From Westword (Connor McCormick-Cavanaugh):
With bipartisan support, the bill soon made it through the full House and Senate; Governor Jared Polis signed it at the end of May. Now voters will have the final say on Proposition DD in November — not because the legislature thinks that the people should have the right to decide whether sports betting is allowed in Colorado, but because the Taxpayer Bill of Rights, the 1992 voter-approved constitutional amendment known as TABOR, requires that any proposed new taxes be authorized by the people, and there will be a tax on these bets.
In this case, though, the tax won’t be paid by all the people of Colorado. Instead, it will come from a 10 percent tax on the revenues generated by sports bettors at casinos and through mobile-app companies authorized to allow such bets. But the vast majority of the tax money collected will go to the state’s water plan.
If DD passes, that plan will be one of the big winners in the push for legalized sports betting…
“You can’t send a measure to voters that is just a blank check to government,” says Brian Jackson of the Environmental Defense Fund. “It has got to go somewhere.”
In August 2018, Jackson met with Garnett at a cafe near the Capitol, where he made his pitch that most of the tax money should be allocated to the state’s water plan, which had gone largely unfunded since it was completed by the Colorado Water Conservation Board and approved by Governor John Hickenlooper in November 2015.
“Garnett was looking for something that had bipartisan support, something that had statewide appeal, something that needed money. And we fit all those,” Jackson recalls.
Early in Hickenlooper’s tenure, his administration had recognized that if the state didn’t change its approach to water, it would be looking at a shortage in the future; the Colorado Water Plan was created to ensure that the state would have water for decades to come. It focuses on river health, drinking water, agriculture and recreation, and is designed to both keep up with Colorado’s population boom and balance the needs of the more heavily populated Front Range and Western Slope.
The plan also created a mechanism for funding water projects. For example, if municipalities along the Front Range are considering a water-reuse project, they can apply for funding from the Colorado Water Conservation Board, explains Jackson: “The more water you reuse, the less you pull from the Western Slope or from other river sources. But it costs money. This is the type of activity that could benefit from dedicated resources.”
The kind of dedicated resources that would come from a sports-betting tax.
While the state has put some money into the plan, Jackson estimates that it would need something in the range of $100 million a year to make a true, long-lasting impact. Right now, he says, “it changes year to year. In the last four years, it’s been as low as $5 million and as high as $15 million.” He thinks that sports betting could pour another $5 million to $15 million into the plan every year to start, and maybe more once the market matures.
Garnett recognized that water was a concern for both sides of the legislature, and making the Colorado Water Plan the beneficiary of much of the sports-betting tax could be a winning proposition for Democrats and Republicans alike.
“We actually know where the revenue is going,” points out Representative Patrick Neville, a Republican who sponsored the bill with Garnett. “This can’t be a honey pot for politicians to steal money from.”
The bill’s sponsors cautioned lawmakers that sports betting wouldn’t be the entire solution for the state’s water woes, but every drop helps.
“It’s not sufficient to satisfy all of the water demand and projects across the state,” says Gaspar Perricone, a lobbyist for Freestone Strategies who worked on the bill. “It’s a good down payment.”