Legal sports wagering in Colorado is still on track to make its May 1 deadline. The state could approve the first wave of sports betting licensees later this week.
An agenda for a Thursday meeting of the Colorado Limited Gaming Control Commission specifies seven applicants who are up for consideration. Though the fates of those applications are still unclear, the results of approval or denial are easy to postulate.
Who might be among the first sports betting licensees?
All seven of the applicants on the agenda are Colorado casinos. They are:
- Monarch Black Hawk Inc. dba Monarch Casino Resort Spa
- Kings, Queens, and Jacks LLC dba Saratoga Casino Black Hawk
- Dostal Alley Inc. d/b/a Dostal Alley
- Double Eagle Resorts Inc. dba Double Eagle Hotel & Casino
- Casino Holdings Inc. dba Brass Ass Casino
- Holland Ventures Inc. dba J.P. McGill’s Hotel & Casino
- Midnight Rose Hotel & Casino Inc. dba Midnight Rose Hotel & Casino
It’s unclear if the commission plans to approve all seven licenses. It could approve only some or none of them.
The final option, none, would be quite surprising at this point. The commission has said that it wants to do everything it can to help operators go live on May 1.
May 1 is a crucial day because that’s when a moratorium on legal sports betting expires. Until then, Colorado law prevents license holders from accepting wagers even if they are ready to do so.
Getting license approval is an important step in those preparations. If that’s even just delayed, that could reduce the number of resources that casinos and sportsbook operating partners will devote to preparations.
For some of these applicants, the preparation process has already begun. That included brokering market access deals with sportsbook operators.
Why Colorado’s casinos will partner with sportsbooks instead of building their own
All these applicants are located in Black Hawk, Central City and Cripple Creek. Not all of them have announced partnerships with sportsbook operators, however.
That isn’t a requirement in Colorado. The casinos can opt to operate their sportsbooks themselves. Examples of casino brands that do so in other parts of the country are Hard Rock and MGM.
Even those casinos use sportsbook operating software built by other companies, however. They simply present their in-house brands to the consumers on those platforms.
It appears that most if not all of the operators in Colorado will “farm out” their sportsbook operations. The advantage of doing so is that the casinos get a cut of revenue for simply providing the opportunity, not unlike a finder’s fee.
The master licenses, which these casinos have applied for, allow them that freedom for both online and retail applications. For example, Double Eagle has had that kind of a deal in place with PointsBet since last July.
Not all of the applicants have such deals in place right now, however. Dostal Alley is still playing the market, for example.
As time goes by, the number of operators who don’t already have access to the Centennial State is dwindling. A master license in hand might be worth two pending applications, however.
Why these casinos may have an advantage in the market
While it may not be long after Thursday’s meeting that the commission approves more licenses, this will be a head start for any applicants approved on Jan. 20. A couple of the major brands like PointsBet already have secured a path into Colorado, however.
DraftKings and FanDuel are in with Twin River. Jacobs Entertainment is bringing theScore Bet in. Century Casinos has inked Circa Sports to a deal.
There are others still waiting in the wings with interest in the jurisdiction like Betfred. These casinos getting their licenses would make them tempting options for such operators.
Also working in the casinos’ favor is that the existing contracts aren’t all-inclusive or exclusive for either side. For example, Circa’s and FanDuel’s deals don’t cover brick-and-mortar operations, just online.
In addition, such companies are free to make similar deals with other casinos and sportsbook operators. There’s nothing in these contracts making such deals exclusive.
All the operators will have to apply for a vendor license with the state. While less expensive to get and renew than a master license, these deals are contingent upon the operators receiving approval.
The process of getting these legal sportsbooks in Colorado up and running could begin on Thursday. If these sports betting licensees get their wish, their chances to be among the first to accept wagers in the state increases drastically.