Online Wagering Is Driving Colorado Sports Betting Revenue
The Colorado sports betting industry has grown into a top US sports betting market since its May 2020 launch. The amount wagered by Colorado sports bettors has increased every month since launch and has broken the $200 million mark in each of the last three months.
According to the latest numbers released by the Colorado Department of Revenue, Coloradans bet $231.2 million in November, up from $210.7 million wagered in October. Those wagers resulted in $18.4 million in gross gaming revenue and nearly $800,000 in taxes to the state.
As strong as the wagering and revenue numbers are, it’s the last number that is the most interesting.
Marginal vs. Effective Tax Rate
Colorado’s sports betting law calls for a tax rate of 10%, which should have resulted in $1.8 million in tax revenue in November. So why did Colorado collect less than half that amount from its licensed sportsbooks? The answer, as Betting USA pointed out last month, is things like promotional play deductions that significantly lower an operator’s tax burdens.
Colorado Sports Betting Is Very Online
Online betting has been driving much of the US sports betting industry’s revenue. The COVID-19 pandemic has boosted the percentage of sports betting wagers placed through online channels, but Colorado is in a league of its own when it comes to percentage breakdowns:
- Retail wagers: 1.9%
- Online wagers: 98.1%
That discrepancy is pandemic-driven, but it also stems from the location of Colorado’s land-based casinos. In Colorado, Casino gambling is limited to Blackhawk, Central City, and Cripple Creek, all three being a considerable distance from the state’s population centers.
Here’s the drive time from Denver to all three locations:
- Central City – 45-60 minutes
- Cripple Creek – about two hours
- Blackhawk – 45-60 minutes
Even in a post-COVID world, Colorado’s sports betting industry is going to be very online.
Colorado Sports Betting Handle and Revenue
The Big 3 in Colorado
According to estimates from Eilers & Krejcik Gaming, the Colorado market is a two-horse race between national sports betting powerhouses DraftKings and FanDuel, with the former getting the better of the latter. But there’s a third player in the market, and that sportsbook is growing at a significant rate.
E&K estimates put the top three operators in the market at the following market shares in November:
- DraftKings 40%
- FanDuel 30%
- BetMGM 20%
E&K breaks out two other operators in Colorado, William Hill and PointsBet. Still, they’re simply the best of the rest in a very crowded market where the following 14 brands collectively account for in the neighborhood of 10% of the total market.
- PointsBet
- BetRivers
- William Hill
- Betfred
- BetMonarch
- FOX Bet
- SBK Sportsbook
- Circa Sports
- Sky Ute Sportsbook
- BetWildwood
- SuperBook
- MaximBet.com
- Elite Sportsbook
- theScore Bet
Steve Ruddock is the content director for BettingUSA and the Editor-in-Chief of Gaming Law Review.
Steve has covered the legal and legislative developments in the US gambling sector for more than a decade for online and print publications.
