Benefitting the county, schools, and much more
By Don Ireland
This year marks the 30th anniversary of casinos opening in the former little mining towns of Black Hawk, Central City and Cripple Creek, Colorado. In those early years, smoking was allowed inside the casinos and bets were limited to $5 per wager. There were no 24-hour casinos and sports bets weren’t a thing, mostly because no one owned a smartphone or was using an app in 1991.
Fast-forward to 2021.
Since the inception of gaming in Colorado, the state has received $18 billion from casino revenues and $315 million in historic preservation funding as the result of monies generated from the three communities. Other things have changed: many casinos operate 24/7 and permitted wagers now can exceed $1,000. Sports betting, mostly conducted online via apps affiliated with casinos, began in the spring of 2020. It’s now taboo to smoke inside a casino, although the Wild Card in Black Hawk allows it, claiming it is a cigar bar.
Without a doubt, the biggest change in the evolution has seen the City of Black Hawk stepping forward to become the dominant force in Colorado gaming. While Cripple Creek and Central City have seen declines in the number of operating casinos over the past two decades, Black Hawk continues to forge onward.
Black Hawk’s critics frequently claim that the city doesn’t have the small-town, old-fashioned appearance that Central City and Cripple Creek’s main streets offer with their casinos. However, those in the Black Hawk camp counter that its larger casino buildings – which have expanded to offer guests spa treatments, swimming pools, luxury suites, and superior dining options – are more compatible to the preferences of their visitors. They also cite that Black Hawk’s ongoing master “renaissance” plan does a better job of showcasing the historic buildings and times dating back to the late 1800s, during the heyday of Colorado’s gold rush.
No matter which camp you are in, there’s no arguing that Black Hawk’s evolution has enabled the city to define the shape of Colorado gaming. The choices and decisions made by Black Hawk officials over the past three decades don’t just merely impact the small city of around 100 residents. Black Hawk’s influence and wealth also has grown to play significant financial roles for the state, Gilpin County, and the local school district.
In 2019, Colorado casinos generated $833,668,376 in revenues after accounting for adjusted gross proceeds (AGP). The tax collected on that amount was $123,326,340, according to state gaming figures. (Because 2020’s pandemic negatively impacted businesses throughout the state and 2021 figures won’t be available until next year, this analysis report relies heavily on the numbers from most recent “typical” year – 2019.)
Black Hawk’s 2019 impact was indisputable. The city’s 15 casinos generated $613,419,924 of the state’s $833,668,376 in gaming revenues, about 73.6 percent. Cripple Creek garnered 16.8% ($140,570,139 of the state gaming revenues, generating $12,450,258 in taxes) and Central City 8.9% ($79,678,312 in revenues, creating $8,994,705 in taxes). To look at the figures from another perspective: Black Hawk’s gaming revenue was more than eight times the size of Central City’s total and more than four times that of Cripple Creek in Teller County.
Not only has Black Hawk become the main player in Colorado gaming, it is evolving to attract more adult tourists to the city. The city’s renaissance plan, created several years ago, marched several large steps forward in 2021. They include a blocks-long, historic showcase along Gregory Street, an artisan beverage district – adjoining a forthcoming, $50 million whiskey resort – more than 700 acres of hiking and mountain biking trails and an Airstream trailer outdoor lodging site.
Although Black Hawk is considered the 800-pound gorilla of Colorado gaming, Mayor David Spellman understands the significant impact his city has on the state and two other local governing jurisdictions – Gilpin County and the Gilpin County RE-1 School District. About half of Gilpin County’s estimated 6,200 residents are employed in the gaming and hospitality industries, meaning the success of their livelihood depends on the success of Black Hawk developing ways to continue to attract people to its adult entertainment offerings and consider the city a resort destination.
“Black Hawk is not only the “show horse” for Gilpin County, but it is also the “workhorse,” Black Hawk Mayor David Spellman said. “As the City achieves its goal of becoming a resort destination, we will increase the number of visitors coming here and the duration of their stays. Black Hawk becoming a resort destination will generate additional revenue for the County and the School District through direct gaming taxes, property taxes, and sales tax. The County and the School District will become the direct beneficiaries of all the heavy lifting that Black Hawk has done and will continue to do in the future.”
Gilpin County impact
Black Hawk not only generates gaming-revenue funding for Gilpin County, it also accounts for the largest part of the county’s commercial property tax base.
Gilpin County’s revenues for 2019 were estimated at $23,661,407, of which 55.08% ($13,032,211) was created as the result of Black Hawk. That includes 66.29% of county-wide assessed property values from Black Hawk gaming venues. Black Hawk also generated 92.06% of gaming income received by Gilpin County. Central City, which generated 4.53% of Gilpin County’s revenues, provided 4.41% of county-wide assessment values from gaming properties and 7.94% of county gaming taxes paid by the community’s six casinos.
“Black Hawk is very important to us,” said Gilpin County Commissioner Web Sill, who moved to Gilpin 38 years ago – before gaming arrived. “We’re massively interested in the success of Black Hawk and Central City, too.”
Gilpin Schools impact
Black Hawk is the key budget player for Gilpin County RE-1 Schools. The school district’s assessed property value for the county totaled $381,507,747, of which 81.62% is from gaming-based properties. Black Hawk’s assessed value for its gaming district properties is $291,943,727 while Central City’s is $19,436,737.
According to a 2019 audit, Black Hawk generated 42.66% of Gilpin School’s income and Central City contributed 1.79%.
Sales tax helps schools
In 2009, Black Hawk levied a sales tax. The 8.9% tax rate is divided and dispersed three ways: 4.5% to the City of Black Hawk, 2.9% for the state and 1.5% for the Gilpin County School District.
While 1.5 percent may seem small, the actual dollar amount generated by Black Hawk’s Educational Enhancement Tax is not. In 2019, Black Hawk’s sales tax resulted generated $1,434,788 for the local school district. Between January 2009 and May 2021, the school district has received $10,522,359 as its share of the sales tax income.
Gilpin County School Board President Steve Boulter said, “I can’t say enough about the importance Black Hawk plays. The sales tax has enabled us to remain competitive and offer students quality education.” Boulter noted that the total financial impact from Black Hawk on the district has helped keep the property-tax millage rate much lower than those charged by nearby counties.
“First and foremost,” said Spellman, “the reasoning behind the Educational Enhancement Tax was to ensure a reasonable and responsible property tax rate by capping the Gilpin RE-1 School District mill levy at eight mills. The Educational Enhancement Tax benefits the residents and businesses of Black Hawk by keeping their overall property tax rates low.
“The secondary benefit was to help ensure a quality education for the students, but this was outside the control of the City and was dependent on the School Board. To date, the School Board has done an excellent job keeping up their end of the agreement, with the students receiving solid educational opportunities. Although Black Hawk was under no obligation to commit any of its sales tax to the School District, it made good business sense to work with the school district and, by doing so, hopefully, improve the lives of the students.”
Black Hawk not only contributes significantly to the incomes of the county government and school district, it also personally helps graduating Gilpin County High School seniors. Each year, Black Hawk grants a $6,000 scholarship to any school district graduate who goes to college. The program is for any Gilpin County High School senior – they do not have to be a Black Hawk resident.
Since 1994, Black Hawk has paid out $893,375 in scholarships to Gilpin County High School graduates. This year, there were 24 seniors in the graduating class.
“The Black Hawk Scholarship Program was another way for the City to help enhance the educational opportunities at the school and benefit the students directly,” according to the mayor. “In addition, both the Black Hawk Scholarship Program and the Educational Enhancement Tax helped make the Gilpin RE-1 School District attractive for open enrollment and students from outside the District.”
The coronavirus pandemic caused worldwide upheaval. As part of stay-at-home mandates from Colorado, casinos in Black Hawk, Central City and Cripple Creek were forced to close for several months. As some restrictions eased in January 2021, casinos were permitted to reopen but many slot machines remained unplugged due to social-distancing regulations. According to numerous national and state media reports, the pandemic-related closures resulted in Gilpin County being listed as one of the hardest-hit counties in the nation for unemployment because its tourism business was shuttered. Without casinos, the shutdown created financial havoc for the local budgets of Gilpin County, Gilpin County School District, Black Hawk and Central City.
For example, Gilpin County schools received $1,434,788 in 2019 as its share of the sales tax in Black Hawk. The figure plummeted to $823,054 in 2020 after casinos were closed in the spring. When the casinos reopened earlier this year, the school district revenue began to bounce back. From January through May 2021, the Black Hawk sales tax revenue heading to the schools was listed at $476,183, before the annual surge of summer tourism season got under way.
The City of Black Hawk also had to cut its budget and reduce its staff in 2020. In 2019, Black Hawk’s budget included $30,057,083 in revenues. This year, the budget is substantially smaller, $22,047,240.
Spellman forecasts better times ahead. “Black Hawk is already making an impressive rebound, with June of 2021 gaming revenue exceeding June of 2019 by 35%,” he said. “This increase is attributable to more of the Monarch Resort Spa being open and the benefits of Amendment 77. With what we have planned in Black Hawk, there is more blue sky in front of us than dark, gloomy skies.”