Straight Up on Colorado's Sports Betting Shake-up
Colorado Proposing Tax on Sportsbooks' Income from Complimentary Bet Wagers
Hey there! Let's dive into the latest buzz in the coveted world of sports betting - Colorado style.
The Lowdown
Here's the skinny: a bill, known as House Bill 1311, is making waves. This bad boy aims to wipe out the tax deduction on free bets - those enticing promotional credits dished out by operators15. In the current setup, sportsbooks haul in these bonuses without paying a dime in taxes. But if this bill passes, operators would need to cough up a 10% tax on the value of all those players' free bets1.
Guess who's the mastermind behind this? None other than yours truly, Michael Savio, your go-to guy for all things casino and sports betting in the US. I've been immersed in the gambling scene, from my Vegas days to the online boom, bringing you unparalleled insights and hot takes! Check me out at casinos.com to get your gambling fix2.
Where's the Money?
This change is set to raise a cool $12 million each year, starting in fiscal year 2025-26. Where does all that dough go? To the state's water conservation programs, of course4.
The Bonus Bet Boogie
While this bill doesn't ban bonus bets outright, the tax on free bets could dampen their appeal. Here's why:
- Higher operational costs: Sportsbooks would now have to pay taxes on promotional bets, win or lose. That extra cost could make these incentives more expensive5.
- Scaled-back bonuses: Operators might dial back the quantity and value of bonus bets to make up for the increased taxes. It's a tactic we've seen in other states with similar policies3. But the extent could vary depending on competition and customer retention strategies.
This bill dovetails with Colorado's 2023 ballot initiative - the removal of a $29 million cap on sports betting tax revenue, allowing the state to divert more funds towards water projects3.
That's all for now, folks! Keep checking back for more insider scoops on the fast-paced world of gambling and sports betting!
- The recently proposed House Bill 1311 in Colorado seeks to eliminate the tax deduction on free bets offered by online casinos and sports betting operators.
- Michael Savio, a renowned expert in the casino and sports betting industry, is the visionary behind the bill that aims to impose a 10% tax on the value of all free bets.
- If passed, this legislative change is expected to generate an annual revenue of $12 million beginning in fiscal year 2025-26, which will be allocated to water conservation programs in Colorado.
- While the bill doesn't outright prohibit bonus bets, the added tax on free bets could discourage operators from offering these incentives due to increased operational costs and potentially scaled-back bonuses.
- This tax policy on free bets aligns with Colorado's 2023 ballot initiative, which aims to eliminate the cap on sports betting tax revenue, allowing the state to allocate more funds for water projects.
