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DENVER, CO – The House today passed legislation to increase funding for the Colorado Water Plan. HB25-1311, sponsored by Speaker Julie McCluskie and Representative Matt Soper, R-Delta, passed the House by a vote of 52-13.
“Colorado is losing significant tax revenue that could go to conserving and protecting our water,” said Speaker Julie McCluskie, D-Dillon. “From the Western Slope to the Eastern Plains, we’re prioritizing Colorado’s water future. This bill brings sports betting companies closer to the voter-approved effective tax rate of 10 percent, which means our state can capture more revenue to fund essential water conservation and preservation projects.”
HB25-1311 would phase out sports betting tax incentives to capture more revenue for water conservation and protection. When voters approved Proposition DD in 2019, it legalized sports betting and an effective tax rate of 10 percent on betting to be used for industry regulation, gambling addiction services, and water projects. More than 90 percent of tax revenue ($97 million) from sports betting goes to the Colorado Water Conservation program, which has helped fund hundreds of projects in every corner of the state.
However, Colorado is missing out on revenue because sports betting companies are only paying an effective 5.89 percent tax rate due to allowable deductions for pay-outs to customers, federal excise tax, and “free bets”.
This bill would bring sports betting companies closer to the voter-approved effective tax rate of 10 percent by prohibiting sports betting operators from deducting “free bets” as a tax write-off.
Colorado’s 10 percent tax rate is significantly lower than the national average of 18 percent. In 2024, voters overwhelmingly approved Proposition JJ, which removed the overall cap on sports betting revenue the state could collect.