Colorado lawmakers, licensed sportsbooks, gaming regulators and more industry stakeholders spent four hours on Tuesday debating Senate Bill 26-131, a wide-ranging measure that aims to protect against “abusive practices” in sports betting.
Amid the lengthy debate in the Senate Finance Committee on March 17, including discussion of measures that attempt to limit sports betting advertising, one question featured prominently throughout the afternoon: Should Colorado try to ban prop betting?
Section five of SB 26-131 would explicitly prohibit any licensed online sports betting operator from offering wagers on “any outcome other than the final result or score”, regardless of whether they are placed before or during the game.
The Finance Committee ultimately passed SB 26-131 by a narrow 5-4 vote and was sent to the Appropriations Committee, but not before numerous lawmakers, as well as sportsbook representatives, expressed grave concerns.
Colorado sports betting has changed fundamentally, argues sponsor
Two of the primary sponsors of the bill kicked off the hearing by arguing that sports betting in Colorado has changed drastically since state voters approved its legalization via Proposition DD in 2019.
“What we’ve seen in recent years is an industry that has grown rapidly, far beyond what many Coloradans expected,” Sen. Byron Pelton told the room. “The volume of advertising, the ease of placing bets from a phone, and the constant push to engage new users has changed the landscape.”
“What people voted on is very, very different than what we have today,” added Sen. Matt Ball. “The image was of a bet that you make on Sunday on the Broncos. But online sports betting apps now are very different. They have basically become a casino in your pocket, and you can bet on absolutely anything from whether the next pitch is going to be a ball or a strike to Eastern European table tennis.”
But would banning props go against voters’ wishes?
Throughout the long hearing, numerous lawmakers voiced concerns that the proposed prohibition on prop bets would risk going against the wishes of the Colorado residents who voted in favor of sports betting.
“I’m very conscious of overriding the will of the voters and what they want,” acknowledged Sen. Kyle Mullica. “The portion of the bill that’s elimination around prop betting, this was allowed through legislation from the voters, and so that’s not just restrictions, that’s elimination. That’s where some of my heartburn is coming from on the legislation.”
Ball contended that prop bets were not “front and center” on the ballot, and so cannot be deemed to be something that was directly approved by voters. “And prop bets, at that time, also were really, really different,” he argued. “You have a constant menu of both prop bets and parlays; that just wasn’t a thing. I think we’re talking about putting restrictions on something that very clearly wasn’t on voters’ minds, because that product in its current form just didn’t exist.”
However, Committee Vice Chair Janice Marchman opined that the reference to props in Proposition DD was sufficient.
“I assume that our voters are, in fact, educated about what it is that we’re putting out,” said Marchman. “This was in our legislation and in the blue book [the ballot information booklet] too, about prop bets. I feel like if we want to take prop bets out, we owe it to the voters to go back to them and ask them to take that part out.”
Marchman also noted that the state asked voters again in 2024 for their thoughts on sports betting, five years after they first said yes, and that around three-quarters of them voiced approval. “So, even if we don’t know if they thought they were voting on prop betting in 2019, they certainly knew what they were voting on in 2024,” she argued. “So that right there is a problem for me.”
Sportsbook warn of consequences
Representatives from FanDuel, DraftKings, BetMGM and the Sports Betting Alliance (SBA) all testified against the bill, and there was a rare appearance in a U.S. legislative hearing from a representative of bet365. The British sportsbook has invested heavily in Colorado, opening a new $135m U.S. headquarters in Denver in late 2024.
“Our concern with this bill is that its provisions are blunt instruments that would cause significant unintended harm to consumers, to operators and those who do business with operators and to the state without necessarily achieving their stated goals,” said bet365’s Andrew Moreno.
“We share the committee’s goal of protecting Colorado consumers, but a blanket ban on proposition wagers will not achieve that objective,” added DraftKings Chief Legal Officer R. Stanton Dodge, warning that such a move would risk pushing bettors toward the unregulated offshore market.
Dodge told the committee that prop bets account for approximately 30-45% of operators’ revenue statewide. “We estimate that the cumulative effect of the bill would reduce sports betting tax revenue to the state by as much as 50%.”
Jennifer Anderson, FanDuel Director of State Government Affairs, stressed that while prop bets as a category are allowed, Colorado’s Division of Gaming vets all markets – a view backed up by Division of Gaming Director Christopher Schroder.
“We inspect each [betting market] to ensure it meets our regulatory requirements, that it cannot be manipulated easily by one person, that it’s not a negative wager,” Schroder said. “We wouldn’t allow a wager such as ‘will this individual strike out?’ because that’s a very easy thing to manipulate.”
Sen. Marc Snyder cited concerns that the state may stand to lose around $2.5m in the first year from scrapping prop bets, per estimates. FanDuel’s Anderson warned that a blanket ban would have revenue implications that are much higher than projected in the bill’s fiscal note.
Sen. Mullica was one of the senators who voted yes to advance the bill, but not before noting that he would be a “no” on the Senate floor if the props issue was not addressed.
“I personally don’t want to see proposition bets all outlawed,” he said. “I think about an individual being able to bet on if their favorite football player scores a touchdown. That wouldn’t be allowed in your bill. That’s a prohibition, to me, and I’m not sure that quite accomplishes it. It just feels arbitrary and I don’t know what we’re trying to solve with that. I’m not quite sure why prop bets are being singled out here.”
