Colorado Senate Rejects Proposal to Ban All Prop Bets

The Centennial State’s crackdown on sports betting continues to lose momentum.

The Colorado Senate Appropriations Committee has removed a proposal to ban all prop bets from SB 131. The committee was unable to agree on the bill with the ban included, leading five of the seven to vote to remove it. The change allowed it to pass the committee by a 4-3 vote. 

The bill one of several being reviewed that propose major new regulations for Colorado’s sports betting market. Lawmakers have been eager to help fight the growth of problem gambling, but several key proposals, like the prop betting ban, are being removed.

One of the biggest reasons for the proposal’s failure was fears over the impact on tax revenue. Prop bets account for much of the business that online sportsbooks do, meaning removing them would likely lead to a drastic drop in wagers.

The state uses the tax revenue it collects from sports betting to fund critical water projects. Colorado is facing one of its worst droughts in recent memory, making that money even more important.

With its passage in committee, SB 131 will now head to the Senate floor for a second reading.

Prop Bets Present Dangerous Dilemma

Over the last few years, we have seen enough studies report a strong link between prop bets and problem gambling. That’s because they offer many different ways to bet on a single event, setting up the potential to be. People who place these wagers tend to bet more often and spend more money with sportsbooks, making them more vulnerable to problem betting.

Prop bets are also crucial for parlays, where bettors combine several wagers into one for a larger payout. These bets are a key revenue generator for sportsbooks, as they lose at a far higher rate. 

Unfortunately, that means banning prop bets will almost certainly lead to a significant drop in tax revenue. While some states can afford the losses, markets like Colorado can’t afford to have those funds suddenly dry up. 

This dilemma has led to large-scale bans on prop bets in US markets, despite growing concern about the impact on public health.