As exciting as things are getting at Colorado’s statehouse, not all policy fights, even during session, take place in the committee rooms and chamber floors of the State Capitol.

To wit, one that has been shaping up for a while now is taking place between the Department of Revenue on one hand, and the legislature’s fiscal analysts on the other, contending over last November’s successful Proposition DD. The ballot proposal, adopted by voters, legalized sports betting and authorized tax revenue generated from it to go to help fund the state’s water plan.

Simply put, the divergence between the revenue estimates offered by the Revenue Department and the legislative branch’s analysts is, well, gaping.

Late last year the Colorado Division of Gaming, which resides within the Department of Revenue, released an estimate predicting that freshly legalized sports betting in the state would generate only between $1.5 million and $1.7 million in the ’20/’21 fiscal year, which starts on July 1 (sports betting ceases to be a crime on May 1.) These figures are at considerable odds with those delivered up by the General Assembly’s number crunchers, who had predicted much healthier returns of about $16 million per year for the initial few years.

The landscape is further complicated by third-party analysts, such as sports stats tracker Brian Musburger, who has sanguinely predicted that betting markets could see $100 million in bets per month right from the get-go.

For the Bernie Sanders voters out there, that would generate an awful lot more revenue than $1.5 million.

So who is right? Well, like most policy questions, the answer is probably sitting somewhere between the extremes. $100 million in monthly bets right off the bat is, to put it gently, likely rather optimistic. At the same time, the Department of Revenue’s anemic forecast is probably not much more realistic.

It would seem that what most accounts for the discrepancy between the estimates generated by the department and the Joint Budget Committee’s fiscal analysts is the failure of the Revenue Department to evaluate the fiscal experiences of other states that legalized sports gambling.

The legislature’s analysts, on the other hand, drew heavily on real-world data, such as the empirical evaluations laid out in a report published by third-party research firm Eilers & Krejcik in August 2019, which looked specifically at the revenue generated in other states that recently legalized sports betting. The firm then compared them to Colorado’s circumstances. Direct comparisons between states are, of course, imprecise, but the numbers are nevertheless telling. New Jersey probably offers the most useful correlation in that it has a competitive mobile market with a bit of history behind it. Given the population difference and other factors, the Eilers report projected that Colorado would generate 53% of New Jersey’s sports-betting tax revenue.

What it found was that in the second year of legalized sports betting (2019), New Jersey hauled in $22 million in taxes collected off the activity. At the 53% adjustment, that translates to $12 million that Colorado could be expected to collect. Much closer to $16 million than $1.5 million.

Other states, for a variety of reasons, do not offer as straight forward a juxtaposition as NJ, but the figures are still useful; for instance, Indiana generated $2.8 million just from the three months of September through November 2019. New Hampshire generated $1.2 million in its very first month of legal sports gambling. These would argue against the meager $1.5 million per year figure presented by the Department for Colorado.

Other factors are at play as well, most notably the impact of time for market maturation. Yes, people have been betting on sporting contests probably ever since cavemen #3 and #4 began watching cavemen #1 and #2 attempt to settle a disagreement over who was stronger. Nonetheless, the institutionalization of an activity, however popular prior to receiving government sanction, takes time. The most reliable analyses put that time for fully developing the market at around five years for Colorado, with front-end returns on the lower side, graduating over that period to something more like the $29 million annually, as predicted.

Fiscal consideration are, of course, only part of the calculations that go into an evaluation of a law’s merits. The conservative falls back on the presumptive question of “does this policy augment or diminish human liberty,” coupled with the corollary of “at what cost or benefit to society” – the answers to which would seem to tilt the balance in favor of the voters plebiscitary approval of Prop DD.

Kelly Sloan is a political and public affairs consultant and a recovering journalist based in Denver.