Colorado governor signs bill that eliminates tax deductions for sportsbook promotions
House Bill 1311 will enter force in two phases in 2026.
US.- Governor Jared Polis has signed House Bill 1311, which will gradually remove the ability of sportsbooks to deduct promotional spending from tax obligations. Two weeks ago, the bill was passed in the Senate with 52 votes in favour and only 13 against.
Since the legalisation of sports betting in 2019, sportsbooks in the state are permitted to deduct free bet promotions, promotional payouts and federal excise taxes when calculating their net proceeds. The deductions were intended to help operators establish themselves in the market. From January 1, 2026, operators will only be permitted to deduct up to 1 per cent of total wagers. From July 1, 2026, that deduction will also be revoked.
A 10 per cent tax on net proceeds funds Colorado’s Water Plan Implementation Cash Fund, which supports long-term water conservation and infrastructure projects across the state. Projections suggest the Water Plan could receive an extra $3.2m in 2026 and $12.9 m in 2027.
In February, Colorado’s sports betting gross gaming revenue (GGR) totalled $46.4m, up 80 per cent year-over-year but down 23.9 per cent from January 2025. Online bets brought in $46.2m retail betting $152,547. The handle was $496.6m, down 7.5 per cent year-over-year and 24.4 per cent from January 2025. Of the total handle, $493.6m was wagered online and $2.99m via retail.
