Unvarnished Take on HB 1311: A Gob on Sports Betting Taxes in Colorado
Coloradan legislature advances bill delaying taxation on promotional sports wagers until the 2026 legislative session
By: Michael Savio on 05/08/2025 04:10
Short 'n' Sweet
- HB 1311 proposes taxing online sportsbooks on promo bets starting in 2026
- Senate amendments must secure approval from the House
- This legislative move is a sly maneuver to boost state revenue without jacking up the 10% tax rate on sports betting earnings
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Snapshots
HB 1311: The Scoop
HB 1311 kicks off a Colorado legislative shake-up, targeting free bets in the sports betting industry. Operators will soon have to shell out taxes on these bonus bets starting 2026. Don't blink, or you might miss this neat trick to bolster state revenue without upping the 10% tax rate on net sports betting returns[1][2][3].
The Meat of the Matter:
- Free Bet Taxation: From September 1, 2025, operators can no longer dodge their tax liabilities by deducting free bets.[2][3] The new rule extends to both sports betting and online casino operators.
- Tax Rate Status Quo: The bill doesn't mess with the current 10% tax rate on net sports betting proceeds. It merely widens the taxable base.[1][3]
- How's the Money Divvied Up: 6% of the extra dough goes to the Wagering Recipients' Hold Harmless Fund, leaving 94% for the Water Plan Implementation Cash Fund — all in aid of water conservation projects.[3]
Flat Tax Hike vs. HB 1311: A Tale of Two Beasts
HB 1311 offers a sneaky alternative to a flat tax hike. Here's the lowdown:- Broadening the Tax Base versus Rate Hike: The bill takes aim at deductions for free bets, beefing up the tax base instead of nudging up the rate.[1][3]- Impact on the Industry: Unlike a straight-up tax hike, HB 1311 zeroes in on promotional activities, potentially hitting operators differently based on how much they rely on free bets.[3]- Money Matters: The additional dough collected is earmarked for water conservation initiatives, giving a crystal-clear idea of where the funds are heading, unlike a general tax increase.[3]
Anticipated Impact:
The bill is expected to generate an estimated $11.8 million in additional tax revenue in fiscal year 2025-26.[2][3]
Wrap Up
HB 1311 is Colorado's crafty scheme to bring in more dough from the sports betting world, all while keeping the current tax rate under wraps. As part of a broader gambling taxation optimizing effort, it's positioned to capture more revenue while cozying up to state conservation projects. 💰💧 💸*Double entendre optional. Examples: "It's a splashy move to bolster the revenue stream" or "This bill is drowning in the green of tax collection."
Sports betting enthusiasts in Las Vegas may find themselves affected by HB 1311, as it targets the taxation of free bets in the sports betting industry across online casinos, set to start in 2026. On the other hand, Michael Savio, the gaming guru, keeps readers updated on the latest developments within the US online casino industry, providing in-depth analyses and hot takes on gambling news.
