In 2019, following the trend among many states, Colorado voters approved a referendum authorising retail sports betting (at casino locations) and online mobile sports betting.

There are two types of online gaming activities authorised in Colorado. The first is online sports betting conducted by a licensed online sports betting operator. The second is fantasy sports contests. Although the regulatory agency over gaming also handles the licensure of fantasy sports operators, fantasy contest licensure is more akin to a registration and is separate from the gaming regulatory process. Online casino gaming is prohibited in Colorado.

The following types of land-based gaming activities are authorised in Colorado:

• casino gaming activities, including poker, occurring in the mountain cities of Black Hawk, Central City, and Cripple Creek;
• sports betting activities occurring in the mountain cities of Black Hawk, Central City, and Cripple Creek;
• bingo, raffles, and charitable games;
• horse racing at licensed tracks;
• The Colorado Lottery, the tickets of which are sold by authorised retailers;
• fantasy sports contests conducted by licensed or registered fantasy contest operators at licensed gaming establishments or horse tracks; and
• social gambling.

This guide only addresses points one and two above, as well as online sports betting, as these are the activities subject to gaming regulation in Colorado.

The Colorado Limited Gaming Act (CRSA 44-30-101 et seq), which became effective in 1990 by voter referendum, is the key legislation that applies to authorised gambling and sports betting activities. Initially, the act only authorised the operation of casinos located in the cities of Black Hawk, Central City, and Cripple Creek. However, in 2019, Colorado voters approved another referendum authorising retail sports betting (at casino locations) and online sports betting. Upon its passage, the statutory language authorising sports betting was added to the Colorado Limited Gaming Act.

Under Colorado law, “gambling” means “risking any money, credit, a deposit, or another thing of value for gain contingent in whole or in part upon lot, chance, the operation of a gambling device, or the happening or outcome of an event, including a sporting event, over which the person taking the risk has no control” (CRSA 18-10-103). Gambling is generally illegal in Colorado, but certain forms of gambling have been legalised, as described.

The definition of “gambling” set forth in CRSA 18-10-103 includes land-based gambling. The type of land-based gaming authorised by the Colorado Limited Gaming Act is defined as “physical and electronic versions of slot machines, craps, roulette, and the card games of poker and blackjack authorised by Article 30, as well as such other games as are approved by the voters of Central, Black Hawk, or Cripple Creek at a local election held in each city to control the conduct of gaming in that jurisdiction, and defined and regulated by the commission, each game having a maximum single bet as approved by the voters of Central, Black Hawk, or Cripple Creek at a local election held in each city to control the conduct of gaming in that jurisdiction.” (CRSA, Section 44-30-103)

The definition of “gambling” set forth in CRSA 18-10-103 would encompass online gambling activities. There is no definition of legal online gambling. In order for online gambling to be legalised, there would need to be a public referendum similar to the process through which limited gaming and sports betting were legalised in 1990 and 2019 respectively.

As it relates to unregulated gambling, the key offences that can be committed under CRSA 18-10-103 include engaging in gambling, engaging in professional gambling, possessing a gambling device, transmitting gambling information, and maintaining gambling premises.

There are penalties for unlawful gambling under CRSA 18-10-103. These vary from a petty offence (individual participant: up to 10 days in jail and up to USD300 in fines), to a class 2 misdemeanour (gambling device: up to 120 days in jail and up to USD750 in fines), to a class 6 felony (gambling device possession: 12 to 18 months in prison and a fine of up to USD100,000).

In 2023, the Colorado legislature authorised adding the capability of casinos to issue credit, but that bill was vetoed by the Governor of Colorado. At present, it is unclear whether or not a similar effort may be attempted during the 2024 Colorado legislative session.

The primary regulator of both casino gaming and sports betting in Colorado is the Colorado Division of Gaming (CDOG), which is a state agency division within the Colorado Department of Revenue. CDOG conducts background investigations and also conducts day-to-day regulatory oversight. The Colorado Limited Gaming Control Commission (CLGCC) is a five-member regulatory body that makes the final determination on licensing and disciplinary matters involving casino and sports betting industry participants in Colorado. In this role, CLGCC has adopted regulations that CDOG uses for its regulatory oversight, in addition to requirements in the Colorado Limited Gaming Act.

The regulatory approach in Colorado is substantially similar to other commercial gaming jurisdictions in the US. When the regulatory structure was initially set up in 1990, Colorado looked to Nevada for guidance. When sports betting was legalised in 2019, Colorado looked towards New Jersey as New Jersey had experience with online sports betting operators. CDOG maintains regular contact with other regulatory agencies in the US.

At present, CDOG is focusing regulatory changes to address responsible gaming, the continued rollout of sports betting in Colorado and the addition of fantasy sports to their regulatory responsibility.

For casino gaming, the following licences are available:

• (a) retailer;
• (b) operator;
• (c) manufacturer;
• (d) distributor; and
• (e) associated equipment supplier.

(a) and (b) above are related to the operation of casino gaming. (c), (d), and (e) above involve gaming equipment. CDOG uses the same investigative standard for each of these licence categories.

For sports betting, a casino licensee (retailer) must obtain a Master Licence for sports betting. A Master Licence allows for both retail and mobile sports betting. A Master Licensee may conduct sports betting directly or contract with a third party. A third-party conducting retail sports betting must obtain a Sports Betting Operator licence. A third party that conducts mobile sports betting must obtain an Internet Sports Betting Operator licence. Sports betting platforms and parties that share in a percentage of wagering revenue must obtain a Vendor Major licence. CDOG uses the same investigative standard for each of these licence categories.

There is also a Vendor Minor licence for sports betting, which functions as more of a registration. This category applies to host sites for data servers, marketing firms and other vendors who do not share in wagering revenue.

For sports betting, CDOG will process and CLGCC will issue temporary licences for applicants. Temporary sports betting licences are valid for two years. Temporary licences are not available for casino gaming.

There is no cap on the number of retail land based casinos, other than such need to be located in the mountain cities of Black Hawk, Central City, or Cripple Creek. The number of online sports betting skins available is limited to one per land-based casino.

All licences (including temporary sports betting licences) have a duration of two years.

Key Application Requirements

The key requirements for a casino and sports betting licence in Colorado are consistent with what is seen by other US gaming jurisdictions (eg, Nevada and New Jersey). There are also prohibitions that preclude individuals with felony and theft/fraud/gambling-related misdemeanour convictions from being able to obtain licences. Application requirements for land-based and online operators are substantially the same.

The entity applying for licensure must complete a business licence application for the licensed activity contemplated. In addition, all holding companies related to the applicant must complete an associated business application.

Directors, Owners, and Senior Management

Officers, directors, key employees, and shareholders must be personally licensed. Generally, this involves the submission of a multi-jurisdictional gaming application and Colorado supplement. The Colorado supplement requires the attachment of certain tax, banking, credit card, and other personal documentation.

Shareholder Disclosure

For privately-held companies, 100% of the company ownership must be disclosed to CDOG and owners must apply for full licensure (multi-jurisdictional form and Colorado supplement). For casino gaming, there is a limited owner designation for those owning 5% or less (and not involved in operations), which operates more like a registration rather than a full licensing investigation. For sports betting, the limited owner designation threshold is 10%.

For publicly-traded companies, shareholders owning more that 5% must be disclosed, which is the same as the United States Securities and Exchange Commission requirement. Licensure (involving the filing of a multi-jurisdictional form and Colorado supplement) is only mandated for parties owning 10% or more, but CDOG and CLGCC have the discretion to require licensing of a shareholder owning less than 10%.

Institutional investors that acquire more than 20% of ownership in a publicly-traded company owning a licensed entity in Colorado need to file for licensure. Below the 20% threshold, there is an institutional investor disclosure form that is required to be filed with CDOG.

Although it fluctuates depending on volume, the licensing process generally takes 6 to 12 months following application submission.

Temporary sports betting licences are typically processed within 90 days of application submission.

The Vendor Minor licensing process is more akin to registration and typically takes 45 to 60 days to complete.

Application fees and investigative costs associated with the application process vary depending on the number of individual applicants involved, but generally are less than other US jurisdictions (ie, Nevada).

Limited gaming licence fees are paid at renewal and depend on the type of licence, but currently range from USD3,700 to USD8,000. Employee license renewal fees are between USD70 and USD215.

On an annual basis, CLGCC approves an “Operating Fee” for sports betting licensees. The fee for fiscal year 2024 is USD78,000 (for online sports betting operators) and USD11,700 (for retail sports betting operators). New and renewal sports betting licence fees are minimal.

The requirements with respect to premises licensing are the same as with operator licences as described.

There are currently no recent or forthcoming changes to land-based gambling in Colorado.

In the sports betting context, a B2C operator must obtain an Internet Sports Betting Operator licence (for mobile sports betting) or a Sports Betting Operator licence (for retail sports betting).

In the sports betting context, a B2B operator supplying a platform or content to a B2C operator, and sharing in gaming revenue, must obtain a Vendor Major licence. Other vendors would be required to obtain a Vendor Minor licence.

Generally, a licensed entity can receive information and services from their affiliates under common control.

Marketing affiliates are permitted. The licensing requirement for marketing parties is only applicable to sports betting. Generally, flat fee structured marketing requires a Vendor Minor licence while sharing in a percentage of wagering revenue requires a Vendor Major licence. Due to this licensing requirement, marketing entities are typically structured with flat fee payment arrangements rather than based on percentage revenue.

The licensing standard that would apply to a white-label provider depends on the method of compensation and amount of active operational involvement of the white-label provider. Active operational activities will trigger full licensure. If no active operational aspect is present, sharing in a percentage of gaming revenue would also trigger full licensure (Vendor Major category for sports betting). A flat fee arrangement with the white-label provider in the sports betting context would require a Vendor Minor licence. Regardless, any white-label arrangement is required to be disclosed to CDOG.

In 2008, the Gambling Payment Intercept Act went into effect, which requires the deduction of winnings from land-based gaming for the collection of child support, criminal restitution, and certain debt obligations. In 2022, the scope of the act was expanded to include winnings from sports betting and internet sports betting.

Online sports betting operators must maintain internal control procedures, approved by CDOG, that address, among other things, user access controls, fraud detection, payment processing, data security, and server security.

Both casinos and sports betting operators must follow certain responsible gaming requirements.

Casinos must display a responsible gaming logo on their website and the premises and have a policy in place to provide patrons with the opportunity to revoke their privileges for services. Casinos must also have a self-exclusion programme and share exclusion data with CDOG.

Sports betting operators must display responsible gaming information on their platform, must include advertising and promotion disclaimers, and must maintaining self-exclusion protocols.

Casinos and sports betting operators are not permitted to direct market to excluded patrons.

CDOG recently launched a self-exclusion programme in Colorado, replacing the programme previously administered by the Problem Gambling Coalition of Colorado.

CDOG serves as custodian of Colorado’s self-exclusion list and receives self-exclusion requests directly from patrons. CDOG also administers a grant programme that provides support for efforts that improve responsible gaming and problem gambling programmes in Colorado.

The key AML legislation relevant to gaming operations in Colorado is the federal Bank Secrecy Act (BSA) (31 USC 5311 et seq) and related guidance established by the Financial Crimes Enforcement Network (FinCEN) bureau of the United States Department of the Treasury.

There are currently no recent or forthcoming changes to anti-money laundering requirements in Colorado.

CDOG has an expectation that its sports betting and casino licensees will adhere to the anti-money laundering requirements set forth in the BSA, which is administered by FinCEN. This is confirmed when the licensee’s internal controls are reviewed and approved by CDOG for both casino gaming and sports betting.

Casino and sports betting advertising activities are regulated by CDOG.

Colorado does not have a definition of advertising prescribed by statute or regulation. Any form of online or other advertising, marketing or promotional activities would be viewed as advertising by CDOG.

Under the sports betting regulations, all promotional materials must include material terms in close proximity to the headline claim and include other disclaimers. Marketing firms that support licensees are required to obtain Vendor Minor licences.

Advertising for casinos and sports betting is permitted. The primary regulatory limitation is that CDOG mandates that all advertising be truthful and not misleading. Sports betting licensees are prohibited by regulation from directing advertising toward underaged participants.

There are no penalties particular to advertising violations. CDOG has broad discretion to impose sanctions and penalties based on the circumstances of the violation.

There are currently no recent or forthcoming changes to advertising requirements in Colorado.

As a general rule, any acquisition or change of control of a gaming company requires the prior approval of CLGCC (ie, licensure of the buyer). Companies making public offerings of securities are required to notify CLGCC, with the timing of the notice based on the nature of the offering. In addition, publicly-traded companies are subject to periodic and mandated reporting requirements, including those related to the transfer of securities.

Changes in control for publicly-traded companies technically only require compliance with filing the requisite gaming applications referenced in 4.7 Application Requirements. That said, most of such transactions are multi-jurisdictional and the new party is able to be licensed pre-closing, given the requirement in most jurisdictions for licensing before closing of an acquisition of control of a publicly-traded company. Changes in control for private companies require prior licensure of the buyer entity.

The limited owner designations discussed in 4.7 Application Requirements (5% or less for casino gaming and 10% or less for sports betting) would apply to passive investors in a privately held entity. In addition, as discussed in 4.7 Application Requirements, institutional investors can acquire up to 20% of ownership in a publicly-traded company that owns a licensed entity in Colorado; and the threshold for licensing of individual shareholders of a publicly-traded company is 10%.

The Colorado Limited Gaming Act gives CDOG and CLGCC broad discretionary enforcement powers for violations of the applicable gaming laws and regulations. These powers include the sanctioning of licensed entities and associated individuals, the revocation, denial, or suspension of licences, as well as monetary fines.

Sanctions are enforced by CLGG action. Individuals subject to violations have had to relinquish their personal licences. Entities and individuals have been subject to monetary fines, which need to be paid in order for the underlying licence to remain in good standing (and not subject to further sanction).

Financial penalties are determined on a case-by-case basis. There is no schedule of fine amounts in Colorado.

Individuals can be subject to fines and personal licence revocation.

The gaming tax rate for casinos is a graduated tax based on adjusted gross proceeds: USD0 – USD2 million (0.25%); USD2 million – USD5 million (2%); USD5 million – USD8 million (9%); USD8 million – USD10 million (11%); USD10 million – USD13 million (16%) and over USD13 million (20%).

The sports betting tax rate is 10%of net sports betting proceeds.

There is currently no highly anticipated reform to Colorado gaming laws under consideration.