Colorado’s Division of Gaming on Monday kicked off what may well be the most transparent process to launch sports betting in the country with the first of five meetings covering everything from general rules to integrity. The Monday morning session was an opportunity for stakeholders to offer comments and get clarifications on the rules. Stakeholders from local municipalities and potential operators, including William Hill and DraftKings, were part of the discussion.
“We’re just soliciting input and we wanted to get this done before the holidays,” said Dan Hartman, the director for the Division of Revenue, who chaired the meeting. “It’s an aggressive schedule the next three days.”
Monday afternoon Hartman covered compliance, and there are three more meetings to come: two sessions Tuesday will cover technology and integrity and information, and the final session on Wednesday morning will cover responsible gaming.
Stakeholders want clarification on prop bets
Colorado legalized sports betting by referendum in November and the new law mandates that sports betting be up and running by May 1, 2020. The law allows for retail and mobile sports betting. Hartman said 77 people and 55 companies would be part of the discussion this week.
During the general rules session Monday morning, stakeholders and Hartman agreed that the intent of the law is for betting on high school sports to be prohibited and that betting on e-sports would be allowed. Stakeholders also asked for a more clear definition of prop bets.
The discussion also included talk about how taxes would be paid to the state, the licensing timeline and a reminder from William Hill’s Danielle Boyd that sports betting is a low-margin business and that for every $1 billion in handle, only about $50 million would be taxable revenue.
Administrative costs projected to be $2.5 mm
In the afternoon session, which focused on compliance, there was extended discussion about how fees would be charged, as the regulations currently have a sliding scale for what fees will be charged to operators for each sport that they will offer betting on. According to Hartman, the fiscal note with the new law suggests it will cost $2.5 mm for the state to run sports betting. That cost will be split by the number of operators that are active in the state. There are currently 33.
Stakeholders also touched on testing and certification, self-exclusion, and the use of kiosks.
Where other states have developed regulations and worked toward going live with sports betting behind closed doors, Colorado’s approach is exactly the opposite. Throughout the meetings, Hartman and his staff asked stakeholders to make suggestions, offer up examples of where specific rules or policies work and to be continually be in touch with his office.
“I really want to hear what works and what we can do better,” he said.
