Proposed Ban on Prop Bets Stripped From Colorado Bill

While Colorado continues to consider massive changes to its sports betting market, it appears prop bets will remain untouched.

The state’s Senate Appropriations Committee has passed SB 131, but not before stripping it of a proposal to ban prop bets. The majority of committee members opposed a ban, largely due to its impact on Colorado’s tax revenue. 

They chose to remove the ban to keep the bill’s primary focus intact, which aims to restrict the ability of sportsbooks to limit bettors. It passed by a 4-3 vote, sending it to the Senate Floor for a second hearing.

Prop bets bring in big money

Colorado isn’t the only state to reject a proposal to ban prop bets in 2026, and their reason was the same as the others: money.

Prop bets have been linked to problem gambling, but are also a key revenue generator for sportsbooks. They allow operators to offer dozens of additional bets on a single event, allowing bettors several chances to place wagers. They are also crucial to parlays, which combine bets to offer higher payouts but lose far more often.

As a result, a ban on prop bets would lead to a significant reduction in tax revenue, which Colorado can’t currently afford.

Move about more than money

While tax revenue was a primary reason for rejecting the ban on prop bets, it isn’t the only one.

Another crucial factor in the decision was the bill’s main goal: to restrict how sportsbooks can limit bettors. Currently, sportsbooks are allowed to limit winning bettors without any real regulations. The industry has fought to defend the practice, claiming it can’t succeed without it.

Several states have looked to end the practice of limiting bettors, but each has failed. Operators have sunk millions into political donations and lobbied to defeat those proposals, and refused to discuss the topic in depth with regulators. 

That means SB 131 is already facing a near-impossible uphill climb to become law. Adding a ban on prop bets would only double the opposition from sportsbooks, making the bill’s odds even longer.

Colorado needs sports betting revenue

Some US markets may be willing to sacrifice much of their tax revenue from sports betting, but Colorado isn’t one of them.

The Centennial State is coming off one of its driest winters in history, which is leading to a brutal drought. Water restrictions are in place in Denver and other metro areas around Colorado, with no relief in sight. This creates a dangerous environment in which wildfires can spread easily, threatening large communities across the state.

Colorado uses its sports betting tax revenue to fund water projects that can help it navigate a future in which the water supply is dwindling. That adds a different element to the debate over sports betting and its impact on the public’s health.