Colorado is set to become the first state to get rid of tax write-offs for sports betting promos.<\/p>\n
In a move to raise more revenue for the state, Gov. Jared Polis is expected to sign a bill (H.B. 22-1402) that gradually reduces tax write-offs for sportsbooks. Currently, sports betting companies in Colorado can write off as much as they desire from their taxable revenue, as long as it comes from free bets.<\/p>\n
Thats anything from a free $1,000 deposit match to boosted odds on a basketball team to score at least one point, regardless if the sportsbook loses or not.<\/p>\n
The bill, which passed the House 50-15 and Senate 25-8, also earmarks an extra $3 million a year for problem gambling treatment.<\/p>\n
In Colorados two years of legal sports betting, the state has made $17 million in revenue off its 10% tax. Sportsbooks, however, have made $408 million, which means about $23 million has gone untaxed and makes the real tax rate more like 4%.<\/p>\n
That money is earmarked for the Colorado Water Plan, which was promised about $16 million a year from sports betting when voters legalized it.<\/p>\n
Starting Jan. 1, 2023, no more than 2.5% of an operators monthly betting handle may go untaxed as free play.<\/p>\n
That number decreases by .25% every year until 2033, when free play write offs will be gone entirely.<\/p>\n
The tax perk was designed to make it easier for sportsbooks to induce people to bet in newly legal states.<\/p>\n
Some states like New York dont allow it at all while others, like Virginia and Louisiana, have tried to get rid of it, though their attempts have failed.<\/p>\n
Those two states, like Colorado, have seen tax revenue fall short of initial projections.Virginia generated $20 million in sports betting taxes in 2021, while its less populous neighbor, Tennessee, made nearly $40 million off of a similar tax rate.<\/p>\n
By 2023, Colorado will have had sports betting for over a dozen years. While free play will likely continue, at that point itd be hard to argue its value to the state.<\/p>\n
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Colorado Becomes First State to Nix Sports Betting Tax Write-Offs - The Action Network<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Colorado is set to become the first state to get rid of tax write-offs for sports betting promos. In a move to raise more revenue for the state, Gov. Jared Polis is expected to sign a bill (H.B Continue reading