Legislators in Colorado have proposed a bill aimed at revamping the state's online sports wagering sector. If Gov. Jared Polis (D) gives his approval to Senate Bill 131, a set of new regulations would be introduced to the industry.

Presented by Senators Matt Ball (D-Denver) and Byron Pelton (R-Logan), SB131 cleared the state Senate on April 28 with a vote of 20-14-1. The House of Representatives endorsed a modified version of the sports betting legislation with a vote of 50-13-2 on May 9. The Senate subsequently accepted the changes with a vote of 20-15 on Tuesday, May 12.

This proposal aims to transform online sports betting in Colorado.

One of the most favorable conditions for consumers is that proficient bettors, referred to as sharps, would not face restrictions from sportsbooks. While oddsmakers may still set maximum bets on specific lines, this restriction would not apply on an individual customer level.

Reactions from Sportsbooks

Several sportsbooks in Colorado expressed opposition to SB131, arguing that it could adversely affect the regulated sports betting landscape, potentially driving some bettors towards offshore sportsbooks, unlicensed bookies, or prediction markets.

The lobbying efforts by the sportsbooks achieved some positive outcomes. An earlier iteration of SB131 intended to prohibit player proposition bets, which are wagers influenced by a player's performance or specific aspects of the game. Props not only keep bettors entertained but also maintain their engagement throughout the contest.

In Colorado, prop bets frequently represent the majority of wagers in terms of total volume. The Appropriations Committee advised on allowing props to stay in play after being informed that eliminating prop bets would lead to over $1.6 million in lost state tax revenue each year.

Additionally, sportsbooks managed to secure an increase in the daily deposit limit for bettors during the lobbying efforts. SB131 initially suggested restricting sports bettors to five deposits within a 24-hour period. The final amendment raised this limit to six deposits.

“Deposit limits are widely recognized as an effective harm-reduction tool designed to introduce friction and slow loss-chasing behavior, and reduce extreme outcomes, particularly among high-intensity users,” Ball said, as reported by The Denver Post.Not all developments favored the industry. In spite of objections, SB131 asserted that credit cards could not be utilized for deposits, and sportsbooks were forbidden from employing push notifications on their applications or text messaging to lure in bets or deposit funds.

Additionally, oddsmakers were prohibited from promoting their services between the hours of 8 am and 10 pm, as well as during any live sporting events.

Consumer Protections

The sports betting sector in Colorado has expanded significantly, with oddsmakers experiencing considerable engagement over the last five years.

On Wednesday, the Colorado Department of Revenue disclosed that taxes collected so far in the current fiscal year have increased by 36%, totaling $36.4 million. The tax revenue for March skyrocketed by 103%, reaching $4.4 million.

"Colorado’s strong March numbers underscore the sustained growth and public interest in legal sports betting,” said Christopher Schroder, director of the Division of Gaming.

“As the industry continues to expand, we continue to prioritize consumer protection. We strongly encourage all bettors to utilize the responsible gaming tools available, including setting limits on time and wagers, and to visit BetSmart.Colorado.gov for resources and information on how to play responsibly,” Schroder added.