Colorado’s new sports-betting restrictions take effect as wagers reach a record $6.4 billion

Two Colorado sports-betting laws took effect Aug. 12, adding new limits for bettors and sportsbooks as wagering in the state reached a record roughly $6.4 billion in the latest fiscal year.

Senate Bill 26-131 prohibits credit-card deposits, limits customers to six separate deposits from one account holder during a gaming day and bars sportsbooks from initiating or sending solicitational betting or deposit texts and push notifications to Colorado account holders. Senate Bill 26-163 expands Division of Gaming authority and allows Colorado’s voluntary self-exclusion program to cover sports betting.

What changes for bettors

Colorado sportsbook customers can no longer use a credit card to deposit money in connection with a sports bet. The law also limits an individual account holder to no more than six separate deposits during a gaming day.

Customers should use another permitted payment method and check with their sportsbook if a transaction is declined or an account feature changes. The fiscal note says DraftKings stopped accepting credit cards in August 2025 and FanDuel did so in early March 2026; together, the two operators represented more than two-thirds of the market. The new law makes the prohibition apply across licensed internet sports-betting operators.

Sportsbooks also may not initiate or send mobile push notifications or text messages to account holders in Colorado to solicit bets or deposits. That restriction covers promotional alerts intended to encourage wagering or additional deposits.

Advertising rules prohibit a sports-betting operation or its marketing affiliate from targeting people younger than 21 or creating advertising clearly meant for that audience. Advertising is also restricted on media where a majority of the expected demographic audience is under 21.

More state oversight and a sports-betting self-exclusion option

SB26-163 gives the Division of Gaming broader responsibilities involving licensing and enforcement. Division investigators and their supervisors may inspect, examine, investigate, hold or impound premises where they suspect unlicensed gaming or unlicensed sports betting is taking place.

The law also expands Colorado’s voluntary self-exclusion program so people can exclude themselves from sports betting, in addition to other gaming activities. The Legislative Council Staff summary says the Bet Smart Colorado program can remove participating individuals from marketing lists and gaming-related privileges.

That provision is separate from the operator restrictions in SB26-131: SB26-131 governs deposits, promotional messages, advertising, data collection and water funding, while SB26-163 addresses regulatory authority, enforcement and self-exclusion.

Why the timing matters

The new rules arrived as Colorado’s legal sports-betting market posted record wagering volume. Axios Denver, citing state data, reported that Coloradans wagered about $6.4 billion during the latest fiscal year. That figure measures wagering volume, not sportsbook revenue or the state’s tax collections.

Colorado generally imposes a 10% tax on net sports-betting proceeds. Under the SB26-131 fiscal note, net sports-betting proceeds are calculated from wagers after payments to players, federal taxes and limited free bets.

After specified distributions and administrative expenses, the remaining sports-betting revenue goes to the Water Plan Implementation Cash Fund. The money is annually appropriated through the Colorado Water Conservation Board’s projects process for water-project grants.

SB26-131 requires the annual transfer to the water fund, after other expenses, to be no less than the amount transferred in the previous fiscal year to the extent permitted by available funds. The provision protects the prior-year level as a statutory benchmark but does not guarantee an unchanged transfer regardless of revenue, expenses or available funds.

Estimated fiscal trade-offs

The Legislative Council Staff fiscal note estimates that SB26-131 will reduce Sports Betting Fund revenue by $652,597 in fiscal year 2026-27, $676,056 in fiscal year 2027-28 and $709,859 in fiscal year 2028-29. It estimates implementation expenditures of $231,378, $993,317 and $249,317, respectively.

Those are projections, not final results. The estimated costs include staffing, legal services and development of a database for additional transactional data. The fiscal note estimates that funds available for distribution could decline by $883,976 in fiscal year 2028-29, $1.67 million in fiscal year 2029-30 and $959,176 in fiscal year 2030-31. Actual water-project spending remains subject to the annual Colorado Water Conservation Board projects bill and appropriations process.

Data reporting begins later

Operators must begin providing the Division of Gaming with redacted transactional data from the prior calendar year by Feb. 1, 2028, and each year after that. The data must protect users’ individually identifiable information and are exempt from disclosure under the Colorado Open Records Act.

The enacted bill summary and fiscal-note summary state that the Division of Gaming must publish a report compiling the data on its website beginning Jan. 1, 2029, and annually thereafter. The General Assembly bill page contains conflicting summary language referring to reports every three years, so the state’s implementation of the reporting cadence remains worth watching. The enacted fiscal-note summary provides the annual schedule used here.

Sources

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