Colorado has introduced new regulations for sports betting, which will prohibit credit card deposits, restrict users to a maximum of six deposits every 24 hours, and ban mobile push notifications and text messages that encourage betting.
Signed into law by Governor Jared Polis, the legislation, known as SB 26-131, will come into effect on Wednesday, August 12. This law grants the Colorado Gaming Control Commission the power to impose fines of up to $25,000 for any violations.
With these changes, Colorado becomes the first state to implement a ban on marketing push notifications aimed at bettors, alongside a daily deposit cap.
This marks the first significant update to Colorado's sports betting regulations since online wagering was approved by voters in 2019, although the current law is more limited than earlier proposals.
Previous drafts attempted to outlaw prop bets and restrict sports betting advertisements from 8 a.m. to 10 p.m., as well as during live sports events. However, these provisions were discarded due to concerns about their feasibility and potential negative impact on the state's betting market.
The proposed ban on prop bets, which would have affected wagers tied to individual player performances like rebounds or touchdowns, raised alarms over possible tax revenue losses. A financial analysis indicated that a complete ban could have led to a decrease of $2.4 million in sports betting tax revenue for 2026-27, $2.6 million for 2027-28, and $2.7 million for 2028-29.
After the Senate Finance Committee eliminated this measure, the anticipated revenue drop was reduced to approximately $800,000 for 2026-27.
In the previous year, Colorado saw over $6.5 billion in wagers on various events, from table tennis to the NFL, generating nearly $44 million in sports betting tax revenue, much of which was allocated to water conservation initiatives.
Sportsbooks like DraftKings and FanDuel have reported increased revenues as prop bets and multi-leg parlays have gained popularity, although these types of bets are often more challenging for players to win.
Concerns surrounding online sports betting have centered on easy access via mobile applications, extensive advertising, the risk of addiction, and financial repercussions. A research paper from UCLA and USC highlighted that states with online sports gambling experience higher rates of financial difficulties, including personal bankruptcy filings being up to 30% more likely.
State Senator Matt Ball, D-Denver, remarked, “Pernicious algorithms and advertisements are increasingly preying on vulnerable online sports bettors,” following the bill's enactment.
He added, “Since Colorado legalized online sports betting in 2019, the rapid technological advancements in the industry have ensnared more individuals in the cycle of devastating gambling addiction.”
Additionally, the state plans to gather data and release reports in the coming year to evaluate the industry's effects on consumers.
Joshua Ewing, Executive Director of Healthier Colorado, stated, “Yesterday's bill signing is the result of months of advocacy from Coloradans who refused to accept that an industry generating billions in revenue could continue operating without basic public health guardrails.”