Politicians in Colorado are trying to get as much money as they can from sports betting.
Sports betting in Colorado is legal. One main reason why state politicians are glad that sports betting is legal in Colorado is the revenue that top sportsbooks generate.
Politicians in Colorado want to get as much money from sportsbooks as possible. This revenue is great for states because state politicians can use it to advance important things like education.
A key way in which politicians get money from the sports betting operators in their state is by taxing them. Colorado is making a move in order to increase its tax revenue.
More Tax Revenue
Sports betting operators use deals to attract new customers. Initially, the cost of bonuses offered as part of these promos was written off. Plus, sports betting operators only faced a 10 percent tax rate. Given these two circumstances, tax revenue was negligible for Colorado. Politicians in the state wanted to change that.
As a result, the financial break given to the promos offered by sports betting operators will slowly be minimized. Over time, sports betting operators in the state will get to write off for taxes a decreasing amount of what they spend on promos.
In other words, when they offer more incentives to bettors, they will get taxed more for them.
Virginia tried to do what Colorado is doing.
It must be unsurprising when other states follow suit because profit in the form of revenue for the state has formed a significant motivating factor for the legalization of sports betting.
As another example of a state that could follow Colorado, Arizona has not enjoyed much tax revenue largely because of the break it is giving to sportsbooks offering promos.