Colorado voters approved Proposition DD in November, a ballot initiative to legalize sports betting to direct revenue to the state’s water projects.

New estimates show that the first year of sports wagering will have little contribution to the water budget, indicating it could take some time for the plan to play a significant role in fulfilling the state’s water needs.

The Colorado Sun reports,

“The Division of Gaming expects sports betting, which starts in Colorado in May, to generate between $1.5 million and $1.7 million in tax revenue in the 2020-21 fiscal year, which begins on July 1. That amount isn’t enough to reach the threshold under which funds would be transferred to water projects.”

That estimate is credited to an analysis by Gov. Jared Polis’s office. Polis, a Democrat, signed a bill last year, allowing Prop DD to be included on the November 2019 ballot. Of course, sports betting will be taxed in Colorado, and as it amounts to a new levy, it had to be approved by voters there, as the state constitution requires all new taxes must be signed-off on by residents.

Unexpected Outcomes

Prop DD was expected to easily pass, heading into the Nov. 5 election. However, that didn’t happen, and as more than 49 percent of Centennial State voters rejected the plan, approval wasn’t made official until Nov. 6.

The Polis Administration prediction of just $1.5 million to $1.7 million in sports betting tax revenue in the first year falls well below lawmakers’ prior projections, which estimated the state could generate $20 million or more annually from the initiative.

The state would still need to find other sources for plugging a $100 million annual shortfall in its water budget even if $20 million (or more) is eventually reached.

As reported by, that was one of the main criticisms of Prop DD: that it wouldn’t come close to fulfill Colorado water needs, and that politicians there could direct sports betting earnings away from water to other projects.

Other Changes

Operators of Colorado gaming properties such as Native American tribes and commercial companies like Century Casinos, Monarch Casino and Full House Resorts, have showed interest for sports betting licenses. However, Colorado politicians believe the initially proposed $125,000 per license fee with renewal every two years needs to be lowered.

The Sun reports,

“Instead, gaming officials think that the most they could reasonably charge for a license fee would be $40,000, and possibly much less.”

Furthermore, the Colorado Division of Gaming could need up to $10,000 for background checks, a $2,000 charge for a master license, and $1,200 for what the department calls “spots betting operator” and “internet sports betting operator” permits.

Gaming companies will pay a 10 percent tax on net sports betting revenue under Prop DD,. The net figure is obtained after operators pay out to winners and account for federal levies.

When sports betting becomes active in the Centennial State in May, gamblers there will be able to bet on college and professional competitions, the Olympics, and even esports.

Hud Wafiq Ganem is a gambling industry pioneer. He is the founder of and his yearly gambling industry predictions and analysis are respected and adhered to by veterans and novices alike.
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