The Colorado Senate voted this week to approve a bipartisan sports betting reform bill that represents the most substantial regulatory action the state has taken on the industry since voters legalized it seven years ago. Senate Bill 26-131 passed 20-14 and now moves to the House for consideration.
Key Takeaways
- The Colorado Senate approved a bill to add new restrictions to the sports betting market.
- The bill reduces the number of deposits allowed and curbs advertising.
- Sportsbooks worked in tandem to prevent the bill from passing but failed.
The legislation targets several practices that critics have linked to compulsive gambling behavior. Under the bill, online sportsbooks would be prohibited from allowing users to make more than five deposits within any 24-hour window.
Operators would also be barred from sending push notifications and text messages designed to solicit bets or encourage additional funding of accounts. Advertising restrictions and tougher penalties for operators that accept wagers from users under 21 are also included.
The Colorado sports betting market has grown from roughly $1 billion in annual wagers when it launched to more than $6 billion in recent years, with tax revenue from the industry dedicated to state water projects and totaling approximately $30 million annually. That financial backdrop has shaped every debate around the bill.
State lobbying records show that DraftKings, FanDuel, BetMGM, and bet365 lobbied against the bill, as did the Sports Betting Alliance.
Enjoying Covers content? Add us as a preferred source on your Google account
Prop bet ban dropped under budget pressure, industry pushback
That same lobbying firepower played a direct role in reshaping the bill before it ever reached the Senate floor for a final vote, with one of the bill's most notable provisions removed entirely. An earlier version of the bill included a full ban on proposition bets, a category of wager that lets bettors place real-time stakes on individual elements of a game, such as a specific player's statistical output.
Advocates have pointed to research linking the fast-moving nature of these bets to compulsive gambling behavior.
The prop bet ban was pulled after sportsbook operators warned legislators that the provision would cost the state millions in tax revenue at a time when Colorado is already dealing with a serious budget shortfall. Much of the money generated by sports betting taxes is directed toward state water projects, and lawmakers did not want the general fund to absorb the gap.
Removing the provision brought the projected revenue loss down from $2.6 million to around $800,000, with the remaining impact tied primarily to the bill's ban on using credit cards for sports wagering.
Bill sponsor Rep. Matt Ball acknowledged that the industry's financial resources made the fight an uneven one, noting that reform advocates were significantly outspent by the operators opposing the bill.
The bill still retains a number of its other reform provisions, including daily deposit caps, advertising restrictions that broadcasters continue to oppose, and the ban on certain solicitation notifications. The measure now heads to the House, where it must clear before the legislative session wraps up in May.
