Sports Betting in Colorado: Changes to Expect
Colorado Contemplating Imposition of Tax on Sportsbooks' Income from Complimentary Wagers
The Gist:
- New taxes might boost state revenue by up to 30% if a bill passes.
- Colorado's sportsbooks currently enjoy one of the lowest operator tax rates in the States (10%).
- The proposed legislature could lead to fewer bonus bets at sportsbooks.
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What Lies Ahead?
Colorado's vibrant sports betting industry could see major changes in the near future. A newly proposed bill aims to adjust taxes, impacting the offerings of bonus bets statewide.
- Taxes: The introduction of new taxes could potentially increase state coffers by a whopping 30%. Colorado's current 10% tax rate on net sports betting proceeds (both retail and online) is already among the lowest in the Nation. This rate has remained stable despite other states experimenting with higher or graduated tax rates.
- Bonus Bets: Lawmakers are targeting tighter regulations on bonus bets (also known as free bets) to enhance state tax revenues. The intention is to reduce the overly generous promotions offered by sportsbooks, which can result in lower taxable revenue due to promotional costs often being subtracted from revenue before taxes are applied. This stricter control on bonus bets may lead to higher taxable revenue for the state. However, cautions have been raised that limiting promotions might affect overall betting engagement and handle, which could potentially dent long-term tax revenues negatively.
📘 Enrichment Insights:
- Revenue Breakdown: Colorado's sports betting market has been experiencing phenomenal growth with mobile wagers leading the charge. Total net sports betting revenue climbed from approximately $21.9 million in March 2025 to nearly $35 million in April 2025, demonstrating the expanding market's potential for continued expansion in 2025 [1]. In 2024, total bets in Colorado amounted to $6.19 billion, marking an increase of 11.3% over 2023. Operator revenue, in turn, shot up 24.4% to $325 million [1].
- Tax Collections: Colorado's revenue from taxed sports betting has been steadily increasing. April 2025 saw tax collections rise by 57.7% compared to March, totaling $3.4 million [1][2].
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- Michael Savio, an industry insider, suggests that the sports betting industry in Las Vegas, a popular gambling hub, may mirror the changes in Colorado, as a new bill aims to adjust taxes and impact bonus bets at sportsbooks nationwide.
- The potential increase in taxes on sports betting in Colorado could lead to a significant boost in state finance, reaching up to 30%, if a proposed bill passes, making it a lucrative business venture for the state.
- The proposed legislature could affect the sports betting industry not only in Colorado but across the States, as it targets tighter regulations on bonus bets, a common practice in online casinos, which could impact sports betting businesses and sports finance.
