Overview:
"Sports betting is a growing industry in Colorado," according to the Department of Revenue. We break down what its revenue funds.
It’s a chilly day at Coors Field as the Colorado Rockies face off against the San Diego Padres. However, Denver native Austin Spaulding’s focus isn’t on the game in front of him, but on the one he’s betting on via DraftKings.
While the Rockies game rages on, he pulls out his phone to see if his three-leg parlay hit on the Chiefs vs. Chargers game in Brazil. His $20 bet could win him $130, a pretty nice profit!
Unfortunately, while looking at his phone, he just missed Hunter Goodwin’s double to right, allowing Mickey Moniak to run home in the game right in front of him.
“Honestly, I’m impressed that we were up in the seventh inning anyway, but it was a really cool hit and I can’t believe I got distracted for a bet I didn’t even win,” Spaulding said. “Damn Chiefs let me down.”
As a self-proclaimed casual bettor, Spaulding knows when to draw the line, but many others might not.
“I think there is a large population of people that sports bet, that do it irresponsibly,” Spaulding said. “Especially working at a college bar, I hear a lot of kids putting all their money on stuff.”
A casual bet with real consequences
But what if this irresponsibility is doing something responsible in Colorado? Spaulding said he didn’t know that his betting is funding water conservation efforts, protecting streams and lakes, flood mitigation, drought plans, water supply planning and water project financing.
Sports betting became legal in May 2020 in Colorado and since then has become a steadily growing industry, with revenue increasing 5% from February 2024 to July 2024. The Colorado Department of Revenue and the Colorado Water Conservation Board have brought in over $140 million in sports bettor tax revenue since legalization.
“I didn’t know that’s what the money went to,” Spaulding admitted. “But if you think about it, it’s definitely pretty cool that it’s actually going to something helpful.”
Sports betting is a year-round, consumer-reliant industry that doesn’t rely on federal funding or have any strings attached. Derek Kuhn is the Communication Director for the Colorado Department of Revenue and has seen substantial growth in revenue from the tax since 2020. He said traditional casino games are being outpaced by sports betting, with July 2024 to Jan. 2025 being the most substantial growth.
“Sports betting is a growing industry in Colorado, and the numbers reflect that. Tables make up a much smaller share of bets in Colorado,” Kuhn said. “Of this $14 million, slots contributed most of the tax revenue. During the same period, sports betting raised over $21 million in tax revenue.”
Colorado is currently in the midst of fantasy football season, in which people wager based on their players’ performance, resulting in increased betting activity throughout the state. They include buy-ins, cash prizes, and side wagers on sites like ESPN, DraftKings and FanDuel that generate a lot of money for the state.
These platforms blur the line between casual players and gamblers. Participation is frequently regarded as a ‘gateway’ to regular betting, contributing to the all-time high in sports gaming revenue.
“And yeah, it’s not good for mental health. It’s not good financially, obviously. I see it being very detrimental overall,” Spaulding said. “I see it as a bad thing.”
Denver projects get a boost
Good or bad for gamblers, the boost in funding from sports betting tax revenue has helped launch a major river habitat restoration project on the South Platte River, which cuts directly through Denver, flowing alongside city neighborhoods and parks. Not only does the river provide scenic views, but it is also part of Denver’s stormwater management system, which controls flooding in areas of high population such as LoDo and Sun Valley.
These restorations also assist in riverbank stabilization, native fish population maintenance and improving water quality downstream, which is used for Denver’s municipal use. For residents, it means cleaner water, more green spaces and significant improvements to nearby communities.
Another growing area of town is Cherry Creek Park. The reservoir has a mile-long stretch that has been undergoing restoration funded by the sports betting tax revenue. Denver’s flood control system is overwhelmed by spring runoff and large storms, so this project is designed to help in suburban areas such as Glendale and other neighborhoods along the Cherry Creek corridor.
As one of the most visited Denver areas, used for swimming, paddleboarding and hiking, its conservation is vital to water and habitat safety, despite the challenges. Jeannine Shaw is the Grants Section Chief for the Colorado Water Conservation Board, the top water policy agency, and is in charge of allocating funds and addressing the state’s water-related concerns.
“The most critical, big-picture water challenge in Colorado is the fact that we are working with a very limited supply,” Shaw said. “Water scarcity and drought is increasing as our climate warms and population increases—water touches all parts of our state, from the agriculture that feeds us to the ecosystems we rely on, so as an agency, we are focused on supporting innovative solutions to ensure every community in the state can have the water resources they need.”
In 2019, Colorado voters agreed on Proposition DD, which legalized sports betting and directed the majority of revenue to the Colorado Water Plan to address water scarcity, infrastructure and the growing demand of Denver’s streams and reservoirs that power the state’s ecosystems. The 10% tax was imposed on sports betting proceeds, and the Water Plan was capped at $29 million. Any excess was required to be refunded to sports betting operators and casinos.
In November 2024, 76.4 % of voters passed Proposition JJ, which allowed the state to keep all tax revenue and get rid of the cap. This leaves more money to go into local water conservation and protection projects, along with infrastructure improvement, habitat protection and streamlining the funding process.
“Since 2018, the CWCB has awarded over $100M in Water Plan Grants,” Shaw said. “Water Plan Grants support the four key action areas of the 2023 Colorado Water Plan: vibrant communities, robust agriculture, thriving watersheds, and resilient planning.”
They have received $1.4 million in funding from Prop JJ for grantmaking in the fiscal year 25-26. The Office of State Planning and Budget’s forecast estimates about $7.3 million more from Prop JJ in its second year and $8.97 million in the third.
Different sport seasons and public interest leave the month-to-month revenue on a constant ebb and flow. January 2025 broke the record with $60,909,818.74 in gross gaming revenue (total wagers minus payouts), according to the Department of Revenue’s Monthly Statistic Report.
Risk and responsibility
Most of the taxed funds are put directly into the Water Plan Implementation Fund and used to build, restore and educate the public about water use. Between May 2020 and December 2024, the state collected over $70 million in tax revenue and drastically helped fund projects in areas where snowmelt and streamflow are unpredictable, such as the Upper Colorado River Basin to the west.
“Another example is the Rye Resurgence Project, in Colorado’s distilling and baking communities. Local farmers grow winter cover crops, including 30 acres of distilling or baking rye that will be marketed and sold at a premium price,” Shaw said. “Success of this project will be the establishment of a San Luis Valley rye market as one more option for farmers seeking to reduce groundwater water use, prevent erosion and improve soil health, all while making a profit.”
The Water For Colorado Coalition notes that 93% of the taxes are put into water conservation efforts like these, while the remaining 7% goes into gambling addiction resources. Nearly $3 million in grants went to promoting responsible gaming in Colorado in 2024.
“This includes working with operators to ensure they have responsible gaming plans in place to identify problem gamblers and offer safeguards such as limit setting with deposits, withdrawals and time—opting out of advertising, intervention and cooling off or time-out periods,” Kuhn said. The ultimate goal is to have a safe and fair sports betting industry in Colorado.
“We launched a new website, BetSmart.Colorado.gov, to promote responsible gaming in February,” Kuhn said. “I also dispute the claim that most sports bettors in Colorado are addicts. With over 4 million state residents eligible to place sports bets, fewer than 1,000 Coloradans have signed up to be voluntarily excluded from gambling.”
From the South Platte to Cherry Creek Reservoir, visible improvements are happening because of the increased tax revenue from sports betting, but Shaw says the deeper challenge is less visible: changing how people value water.
“With the cost of new water supply increasing, the fact that trans-basin diversions are much more difficult and expensive to build, and climate change affecting both supply and demand, water conservation should be front and center in most water resources portfolios,” Shaw said. “The thing about implementing water conservation programs is that it is difficult to change human behavior.”
For now, the biggest gamble isn’t on the field but on how Coloradans manage their most limited resource and sports betting taxes are helping the state accomplish that.
