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Proposition DD aims to legalize and tax sports gambling in Colorado

October 18, 2019 | Local News

By Dan Karpiel

The Surveyor

Colorado ballot measure Proposition DD, if approved, would legalize sports gambling in Colorado and impose a 10% tax on profits earned from businesses that conduct sports betting operations. The tax levied under the terms of Prop DD would not be levied on individuals who win a wager but rather on the casinos and online gambling businesses contracted by casinos who earn profits on sports gambling. Since the measure seeks to impose a new tax, it requires voter approval under the Taxpayer Bill of Rights (TABOR) law.

As a result of a 2018 ruling by the United States Supreme Court in the case Murphy v. NCAA, the federal prohibition on sports gambling under the Professional and Amateur Sports Protection Act was declared unconstitutional via the anti-commandeering doctrine, which states the federal government, “lacks the power directly to compel the States to require or prohibit acts which Congress itself may require or prohibit.” Since 2018, eight states have already passed laws legalizing sports gambling and several others are on track to do likewise.

If approved by voters, DD would permit Coloradans over the age of 21 to place wagers on the outcome of collegiate, professional and Olympic sporting events in-person at casinos in Black Hawk, Central City and Cripple Creek and online by casino-contracted internet gambling businesses.

The second portion of the measure would be to impose a 10% tax on casino profits earned from sports betting operations and use the funds generated for three purposes (with percentages of revenue earned). One, create and fund the Water Implementation Cash Fund (69.5%); two, cover the costs of administration and regulation of sports gambling (27.22%); and three, provide additional funding to the state Office of Behavioral Health to raise awareness and provide treatment for gambling addiction (1.35%). At least $534,000 annually, or 5.53%, whichever is greater, will go into a hold harmless fund where entities that experience a financial loss due to sports gambling may apply for funds to recover those losses.

The largest portion of the tax revenue generated, which is estimated to be around $10 million in fiscal year 2020-21 and increase to $13.5 to $15.2 million in 2021-22, would go toward water projects in the state. Per the language of the measure, the funds here would be used to provide grants to governmental and private entities for water storage and supply projects, conservation, land use, and drought-planning projects, water education, outreach, and innovation projects, agricultural water efficiency projects, and environmental and recreation projects.

Proposition DD enjoys broad bipartisan support. The measure was co-sponsored in the Colorado General Assembly by Representatives Alec Garnett (D) and Patrick Neville (R) and Senators John Cooke (R) and Kerry Donovan (D). A wide and diverse array of organizations also support the measure, including the Colorado Chamber of Commerce, the Colorado Cattleman’s Association, the Colorado Farm Bureau, the Environmental Defense Fund, ProgressNow Colorado and the Bell Policy Center.

One argument in favor of legalizing sports gambling is doing so would help eradicate the black market for sports gambling, e.g. the private bookmakers, or “bookies,” who can have ties to various organized crime groups and engage in other illegal activities.

As state Representative Alec Garnett, a House Democrat and co-sponsor of the ballot measure said, “Coloradans should have the option of betting on the Nuggets or the Broncos. This new funding will go toward protecting our precious water and we believe this is something everyone can support. I also hope this measure will help stamp out black market sports betting and thank my colleagues on both sides of the aisle for their support.”

Another argument in favor of the measure states that with Colorado’s population expected to double by the year 2060, the state will not have an adequate water supply at current usage rates to sustain the same quality of life. The funds generated from this tax, which is imposed on businesses who provide an at-will activity, will help ensure there is enough water for future needs while helping preserve and protect Colorado’s natural environment.

An argument against voting for DD is people can become addicted to gambling, sports wagering included, and there exists no prohibition on how much a person can lose placing bets. Prop DD will make it easier for someone with a gambling problem to wager, and potentially lose, a great deal of money with just a few clicks on their smartphone or computer.

The organizations Coloradans for Climate Justice and Save the Colorado are registered in opposition to measure and argue the measure will fund, “river-destroying dams supported by the Colorado Water Plan.” Gary Wockner, director of Save the Colorado and Coloradans for Climate Justice, said, “This ‘Gambling For Dams’ bill is a climate-denying, river-destroying scheme pure and simple. To think that Colorado can dam its way out of climate change is a gamble of the highest stakes.”

A ”yes” vote on Proposition DD is a vote in favor of legalizing sports betting in Colorado and imposing a 10% tax on casino profits earned from those wagers and designates the funds be used primarily to fund water supply projects in the state.

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