Sports betting deduction bill passes third reading in Colorado
The measure would remove deductions on free bets and appropriate funding for the department of revenue.
Key Points
- Operators are allowed deductions on free bets placed by players under current law
- These deductions would be removed by next summer if HB 1311 becomes law
A bill addressing deduction allowances for net sports betting proceeds has passed its third reading in the state of Colorado.
No amendments have been made to the current legislation, according to a LegiScan online report.
Colorado House Bill 1311 would set new guidelines for deduction rates on net sports betting proceeds.
Six years ago, voters in Colorado approved a 10% tax on net sports betting proceeds. Online and retail sports wagering operators are allowed to deduct all payments to players under the current law.
The current law on the books also allows operators to deduct all federal excise tax paid, as well as “certain percentage of free bets placed by players.”
However, HB 1311 would remove those deductions next year.
These allowances would go away beginning July 1, 2026, according to bill’s current language.
However, these deductions will be phased out if the bill becomes law.
According to its current parameters, deductions of up to 2% on free bets would be permitted between July 1, 2025 and December 31, 2025.
The rate would then fall to 1% on free bets between January 1, 2026 and June 30, 2026 and would be removed the following month.
Another piece of this legislation would appropriate funding for the state’s department of revenue.
HB 1311 states, “For the 2025-2026 state fiscal year, $17,135 is appropriated from the sports betting fund to the department of revenue for personal services and tax administration IT system support.”
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