Colorado Breaks Handle Record With $573.7M In January

• According to a report released Tuesday by the Colorado Department of Revenue, Colorado’s sportsbooks broke their previous sports betting handle record in January with $573.7M wagered.
• Colorado’s sportsbooks also came just short of their revenue record; however, nearly 60% of the revenue figure was written off as promotional spending, greatly diminishing tax revenue.

DENVER – Sports bettors of Colorado wagered more money in January than any previous month, according to a report released by the Colorado Department of Revenue.

Colorado Smashes Sports Betting Handle Record In January

According to the report,  Coloradans wagered a state-record $573.7 million on sports in January, by far Colorado’s largest monthly handle since launch – the previous record, set in October, was $491.5 million.

The strong month makes Colorado the seventh jurisdiction to reach the $500 million handle threshold in January. The across-the-board success of legal sports betting in January, Colorado included, led to the national total sports betting handle breaking the $8 billion benchmark for the first time.

Colorado’s sportsbooks held a touch over 6% of the January handle for over $34.6 million in sports betting revenue.

That revenue mark came just short of Colorado’s previous revenue record of $36.8 million, set in November.

Colorado’s $34.6 million in legal sports betting revenue led to a total of $1.4 million in tax revenue, meaning only about 2.94% of the total revenue figure ended up in Colorado’s coffers.

The $1.4 million tax contribution in January brings Colorado’s total sports betting tax revenue to over $16.1 million since launch.

Promotional Spending Continues To Eat Into Tax Revenue

The primary reason that only a small portion of Colorado’s revenue ends up as tax revenue is the tax structure of Colorado’s sports betting industry.

In Colorado, sports betting is taxed on adjusted gross revenue, because sports betting promotions (free bets or sign-up bonuses, for example) are tax-deductible.

In January, sportsbooks in Colorado spent approximately $23 million in promotions, all of which was subtracted from the total revenue figure.

This left about $11.7 in taxable revenue, meaning that about 9.1% of January’s taxable revenue ended up in the coffers.

Since launch, Colorado’s sportsbooks have reported approximately $360.6 million in sports betting revenue; 60% of that total – or about $216 million – was deducted as promotional spending.

This level of promotional spending is likely contributing to Colorado’s strong sports betting growth, but it is also holding back Colorado’s potential tax receipts.

Parlays Biggest Moneymaker For Colorado Sportsbooks

In January, the biggest moneymaker for Colorado’s sportsbooks was parlays – sports bettors wagered over $90 million on parlays, $13.3 million of which was held by sportsbooks.

College football betting, featuring the National Championship Game between the Alabama Crimson Tide and the Georgia Bulldogs, brought in nearly $5.6 million in revenue on a whopping 35% hold rate.

While parlays were the biggest revenue source for Colorado’s sportsbooks, NFL betting brought in the largest handle. However, despite the larger handle, bettors had great success betting on the NFL, leading to diminished revenue.

Bettors wagered approximately $144 million on the NFL in January, with just $6.7 million of that total being held by sportsbooks.

Bettors were also successful betting on the NBA in January. Of the $163.6 million total NBA betting handle, Colorado sportsbooks held just over $4.8 million.

NHL betting has risen significantly with the recent success of the Colorado Avalanche, with wagers up 70% month-over-month for a total January NHL handle of $24.7 million. Despite the remarkable increase in wagers, sportsbooks only held about 3.3% of that total.

Betting on tennis is similarly up in the wake of the Australian Open, with Colorado’s sportsbooks raking in a record tennis betting handle just shy of $20 million. Table tennis, Colorado’s favorite minor sport, saw a 17.2% drop in handle – however, sportsbooks still turned over a $7.6 million table tennis handle in January, which is remarkable in its own right.

Rounding out the report’s individual sports figures was Mixed Martial Arts betting, which brought in over $2.1 million in handle; and “other sports”, which brought in a total of about $24.8 million in wagers.

News tags: Alabama Crimson Tide | Australian Open | College Football | College Football Playoffs National Championship Game | Colorado | Colorado Avalanche | Colorado Department of Revenue | Georgia Bulldogs | Mixed Martial Arts | NBA | NFL | NHL | table tennis | tennis