$1 million in new gaming fees will be decided by Black Hawk voters in November
By Don Ireland
This fall, Black Hawk voters will decide if the city should grab a slice of the sports-betting pie. If they approve, the city will gobble up an estimated $1,050,000 in new taxes from sports betting and other types of gaming that were approved by Colorado voters two years ago. Sports betting has proven to be successful in Colorado. Last year – the first year of legalized sports wagering – Colorado residents placed $2.3 billion in wagers, throwing down cash to bet on football, basketball, hockey, baseball and many other sports.
According to the State’s Department of Revenue, which includes gaming, gross revenues from that $2.3 billion in sports bets totaled an estimated $148,103,448, with net proceeds coming in at $65,962,159. Sports betting operators pay a 10 percent tax on house wins. The majority of the final state revenues from sports bets – estimated at around $4 million after the state’s administrative expenses are deducted – will go toward Colorado’s water plan, as outlined in a statewide ballot question approved two years ago. Actual figures will be released by the state in the near future following an audit.
Despite billions being wagered on sports, the City of Black Hawk didn’t earn a penny from it.
Nor did the city benefit from other new games of chance approved in Amendment 77 by state voters, a measure that allowed casinos to offer its patrons types of “stadium games” played by groups of people. Those new offerings include keno, Pai Gow, baccarat and different varieties of poker, to name a few. As a result, Black Hawk was only able to collect device fees from “traditional” sources, slot machines, blackjack, video poker, poker, roulette and craps.
At last week’s meeting, Black Hawk City Council approved two questions to be placed on the Nov. 2 ballot. One measure would ask Black Hawk voters to allow the city to collect taxes on the new stadium-style games now offered in many of the community’s 15 casinos. The other would establish an annual device fee on machines and kiosks used for sports betting.
Black Hawk estimates its community of around 100 residents includes roughly 86 voters. As a result, a “yes” vote on both questions would need to be approved by 44 citizens for them to pass.
If that happens, Black Hawk’s stands to collect $1,050,000 in new revenues. Taxes on sports-related betting devices are estimated to bring the city $630,000 and revenue for the stadium-style games could net another $420,000.
Black Hawk Manager Stephen Cole said local voter approval of the ballot questions would enable the city to close the loophole that was created when the state’s citizens voted to expand the additional forms of wagering. However, local voter approval is needed to authorize the city to close that loophole, enabling the city to collect fees on those newer types of wagers.
In a related move last week, council approved having the ballot questions placed on the November ballot and pay the related costs associated with it. According to the approved ordinance, Black Hawk will spend $273.48 – or $3.18 per registered Black Hawk voter – in printing and related costs to have the issue placed on the local ballot.
The City of Black Hawk has three major revenue sources: gaming tax distribution from the state, device fees, and its local sales tax. Gaming tax distribution from Colorado and device fees accounted for 72.30% of Black Hawk’s general fund revenue in 2019. Sales tax, plus use and lodging tax, contributed another 20.46% to the budget that year.
In 2019, Black Hawk collected $8,007,888 in device fees. With approval from Black Hawk voters this year, that figure would increase by an estimated $1,050,000 in 2022.
According to the state, 99 percent of all sports bets placed in Colorado between May 1, 2020 and April 30, 2021 – the first year of legalized sports betting – were done via apps by residents throughout the state. However, those online apps had to be operated in association with an authorized Colorado casino. The remaining 1 percent of sports bets were placed inside a casino – considered a “retail location” by the gaming commission.
The majority of Black Hawk’s casinos, the state said, are licensed retail locations. They include the Saratoga, Monarch, Golden Mardi Gras, Ameristar, Isle of Capri, Red Dolly, Sasquatch, Lady Luck, Z Casino, The Lodge, and Wild Card. Some of the larger casinos have designated sports-betting sections. The Ameristar Casino Resort Spa has a Barstool Sportsbook for patrons who want to watch sporting events and bet on them.
Other Black Hawk casinos authorized by the state to use apps associated with sports betting are the Gilpin Casino, Bull Durham, and Golden Gulch.
The first year of legalized sports betting started during last spring’s pandemic, a time in which several sports seasons changed or were cancelled because of Covid-19 concerns. When the pandemic struck, many sports bettors looked outside the U.S, placing wagers on Korean baseball, Russian table tennis and other events because some American sporting events were initially in limbo. With most professional and college sports returning this fall throughout the country, officials speculate it is possible the increased number of events will result in more sports bets being placed.