Sports betting may have launched May 1 in Colorado, but the big day for most casinos in the state happened in March. That was when the Colorado Limited Gaming Commission awarded the first round of master licenses. It’s not enough to launch an app or put up lines on games. If you want a piece of the state’s sports betting pie, you need a master license.
Under the structure approved earlier this year, there are five types of licenses a company can apply for. There’s the master license, a sports betting operator license, an internet sports betting license, a vendor major and finally, a vendor minor license. The fees and background deposits vary for each one, as do the requirements. But what are the differences, and more importantly the benefits, for each one? Are there restrictions on who can apply? Let’s take a look.
What Gaming License Do I Need?
When it comes to gaming licenses in Colorado, it’s not a simple case of one size fits all. It just depends on how your company plans to work with sports betting. Let’s start from the ground floor. Casinos and other gaming companies have three options to choose from in terms of a license and in most cases, they’ll need all three. First, if you want to operate a physical brick-and-mortar sportsbook in your casino, then you need a sports betting operator license. Casinos can obtain one for themselves or contract with a gaming company that has one. But what if you want to go digital? You’ll need an internet sports betting operator license for that. Again, the casino can get one or contract with a third party. To be clear, if you plan to operate both a physical setup and bring in online revenue right now, your company will need one of each license.
You’ll also need a third piece. In Colorado, the sports betting licenses are tied to the casinos. That means each casino needs what’s called a master license. Without this, let’s be clear, the casino cannot do business in the sports betting realm.
“It’s pretty straight forward with that license,” said Suzanne Karrer, Communications Manager for the Colorado Department of Revenue. “Only existing licensed casinos in the state of Colorado can apply and receive one master license for sports betting.”
Right now there are 33 casinos in Colorado and all 33 have applied for and received master licenses, Karrer said. It costs $2,000 for a master and $1,200 for both the sports betting and internet operator licenses. There’s also a $10,000 background deposit fee for both the sports betting and internet operator licenses.
What’s A Vendor License?
Remember when I said there were five types of licenses in Colorado? Casinos and gaming companies have to make one more choice before taking bets. The law is very specific when it comes to vendors. It states all vendors who are acting on behalf of, contracted with or employed by a sports betting operator or an internet operator must be licensed. That means every single one. The choice comes in terms of what type of license a casino or gaming company will obtain for its vendors, either major or minor.
The major vendor license comes at a fee of $1,200 and requires a background deposit of $10,000. It’s for anyone who manages, administers or controls wagers that are initiated, received or made on the sports betting system. It also includes anyone who manages or controls the games, software or hardware, as well as anyone who provides what the law calls products, services, information or assets to a betting operator.
Minor vendors, on the other hand, have to pay a $350 fee with no background deposit. These are people who, according to the lu can apply online for the licenses, but they won’t be complete. You will need to collect a number of documents and email them to [email protected] before getting the license approved.
Those documents include a request to release information, Colorado Tax Form 8821 and certified copies of your company’s articles of incorporation, bylaws, articles of organization or any partnership agreement. Corporations applying have to include copies of all annual and bi-annual reports and SEC filings for the last three years and minutes from each board meeting for the last year.
So far, officials have seen a limited roll out, due to COVID-19. According to the Department of Revenue, there have been 44 licensees so far: 25 for internet operators and 19 retail operators. Due to the time involved with reviewing them, officials ask that you allow up to a month for a response.