How Sports Betting Became Legal In Colorado
Sports betting was legalized in Colorado in November 2019 when voters passed Proposition DD by a slim margin. The proposition called for a gambling expansion in Colorado that included legalizing sports betting. Soon after, big names in the sports betting business clamored to get their foot in the door in Colorado, including DraftKings.
Proposition DD was passed by a very narrow margin with just 50.73% of voters in favor. Now, with sports betting legal, Colorado will impose a 10 percent tax on gross revenue to be earmarked to support the state’s Water Plan.
All of Colorado’s 33 casinos are eligible to apply for licensing that will allow them to offer both in-person and online sports betting.
DraftKings Partners With Twin River Worldwide Holdings
DraftKings was one of the first major sports betting companies to receive both a physical and digital sports betting license. DraftKings has partnered with Twin River Worldwide Holdings to operate a retail sportsbook inside the Mardi Gras Casino in Black Hawk, according to Ezra Kucharz, DraftKings’ chief business officer. DraftKings will also be the Mardi Gras’ mobile sportsbook provider.
The partnership was announced back in January, making Colorado the sixth state to feature a DraftKings sportsbook. The announcement came after Twin River Worldwide Holdings completed its acquisition of Golden Gates, Golden Gulch and Mardi Gras casinos in Black Hawk.
Twin Rivers has been given three sports gaming licenses in Colorado, one for each casino. One of those licenses will be used to partner with DraftKings while another will be used with FanDuel, with whom they had previously partnered. The third license will be retained by Twin River.
Whether Twin River will hold that license for the creation of their own sportsbook or to partner with another sportsbook operator is currently unknown. However, they should have no issues finding another external operator if they so choose. Plenty of major sportsbook brands will be looking to gain access to Colorado.
The Money Is In The Mobile, Not The Retail
Retail sports betting is a much smaller market than online betting. In New Jersey, for example, approximately 85 percent of betting handle each month is from online wagering. However, there is still an attraction for some to place their bets at sportsbook windows.
The DraftKings retail sportsbook in Pennsylvania, located at the Meadows Racetrack and Casino, has been open since October of 2019. Since then, DraftKings has seen just $7.3 million in handle at its retail location. That is compared to $190.5 million in handle via online.
Colorado Legal Sports Betting Expectations
The Colorado Gaming Commission established rules for sports betting earlier this year. The commission began receiving licensing as far back as November when Proposition DD was passed. The original goal was to have sports betting launch in the state on May 1. However, with the recent Coronavirus pandemic and the lack of sports actually being played, that may be in jeopardy.
One of the leaders in bringing legal sports betting to Colorado is State Rep. Alec Garnett (D-Denver), who has estimated the 10 percent tax on sports betting revenue from casinos will lead to approximately $10-$20 million in revenue in a full fiscal year. The Colorado Division of Gaming is expecting to issue up to 33 licenses, most in Black Hawk, Central City and Cripple Creek.
What Can We Expect For DraftKings In Colorado?
Colorado has a population of just under 5.8 million. If you base projections on population alone, you can expect DraftKings to see success somewhere close to what they are having in Indiana, which has a population of 6.7 million. Ameristar Casino, which is partnered with DraftKings in Indiana, saw $73 million in sports betting handle in January.
DraftKings is seeing success in both states despite Iowa requiring residents to register for an online betting account in person. Colorado may not be the biggest market for DraftKings in the country, but it could certainly find itself near the top.
The expansion to Colorado is just another step on the path for DraftKings to continue its U.S. expansion. DraftKings will look to compete alongside FanDuel as one of the biggest sportsbook operators in the country. As a result, we can expect to see DraftKings continue to make partnerships in every other legal gambling state.