Colorado Voters to Decide on Proposition JJ – Sports Betting Tax for Water
In the upcoming November 2024 general election, Colorado voters will get to make a decision on Proposition JJ. If the proposition passes, the state will be allowed to keep the sports betting tax revenue over the $29 million previously capped by Proposition DD in 2019.
The amount (estimated to be around $900,000 for the 2023-2024 fiscal year and potentially around $2.5 million by 2025-26) will be used to fund much needed water infrastructure projects. If the proposition doesn’t pass, there won’t be any changes to the current status quo.
How Proposition JJ Aims to Tackle Colorado’s Water Crisis
At present, Colorado is facing a major water shortage crisis, with two of its most critical reservoirs – Lake Mead and Lake Powell – at a historic low. In 2022, levels at Lake Mead were at 25% of its capacity, which required water cuts for some users. The Colorado River supplies water to over 40 million people across seven US states, including 30 Native American tribes, and parts of Mexico.
In addition to the households in the area, the river is also crucial for agriculture and the environment as a whole. Lake Powell, which is another key reservoir in the system, also faces similar issues. The increasing population combined with the consequences of climate change have created a rather difficult situation that needs to be resolved before it’s too late.
One way for Colorado to support the underfunded but critical water infrastructure projects is to use the excess revenue generated from sports betting taxes in the state. This won’t be able to close the funding gap, estimated at $50 million per year through 2050, but it will be a nice starting point. The question is – how are Colorado residents going to vote?
Support and Opposition to Proposition JJ
Let’s clarify what the current status quo is. As of 2019, the cap for sports gambling tax revenue in Colorado is $29 million. The amount is used to cover administrative costs and fund gambling-related programs in the state. Any excess revenue is funded back into casinos and sports betting operators.
Proposition JJ has garnered bipartisan support from environmental groups, agricultural organizations, and local governments. Many see it as a way to provide additional funds and meaningful change to the pressing water crises without having to raise taxes. The ever-growing sports betting industry has the potential to provide millions of dollars in excess tax revenue in the years to come.
“Water is more than just our day-to-day necessity for survival, it’s what drives economies. Water embodies or captures the spirit of the West, what it means to be a part of Colorado … and now we have a chance to ensure that these dollars will continue to fund critically necessary water projects in the state instead of returning dollars to casinos and sports betting agencies.” – said Julie McCluskie, Speaker of the Colorado House of Representatives.
However, not everyone is in favor of proposition JJ. Although significantly fewer in number, the opposition has voiced concerns about the potential expansion of sports betting and its links to gambling addiction. Others worry that using the revenue for water management might divert attention from other important programs currently funded by sports betting taxes, such as gambling addiction prevention.
What’s to Come
While we can’t know for sure, we expect that proposition JJ in Colorado will face a predominantly positive vote. Its benefits seem to outweigh its cons, at least according to the majority of the residents in the state. Still, government officials face a long way in trying to fix the water shortage issues and make sure that households, agriculture, and the environment are well taken care of.
In 2022, Colorado cleared a historic record of $7 billion in sports wagering, so we tend to agree that an increase in tax could potentially be a good starting point. We are yet to see what happens, and we’ll make sure to keep you posted on the results from the upcoming November elections. If you have any questions or want to add something, feel free to reach out to our team.