Colorado sportsbook operators should expect an increase in sports betting revenue taxes. The Office of State Planning and Budgeting estimates tax revenues from the industry to be around $24 million in the 2022-2023 fiscal year. Also, most of the money will go to the Colorado Water Project. The initiative’s goal is to ensure the state will have enough water in the future.
In the 2021-22 fiscal year that concluded on June 30, the state collected approximately $12.4 million in sports betting taxes, of which around $11.4 million would go toward the water plan. Thus, experts compare it to scoring a touchdown ($6 million), a field goal ($3 million), and safety ($2 million) with these figures. However, it could discourage individuals from learning how to be a bookie in the state.
According to Bryce Cook, OSBP’s senior economist, the government approved a statute this year restricting the number of free bets that sports betting companies will start on January 1, which is the primary reason for the significant increase in forecasts. Revenue from sports betting at casinos in Colorado is taxed at a rate of 10%. In addition, free wagers do not result in monetary gain.
More Tax Burden on Colorado Sportsbook Operators
Nonpartisan legislative experts projected that Colorado would collect around $16 million annually in sports betting tax revenue before the passage of Proposition DD in 2019. Under the Taxpayer’s Bill of Rights, the state can levy a maximum yearly tax on sports betting of $29,000,000.00.
According to the OSPB’s quarterly economic and tax revenue estimate provided to the Joint Budget Committee on December 20, the agency projects that the state will bring in $25 million in sports betting tax income in the 2023-24 fiscal year. Also, it would get $27 million in the 2024-25 fiscal year. However, higher taxes might stop others to open a sports betting operation in Colorado.
According to sportsbook software reports, the Legislative Council’s staff predicted the exact amounts of money from sports betting taxes: $22 million this fiscal year, $26.2 million next fiscal year, and $28.9 million the year after.
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