Colorado Eyes Tax on Promo Bets to Fund Water Programs
Colorado’s lawmakers are shaking up its sports betting scene with House Bill 1311 (HB 1311), a plan to tax promotional bets offered by operators.
A New Tax on Free Bets
Introduced on March 28, 2025, the bill aims to rake in $12 million next fiscal year for water programs battling chronic drought. By closing a loophole letting operators deduct free bets from taxable revenue, HB 1311 could boost the state’s $30 million water fund by 30%.
Sponsored by Senator Dylan Roberts, Speaker Julie McCluskie, and Representative Matt Soper, the bill cleared the House Finance Committee 9-3 on April 21 and now heads to the Appropriations Committee.
If passed by the legislature, it could kick in by September 1, 2025, taxing promos.
Water Woes Drive the Push
Colorado’s facing a water crunch: drought, climate change, and a growing population are squeezing rivers dry. HB 1311’s revenue would fuel long-term water planning, irrigation upgrades, and water rights purchases.
The first 6% of betting revenue goes to the Wagering Recipients’ Hold Harmless Fund, with the rest powering the Water Plan Implementation Cash Fund for conservation. Analysts estimate $10-15 million in annual tax revenue, a solid boost for the $800 million Colorado Water Plan.
The bill builds on Colorado’s 2023 cap on free bet promotions, which didn’t tax them directly. States like Ohio and Illinois, with higher betting taxes, set a precedent, but Colorado’s 10% rate stays steady.
The Colorado Gaming Association is tracking HB 1311 but hasn’t taken a stance.
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