you about the possibility for online casinos in Colorado. Other states have seen success and good numbers out of it, is that something in the cards for Colorado someday?
DH: I don’t think you can rule out anything. It seems like the initiative coming up in November is focusing on limits and other games, it doesn’t really have anything to do with iGaming. I think what you will see certainly with the success of sports betting and the ability to regulate it, it’s certainly not going to be a conversation that doesn’t happen. My understanding is it would take another constitutional amendment vote, and the timing on that is really up to the folks that want it. I think we’re showing that we could regulate it, it’s just a matter of whether people in Colorado want it.
CS: So it’s not out of the question?
DH: It’s not out of the question. I think it’s something people would look at, but it’s not up for me to decide, it’s for the state or the people of Colorado and any businesses that want to push it forward to decide. We’re just instruments of public policy. If they bring it on, we’ll deal with it. If they don’t, then we don’t.