The cap on sports betting tax revenue funding water conservation projects could be lifted in Colorado if Gov. Jared Polis signs a bill on his desk.
House Bill 1436 recently passed the Colorado House and Senate with bipartisan support. It removes the current $29 million limit on sports betting tax money funding the Colorado Water Plan, the state’s long-term vision for water management.
Besides signing or vetoing the bill, Polis could let the bill become law without his signature. Since the legislative session ended on May 8, the governor has until June 8 to decide on the measure.
Casinos Adversely Impacted by Sports Betting Receive Compensation
The state taxes Colorado sports betting at 10%. The funds are first allocated to the state’s gaming division to pay for administrative costs. Then, 6% of the amount goes to a “Hold Harmless Fund” that reimburses casino operators for any losses incurred due to the legalization of sports betting.
The remaining tax money funds the Colorado Water Plan. However, any money over the $29 million cap goes back to the casino fund. Future water conservation efforts would not benefit from sports betting tax revenue that exceeds the set maximum.
HB 1436 aims to change that.
It would “allow the state to keep and spend all sports betting tax revenue in excess of the $29 million estimated increase in state tax revenue approved by voters in 2019 for the purpose of funding water conservation and protection projects rather than refunding such excess revenue to casinos.”
State Facing Escalating Water Issues
Advocates of lifting the cap stress the urgency of the situation. They point to four main issues:
- Colorado’s growing population
- Drought issues
- Escalating effects of climate change
- Imperative for innovations in water conservancy
HB 1436 underscores the state grappling with “unprecedented water challenges” as demands on water resources surge.
Concerning the Colorado Water Plan, the Colorado Sun recently reported the state “hasn’t yet been able to secure the estimated $100 million needed each year through 2050 to fulfill the plan.”
Lawmakers adopted the plan in 2015 and updated it in 2020. Since sports betting launched in 2020, its tax revenue has increased yearly. In 2023, tax revenue was up 13.6% over the previous year by about $1.8 million. With the Denver Nuggets and Colorado Avalanche in the playoffs again this year, tax revenue from sports betting in the Centennial State is expected to continue its upward trajectory.
