Colorado Responsible Gaming Could Receive Boost In Funding

A lawmaker who championed the introduction of legal sports betting in Colorado has introduced a bill that would shift more money to fund problem gambling in the state.

House Bill 1402 passed out of committee last week with the support of House Speaker Alex Garnett. If passed by the state legislature, the measure would allocate $2.5 million annually toward problem gambling programs in the state. Currently, under law, less than $200,000 is spent annually on problem gambling resources in Colorado.

The bulk of tax revenue derived from legal sports betting in the state is used to fund the Colorado Water Plan, which was created to regulate the availability and safety of water for Colorado farmers, as well as for drinking and recreation.

More To The Bill Than Responsible Gaming

There’s also a second benefit to the state if House Bill 1402 is passed: the elimination of a loophole that has cost Colorado millions in tax revenue.

Currently, sportsbooks can deduct large sums of revenue from their taxable amount for their costs associated with bonuses given to new customers. According to Garnett and other state officials, those deductions have cost the state millions of dollars in potential tax revenue.

HB 1402 would remove that deduction, increasing tax revenue, while also forcing sportsbooks to rethink their marketing strategy to acquire new customers in Colorado. Under HB 1402, tax deductions for operators in Colorado would be set at 2.5% of their total sports betting handle, with that figure gradually decreasing to 1.75% by 2026.

Garnett’s bill would also remove the cash-only requirement for playing the Colorado lottery.

History Of Sports Betting Legislation In Colorado

Voters in Colorado passed a referendum in favor of sports betting in November 2019. The following May, the state launched online sports betting and implemented licensing for retail sports betting at approved locations in the state.

Colorado was one of the first states to launch sports betting in the United States, following the landmark decision by the U.S. Supreme Court that removed the federal ban on state authorization of sports betting, clearing the way for states in 2018.

Since legalized sports betting went live on May 1, 2020, Coloradans have wagered more than $6.5 billion, which has produced in excess of $17 million in taxes as of March 2022. The original sports betting laws called for $130,000 to be spent on problem gambling resources and programs. This included a website with resources, as well as a toll-free number for Colorado sports bettors to call if they felt they had a problem with gambling. But some experts have called into question whether the state has done enough in regards to problem gambling education, compared to other states.

“This is an important step to making sure Colorado is following best practices to serve those who may need help,” Garnett said after the bill was advanced to the floor of the State House, as quoted by Colorado Daily.

Peggy Brown, board president of the Problem Gambling Coalition of Colorado, said there is a need for more certified gambling treatment centers in the state.

“We’re hoping to increase that number,” Brown told Westword. “If we can work with the counties and get them to see the need for additional training and we can provide some funding for that, I think we’ll be in a good place.”

Another change that would be implemented if the bill passes is the way the state would regulate the exclusion of certain individuals from sports betting. Currently, the Problem Gambling Coalition of Colorado manages that list of excluded people. If HB 142 passes into law, that responsibility would shift to the Division of Gaming in Colorado, a state office.

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