The Colorado General Assembly have submitted to the ballot a bill that would legalise and regulate sports betting by digital and mobile sports betting platforms and impose a tax of 10 percent on the gross sports betting income of casinos.
The voters are expected to vote on Proposition DD next month and will also consider a measure (Proposition CC) that allows the state to spend the money that would usually be required to return to taxpayers under the special tax- and spend cap adjustment of the state.
Rep Alec Garnett, referring to the bill he introduced, said more voters support sports betting in recent polls than oppose it. The ballot measure does in polls even better when its supporters explain that the tax will be on the income of the casino, not individual wins.
For any new taxes or tax increases, Colorado needs voter approval. The constitutional amendment, approved by voters in 1992, also includes legislative authorisation for any revenue collected by state and local government that exceeds the inflation rate plus annual population growth. At the federal level, Colorado is the only state with such a switch.
An estimate by the Colorado General Assembly’s Legislative Council estimates that it will raise “around $16 million” in tax revenue annually over the first five years if the sports betting bill passes. Of that number, nearly $14.9 million would finance water projects and other water-related commitments, including Colorado Water Plan projects, the report said.
The remainder will go to support gambling addiction treatment and a program to compensate companies receiving tax revenue from conventional gambling and horse racing should sports betting reduce their profits.
Casino revenue will vary depending on the activities of each company, but if casinos are expected to retain 5 percent of the total bet amount, they will pay about 47.5 cents in state tax revenue for every $100 earned on bets, the study said.
There were reasons for and against the measure in the report. This states that many Coloradans are already illegally gambling on sporting events that use black-market bookies or websites that are not subject to oversight, enforcement or taxation.
Arguments for and against the plan are outlined by the Legislative Council. One complaint against the bill, the council said, is that it sets no limits on the amount a person can gamble on sports and devotes only $130,000 to rehabilitation treatment for gambling.
A yes vote on the Taxpayer Bill of Rights (TABOR) bill will allow the state government of Colorado to keep all the money it receives from all existing sources beginning with the state budget year 2019-20. It would require the state to spend all the excess income onK-12 public schools, higher education, and housing, rather than taxpayers ‘ refunds.
According to the Legislative Council’s September economic forecast, income subject to the TABOR cap would surpass the $264.3 million threshold, resulting in a taxpayer refund in FY 2020-21. If the ballot measure was approved, all that money could be retained and spent by the government.