Colorado regulator votes to hold off on exchange wagering for now
The Colorado Limited Gaming Control Commission voted to review and revise rules for exchange wagering amid tax loophole concern.
Regulators in the Colorado Limited Gaming Control Commission (CLGCC) have delayed a plan that would allow exchange wagering in the state. This kind of sports betting would be a new way for bettors to wager against each other in the state, in a exchange-type atmosphere.
A 3-1 vote determined that the regulatory body will take no action on the proposal for possible exchange wagering rules in the Centennial State, and instead hold fire on the new form of betting. However, if the rules had been approved, Colorado would have been the first US state to create and publish definite rules for this form of wagering.
Commissioner Justin Davis said, “There aren’t any rules in place in the nation, or probably the world yet, so we need to proceed carefully, I know the division has done a lot of research to make that happen. But we’ve had a lot of issues raised.”
New Jersey currently allows Prophet Exchange, as the only state to offer a peer-to-peer sports betting market. Nevada originally introduced a similar concept in 2015, but it was doubly unsuccessful as it attracted more negative attention from the Securities Exchange Commission than positive attention from bettors.
Commissioners who voted against the rules planned for Colorado claimed their reasoning was due to a tax loophole could be created for some players. CLGCC Chairman Richard Nathan said this loophole could potentially violate the legislature’s 10% tax rate on gambling operator profits.
He said there should be an “elevation of scrutiny” concerning the issue.
However, the plans aren’t completely off the table; the Colorado Division of Gaming has been allowed time to revise its proposed rules and conditions surrounding exchange wagering. Oversight required for online platforms, and whether regulators are equipped to provide it, will also be considered.
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