Colorado’s water projects won’t see any of the money from better-than-expected sports betting tax revenues until next year.
Sports betting became legal in May, making Colorado the 19th state to do so. Much of the revenue from the 10% taxes collected on casinos’ proceeds — minus startup costs and funding for gambling addiction help — is supposed to go toward the state’s water plan.
Colorado saw nearly $1.2 billion in wagers in just the first six months, bringing in $3.4 million in tax revenue collected. It exceeded the Colorado Division of Gaming’s estimates, and the state Department of Revenue hadn’t expected that revenues would be enough to put any money into the state’s water plan in the first fiscal year.
“We’re happy with the numbers and it’s definitely a little more than we projected, especially after COVID hit,” revenue department spokeswoman Suzanne Karrer said.
The pandemic may be playing a role in the sport betting industry’s success, because it’s nearly impossible to go to live games. But Karrer said there’s more to it: “I think also, just having a regulated market shows that people were confident in the industry because it was regulated and there’s laws around it and there’s licensed operators.”
Although the revenue stream in the first six months of the fiscal year is lagging behind legislative fiscal analyst projections of $9.7 million to $11.2 million in revenue for the first full year of betting, it has exceeded the state’s projected $1.5 million to $1.7 million for 2020-21.
But Colorado House Speaker Alec Garnett, D-Denver, expects that as the market matures and betting becomes more competitive, more money will come in, meeting those projections.
The Department of Revenue will make the distributions at the end of the fiscal year, which runs through June 30. But the Colorado Water Conservation Board is working on revisions to the state’s new water plan before granting money to new projects next year.
Garnett said part of the reason is because officials weren’t sure how consistent the tax revenue would be, but it’s also about equitable access to funds within the Colorado River Basin.
“As we look at population growth, as we look at pressures on our watershed and where we think the state is going to go by 2050,” Garnett said, “I think the water plan is going to increasingly become one of the most important priorities that we need to help send dedicated funding to.”
Additionally, as the state faces budgetary shortfalls due to COVID and sees increasing drought and climate-change effects, Brian Jackson with the Environmental Defense Fund said investing in the state’s water systems becomes even more of a priority.
Initial estimates indicated the plan would need $100 million annually to fully implement the plan between this year and 2050.
