Known for its beautiful landscapes and majestic mountain ranges, Colorado has been a bulwark of gambling since the Gold Rush days when thousands of people flocked to the state in search of wealth and prosperity. Gambling was a common occupation among frontier inhabitants throughout the 19th century. Doc Holliday, Wyatt Earp, and Bat Masterson were only a few of the famed cardsharps who frequented the saloons in the Centennial State.
Gambling went unregulated in these early days but a lot has changed since then. Colorado is now home to legal horse racing, sports betting, lotteries, and full-fledged casino gaming. While reasonably lenient, the state’s regulatory framework protects the public and remains consistent with the social interest.
Commercial gaming is densely concentrated in Central City, Cripple Creek, and Black Hawk, all of which have acquired a status of historic towns. The three cities are home to over thirty commercial casinos where visitors can play anything from slots and video poker to table mainstays like roulette, blackjack, craps, and baccarat.
Two tribal casinos operate in the southwestern part of the state near the border with New Mexico in Towaoc and Ignacio. The gaming sector is a major contributor to the local economy, providing jobs to thousands of residents and fetching over $403 million in annual tax revenue.
State laws are significantly less permissive when it comes to interactive gambling, however. Colorful Colorado joined the ranks of states with legal sports betting in late 2019, allowing locals to post their wagers both online and in-person at retail sportsbooks. Daily fantasy sports also enjoy a legal status but online casino gaming and poker remain illegal in the Centennial State. Lotteries are available in a retail format only.
Gambling Laws in Colorado
Several forms of casino gaming are legal in Colorado on condition operators have obtained authorization from the local regulators. The Division of Gaming within the Department of Revenue and the Limited Gaming Control Commission are the two agencies tasked with administering the local regulatory framework and observing for compliance with state gambling laws.
License Types and Requirements
Six types of gaming licenses are available in the Centennial State. Vendor licenses are required for the manufacturing, import, sale, and distribution of slot machines within Colorado borders. Slot machine permits require renewal every two years. Businesses who seek to operate slot machines on their premises must apply for operator licenses with a validity of two years. Such businesses can only offer slot machines obtained from licensed manufacturers.
Commercial casinos where both slot machines and gaming tables are available require retail licenses from the local gambling regulator. Individuals employed in the field of gaming must submit applications for support licenses. Separate key employee permits are issued to individuals placed in charge of the gambling activities on the gaming floor.
And finally, there are associated equipment supplier licenses issued to individuals who sell, distribute, and import associated gaming equipment in Colorado. For clarification, the term “associated equipment” refers to machines and systems used for monitoring, collecting, and reporting gambling-related transactions. The term excludes gambling devices and equipment like slot machines, card shufflers, and roulette wheels, for instance.
Retail licenses are issued for specific authorized locations only and are non-transferable. Retail licensees may transfer their operations to another location with the approval of the Limited Gaming Control Commission. The regulator can grant temporary or conditional permits to interested operators.
Gambling Fees and Taxes in Colorado
1Costs Associated With the Background Checks
All license applicants must cover the costs associated with the background checks conducted by the local gambling regulators. Application and license fees for operators vary from $8,700 to $17,400, but the exact amount depends on the number of individuals who hold 5% or more interest in the gambling business. Slot machine vendors are subject to the same initial license fee as the operators. Vendor license renewal costs less, with fees ranging from $3,700 to $7,400.
2Commercial Gambling Taxes
The Division of Gaming has the responsibility of determining the annual taxes imposed on commercial gaming operators in Colorado. With that said, the rates must not exceed 40% of the adjusted gross revenue of the casinos under Amendment 50. The percentages deducted from the operators’ gross proceeds vary from 0.25% to 20% as you can see below.
|Adjusted Gross Revenue
|Up to $2 million
|From $2 million to $5 million
|From $5 million to $8 million
|From $8 million to $10 million
|From $10 million to $13 million
|More than $13 million
Payments made by commercial casino operators go toward the Limited Gaming Fund under the requirements outlined in Section 44-30-701 of the Colorado Limited Gaming Act. The same section covers the distribution of gambling-related fees and taxes. Some of the money is used to cover the expenses of the local regulatory agencies, while the rest is appropriated by the state and the governing bodies of the counties and cities where the casinos are located.
|Allocation of Commercial Gambling Taxes
|Counties of Teller and Gilpin
|Cities of Central, Cripple Creek, and Black Hawk
|Colorado General Fund
|Colorado Historical Society
|Allocation of Gambling Taxes Deposited into the Colorado General Fund
|Colorado Office of Film, Television, and Media
|Colorado Travel and Tourism Promotion
|Advance Industries Acceleration
|Higher Education Research Fund
|Creative Industries Cash Fund
|Local Government Limited Gaming Impact Program
3Tribal Gaming Fees and Taxes
Similarly to commercial casinos, tribal gaming operators are subject to licensing fees under the terms of their compacts. The tribal gambling regulatory agency can grant three types of permits for facility, operator, and gaming device manufacturing and distribution. The tribes themselves determine the licensing fees as their compacts do not outline any specific costs.
Sky Ute Casino operated by the Southern Ute in Ignacio is subject to annual renewal fees of $1,000. A significant portion of the funds the tribes generate from Class III gambling goes toward various tribal programs, the welfare of the tribes’ members, charities, and local economic development.
Social Responsibility Policies
Section 44-30-809 of the Colorado Limited Gaming Act prohibits residents under the age of 21 from participating in casino gambling. Underage individuals cannot loiter on the gaming floor or sit at the tables without playing, either. Employees whose job is to conduct gambling games should also meet the minimum legal age requirement.
Sports Betting Regulation in Colorado
Sports betting became legal in the Centennial State in November 2019 after local voters approved Proposition DD with a small margin of around 22,000 people. Proposition DD authorized sports wagering and enabled landbased casinos within the state to take bets legally under licensure.
2In-Person and Remote Wagering
A referendum was necessary since local statutes require residents to vote for the approval of new taxes. The residents of the cities of Central, Cripple Creek, and Black Hawk had to vote separately to authorize the provision of in-person wagering within landbased casinos. Wagering is also available via websites and mobile apps. The Southern Ute can offer sports betting as well under the terms of their gaming compact with the state government. The tribe launched its sportsbook in the summer of 2020.
3Allowed Bet Types
As for the allowed bet types, the licensed sportsbooks can offer action on local and international professional events, including motor sports. Betting on collegiate games is also possible as long as the wagers do not involve the individual performance of the college athletes. Proposition DD disallows wagering on high-school events and unauthorized daily fantasy sports.
4No Restrictions on Single Bets
Unlike casinos where single bets are restricted to $100, sportsbooks are able to set their own wagering limits. Opponents of Proposition DD highlighted this fact, arguing punters can lose huge amounts with a single tap on a touchscreen in the absence of such restrictions. The Division of Gaming and the Limited Gaming Control Commission have the responsibility of licensing and overseeing the sports wagering operations.
5Biennial Fees and Tax Rates
The licensees must pay biennial license fees of up to $125,000 under Section 44-30-1505 (4) of the Limited Gaming Act. Betting operations also pay 10% taxes on their revenue. The tax money is used for the funding of various gambling addiction services and the protection of Colorado’s limited water resources.
Around 6% of the taxes may go toward the Hold Harmless Fund which provides financial support for the counties hosting the sportsbooks. To receive money, the host cities must provide proof their casinos have suffered a decrease in revenue as a result of the sports betting legalization. No integrity fees for the leagues are imposed on the operators.
Legal Status of Online Casino Gaming
When it comes to remote gambling, only online sports betting and daily fantasy sports enjoy legal status in the Centennial State. Daily fantasy sports received authorization after House Bill 20-1286 passed into law as the Fantasy Contests Act. Operators who provide such contests must register with the Colorado Division of Gaming which oversees these activities.
Smaller operators with less than 7,500 active registrants are subject to yearly audits conducted by third-party testing agencies. All licensees must verify their customers’ identities to ensure they meet the minimum age requirement. Only players aged 18 or older can engage in daily fantasy sports.
Customers also have the option to exclude themselves from participation in the contests. Additionally, the operators must store players’ funds in segregated accounts. A registered player can have no more than one account with each licensed operator. Operators who fail to comply with the regulatory requirements risk civil fines of up to $1,000 per violation under Section 44-30-1611 of the Fantasy Contests Act.
Online casino games are not yet legal in Colorado but this does not stop Coloradans from playing at offshore websites that carry licenses from other jurisdictions. Such operators are outside the scope of the Colorado Division of Gaming and the Limited Gaming Control Commission. Players who gamble with them often lack consumer protections and have no legal recourse if they fall prey to abuse or fraud.
Colorado Gambling Regulators
The Colorado Division of Gaming (CDG) and the Colorado Limited Gaming Control Commission (CLGCC) are tasked with the oversight of the local gambling industry. The two agencies enforce the implementation of state gambling laws, issue licenses, collect, and distribute tax funds. The two work together to preserve the integrity and honesty of the local gaming sector. The CLGCC consists of three commissioners, a chair, and a vice-chair, all of whom have been appointed by the Colorado Governor. It has authority over all limited gambling licensees operating within the state.
The local law requires the commissioners to come from different professional and political backgrounds. Up to three of the five members can belong to the same political party. The CLGCC members can serve no more than two four-year terms. Commission meetings are due each month so that CLGCC members can discuss expenditures, gaming revenue, and taxes, among other subjects.
The Division of Gaming oversees registered daily fantasy sports operators in the state. Operating as part of the Colorado Department of Revenue, it transferred some of its regulatory responsibilities to the CLGCC after the passage of the 1991 Limited Gaming Act. The Division maintains a registry of all licensed DFS operators it supervises. At the time of writing, there are 35 licensees on the list, including major names like DraftKings, FanDuel, and RealTime Fantasy.
Despite the low limits on single bets and the other restrictions, Colorado is home to a mature gambling market that generated over $1.23 billion of gross revenue in 2021 from commercial casinos alone. Gambling operations have a massive impact on the local economy, with sportsbooks bringing in more than $6.6 million to the state coffers within their first year of operation. Full-fledged online gaming is not yet legal in the Centennial State but this does little to prevent Coloradans from playing at offshore online casinos.