Legislators in Colorado have introduced a bill that would require sports betting operators to pay taxes on promotional bets.
House Bill 1311 is sponsored by Senator Dylan Roberts, Speaker of the House Julie McCluskie and Representative Matt Soper. It is estimated that new tax money collected under the bill would by around $12 million. This money is earmarked for water conservation programs in the state.
If the bill were to be passed taxing of promotional bets would begin on September 1, 2025.
Colorado currently has one of the lowest tax rates on sports betting at only 10 percent. When sports betting was first legalized in Colorado in 2019 that 10 percent sports betting tax also came with a $29 million cap. That cap was removed in November, 2024.
Instead of proposing to raise their low tax rate on sports betting, which many other states have either proposed or already enacted, Colorado has targeted the tax-free promotional bets. Colorado is not alone is currently allowing sports books to deduct promotional bets from taxes. Other states that do the same include:
Arizona
Connecticut
Kansas
Louisiana
Maryland
Michigan
North Carolina
Pennsylvania
