While national polls show strong support for sports betting legalization in general, lawmakers from Colorado to New Hampshire learned on Tuesday that sending related initiatives to the voters is no sure thing.
While Colorado voters narrowly approved sports betting, voters in New Hampshire showed they are split on whether or not they want brick-and-mortar sportsbooks in their communities.
In Colorado, it wasn’t until Wednesday afternoon that it was clear that Proposition DD, which legalizes sports betting at select venues across the state, and via tethered mobile platforms, would pass. With more than 1.4 mm people casting votes, the margin to legalize sports betting was 20,028 votes — and that margin was among the widest in either direction during vote counting.
Stakeholders were never truly confident that sports betting would pass in Colorado, but not because they believed Coloradans were opposed to it. Rather, the muddy wording on the ballot implied that sports betting would levy a new tax, and some felt those that support the measure didn’t do enough to educate the public.
Initiative implied new tax
A survey by the National Council on Problem Gambling didn’t indicate that Coloradans were heavily opposed to sports betting.
“Given the specific wording of the ballot initiative, our intel did always suggest Proposition DD’s passing to be a genuine coin toss, so we’re thrilled the people of Colorado voted to bring sports betting to the Centennial State,” Johnny Aitken, CEO of PointsBet USA, told Sports Handle Wednesday.
PointsBet, an Australian-based company that is relatively new to the U.S. sports betting scene, has a physical sportsbook in Iowa and mobile sportsbooks in Iowa and New Jersey. The company also already has partnerships in place in Colorado, Illinois (which approved sports betting in July but has not yet launched) and New York, which has retail sportsbooks in parts of upstate but not yet permitted the launch of online sportsbooks.
Thank you CO voters! With the proceeds from sports betting, we can begin to implement the hard work of conserving & protecting Colorado's water. Today's win marks an important step for all of us who call Colorado home. Full Statementhttps://t.co/U2QcrnaSlu
— YesOnDD (@YesOnPropDD) November 6, 2019
Coloradans were asked to vote “yes” or “no” to the following question Tuesday (emphasis added):
Shall state taxes be increased by twenty-nine million dollars annually to fund state water projects and commitments and to pay for the regulation of sports betting through licensed casinos by authorizing a tax on sports betting of ten percent of net sports betting proceeds, and to impose the tax on persons licensed to conduct sports betting?
“Tuesday’s results, while by a slim margin, were a pleasant surprise for a ballot measure that had horrible language and a lackluster campaign,” said Brendan Bussmann of the gaming consulting firm Global Market Advisors. “It provides a cautionary tale for other states that plan to or have to take sports betting to the voters that you need clear language and a solid campaign or you end up in a close one.”
‘Most … votes on taxes fail in Colorado’
Given that the first five words on the Colorado ballot were “Shall state taxes be increased,” it’s no wonder that voters paused or were outright confused when answering. It’s not taxes that will be increased, but tax revenue. The wording is required under Colorado’s Taxpayer Bill of Rights. The goal of TABOR, according to a Denver Post story, is to allow Colorado taxpayers to “control the purse strings.” It also sets requirements for the wording of tax-related initiatives.
With #Colorado Prop DD (sports betting legalization and taxation) currently trailing by 2,659 votes (0.24%), you have to think the TABOR requirement that its ballot language begin with "Shall state taxes be increased…" could wind up making the difference, if DD goes down. pic.twitter.com/XdaMSjn1cU
— Jared Walczak (@JaredWalczak) November 6, 2019
According to Ulrik Boesen, a senior analyst at the Tax Foundation, “Colorado’s voters are conscious about government spending. Historically, most statewide votes on taxes fail in Colorado.”
Beyond the TABOR law and confusing wording, stakeholders say there was little in terms of campaigning for legalization. According to Ballotpedia, a total of $2.7 mm was spent by those supporting the initiative, much of it by daily fantasy and sports betting giants FanDuel and DraftKings. No funds raised were reported by those opposed to the measure.
“Education is the key whether it is members of a legislature or the voters in a jurisdiction,” Bussmann said. “Future states and municipalities should never take for granted the role of the voters in this process and make sure they are informed.”
Ulrik shared with Sports Handle that while there didn’t appear to be any “organized opposition” to the bill, there were concerns throughout the state about how sports betting revenue would be spent, the level of funding and the water plan itself.
Why four NH cities voted ‘no’
The only other state to send a sports betting question to the voters this year was New Hampshire, and the vote was not about legalization, but about where physical sportsbooks will be located in the state. The Granite State also had some surprising results — as only four cities approved the measure, and two of the three biggest cities did not.
Concord, Dover, Nashua and Rochester all voted against having a bricks-and-mortar sportsbook within their jurisdictions, and all four have charitable gaming locations. Berlin and Manchester, the biggest city in the state, also have charitable casinos, but voters in both locations approved sports betting.
BIG miss by the voters in Nashua. Right over the MA border. Lots of out-of-state shopping traffic. Would have been been huge for location(s) there and NH handle as a whole. https://t.co/WePdd1VROj
— Mike Mutnansky (@MutWEEI) November 6, 2019
According to sources, the state’s charitable casinos were concerned they would be shut out of legal sports betting and lobbied voters to keep sportsbooks out.
“With five cities voting to allow sports book retail locations, we can continue with the sports betting implementation process, developing a responsible system that engages players and drives revenue for education in New Hampshire,” Charlie McIntyre, executive director, New Hampshire Lottery told In Depth NH.
In 2018, Arkansas was the only state put sports betting on the ballot. Razorback State voters legalized via referendum last year, and the measure passed with 54.1 percent of the vote. Sports betting was approved at four locations throughout the state, and automatically licensed two existing facilities to host sports betting. The referendum allowed for two others — in “Pope County within two miles of Russellville,” and in “Jefferson County within two miles of Pine Bluff” — to be licensed.
