An unidentified operator of online sports betting sites is in line for a multimillion-dollar tax break in Colorado.
The Colorado Economic Development Commission (EDC) approved on Thursday up to $14,055,942 in tax credits for “a global leader in the online sports betting and gaming sector, known for its excellence in technology innovation that has shaped the industry over the last twenty years,” a press release said.
“The company’s many different technology departments, alongside its extensive customer support organization, have enabled it to become one of the most respected names in the industry,” the release added.
There are other hints about the identity of the company behind the so-called “Project Forge,” such as a pre-existing presence in New Jersey and more than 6,000 employees who don’t work in Colorado. That company is now eyeing Denver County as the site of its new headquarters in the United States and has estimated spending more than $40 million to house its workforce.
“Project Forge’s expansion seeks to bring the company’s reputation and brand awareness to the US as its newest growth frontier,” the release notes. “In addition to Colorado, the company is considering Tucson, AZ and Nashville, TN. The company’s decision on where to locate Project Forge is based on access to talent, costs of markets where it is considering expanding, proximity to an international airport, and quality of life for its employees.”
A confidential case
The Denver Post reported the company in question is from the United Kingdom. Still, the exact identity has not been publicly revealed by the EDC, and the commission added that “[d]ue to the nature of the company, further identification would jeopardize the company’s confidentiality."
Even so, Colorado sports betting includes more than 20 bookmakers taking action in the state, making it a hub for the legal wagering industry in the U.S. It stands to reason a sports-betting company would want to establish itself in a state where it can also legally accept sports bets.
Furthermore, there are only so many U.K.-based bookmakers with a presence in the U.S. and more than 6,000 employees. For example, Entain PLC (the co-owner of BetMGM) and Flutter Entertainment PLC (the parent company of FanDuel) have more than 20,000 employees apiece around the world, and both have ties to licensed gaming entities in Colorado and New Jersey. However, spokespeople for both companies said they are not involved in Project Forge.
A perfect fit?
One company that fits the description perfectly is bet365. The U.K.-based bookmaker reported 6,092 staff working within its sports, gaming, and associated operations during the year that ended March 27, 2022.
Moreover, bet365 is licensed in Colorado and New Jersey (where it also has an office) and is still establishing itself in the U.S. That said, the company did not respond to questions from Covers before this article was published.
Anonymity aside, the possibility of providing an operator with millions in job-creation incentives also highlights some of the other economic benefits of the legal sports betting industry beyond the tax revenue it can provide.
The EDC crafts “incentive packages” to help businesses expand or relocate to the state. And “Project Forge” is expected to create more than 800 net new jobs at an average annual wage of $97,238, 108.4% of the average annual wage in Denver County, the press release noted. Those jobs will range from senior leaders, to software developers, to sportsbook traders, among other things.
“This project would support the state’s economic goals by creating a large number of high-paying net new jobs in the state economy,” Thursday’s press release noted.
Project Forge, the code name given to the applicant, has more than 6,000 employees, including some at its U.S. base in New Jersey, but none in Colorado. Tucson and Nashville are competing with Denver for what will become the company’s new U.S. office. https://t.co/xxU9d5JRb5
— The Denver Post (@denverpost) April 21, 2023
The "performance-based Job Growth Incentive Tax Credits" that could be provided to the unidentified company are to be spread over eight years and depend on the bookmaker creating up to 807 net new full-time jobs.
Those jobs need to pay a minimum average annual wage of $89,700 or 100% of whatever the average wage of another Colorado county if it moves.
The incentives would give the company a Colorado state income tax credit that is equal to 50% of what they would pay annually per net new job under the Federal Insurance Contributions Act. But before any credits are issued, the operator must create and maintain at least 20 net new jobs in the state and maintain its new positions for a year.
“We are excited about the opportunity to work in Denver and Colorado,” a Project Forge executive named Richard said Thursday, according to the Denver Post. “It seems to be a great fit for us.”
