Colorado Sports Betting Tax Revenue Continues to Grow

The Centennial State’s sports market continues to pay off.

Colorado’s Division of Gaming released its September sports betting revenue report, which shows continued growth in tax revenue from the market. The state collected $4.7 million on a $546.8 million handle for the month. This represents a 50.35% increase from August and 29.04% compared to September 2025.

The state currently uses this tax revenue to fund water projects to help find new sources of fresh water amid the West’s extended drought.

New Rules Didn’t Lead to a Dip

September’s strong numbers are a win for Colorado lawmakers, who recently passed new rules to help combat the growth of problem gambling. Some of the most significant changes included:

• A ban on push notifications that offer promos & bonuses
• A ban on credit card deposits
• Capping deposits at six during a 24-hour period

Lawmakers stripped the original proposal of its most significant changes because they were concerned about how they would affect tax revenue from sports betting. A fiscal note projected that the remaining changes would lead to a far more manageable loss of $700,000 in annual tax revenue.

Director of Gaming Christopher Schroder shared celebrated the win in a press release announcing September’s numbers.

We are pleased to see continued growth in Colorado's sports betting market, which directly benefits vital state initiatives like our Water Plan. As the market expands, promoting responsible gaming remains a top priority. We encourage players to utilize the tools and resources available at BetSmart.Colorado.gov to ensure their play stays safe and enjoyable.

Water Projects Must Be Funded

The discussions around new regulations for Colorado’s sports betting market were a wake-up call for many lawmakers. They showed not only the devastating financial impact these changes would have, but also how crucial the water projects funded by that tax revenue are. 

As a result, the bill enacting the final changes also included language requiring Colorado to meet or exceed the tax revenue funding these projects each year. This was expected to limit lawmakers' ability to further crack down on the industry. 

However, if the success from September continues, it could lead to revisiting the debate in 2027.

Another Spike Could Be Coming

Colorado’s sports betting market may be in store for even higher growth in 2027.

The sports betting industry is currently awaiting a US Supreme Court ruling on the future of sports prediction markets. Lower court rulings have largely been against the controversial offering, forcing some prediction platforms to pause sports markets while they await a ruling from the nation’s highest court.

If SCOTUS also rules against sports markets, it would allow states like Colorado to force operators to drop them immediately. This would push customers back into the state’s regulated sports betting industry, resulting in a significant bump in revenue.