Colorado bill to change online sports betting promo taxes delayed
A Colorado bill aimed at reforming how sportsbooks handle promotional bets for tax purposes has stalled in the Colorado Senate as the state’s legislative session concluded.
House Bill 1311, which proposes ending the practice of deducting promotional betting credits from taxable revenue, was passed by the Senate with amendments. However, because of time constraints, the House did not revisit the modified version before the General Assembly adjourned on 7 May.
Colorado’s online sportsbooks can subtract a portion of free bets, used mainly to entice or retain customers, from their gross revenue, lowering their tax burden. HB1311 seeks to close this loophole to boost tax collections and provide a clearer picture of actual revenue.
Deductions are capped and are set to decrease further in the coming years.
The Senate’s key amendment pushes the bill’s effective date from September 2025 to July 2026. Yet, despite the delay, the bill would still generate significant state revenue, estimated at more than US$11 million annually after full implementation.
This excess revenue would then be put toward paying for Colorado’s water projects.
The legislation now awaits potential consideration in a future session. If passed and signed by Governor Jared Polis, sportsbooks would have to include all promotional bets in their taxable revenue calculations.
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Charlotte Capewell brings her passion for storytelling and expertise in writing, researching, and the gambling industry to every article she writes. Her specialties include the US gambling industry, regulator legislation, igaming, and more.
