Prop DD, Colorado Sports Betting Initiative, Garners Big Support From Thirsty Agriculture Community

Posted on: August 30, 2019, 11:30h. 

Last updated on: August 30, 2019, 12:27h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Proposition DD, Colorado’s effort to permit sports betting, will appear on ballots there this November, and the plan is already commanding support from the state’s farmers and ranchers.

Coloradans hoping to bet on the Broncos and other local teams will soon get to vote on the idea. (Image: ESPN)

However, proponents of sports wagering may not want to view Colorado’s agriculture community throwing its weight behind Prop DD as an act of altruism, because if the initiative passes, there’s something in it for them, too: water.

Policymakers in the Centennial State have pitched the sports betting ballot plan as an avenue for filling in parts of a $100 million void in the state’s water plan. There are approximately 34,000 farms and ranches across the state, which employ more than 175,000 workers and drive $40 billion in annual economic activity.

Proposition DD will contribute to the development of additional storage and improve irrigation efficiency so that the agricultural industry has the water needed to thrive in Colorado,” said Terry Fankhauser of the Colorado Cattlemen’s Association in a statement.

Even if Prop DD is approved, it will not be a cure-all for Colorado’s water needs. Based on an estimated 10 percent tax rate on sports bets, the most ambitious forecasts see sports wagering generating $20 million in annual receipts for the state.

Mechanics Of Prop DD

Because the state will tax sports bets, Prop DD amounts to a new excise, meaning voters there must sign off on it before it goes into effect, as mandated by the state’s constitution.

It is expected that voters will see the following on their ballots in November: “Shall state taxes be increased by twenty-nine million dollars annually to fund state water projects and commitments and to pay for regulation of sports betting through licensed casinos by authorizing a tax on sports betting of ten percent of net sports betting proceeds, and to impose the tax on persons licensed to conduct sports betting operations?,” according to the Secretary of State.

Currently, there is not substantial polling data on the initiative. But a June online survey of 5,000 Coloradans conducted by a gaming company indicated Prop DD, at that time, enjoyed support of just 29 percent, compared to opposition of 31.5 percent, with 39.5 percent undecided. That poll had a margin of error of 1.3 percent.

Plenty Of Critics

Prop DD has detractors, including some that assert the ballot question is vague and that it’s merely a scheme that, if approved, would open the door to more tax hikes in the name of water.

Even in liberal Colorado, where the Democrats control the governor’s mansion and both houses of the state’s legislature, some environmental groups oppose the sports betting question.

“This ‘Gambling For Dams’ bill is a climate-denying, river-destroying scheme pure and simple. To think that Colorado can dam its way out of climate change is a gamble of the highest stakes,” said Gary Wockner, director of Save the Colorado and Coloradans for Climate Justice.

Still, some gaming companies are jockeying for position ahead of the Prop DD vote, betting that Colorado will vote in favor of the measure. If the state approves sports betting, it will have some geographic advantage because, of its seven neighboring states, only New Mexico permits sports betting. None of the other six appear likely to ratify related legislation this year or in 2020.