Colorado Governor Approves New Sports Betting Regulations

After months of debate and amendments, Colorado’s new sports betting regulations will finally become law. 

Governor Jared Polis officially signed off on SB 131 this week, which will make some big changes to Colorado’s mobile sports betting market. The bill will ban credit cards, restrict sportsbooks' push messages, and impose new limits on deposits. 

It will also officially ban industry advertising during events where the majority of viewers are under 21.

The bill originally proposed far more severe restrictions, including a ban on all prop bets. There was some hope that the controversial bet type would at least be restricted, but the projected loss of tax revenue led to the effort being dropped.

According to a fiscal note on SB 131, the new regulations approved by Polis will cost the state far less. The losses are projected to range from $650,000 to $700,000 annually over the next three fiscal years. 

For comparison, Colorado generated over $4.3 million in tax revenue in March 2026 alone.

Could a Tax Hike Be on the Horizon?

Unlike most US betting markets, Colorado hasn’t seen much momentum to raise its tax rate for mobile sportsbooks. It currently sits at 10%, which is among the lowest in the US and well below the national average. Many lawmakers in the Centennial State believe the favorable tax is helping drive its market success.

The overwhelming majority of tax revenue from Colorado sports betting goes to the state’s water projects. These efforts aim to bolster freshwater supplies as the state enters another summer drought. It resulted in over $33 million in funding after a historic 2025 fiscal year.

Lawmakers showed how important those projects are when passing SB 131, which requires Colorado to meet or exceed the funding sent every year. This will limit the ability to implement additional regulations to combat problem gambling, resulting in tax revenue losses.

While SB 131’s requirement ties the state’s hands for now, a tax hike would change that. Raising the rate closer to the national average (around 20%) would lead to a spike in tax revenue. It would also result in relatively mild pushback from the industry, which has seen larger rate hikes and new fees added in markets around the US.