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Colorado has offered legal online sports betting since May 2020, and recently state lawmakers have attempted to restructure how funds generated by that market will be allocated by passing HB 22-1402 through both chambers, a bill aimed at rearranging how that money is doled out.
A big change that will go into place once the bill is signed into law by Gov. Jared Polis is an increase in the money earmarked to tackle problem gambling, an issue we have covered regarding the responsibility sportsbook operators and gamblers have to help mitigate that.
One of the major pushbacks against legalizing sports betting state by state is the expected increase in problem gambling that might result, an addiction issue that Peggi O’Keefe, executive director of the CO Gaming Association, hopes lawmakers would continue to address, saying:
It just seems like this is the year that we really got attention from legislators wanting to fund additional programs for responsible gaming. Probably sports betting added to the whole high profile of it, but it’s been a high priority for our association, and we’re thrilled that it looks like we might get something over the finish line — knock on wood.
There are eight total sections of HB 22-1402 that will go into effect once the governor signs that legislation into law, and one of them has caused a stir among industry insiders.
Another of the eight sections of HB 22-1402 is aimed at reducing the number of free bets sportsbooks can offer their customers, an inevitable move that every market is destined to endure, but it’s a painful shift in how things are done for every sportsbook operating in CO.
The bill sets a date for this reduction in free bets, stating:
Section 6 limits the total amount of free bets that may be deducted on and after January 1, 2023, for the purpose of calculating the net sports betting proceeds of a sports betting operator or internet sports betting operator.
Sportsbooks work with narrow profit margins and those free bets not only help them gather up new customers and promote more action, but they also reduce the amount they must claim they made, so limiting them will most likely directly affect the revenue potential of those operators.
Colorado’s sports revenue numbers are continuing to grow as Centennial State residents prove they love to gamble.
Last year was the first full year of Colorado’s legal online sports betting market and during 2021 those gamblers placed $3.8 billion worth of wagers and that resulted in a $103.5 million profit for those operators there, but credit some of that to the number of free bets that have been allowed.
Those numbers could be affected as this new law goes into place, but then that market will adjust accordingly or fail, a fate that all 35 states that have legal sports betting must face, a shift that will most likely force all of them to create innovative ways to collect new customers.
In the first two months of 2022, Colorado online sports betting has already generated over a $1 billion handle, a sign that this new market is growing so it should stay intact even when the freebies predictably go away.
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Mike Lukas is a retired standup comedian turned freelance writer now living in Dallas, Texas, originally from Cleveland, Ohio. His love for the game of football and all things Cleveland Browns turned Mike into a pro blogger years ago. Now Mike enjoys writing about all thirty-two NFL teams, hoping to help football gamblers gain a slight edge in their pursuit of the perfect wager. Email: [email protected]More info on Mike Lukas
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