Proposition DD, which would legalize sports betting in Colorado and create a 10 percent tax on casinos’ house winnings that would largely benefit Colorado’s Water Plan, is too close to call in the latest round of ballots reported by Colorado's Secretary of State.
Proposition DD is currently just a less than 1 percent behind with more than 1.2 million ballots counted in that race so far. The difference in votes seesawed late in the night from a couple thousand votes to less than a hundred and back.
The whole sports gambling system was contingent on the tax question passing, meaning if the tax fails so does that ability for people to place wagers on sporting events.
Considering there was no organized opposition to Proposition DD, the fact that the race is so close is in a way a victory. One of the measure's few outspoken opponents, Centennial Institute director Jeff Hunt, was heartened by the results.
"I think it's great news that it's this close," Hunt said. "When people read that it'll be a $29 million tax increase, they probably voted 'no' on that alone."
Hunt opposed sports gambling, but had no money to fight it.
The pro-DD side said they expected the tight race all along.
"We knew certainly that this was going to be a close race," said Curtis Hubbard, a spokesman for the Yes on Proposition DD campaign.
Hubbard admitted that the ballot language was confusing, which is why they emphasized in advertising that this was a tax on casinos and it would fund water.
"We thought those were two really critical pieces that just upon reading the ballot language (voters) may not understand," he said.
The U.S Supreme Court threw out the near-nationwide ban on sports gambling last year. To date, 19 states have legalized the practice, according to data from ESPN. Before that, Nevada was the only state where gamblers could place wagers on sporting events.
The proceeds from the tax would go towards funding the Colorado Water Plan, a series of water conservation projects to make the state more resilient to climate change. The plan’s proposed projects cost $20 billion, but user fees will pay for most of it.
State analysts estimate that sports gambling taxes could bring in up to $15.2 million by 2022. That’s just a tiny fraction of the $3 billion needed to fully fund the plan, but proponents say it’s a start.
Casinos really need the new revenue. According to state data, gambling on slots and table games is down .5 percent through September, versus the same period last year. Casinos argue revenue should be growing fast in Colorado given the state’s strong economy and population growth.
If DD were to pass, Colorado's three dozen casinos could apply to start a physical sportsbook in their mountain locations, and could build a mobile app themselves or contract the development and maintenance out to an online betting company like FanDuel.
FanDuel was by far the largest contributor to the Yes on Proposition DD campaign, giving $1 million through Oct. 28. Various Colorado casinos and DraftKings, similar to FanDuel, contributed much of the rest of the $2.4 million to the ‘yes’ campaign. There was no organized opposition, and sin taxes are the only types of new taxes to pass statewide, since voters approved strict constitutional rules in 1992.
Colorado’s constitution mandates all tax increases must be approved by voters. When state lawmakers passed the sports gambling bill this spring, referring the issue to voters, they wrote it so that passing the tax increase on casinos was the only path to legal sports gambling in Colorado.
The bill set up the framework for regulations. It banned bets on high school games and prop bets on college events. Prop bets are wagers on small developments within the game like a pitch being a strike or ball. It’s too easy to influence athletes in those sports, the reasoning goes.