Sports Betting

Colorado To Vote On Increasing Sports Betting Tax

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Colorado To Vote On Increasing Sports Betting Tax

The Colorado State Legislature has referred a measure to voters that would allow the state to retain tax revenue collected above $29 million annually from the tax on sports betting proceeds.

Proposition DD was approved in 2019 for the legalization of sports betting, enacted a 10% tax on proceeds

In 2019, voters approved Proposition DD, which legalized sports betting and enacted a 10% tax on licensed sports betting proceeds. All revenue would be deposited into the Sports Betting Fund.

The revenue would then be used to help fund sports betting in Colorado. Funds would also be distributed to the Hold Harmless Fund, the Office of Behavioral Health to fund the prevention and treatment of gambling disorders, and the Water Plan Implementation Cash Fund.

Proposition DD allowed the state to retain $29 million per year to fund state water projects through the Water Plan Implementation Cash Fund.

Approval by Colorado residents is required to retain the revenue, considering the state expects tax revenues to be greater than the $29 million estimate that was approved by voters.

Brian Jackson, director of Western water for the Environmental Defense Fund, led the 2019 campaign backing the initial ballot measure. Environmental groups have also assisted his campaign efforts for this latest measure.

“Frankly, we never thought we would hit that cap,” Jackson said. “But revenues and profits have snowballed. “We are going to run a campaign because this is a great opportunity to invest in our state and to widen the message about conserving and protecting Colorado’s water.”

Measure was introduced in Colorado as House Bill 24-1436

The measure was introduced as House Bill 24-1436 on April 1. The proposal has bipartisan support, with House Speaker Julie McCluskie, D-Dillon, and Rep. Marc Catlin, R-Montrose, serving as the measure’s sponsors in the House, and Sen. Dylan Roberts, D-Frisco, and Sen. Cleave Simpson, R-Alamosa, leading the Senate.

Furthermore, the House passed the measure in a vote of 59-1 with five members absent on April 19. The Senate passed the measure in a vote of 33-2 on May 1. The 2024 legislative session ends May 8.

If voters now approve the measure, the state would be authorized to retain revenue above $29 million per year and funds to the Water Plan Implementation Cash Fund.

That breaks down to an estimated $2.8 million in 2023-24, $5.2 million in 2024-25, and $7.2 million in 2025-26. If voters reject the measure, the state would refund casinos and sports betting operators any taxes paid above $29 million each year.

This measure requires voter approval under the Taxpayers Bil of Rights (TABOR) since it would increase state revenue. In Colorado, a legislatively referred state statute must be passed by a simple majority vote in each chamber of the state legislature.

Measures referred by the state legislature do not require the governor’s signature. Because of the Colorado TABOR, statewide voter approval is required to enact any legislation to increase government revenue at a faster rate than the combined rate of population increase and inflation.