Yet another state is expected to join the online sports betting fray with Colorado going live this Friday.
According to MileHighSports.com, Colorado online sports betting will kick off on May 1st with several operators, including DraftKings Sportsbook and FanDuel.
Joining the likes of Pennsylvania, New Jersey and Indiana, Colorado has moved swiftly to legalize both in-person and online betting in its state.
Government officials are no doubt eager to get their hands on what is expected to be $400 million in revenue for the operators. This means high tax dollars coming into Colorado coffers.
Meanwhile, New York online sports betting is being held up largely by opposition from Governor Cuomo. There was a chance some pushback in the state Senate could get online sportsbooks on the ballot for 2020, but focus has rightfully been diverted to the ongoing crisis. However, coming out of this, New York will need to recoup lost tax revenue from all the expenditures related to the current crisis. So it’s possible we see online betting apps come to New York perhaps sometime in 2021.
Meanwhile, Colorado joins a growing movement of states that have moved to legalize betting, partially because sports fans and consumers want it and like it, but also because gambling revenues are taxed, which means an easy way for states to add to their bottom income.
Some states, like Pennsylvania, have relatively high tax rates – 36% for online betting – while in Colorado the rate will only be 10%.
There has been much debate over the perfect tax rate. Too high and operators find it difficult to be competitive or, worse, don’t even want to enter your state.
Too low and it becomes a free-for-all amongst operators in an effort to sign up players with relatively little revenue going to the state.
Most experts agree that the optimal tax rate is somewhere in the teens. This means Colorado is on the low end and online apps will be eager to partner with one of the states’ many casinos to enter the market.
Their margins will be much higher, meaning they could be much more aggressive to sign up new players.
Obviously there won’t be much to bet on when betting does launch in Colorado. There are no major professional sports being played, so fans will have to wager on ping pong or other far-flung events if they want to get in on the action.
But Colorado moving to legalize betting could wind up being timed quite well if the NBA and hockey finish their seasons in 2020, followed shortly thereafter by the NFL season. Again, if all of this is able to take place, sports fans may be eager to not only watch, but also bet on, the games.
Colorado stands to benefit from this pent up demand.