A divided panel of lawmakers on Tuesday narrowly advanced a bill to impose new restrictions on Colorado’s booming sports betting industry, as lawmakers cited worries about youth gambling and addiction, while online operators warned the changes could drive bettors to unregulated markets and slash state revenue.

Senate Bill 131 would limit customers to five deposits within 24 hours and restrict the use of credit cards for sports betting.

The bill — sponsored by Sens. Matt Ball, D-Denver, and Byron Pelton, R-Sterling — would also prohibit proposition bets, which are wagers on specific events or milestones within a game, such as passing yards or the first team to score.

Additionally, the proposal would prohibit sports betting companies from sending certain push notifications or texts to account holders in Colorado and set guardrails on the language that can and cannot be included in certain sports betting advertisements.

Finally, the bill would require sports betting operators to provide annual transactional data and metrics reports to the Colorado Department of Revenue’s Gaming Division. The division will publish a report on the data every three years beginning in 2029.

Colorado voters approved Proposition DD in 2019, legalizing sports betting statewide. The majority of the state’s sports betting revenue goes to the Colorado Water Plan Grant Program, which funds water conservation, storage, and supply projects.

According to the Colorado Department of Revenue, sports betting has generated more than $100 million for the state’s water programs. Last week, the department announced a record $5 million in revenue for January of 2026.

According to Ball, the industry has grown sixfold since it began operating in the state five years ago.

That revenue spike has come at a cost, Pelton and Ball said.

In the first year after legalization, calls to the state’s problem gambling hotline rose by 45% and nearly three-quarters of Coloradans say legalized sports betting has worsened problem gambling, according to backers.

“Every indicator that we have right now is that the rates of gambling addiction in this country and in this state have skyrocketed because of the rise of online sports betting,” Ball said.

Sports betting — particularly mobile sports betting — has become increasingly common among young men, Pelton added.

While he and Ball want to honor the will of the voters, they also want to ensure protections for kids who are not legally allowed to gamble, Pelton said.

“This bill takes a balanced approach,” he said. “It does not undo what voters approved. It preserves a legal market for adults who choose to participate, but it also puts in place reasonable, common-sense guardrails, because freedom and responsibility go hand-in-hand.”

Online operators: Bill will push gamblers to unregulated markets, diminish state revenue

Sports betting companies, such as FanDuel and DraftKings, argued the bill would push gamblers to the unregulated market and cost the state millions of dollars in revenue for water projects.

“Preventing unauthorized access to our platform, particularly by underage users, is central to our mission,” said Jennifer Anderson of FanDuel, adding that the company invests significant amounts of money into tools, research, policies and partnerships to promote safe gambling.

Stanton Dodge of DraftKings urged lawmakers to pursue “evidence-based solutions” that provide protections for kids without driving adults to the unregulated market.

Dodge and other opponents pointed to the bill’s proposed ban on proposition bets, which Dodge said account for over a third of DraftKings’ revenue.

Sports betting is generating more revenue than expected in Colorado, Dodge said, and if the proposed legislation is passed, there could be as much as a 50% reduction in tax revenue.

“At a time where Colorado faces an $850 million structural budget deficit and no replacement revenue source, we do not believe now is the time to divert revenue to illegal, unregulated markets,” he said.

“There’s no single act of government that inflicts more harm on the financial, mental health, and social well-being of the people of Colorado than the institution of predatory gambling,” countered Les Bernal, director of the national nonprofit Stop Predatory Gambling.

Less than 5% of sports bettors are profitable in the long run, Bernal said, adding that, last year alone, Coloradans lost nearly $2 billion from gambling, sports betting, and the lottery combined.

Bernal argued that Proposition DD was driven by “powerful financial interests” from the gaming industry that spent millions of dollars on the campaign, with no paid opposition.

“This is a con,” he said.

Up to one-sixth of gamblers may be at risk for problem gambling, according to Josh Ewing of Healthier Colorado.

When voters approved Proposition DD, sports betting looked very different. Over five years later, sports betting companies have adopted an approach similar to social media platforms, using algorithms to maximize user engagement, according to Ewing.

“The technology has advanced, the scale and speed of betting have increased, and we are seeing early indicators of real public health impacts,” Ewing said. “That raises the stakes in a very real way. When systems are designed for continuous engagement, we have a responsibility to ensure that there are appropriate safeguards. That is exactly what Senate Bill 131 does.”

The bill passed on a 5-4 vote Senate Finance Committee, with all Republicans and Sen. Janice Marchman, D-Loveland, voting in opposition. Marchman and several other lawmakers expressed worries about going against the will of the voters, particularly in banning proposition bets.

Several legislators said they are also concerned about the requirements for broadcast advertisements, which broadcasters said they may not be able to comply with.

The bill now moves on to the Senate Appropriations Committee.