Zona de Azar USA – Sports Betting Tax to Go Before Voters in Colorado
USA.- October 8th 2019 www.zonadeazar.com Colorado voters will decide next month whether to legalize sports betting and immediately subject it to taxation.
The measure (Proposition DD), referred to the ballot by the Colorado General Assembly, would legalize and regulate sports betting through online or mobile sports betting platforms operated by casinos in the state. It would impose a 10% tax on casinos’ net sports betting proceeds. Voters on Nov. 5 will also consider a measure (Proposition CC) that will allow the state to spend the money it would ordinarily be required to return to taxpayers under the state’s unique tax-and-spending limitation amendment.
Recent polls show more voters support sports betting than oppose it, Rep. Alec Garnett (D), sponsor of the bill (H.B. 1327) referring the measure, said Sept. 27. The ballot measure fares even better in polling when its backers clarify the tax will be on casino’s profits, not on individual winnings, he said.
Thirteen States
In May 2018, a U.S. Supreme Court ruling allowed states to legalize sports betting. Sports betting is now legal in 13 states, pending in five more, and under consideration in at least 22 others, according to Legal Sports Report, a legislative tracker.
Colorado requires voter approval for any new taxes or tax increases. The constitutional amendment, approved by voters in 1992, also requires voter approval for any state and local government revenues collected in excess of the rate of inflation plus annual population growth. Colorado is the only state with such an amendment at the statewide level.
An analysis by the Legislative Council of the Colorado General Assembly predicts that, if the sports betting measure passes, it will raise “about $16 million” in tax revenue annually over the first five years. About $14.9 million of that amount will fund water projects and other water-related obligations, including projects under the Colorado Water Plan, the analysis said.
Addiction Funding
The remainder will go to fund gambling addiction services and a fund to reimburse entities that receive tax revenue from traditional gambling and horse racing should betting on sports decrease the revenues they receive.
Casino revenue will vary based on each establishment’s operations, but if it is assumed that casinos keep 5% of the total amount of bets made, they will pay about 47.5 cents in state tax revenue for every $100 collected on bets, the analysis said.
The analysis included arguments for and against the measure. It notes that many Coloradans already illegally bet on sporting events using black market bookies and websites, which are not subject to oversight, regulation or taxation.
The Legislative Council summarized arguments for and against the proposal. One argument against the measure, the council said, is that it puts no limits on the amount a person can bet on sports, and dedicates only $130,000 to gambling addiction services.
TABOR Exemption
A yes vote on the Taxpayer Bill of Rights (TABOR) measure would allow the Colorado state government to keep all of the money it collects from all existing sources beginning with the 2019-20 state budget year. It would require the state to spend all excess revenues on K-12 public schools, higher education, and transportation, instead of on refunds to taxpayers.
According to a September economic forecast by Legislative Council, revenue subject to the TABOR limit will exceed the cap by $264.3 million, resulting in a taxpayer refund in FY 2020-21. If the ballot measure is approved, the state would be able to keep and spend all that money.
Calls placed to “No on CC,” the campaign that opposes the measure were not returned, but the campaign web site said the proposition is a “misleadingly worded ballot measure” that, if passed, will cost Colorado taxpayers “billions of dollars in perpetuity, would gut our very popular Taxpayer’s Bill of Rights, forfeit all of our future TABOR refunds, and forfeit our right to vote on future refunds.”
‘Allows Investment’
Marie Logsden, spokesman for the “Yes on CC” campaign, said the opponents were the ones being misleading.
“Prop CC allows the state to invest in education and transportation without raising taxes,” she said. The measure acts within the letter of TABOR to allow the state to “invest in our urgent needs with the money we already have,” she said.
“We are one of the lowest-taxed states in the country and with Prop CC we can stay that way while repairing our roads and fixing our schools,” she said.
Edited by: @MaiaDigital www.zonadeazar.com
