November 13, 2022

Audit Reveals Gaps in Colorado Sports Betting Operations

Audit Reveals Gaps in Colorado Sports Betting Operations

has revealed significant flaws within the Colorado Division of Gaming’s regulation of sports activities betting.

The Colorado State Auditor, which published Monday its evaluation of the CDOG and the Colorado Limited Gaming Control Commission, claims the state is probably losing tax revenue by not requiring sportsbook operators to offer extra documentation.

The audit report covers the time between May 1, 2020, and April 30, 2021. During that time, the Colorado bettors wagered practically $2.three billion.

The Centennial State launched its sports activities betting trade in May 2020, months after the state voters said ‘Yes’ to legalized wagering by way of referendum in November 2019.

What’s in the Audit Report?

The 56-page report discovered that the Division of Gaming lacked “an efficient course of to investigate sports activities betting operations for temporary licenses, or to gather enough documentation to determine if the operators’ month-to-month tax filing have been accurate.

In March 2020, 90% of Colorado’s 39 licensed sportsbooks held temporary licenses. According to the report, 5 of these 35 temporary licensees “did not complete the minimal background investigative procedures for momentary licenses.”

It means that these licensees than they might have for a everlasting license, the report said. “However, the short-term licenses allowed them the identical privileges as permanent licenses.”

Tax Discrepancies

The audit report additionally discussed discrepancies in the tax filings of twenty-two sports activities betting operators from May 2020 by way of April 2021. The auditor “found broad variation between the amount of wagering activity” between daily stories and month-to-month filings.

For occasion, an operator reported $1.four million more internet gaming income in every day reviews than in monthly tax filings.

The report famous that whereas some variation is anticipated as wagers may be altered, voided, or canceled after they’re placed, the regulator had no system to check this.

“…the Division could not reveal if or the way it verified that the tax filings have been based mostly on correct knowledge,” the report said.

On numerous occasions, the audit report seemed to imply that the Division of Gaming failed to sufficiently monitor sports activities betting operators as an effective regulatory physique.

Auditor Suggests Lawmakers Amend Sports Betting Law

The auditor also advised that Colorado lawmakers “consider the effects” of the Commission rule related to an operator’s month-to-month losses. The concession permits the Colorado sportsbooks to carry forward month-to-month losses, “thereby reducing their tax liability.”

The auditor stated the apply might not align with the best interest of voters and legislative intent.

The Centennial State, which imposes a 10% tax on all internet sports activities wagering proceeds, raised simply $6.6 million in tax in its first full yr of legal sports betting. The state might earn an additional $706,000 throughout the same interval without the carry-over concession, the report stated.

Colorado lawmakers have just lately moved to handle the tax concern by passing a latest law limiting the variety of promotional spending operators can write off.

The auditor made 10 suggestions to the two regulating our bodies to overcome the problems raised. CDOG informed the auditor it might follow the recommended pointers.

Colorado has turn into the primary authorized sports betting state to phase out tax deductions on promos for sports activities betting operators. The state legislature has lately passed State House Bill 22-1402, […]

In 1990, voters allowed for limited-stakes casinos to enter the mountain towns of Black Hawk, Cripple Creek, and Central City, alongside tribal gaming venues in the state. Today, 34 commercial […]

Colorado grew to become the sixth US state to surpass $6 billion within the post-PASPA sports activities betting handle in February. New Jersey, Nevada, Pennsylvania, Illinois, and Indiana are the other 5. According […]

Online sports activities betting is legal and reside in Colorado, with state-wide mobile betting launching on May 1, 2020. On this date, 4 market-leading operators went live – DraftKings, BetMGM, BetRivers, […]