After months of meetings with industry stakeholders, the Colorado Limited Gaming Control Commission on Thursday approved a change to the state’s sports betting rules that will allow for fixed-odds wagering on horse and greyhound racing.
The commission also made myriad minor changes to its sports betting rules, including cleaning up some language with regard to its sports betting catalog, allowing for sports betting tellers to receive tips, changing how disputes would be resolved, adjusting the deadline for filing taxes, and requiring operators to send data related to integrity to the regulator first rather than a third-party provider.
With regard to fixed-odds wagering on racing, the commission agreed to an 18-month trial. Dan Hartman, director of the Division of Gaming, assured commission members that all interested parties had signed off on the change, and explained in painstaking detail that horsemen’s groups, tracks, or the state horse racing commission could withdraw approvals any time.
“There is concern this will hurt the horse industry in Colorado, but the consents can be withdrawn at any time, and we have the ability to review,” Hartman said. “It’s been very lucrative in bringing back horse racing in other countries around the world.”
He went on to say that purses in Australia have doubled, and that fixed-odds horse racing has “brought new people into sports wagering” in other countries. The goal, he said, is to introduce the state’s 600,000-800,000 sports bettors to racing and help rejuvenate the sport.
Bets would be taxed as sports wagers
Colorado joins New Jersey as the only states where fixed-odds horse racing is a legal alternative to the traditional parimutuel model, but it differs from the Garden State in a few aspects.
Unlike New Jersey, which legalized fixed-odds betting on horse racing through legislation, in Colorado it was approved via the rule-making process, through its Division of Gaming, after several stakeholder meetings with both the Division of Gaming and Division of Racing Events participating. Fixed-odds wagering on racing will also be treated and taxed as a sports wager, while New Jersey’s structure deals with it as a horse wager.
BREAKING: New Jersey Bill A-4909 authorizing Fixed Odds Wagering on horse racing through a fixed odds wagering system has FINALLY been signed by @GovMurphy #horseracing #NewJersey #wagering #fixedodds
— Sweet Lou Monaco (@loumonaco) August 5, 2021
“I felt all along that we could do it by rule, because it’s a sport and we’re bringing it on as a sport,” Hartman said ahead of the meeting. “The intent was to not negatively impact the racing industry in Colorado, because [Arapahoe Park] is just one track, and it’s a small track, so we didn’t want to steamroll everybody there.”
To that end, the rule is modeled in line with the Interstate Horse Racing Act, in that it requires agreements with both racetrack operators and horsemen’s groups (in Colorado, out of state, and internationally) for sportsbooks to offer fixed-odds wagering on horse racing. Local horsemen would also have to give approval for out-of-state racing to be offered with fixed odds in Colorado, as would Arapahoe Park. That allows the stakeholders in the racing industry to negotiate their own deals with sportsbook operators to ensure operational costs and purses are funded, as they are with parimutuel betting.
“The horsemen remain very excited about the prospect of fixed odds in Colorado and the potential impact on our purses,” Jim Mulvihil, interim executive director of the Colorado Horse Racing Association, the horsemen’s group that represents owners and trainers of all racing breeds in the state, said earlier this month. “We look forward to working with all of the stakeholders to establish a model that works for everyone and grows the sport.”
Fixed-odds wagering could take a while
But those negotiations are not so easy in the racing industry, especially with so many parties involved, so fixed-odds wagering may not be offered any time soon in Colorado, or it could be offered on a very limited basis.
A key difference in how fixed-odds wagering will come to life in Colorado is that each operator must make its own request. With other sports, if one operator asks to add a sport or league or event and the request is approved, every operator can then offer the sport or league or event. With fixed-odds wagering, each operator will have to make its own deals with the horsemen, the racing commission, the host track (i.e., where the event is being held), and the track receiving the transmission of the event.
You know you want to learn more about fixed-odds horse racing in Colorado. You know you do. https://t.co/gIBCZCzhoE
— Jeremy Balan (@jeremybalan) November 17, 2021
“There’s enough operators in this space that are also in the horse racing space. Betmakers and SIS, they are content providers to some of these folks, and they have been working with the local horse track and horsemen here to figure out what a deal looks like,” Hartman said. “But the commercial aspect of this business is going to settle that. If everybody digs in and thinks they’re going to get a ton from this, when the margins are so low, then yeah, there’s not going to be deals.
“Let’s try it, and let’s see how it works, before everyone digs in. … The groups that don’t seem like they want to play, they don’t have to. They can sit on the sidelines. … If we have to start it with some of the smaller tracks, or with international content, that’s what it is.”
In other news …
Among the more minor changes to the sports betting rules, two involve finances. The LGCC agreed to allow the Department of Revenue to grant a five-day extension for filing taxes, in order to make the rule “consistent” with gaming rules in the state, according to Hartman. In addition, the LGCC approved a request to allow kiosks to be reconciled weekly instead of daily.
The list of changes comes nearly two years after Colorado launched sports betting against a backdrop of COVID restrictions and few sports available to bet on.
Hartman said the changes he requested were mostly around issues that presented themselves once wagering was live, and that while he doesn’t expect many additional changes, his staff will continue to monitor and tinker with rules to better suit the industry as time goes on.
On the licensing front, the LGCC granted a permanent wagering license to ISI, which is partnered with the Wildwood Casino, and renewed temporary internet wagering licenses to Betfred, BetMGM, Caesars, Digital Gaming, FanDuel, FOX Bet, PointsBet, Rush Street Interactive (BetRivers), Smarkets (SBK Sportsbook), TwinSpires, and WynnBET, and renewed temporary retail betting licenses of Betfred, BetMGM, Caesars, PointsBet, and TwinSpires.
Jill R. Dorson contributed to this report