Colorado Sports Betting Handle Drops 10% in February

Colorado reported sports betting handle of $537 million for February, a 10% decrease from January’s wagering collection in the state. The Colorado Department of Revenue recorded $596.7 million in betting handle in January. February’s handle also represented a significant year-on-year jump: by 26.31% from last February’s betting handle of $425.1 million.

In terms of tax receipts, Colorado saw a substantial dip from January. In February, Colorado collected $1.3 million after federal tax, promotional credits, and other deductions, which was a 68.4% decrease from January’s tax collection of $4.1 million. Compared to 2023, February’s tax receipts formed a 3.57% increase from last February’s collection of $1.26 million.

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CO Revenue Slows Down

A low hold rate and a dip in betting handle contributed to Colorado’s taxable gaming revenue slowing down. The state’s operators contributed to collect $25.8 million in revenue. Across retail and online books, Colorado’s operators managed a hold rate of just below 5%, well below the industry standard. Yet, betting revenue rose 14% from last February’s total.

These metrics are in comparison to a stunning January, in which the state collected $53.5 million in revenue, more than double February’s tally. January’s revenue was a state record in almost four years of sports betting.

According to the Colorado Division of Gaming, wagers to date in this fiscal year, including February, are $4.1 billion, which represents a 15.3% rise from a year back. At that time, the total betting handle for the fiscal year was $3.6 billion.

That rise in betting handle has also lent itself to the state collecting more tax. Tax collection this fiscal year, including February, is $20.6 million, which represents a 19.8% rise from a year back, which was $17.2 million.

CO Retail Sportsbooks Struggle in February

Retail sportsbooks had a negative hold of 4.14% in February, with net payouts of $145,000. Net sports betting proceeds for retail sportsbooks finished in the red at $154,000. Retail books paid out $2,500 in taxes.

Online sportsbooks had a much better month, with $25.9 million in total gross gaming revenue. Net sports betting proceeds finished at $11.8 million, with $1.3 million paid in total taxes. Online books had a total win rate of 4.86%, which pulled the overall hold rate up to 4.8%.

Basketball Dominates Colorado Betting

With the NFL in its offseason, Colorado’s bettors combined to wager close to $230 million on basketball in February alone. The total payout to players was $223.8 million, forming a gross profit of close to $6 million for the state’s sportsbooks.

Tennis was a far distant second in Colorado, with just $46.7 million collected. However, the hold rate was significantly higher for sportsbooks, with just $38.5 million back to players, resulting in a profit of more than $8 million on tennis.

Betting on ice hockey, primarily the NHL, also found significant interest, collecting over 6% of wagers in the state in February. Sportsbooks were wiped out on ice hockey, with players collecting $36.7 million, which was more than $3 million more than the wagered total of $33 million.

Pro-American football was another profitable sport for bettors, with $29.4 million wagered and $34.4 million paid out to customers. NCAA basketball, soccer, table tennis, and MMA provided minor relief for sportsbooks with positive, albeit low, hold rates.

Betting Momentum Growing in Colorado

Colorado has now seen six consecutive months of betting handle in excess of $500 million, peaking at $716.4 million in December last year. In the first two months of this year, Colorado’s bettors have wagered more than $1.1 billion, which is the highest for the first two months of any year in the state’s betting history.

In 2022 and 2023, the state collected more than $5 billion in betting handle. In 2022, Colorado collected $352 million in gross revenue at a hold rate of 6.8%. In 2023, revenue increased to $392 million on a marginally better hold rate of 7%.

Expectations for this year are high after collecting more than $1 billion in just two months. Like most other states, there could potentially be a lull in sports betting towards the middle of the calendar year before picking up with the NFL’s resumption. In any case, this year is already set to break all records in Colorado, in terms of betting handle and revenue.

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