Gambling, in general, has been a very controversial topic worldwide for decades. The necessary steps toward legalization have taken time. Let’s remember that strict gambling laws prohibited most forms of sports wagering for a long time. This status changed only after the Professional and Amateur Sports Protection Act (PASPA) of 1992 fell. Exploring the historical events that led to the legalization of sports wagering in the Centennial State is fascinating. It gives a good hint about the popularity of the activity across this market and explains how the best Colorado sportsbooks managed to operate legally.
Early gambling landscape (1980s and early 1990s)
In 1980, Coloradans voted in favor of legalizing the Colorado Lottery. It became, along with pari-mutuel horse racing, the only legal form of wagering in the state. A decade later, casino-style gaming was introduced through the Limited Gaming Act of 1991, which allowed licensed casinos to operate in the historic mountain towns of Black Hawk, Central City, and Cripple Creek. These casinos, however, were limited in scope. Only certain table games and slot machines were allowed.
The PASPA era and the 2018 turning point
From 1992 to 2018, sports betting was effectively banned nationwide under the Professional and Amateur Sports Protection Act (PASPA), with only a few states, like Nevada, being grandfathered in. Colorado, like most others, did not allow legal sports betting during this time. However, that changed dramatically on May 14, 2018, when the US Supreme Court struck down PASPA, giving individual states the power to legalize and regulate sports wagering.
This decision did not automatically legalize sports betting in Colorado. Still, it opened the door for action by the state’s legislature and paved the way for future Colorado online sportsbooks to emerge.
Legislative Action: House Bill 19-1327 (2019)
A year after the PASPA repeal, Colorado lawmakers drafted House Bill 19-1327, which proposed legalizing and regulating sports gambling in the state. The bill outlined a structure for retail and online sports betting to be regulated by the Colorado Division of Gaming. It also proposed a 10% tax on the net proceeds of sports betting operations, with the tax revenue earmarked for the Colorado Water Plan, environmental conservation, and support programs for gambling addiction.
Since the state’s constitution requires voter approval for any new taxes, HB 19-1327 was tied to a referendum called Proposition DD.
Voter approval: proposition DD (2019)
Proposition DD appeared on November 5, 2019, ballot and narrowly passed by a margin of 50.7% to 49.3%. This outcome officially legalized Colorado sports betting, making it one of the first states to allow both in-person and online/mobile wagering from the market launch. The vote demonstrated cautious but growing support among Coloradans for expanding gambling options, provided the funds were used responsibly.
Market Launch (2020)
Despite the global COVID-19 pandemic, Colorado launched its legal sports betting market on May 1, 2020, with four online sportsbooks going live on the first day: BetMGM, BetRivers, DraftKings, and FanDuel. The launch was considered smooth, thanks to clear regulations and a competitive licensing process.
From the beginning, Colorado adopted a free-market model, allowing every casino to partner with one online sportsbook. It created space for dozens of operators to enter the market, spurring innovation, competition, and consumer choice.
Growth and expansion (2020-onwards)
Since its launch, the state’s sports betting industry has experienced significant growth. Monthly handle regularly exceeds $500 million, and the number of licensed bookmakers has surpassed 30 brands. Colorado sportsbook operators offer wagers on a wide range of sports, including professional leagues, college games (excluding in-state college prop bets), and even eSports.
In 2022 and 2023, the state made minor regulatory adjustments, improving geolocation standards, enhancing responsible gambling protocols, and streamlining licensing for new entrants. Currently, Colorado is a vibrant and well-regulated sports betting market, offering legal, safe, and accessible options for casual bettors and high-stakes players.
