When legal sports betting comes to Colorado on May 1, the landscape will look vastly different than fans and regulators anticipated.
The 146th Kentucky Derby, originally slated for the same weekend, would have been one of the first events available for wagering. Major League Baseball was supposed to be in full swing. And both National Basketball Association and National Hockey League playoffs would have been heating up.
Instead, the coronavirus pandemic sidelined most major events indefinitely. Though no one is certain when sports will return — or how they might be different — the Colorado Division of Gaming isn’t waiting.
Regulators are moving ahead as planned, meaning fans will soon be able to wager on whatever limited offerings are available. And because casinos are not permitted to open by then under Gov. Jared Polis’ “safer at home” rules, the industry will debut entirely online with more than a dozen mobile and web-based apps.
“Even though it will be a slow time for sports, we are still planning on May 1,” said Dan Hartman, director of the Division of Gaming. “We’re really hoping to get through this and see the resurgence of the industry.”
Colorado’s competitive edge
Colorado sports betting is poised to generate $6 billion in annual wagers and an estimated $400 million in revenue once the industry matures, according to Dustin Gouker, chief analyst for PlayColorado.com. Factor in a 10% tax on sports betting revenue and the state could bring in $40 million each year to benefit initiatives like the Colorado Water Plan.
That’s if Colorado tracks with trends in similarly established markets in Europe and the United States, which mature after four or five years, Gouker said. Coronavirus will slow that trajectory, but he believes the state will blossom into a success story for legal sports gambling because of the business-friendly tax rate and other regulations that make the industry ripe for competition.
According to state statute, sportsbook operators must partner with one of Colorado’s 35 local casinos to enter the market.
“That allows for just about the most open market we’ve seen in the United States,” Gouker said. “Anybody who wants to be a major player in the U.S. sports betting markets will be in Colorado. That means a ton of competition and that really should be good for consumers.”
Fans will have their pick of 17 digital sportsbooks currently licensed to operate in the state, including FanDuel, DraftKings and BetRivers, though few plan to go live on May 1.
For several providers, Colorado is the only place they’ll be available outside of their home market. The iconic SuperBook and NFL SuperContest, for example, are expanding beyond Nevada for the first time with an “as close as you can get to Vegas” retail sportsbook at the Lodge Casino in Black Hawk, said Jay Kornegay, executive vice president of race and sports operations. The mobile app will launch closer to football season, he added.
London-based betting app SBK will make its stateside debut in Colorado in late-May, thanks to a partnership with Full House Resorts, which owns Bronco Billy’s Casino in Cripple Creek and four others throughout the U.S.
“It’s a nice, medium-sized state,” said Jason Trost, founder and CEO of parent company Smarkets. “The regulation is very friendly.”
Digital provider Circa Sports was also enticed by the favorable business laws, such as remote signup. In its home state of Nevada, fans are required to visit a casino in-person to open a mobile betting account. That’s not so in the Centennial State, the company’s first expansion market since coming online in June 2019.
“In Colorado, you can sit on your couch, you can register for an account and fund your account all within 10 minutes and then start betting,” said Mike Van Ermen, strategic operations manager.
A softer than expected launch
May, June and July are typically the slowest months for sports betting, even in a world unravaged by the coronavirus, said many operators. Launching in the spring, however, enables sportsbooks to acquire new customers and work out any kinks before football season, the undisputed high roller of sports betting.
Opening May 1 isn’t an option for physical sportsbooks, which must be located inside casinos in Black Hawk, Central City or Cripple Creek. Polis closed casinos in mid-March to mitigate the spread of the coronavirus and they are not permitted to reopen under the statewide “safer at home” order that takes effect on Monday, said Shelby Wieman, spokeswoman for the governor’s office.
That leaves at least 10 retail operators in limbo without a definitive opening date. But some, like Saratoga Casino in Black Hawk, are still preparing.
Marcus Rohrbaugh, director of gaming operations, said construction is underway to convert an elevated area of the gaming floor into an experiential sportsbook with TVs displaying games and betting odds, and digital kiosks where gamblers can place bets. It’s slow going — he is working virtually with UK-based partner Betfred to design and build out the space — but Rohrbaugh expects it will be ready by the end of May if casinos are allowed to open.
Monarch Casino in Black Hawk also plans to open a retail sportsbook as part of a $440 million renovation and launch a proprietary app, but neither will likely happen immediately. At its sister casino in Reno, Nevada,, sports betting accounts for 1% to 2% of gaming revenue under normal circumstances, said David Farahi, chief operating officer. Until major league sports come back online, he doesn’t expect betting will gain much traction.
Launching the sports betting industry entirely online isn’t inconceivable. In New Jersey and Pennsylvania, online betting accounts for more than 80% of all wagers, said Gouker. That’s only expected to increase.
DraftKings, one of the biggest operators in the U.S., is bringing both retail and digital sportsbooks to Colorado. Though the bulk of the company’s revenue comes from its online product, which will be available May 1, its retail location inside Black Hawk’s Golden Mardi Gras Casino will help DraftKings reach a different demographic.
“Certain consumers prefer to bet in cash. They like to go to a physical location and hold a ticket that represents their bet,” said Matt Kalish, DraftKings co-founder and president of the North American branch. “That’s the traditional model you’ll see in Las Vegas or some of the older markets that offer sport betting. There’s still a pretty big audience that prefers to bet that way.”
Still, the COVID-19 crisis is likely to accelerate growth in mobile gambling, Kalish added. Mike Raffensperger, chief marketing officer of FanDuel Group, which operates the hugely popular FanDuel app, agrees. The more comfortable Coloradans become entertaining themselves at home, the more he expects they will build lasting habits with online platforms.
“You’ll see an adoption of people who maybe historically have gone to racetracks, casinos, physical sportsbooks,” Raffensperger said. “I expect some of that to retain even after we overcome this moment of difficulty in the country and the world gets back to normal.”
On your mark, get set, bet
The Denver Post has confirmed four digital sportsbooks — DraftKings, FanDuel, BetMGM and BetRivers — will be available to Colorado residents starting May 1. Others, including PointsBet, SBK, FOX Bet and BetWildwood, expect to go live shortly thereafter.
The coronavirus pandemic forced operators and leagues to get creative with their offerings to fill the void of major sports. NASCAR, for example, recently began hosting virtual races, where professional drivers do laps around a video game track. The contest was an unexpected hit for DraftKings, which received “tens of thousands of entrants” in one of its pools, Kalish said.
Other unusual offerings like the NBA’s HORSE tournament, lesser-known soccer leagues, and sumo wrestling have drawn interest from bettors, as have free-to-play games that let gamblers wager on the weather, politics and television shows. The NFL draft also proved to be one of the hottest events of the year, said Patrick Eichner, director of communications at PointsBet.
“Overall handle (was) almost three times larger than last year, making it on par with the betting of a typical Monday Night Football or Thursday Night Football matchup,” he said.
Uncertainty still looms over the future of sports betting, even as fans and operators eagerly await the return of baseball, basketball and hockey, and the kickoff to football season. The coronavirus all but guaranteed these sports are not likely to happen under normal circumstances.
Still, most operators don’t believe the current situation will hinder the sports betting industry long-term.
“If there’s a scenario where baseball, NBA playoffs, NHL playoffs, football season are all starting around the same time, that’s like a golden era of being a sports fan and being a sports bettor,” said Gouker at PlayColorado.com. “It could happen in the snap of a finger… and you see things take off really, really quickly.”
