A trend is already developing in Colorado’s burgeoning sports betting market, and it’s unlike sports betting launches in other states, so far.
European companies are using Colorado’s new market to launch sportsbooks.
It started with Spain’s Carousel Group announcing its ambitious plans in mid-May. That was followed by the SBK Sportsbook launch in early June and Betfred‘s hot entrance, both from the UK. Then, Sweden’s Betsson began moving into CO last week.
However, it’s not just European companies.
Major state-side sportsbooks are also taking advantage of the new CO market to expand out of Las Vegas for the first time. Look no further than SuperBook, which plans to launch this month. And Circa Sports, which launched its mobile app last week.
What’s so great about the CO sports betting market?
So, the natural question is, “Why?”
What is it about the 2-month-old Colorado sports betting industry that attracts European companies and major US brands?
Carousel Group CEO Daniel Graetzer said to PlayColorado:
“New Jersey led the march for regulated gaming in the US. However, given the saturation and maturity of New Jersey, it’s natural that new entrants turn to other markets to find their port of entry. Carousel Group and SportsBetting.com are already planning their growth into a number of other states in the US, but Colorado was our first target for a couple of reasons. Colorado is an incredibly attractive market, both in terms of population and its passion for sports. Couple that with more reasonable market entry costs and a pragmatic and friendly regulatory board, and you have yourself the perfect market.”
In terms of specifics, the main reasons to launch a sportsbook in Colorado: the fees and the fans.
1. Friendly fees
As Graetzer mentioned, the fees for sportsbooks to operate in CO are “incredibly” friendly to the operators.
The Colorado Limited Gaming Control Commission (CLGCC) approved the fiscal year 2021 fees during its June meeting.
From the Colorado Department of Revenue Enforcement Division, the internet sports betting operator licensee, or master licensee conducting internet sports betting fee, is $77,000. The sports betting operator licensee, or master licensee conducting retail sports betting fee, is $17,900. The fees took effect on Wednesday and must be paid prior to July 31.
A side note: A 10% sports betting tax will be collected throughout the year and that money will go to the state of Colorado’s water conservation plan.
2. Sports fans
Colorado sports fans are both loyal and passionate, and many want to bet on their teams.
When you consider how good the Colorado Avalanche and Denver Nuggets were before the COVID-19 pandemic shutdown, there is no doubt the needle points up.
Just for good measure, excitement over the Denver Broncos is back. Broncos Country is all aboard the Drew Lock train and the potential the team has to return to a winning tradition.
Since Peyton Manning retired after the Super Bowl 50 win, the Broncos have been headed in the wrong direction with no compass.
The $25.5 million handle for the first month of Colorado sports betting shows what the market is capable of when major US sports return to action.
Jay Kornegay, the executive vice president of operations at the Westgate SuperBook, said to PlayColorado:
“Right off the top, we’re always looking for regulation-friendly jurisdictions. Meaning not over-regulated, which can easily happen and is happening in some other states. And then a favorable tax rate and a great demographic, sports fans and those that enjoy sports and most likely want to bet on sports. Colorado checks a lot of boxes.”
3. Remote sign-up
Another factor is the convenience of signing up for online sports betting remotely.
That means prospective bettors in Colorado can sign up for a sports betting app from their favorite armchair. That’s unlike Las Vegas, where Nevada bettors have to go to the brick-and-mortar casino to sign up first.
That helps explain the various promotions that the sportsbooks are running to get you to choose their app.
4. Expansive sports catalog
The other possible factor is the vast sports catalog Colorado offers. One of the sports you can bet on is pesäpallo, aka Finnish baseball. To say that the catalog is extensive is a mild understatement.
Look at it this way: The more sports an operator can offer, the more appealing it could be for fans and users.
What the heck is pesäpallo? You should check it out.
The catalog and fees demonstrate how friendly Colorado and CLGCC/Division of Gaming is to incoming sportsbooks.
Obviously, the sportsbooks have noticed.
As Kornegay said:
“There (are) other states that have a lot of tight regulations that make it very difficult for operators to run a sportsbook. And, of course, the tax rates are ridiculous and the cost of just getting a license in particular states. Like Pennsylvania. It’s one of the most populated states that we have in this country, and we know that the demographics are very positive. They have a history of being terrific sports fans and betting sports fans. But to operate there, you have to pay an upfront $10 million fee, which is outrageous. So maybe those are states that we would entertain down the line, but right now, that’s now what we’re looking at.”
Enjoy a piece of the Colorado sports betting pie
Bake it all together, and you have a market that sportsbooks want to taste.
It gives companies launching a sportsbook in the US an opportunity to test their products and build their brands. If they’re able to do it in a brand-new market, then the odds are good that they can succeed in other markets.
The same holds true for the brands beyond Las Vegas. If they’re able to succeed in a new market, that shows them they can do so in others and come out on top.
According to Graetzer:
“We feel that we identify closely with the Colorado consumer. They want a localized, customer-centric offering along with a down-to-earth brand that is truly passionate about sports. And our new products and services align well with where we expect this market to go.”
Future of Colorado sports betting looks bright
As for the future, the optimism is thick regarding the potential of the Colorado sports betting market. When major US sports return, that’s when you’ll get the best answer yet as to why so many companies want to launch or expand to the burgeoning Colorado sports betting market.
Dan Hartman, the Colorado Division of Gaming director, said to PlayColorado:
“I think we knew from the start that this market might be a good entrance point for many companies. The availability of licenses, relatively low tax rate, and low license fees made it a natural for international and domestic players to use Colorado as their entrance market. In the end, competition and the market will dictate how the market matures. I think the operators believe that Colorado has launched a strong regulated market, but also a business-friendly environment.”
Added Kornegay, who lived in Colorado and returns every year:
“It comes down to population numbers. Colorado has terrific sports fans. I know that because I’m very familiar with the area. I almost feel like a Rockies season ticket holder. So, I know what terrific fans they are. And very loyal fans. But to me, I just feel like it’ll come down to population numbers. Those more populated states, I think, eventually, will probably see the biggest numbers. The numbers are going to be strong in Colorado, but ultimately it will come to the number of players.”