Colorado Voters Allow State to Keep All Sports Betting Tax Revenue

The Centennial State is about to get a boost in tax revenue from sports betting.

Colorado voters approved Proposition JJ in Tuesday’s election, allowing the state to keep all of its annual sports betting tax revenue. Under the previous law, the state was only allowed to keep $29 million of that revenue, returning any excess to operators. The cap was a non-issue until last year when the state had to refund almost $1 million.

Many residents supported ending the cap, which led to the amendment easily passing. It also benefited from sportsbook operators remaining silent leading up to the election. While the change will cost them money, it should help keep Colorado’s tax rate at 10%. Markets across the country have been raising those rates, leaving the state as one of the cheapest to operate in.

The amendment gained 75% over the vote as residents saw the change as a win-win. Colorado uses tax revenue from the industry to fund water projects. Those projects are focused on preserving dwindling freshwater supplies and other natural resources. While viewed as critical, those projects have struggled to find the funding needed. 

Major Win for Colorado Water Projects

Unlike many other markets in the US, Colorado does not use sports betting tax revenue to support its education system. Instead, it is funneled into projects to preserve the state's dwindling freshwater sources. Water projects struggled to find funding before sports betting became legal, making them a top priority for the state.

Residents also strongly support water conservation, leading many to vote in favor of Amendment JJ. The state's population is increasing, especially in Denver. Over the last decade, the city's population explosion has taken a toll on Colorado’s freshwater supply, which it shares with the American West.