Online casino

Colorado tax advantage thanks to online casino regulations

Colorado is the first state to phase out tax deductions for sports betting provider promotions. Since CO sports betting debuted in 2020, the state first allowed operators to write off bonus expenses. The combination of such a provision and a 10% tax rate produced little tax revenue.

At one of more than 30 casinos across the state, whether in Black Hawk, Central City or Cripple Creek, or at tribal-run casinos like Ignacio and Towaoc. All but a few have a huge selection of slots, table games and poker rooms. Several Colorado Sports Betting Sites and apps, such as BetRivers, BetMGM, FanDuel and DraftKings, also accept sports betting, but online gambling is not yet permitted.

Analysis of tax advantages

According to American Gaming AssociationColorado’s gaming revenue topped $1.23 billion in 2021, the highest annual total in the state and the 14th highest of any state with commercial gaming.

The region ranked 15th in commercial gaming markets in the United States last year, finishing $100 million ahead of downtown Las Vegas, thanks to $812 million earned by Black Hawk casinos and Central City.

For the first half of 2022, Colorado gaming revenue was $646 million through June, an increase of 15.1%. The DD Proposal, which allowed retail and online sports betting and funneled tax money to statewide water projects and commitments, narrowly passed voters in the Colorado in November 2019.

Through June 2020, more than $7.6 billion has been wagered on sports since the market opened, with operators earning $464.9 million. Colorado is an online monopoly, with over 98% of all bets placed through mobile apps. The laws allow Colorado Casinos enter into agreements with various bookmakers. There were 44 physical and online sportsbooks in June.

Online slots revenue in New Jersey rose 27.8% year-over-year to $134.6 million in April, but Internet poker revenue was down 6, 3% to $2.3 million. Overall, online gambling revenue in the state increased 27.0% to $136.9 million.

Given that Colorado has a population of 5,922,618 compared to New Jersey’s 9,388,414, we can anticipate that 2/3 of NJ’s tax revenue from the Internet casino rules will come from Colorado.

Colorado sports betting bill designed to reduce free play write-offs from sports betting

The ability of sportsbooks to deduct free play credits for tax purposes would be limited under Colorado House Bill 22-1402. Free play is a common incentive used by sports betting operators to get customers to sign up. Although bets players place using free play credit are recorded in processing, some states allow operators to deduct them from their taxable income.

Colorado policymakers are looking at free play as a method to increase tax revenue as the sports betting market matures. The reduction in free credit write-offs may lead to a decrease and decrease in sportsbook bonuses used by sportsbooks to attract new customers. Many industry observers believe that since big prizes erode potential earnings, eventually bookmakers will have to stop relying on them.

3.6% of the sports betting handle, according to the tax note for HB 22-1402, is attributable to site credits. Currently, sportsbooks can deduct all of these promotional credits, reducing the amount of tax they have to pay. By becoming law, Gov.

As growth in the handful of sportsbooks slows, reducing free play write-offs would increase state tax revenue. The tax note forecasts an increase in tax revenue of $2.6 million in fiscal year 2022-23 and $6 million in fiscal year 2023-24. This additional money will be allocated to the Colorado Water Implementation Fund and the Indemnity Fund.

HB 22-1402 allocates at least $2.5 million annually for a new problem gambling rewards program, beginning in fiscal year 2022-23. The $130,000 allocated to problem gambling programs is 18 times that. The Limited Gaming Fund would provide this funding. All additional gaming revenue, including license fees and casino taxes, is deposited into this fund.

Colorado has legalized mutual betting, daily and online fantasy sports sports betting. State lawmakers legalized daily fantasy sports in 2016, and a sports betting law was introduced in 2019 and ratified by state voters in a November referendum. The measure allows Colorado residents to bet on sports in person and online.

Online casino games are not allowed in Colorado by law. Many social casinos offer online casino games that bettors can play for fun or prizes. Colorado has a lottery. However, Internet lottery sales are not permitted there.

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