This story was produced as part of the Colorado Capitol News Alliance. It first appeared at cpr.org.
Colorado sports gamblers will no longer be able to use credit cards to fund bets, and will be restricted in the number of deposits they make.
Gov. Jared Polis signed legislation described as the first major reform to sports gambling in the state since voters approved it in 2019.
But the law, while containing restrictions, is a watered-down version of what bill sponsors initially hoped to achieve.
Gone are the bans on TV advertising and popular prop bets — things that were too costly to get rid of or practically impossible to implement. What’s left is a more limited set of guardrails: the daily deposit limits, a ban on certain phone app push notifications and using credit cards to place bets.
Colorado was an early adopter of online sports gambling, approved by voters in 2019. And it’s been popular. Last year, more than $6.5 billion in wagers were placed in the state on everything from table tennis to the NFL. The ease of access on phone apps and the ubiquitous advertising has led to concerns about addiction.
One working paper from researchers at UCLA and USC found that there are greater rates of financial problems in states with online sports gambling: personal bankruptcy filings were up to 30% more likely in states with online sports gambling.
“Pernicious algorithms and advertisements are increasingly preying on vulnerable online sports bettors,” said one of the bill’s sponsors, State Sen. Matt Ball, D-Denver, in a statement after the bill was signed into law. “Since Colorado’s legalization of online sports betting in 2019, technology has rapidly transformed the industry, catching more and more people in the cycle of devastating gambling addiction.”
Sports betting has grown every year in Colorado, but public data shows that sportsbooks, like DraftKings and FanDuel, have increased their revenues even faster, as they promote prop bets packaged in multi-leg parlay bets that pay out more, but are harder for bettors to win.
Sports gamblers in Colorado are losing more, and therefore the state is collecting more tax revenue — almost $44 million last year. Much of that is directed to water conservation projects that never had a dedicated revenue source before.
But the state’s reliance on that tax money made major changes to scale back the industry politically unworkable. DraftKings warned lawmakers in hearings that banning prop bets, which are tied to things like individual player statistics, like rebounds or touchdowns, would hurt the business and tax collections at a time of large budget deficits.
Still, what’s left is believed to be one of the most significant reforms to sports betting in the nation. To protect bettors chasing losses, there’s now a limit of six deposits in a 24-hour period. To avoid mounting debt, credit cards can’t be used to finance bets. In addition, the state will begin collecting data and publishing reports in a few years to better understand the impact of the industry on consumers.
"Yesterday's bill signing is the result of months of advocacy from Coloradans who refused to accept that an industry generating billions in revenue could continue operating without basic public health guardrails,” said Joshua Ewing, Executive Director of Healthier Colorado, in a statement.
