By last Thursday, Rep. Alec Garnett was exhausted. But who could blame him?
A primary sponsor of a bill to legalize Colorado sports betting, he anxiously awaited the results of the public vote. For hours, Proposition DD swayed between passage and failure, rarely with either side getting more than a few percentage points away from the other. At times, even, the prop sat squarely on the fence at a 50-50 split.
But by Thursday, two days after voting returns began pouring in and a day after the count concluded, Garnett and every other proponent for and supporter of regulated wagering in the Centennial State could finally breathe a sigh of relief. With the public voting in favor of passing Proposition DD – by less than 2.5 percentage points – legalized sports betting is now on its way to Colorado.
Ideally, the first retail and online sportsbooks will hit the Rocky Mountains by May 1, 2020. As Garnett pointed out, since the Taxpayer Bill of Rights (TABOR)–a constitutional amendment requiring such a bill to be subject to public voting–went into effect in 1992, only two other proposed taxes have passed. Now, a third has made it across the finish line.
“It’s a great success story,” said Garnett, the House Majority Leader, noting how the bill to simply get to through the legislature and to a public vote “was quite an exercise in bipartisanship and stakeholder relationships.”
The countdown begins for Colorado sports betting
Initially, Garnett recalled, he desired for Colorado to have a regulatory framework in place by the new year. Of course, now, that seems like a pie-in-the-sky timeline.
Instead, the bill targets May 2020 for the state to be ready to flip the switch on legalized wagering. Theoretically, 33 casinos in the state can apply for licensing, though Garnett anticipates that total to be more like “between nine and 12.”
Regardless, whichever properties apply will be authorized to operate one land-based sportsbook or one online sportsbook or both. And by May 1, when the Colorado Rockies visit the Philadelphia Phillies, and potentially during a deep NBA playoffs run by the Denver Nuggets, Colorado sports betting could be up and running.
“The licensing will all depend on when casinos decide to come forward,” Garnett said, noting that the upside is the Colorado Division of Gaming, which already monitors the casinos, has a pre-existing relationship with the properties. “I’m sure that won’t take very long. The relationship that will take time to vet will be online operators.”
Colorado a “model of both sides” coming together
It should come as no shock that legal sportsbooks across the country have expressed excitement about Colorado voters legalizing sports betting.
Among them: Two established companies that have thrived in New Jersey and displayed signs of aggressive expansion.
One is FanDuel Sportsbook, which has opened up retail and/or online operations in New Jersey, New York, Pennsylvania, West Virginia, Iowa, and Indiana.
And FanDuel, an emerging leader in the nascent industry, has praised Colorado – and appears to have it in its crosshairs as an entry point.
“I travel the country and work on the effort to decriminalize sports betting in other states,” said Stacie Stern, manager of government affairs for FanDuel Group. “Colorado was really the model of both sides (of the political aisle) coming together in a common-sense way and not only pass legislation of sports betting but taking the next step to say, ‘Where will the revenue go and what’s important in our state.'”
Said revenue – a 10% tax on operators – will go toward the state’s water management plan as well as toward problem gambling.
Online sportsbooks excited for Colorado sports betting launch
While FanDuel has not partnered with an existing Colorado casino just yet, other operators such as PointsBet, Smarkets, Wynn and BetAmerica sure have. PointsBet partnered with Double Eagle Casino & Hotel, while the other three teamed with Full House Resorts. And all are eager to get things cooking in Colorado.
“It’s great news that the people of Colorado have legalized sports betting, and we can’t wait to bring our sportsbook platform, SBK, to the Centennial State in 2020 through our partnership with Full House Resorts,” said Smarkets founder and CEO Jason Trost, whose company partnered with Full House in September, just a few days before BetAmerica did and a month before Wynn.
“As more and more states adopt sports betting legislation, the industry will be brought further into the light and regulated in a more professional manner, compared with the previous status quo of offshore bookmakers dominating the market.”
While FanDuel has not established a partnership with a land-based casino in the state, thus allowing the brand to enter the online market, it certainly showed an interest in Colorado – at the very least.
Through October, FanDuel was the largest contributor to the campaign to legalize sports betting. And as Stern put it, such a contribution was to both support state regulation and open up an avenue for FanDuel.
“The opportunity to open up new states and bring our sportsbook product to new states is what we’re looking for across the board,” Stern said. “We were definitely supportive.”
Legalization a big step for state and industry
PointsBet already had its eyes on the Denver area. They targeted the city as a burgeoning market of tech talent. As such, roughly two months ago, the sportsbook began locating a western headquarters in the Colorado capital.
Over the summer, though, PointsBet set up an inside track to entering the state market with a partnership via the Double Eagle Casino & Hotel.
“It’s probably as big as it gets for us,” Ron Shell, PointsBet US vice president of customer and insights, said of the proposition passage. “The most obvious reason is we have access to Colorado and offer our best-in-class product to a big state. On top of that, it allows us to push forward with our strategy of becoming the local great sportsbook in Colorado.”
The same can be said about FanDuel. And certainly Smarkets and Wynn. Legal sports betting is on its way. But that is not the biggest story of Proposition DD’s success. Not to Garnett.
“The one thing I believe will go down in the legacy of DD is the water investment,” Garnett said. “For the first time, investing dedicated revenue toward the water plan … is maybe the greatest accomplishment of the entire campaign. If we wait and we’re not preemptive in our approach to conserve water, when our population doubles (in the future), we’ll be in a bad spot. … I really do think that will be the greatest legacy of DD.”
So when does CO sports betting start?
While voters gave the OK for casinos to offer legal wagering, some waiting still remains.
Colorado already has its gaming division to regulate sports betting, but a regulatory framework still needs to be crafted. Casinos and internet operators still need to apply for licensing and get vetted. Sportsbooks still need to undergo testing.
For the public, May 2020 certainly seems like a distant date. For operators, to quote Stern: “May 1 will come sooner than you think.”
After all, FanDuel, according to Stern, has “already hit the ground running looking at next year.” While the group has not landed a casino partner in Colorado, Stern said FanDuel has been “working hard behind the scenes.”
“But now that the referendum has passed,” she added, “I think you’ll see some movement on the part of FanDuel.”
Shell noted that PointsBet can now “fast-forward” its plan a bit. Already with an online sportsbook in New Jersey, and working toward doing the same in Iowa and Indiana, PointsBet would have only one app. It would use geolocation technology to determine which state’s odds you would see. Essentially, Shell said, PointsBet’s preparation now is mostly just tech.
“But to be honest with you,” he added, “we started that a while ago. So we’re ready to hit the ground running.”
While Nov. 5 (and Nov. 6, really) will be a landmark time in Colorado history, lawmakers have yet to celebrate, according to Garnett. There is still plenty more work to get done. But Garnett certainly does not overlook the significance of it all.
“The accomplishment is that those who are close to all this know how robust the black market is,” he said, “and how confident we are in the regulatory structure. … Tuesday night will be a night I will never forget.”