The Colorado Limited Gaming Control Commission has delayed the introduction of new rules that would authorize sports betting exchanges in the state.
In its latest monthly meeting, the Commission voted 3-1 to delay and take no action on proposals to bring betting exchanges to Colorado.
Specific betting exchange rules were proposed by the state regulator – the Colorado Division of Gaming – but the Commission requires more time to deliberate the move, given its infancy in the US.
CDG’s proposal formalized the rules that would stipulate operators would only pay taxes on the commissions from winning bets, given that bettors bet against each other, rather than the sportsbook itself.
This raised concerns from the Commission over tax collections, as reported by the Denver Post, given that operators’ tax payments would undoubtedly be lower than traditional sports betting.
One commissioner, Justin Davis, said the body needed more time to consider the suitability of the proposals given that exchange and peer-to-peer wagering is not widespread in the US.
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. I think it’s important to proceed carefully.”
Currently, New Jersey is the only state to have legalized and regulated exchange wagering in the US. There are two licensed exchange operators – ProphetExchange and Sporttrade – that offer P2P betting, though the state does not have formal rules on the vertical.
Colorado would have been the first state to have exchange wagering rules, but for further progress to be made, Commissioners require more detail on the impact and tax repercussions.
Given Colorado’s open market and regulations, it does not seem too unlikely that these tax issues can be overcome and that exchange betting could ach its second US state in the coming years.