Despite going into the electoral form of overtime, Colorado’s ballot measure to legalize and regulate the sports betting industry has been approved by voters.
In statewide elections held on Tuesday, the sports betting initiative Proposition DD received 761,645 votes for “Yes/For” and 727,508 votes for “No/Against” – enough for a slim victory with 51.5 percent of the electorate in support. The margin was so narrow, however, that outstanding ballots were still being counted the next day.
By Wednesday, as an influx of “Yes/For” votes flowed in from Denver precincts, the Associated Press (AP) finally called the race in favor of Prop DD.
Colorado becomes the 18th state to officially legalize sports betting since May of 2018, when the U.S. Supreme Court struck down a federal ban on the industry outside of Nevada.
Under the new law, the Centennial State’s 33 brick and mortar casinos can begin offering physical and online / mobile wagering on May 1 of next year. Both professional and collegiate sports are covered under Prop DD, which also allows for third-party online / mobile operators like DraftKings and FanDuel to partner with local casinos.
Via the proposed 10 percent tax on gross gaming revenue, supporters of legalization have estimated between $5 million and $15 million in annual contributions will be made to the state’s Water Implementation Cash Fund, which supports the currently underfunded Colorado Water Plan.
Ballot Language’s Emphasis on Raising Taxes Nearly Tanks Vote
Lawmakers within the Colorado General Assembly previously passed a sports betting bill which Governor Jared Polis signed in May.
But because the state’s Constitution contains a provision known as the Taxpayer Bill of Rights (TABOR), voters must provide final assent to any legislation which proposes to raise taxes.
Despite a left-leaning legislature controlled by Democrats, and the electorate’s previous willingness to allow for full-scale casino gambling, Prop DD’s emphasis on taxation likely led to a slimmer than expected margin of victory. When casting their ballots, voters were faced with the following question in regards to Prop DD:
“Shall state taxes be increased by $29 million annually to fund state water projects and commitments and to pay for the regulation of sports betting through licensed casinos by authorizing a tax on sports betting of ten percent of net sports betting proceeds, and to impose the tax on persons licensed to conduct sports betting operations?”
Predictably, the state’s three major urban centers of Denver, Boulder, and Fort Collins concentrated the “Yes/For” vote, while outlying rural areas leaned largely towards “No/Against.”
In an interview with CBS-4 Denver, House Minority Leader Patrick Neville (R-16) revealed that much of the voter outreach efforts associated with Prop DD were devoted to clarifying that only operators would be subject to new taxes:
“We campaigned hard to explain to people that this is a new tax, but on something that right now is totally illegal.
This was as close as it was because a lot of voters got the two mixed up.”
Stakeholders Speak Out to Celebrate Sports Betting Passage
Speaking to the Denver-based media outlet Westword, House Majority Leader and sports betting bill sponsor Alec Garnett (D-2) congratulated the gaming industry and water conservation lobby groups which collaborated to generate support Prop DD:
“I’m proud of the diverse coalition that came together to pass DD.
It’s a win for Colorado’s water and will help shut down a black unregulated market.”
Patrick Neville echoed those sentiments in a press release, pointing to the pressing need to regulate an online / mobile gambling industry which already thrives throughout Colorado thanks to offshore sportsbooks:
“Black markets aren’t conservative and they aren’t good for Colorado.
Bringing sports betting into the daylight, regulating it, and leveraging it for the benefit of our water future is a common-sense approach.
I’m glad the voters agreed.”