Colorado Sports Betting Requires Voter Approval

DENVER – Sports betting legalization is a hot topic for dozens of states around the country, and each has different roads to implementation. In Colorado, a voter referendum approving sports wagering will have to pass before lawmakers can begin to establish regulatory guidelines.

Colorado, for its part, is no stranger to progressive politics, having famously been among the first states to legalize recreational marijuana use back in 2012. This was also approved via voter referendum, and its success in bolstering state revenue cannot be overstated. Legal marijuana contributes over $250 million to Colorado coffers every year.

However, it is important to note that sports wagering and legal cannabis are not going to carry the same immediate impact on state revenue or the local economy. While some overeager gaming analysts have claimed that sports betting in the Centennial State would bring in upwards of $200 million in tax revenue for the state, that is an ambitious number.

Colorado State University graduate and Las Vegas Superbook VP Jay Kornegay hopes to temper such lofty expectations.

“[Colorado sports betting] will create another revenue stream, but it’s not a cure-all opportunity. In other words, sports [betting] revenue could help with I-25 but not to fix the I-70 path to the mountains.”

Referendum Mandated Because Sports Betting Is Classified As A “Tax Increase”

Even if sports betting revenue only brings in a fraction of the estimated $200 million annual windfall, voters are expected to support it. But if they don’t, then legal sports wagering will not come to the state. That’s because the decades-old TABOR Amendment (1992) requires voter approval for all new tax rates and taxable sources.

Colorado is one of the biggest gambling markets in the US, with 35 casinos and racinos hauling in over $825 million annually. Though sports betting would likely be offered by these existing outlets, the pastime would as a matter of course carry different tax rates than other gaming products. However, even if it carried the same rate as slots revenue (or another established casino game), the voters would still have their say.

This is because the TABOR Amendment is concerned with “tax increases” on two fronts: for the taxpayer individually and for the state collectively. While legal sports betting would not increase individual taxes, voters in Colorado also get the final say on how government receives and implements any new taxes generated. Sports betting absolutely meets this standard.

Most Colorado legislators are in agreement that a ballot initiative is appropriate, and they hope to put the question of sports betting legalization to the residents of the state this November. Analysis from the Center for Gaming Research at UNLV indicates that voter interest should carry the measure come election season.

“There’s been a lot of pent up demand from a lot of [Colorado residents]…so it’s not surprising it’s happening.”