The numbers in the statewide measure Proposition DD swung back and forth Tuesday like the lead in a Final Four championship match. On Wednesday afternoon, the buzzer sounded.
The Associated Press called the race in favor of the measure that would decriminalize sports betting to fund water issues. As of 3 p.m., returns from the Secretary of State showed Prop DD passing with a lead of 20,028 votes out of more than 1.4 million cast.
The measure allows Colorado's 33 casinos to start offering wagering on professional, collegiate, motor and Olympic sports in May.
One of the big surprises in those returns: The measure lost in Teller County, home to Cripple Creek, one of three towns that allow casino gambling.
Unofficial returns show Prop DD failed there by 724 votes, or about 8%.
The measure passed by a thin margin of 49 votes in Gilpin County, home to Blackhawk and Central City. That is a difference of 2%.
And that still leaves absentee and military ballots yet to be counted.
Pro-Prop DD spokesman Curtis Hubbard said late Tuesday that he was still confident that the measure would pass.
"We know Election Day votes will break our way," he said. "Getting Coloradans to approve any sort of tax — even a casino tax — is a difficult task. But we built a great bipartisan coalition: Front Range, West Slope, urban, rural, conservationists, farmers and ranchers, and that should be enough to push it past the finish line."
The road to Nov. 5 was a lot easier for Proposition DD than the other measure on the ballot, Proposition CC, which was defeated soundly on Tuesday.
Prop DD had strong bipartisan support in the General Assembly: sponsors of the bill that put the question on the ballot included Majority Leader Alec Garnett (D-Denver) and Minority Leader Patrick Neville (R-Castle Rock), two people who don’t see eye to eye on much.
In the Senate, Majority Whip Kerry Donovan, D-Vail, and Assistant Minority Leader John Cooke, R-Windsor, carried the bill, with an assist from Rep. Mark Baisley, R-Roxborough Park, whose House district includes the gambling town of Cripple Creek.
House Bill 1327 cleared the General Assembly relatively unscathed, with 58 votes in support from the 65-member House and 27 “yes” votes from the 35-member state Senate.
Proposition DD is the result of a U.S. Supreme Court decision back in May of 2018. The decision in Murphy vs. The National Collegiate Athletic Association struck down a 1992 federal law — the Professional and Amateur Sports Protection Act — that basically prohibits sports betting in all but four states.
The state of New Jersey sought to become the fifth state with legalized sports betting, adopting an amendment to its state constitution in 2012. The NCAA and three other major professional sports leagues sued, asking that the law be halted.
Writing for the 6-3 majority, Justice Samuel Alito said that “the legalization of sports gambling requires an important policy choice, but the choice is not ours to make. Congress can regulate sports gambling directly, but if it elects not to do so, each state is free to act on its own." That’s based on the Tenth Amendment, Alito wrote, which says that “all legislative power not conferred by Congress is reserved for the States.”
Here's what Prop DD does: it levies a 10% tax on sports betting proceeds, paid for by the casinos and the bettors who make wagers. Online gambling, through internet sports betting operators hired by the casinos, also would be allowed.
Casino gambling in Colorado is limited to three towns, a decision made by voters statewide and in those three towns in 1991: Cripple Creek in Teller County, and Blackhawk and Central City in Gilpin County. Should Prop DD pass, the decision will have to be confirmed by voters in those three towns as well.
Types of bets allowed by Prop DD include amateur and professional sporting events “in which the outcome is not determined by chance,” the fiscal analysis said.
This can include professional and collegiate games, sanctioned motorsports and Olympic sporting events. Bets could be placed on an athlete’s performance statistics during a game, although “side bets” would not be allowed, such as a wager on how many strikes a pitcher might throw in a game. Other bets not allowed: betting on high school games and video games not sanctioned by a sports governing body.
According to the fiscal analysis tied to Blue Book, the voter’s guide to the election produced by the nonpartisan Legislative Council staff, the state could see about $8.5 million in revenue in 2019-20. That amount is lower because it will take time of the amount of time it will takefor the three casino towns to vote on approvesports betting; estimates say that won’t be done prior to the biggest sports event in the country, the 2020 Super Bowl.
The estimate jumps substantially for 2020-21, with as much as $29 million in revenue. That money would be divvied up into several pots, with the largest chunk directed to funding the state water plan.
Given that a number of state organizations rely on gambling proceeds, a “hold harmless” fund would be set up with 6% of the proceeds to ensure that if gambling revenues drop, those organizations would not lose out. That includes community colleges, the State Historical Fund, and the impacted cities and counties.
The taxes would pay for Division of Gaming administrative expenses tied to sports betting, money to the Office of Behavioral Health to address gambling addiction and the state water plan and for “water projects and other water-related obligations.”
HB 1327 spells out what that might include:
- Ensuring Colorado remains in compliance with interstate compacts. As a headwaters state, Colorado has for decades been part of agreements with other states about the distribution of water flowing from Colorado rivers. The largest is a seven-state compact on the Colorado River that dates back to 1922. Other compacts have been made with Nebraska and Kansas for waters from the South Platte, Republican and Arkansas rivers. Colorado is involved in nine interstate compacts related to its water.
- “Equitable apportionment" decrees, international treaties and federal laws related to interstate storage and release. An equitable apportionment decree, fashioned by courts, is when there is disagreement over the water use of an interstate stream. Courts must figure out how to apportion the water in a manner that serves the needs of water users in both states, and it is based on a fair consideration for all the interests involved rather than a mathematical formula. The language about compacts included in HB1327 comes right from the Colorado Water Plan.
- “Projects and processes” that may include “compensation to water users for temporary and voluntary reductions in consumptive use.” That refers to a demand management plan currently under review by the Colorado Water Conservation Board and tied to a drought contingency agreement signed by the seven states of the Colorado River last May. That demand management review has not been approved by Colorado or the three other states of the Upper Colorado River Basin (Utah, Wyoming and New Mexico), and should even one of those four states not sign on to a demand management plan, the whole thing would be a bust for all four states.
- Grants and contract expenditures, to be distributed by the water conservation board to governmental entities with approved water conservation plans; private entities, and to eligible projects. Those projects include water storage and supply, including the development of additional water storage, pumping water back into aquifers, dredging existing reservoirs to expand capacity; conservation and land use projects; agricultural projects, including those that boost agricultural water efficiency; and environmental and recreational projects.
The measure has won support from the editorial boards of many state newspapers. The Sterling Journal Advocate, in endorsing DD, said that while they’re not wild about sports betting, they’re interested in ensuring the future of irrigation water to support agriculture. The state water plan is a guidebook to building future water supplies, the editorial board wrote, but without funding, “it’s useless.”
The measure is also backed by agriculture and recreation organizations, such as the Colorado Farm Bureau and the Outdoor Industry Association.
But they aren’t the ones paying for the “yes on DD” campaign. That heavy lifting is being done almost exclusively by the casinos and gambling companies. The committee has raised $3.7 million, including nearly $1.4 million between Oct. 24 and Nov. 4. The largest funders have been DraftKings ($1.3 million), FanDuel ($1 million), the Twin River Hotel and Casino in Rhode Island ($350,000) and the Colorado Gaming Association ($225,780).
The committee has spent $2.4 million as of Oct. 23, mostly on advertising. But it’s also put $243,907 into the pockets of political consultants in Colorado, including EIS Solutions, run by former Republican Senate Minority Leader Josh Penry; Brophy Strategies, run by former Republican state Sen. Greg Brophy; and OnSight Public Affairs, a mostly-Democratic strategy house.
EIS’ involvement caught the attention of the Boulder Weekly, which asked its readers in its recommendation to vote against DD “how would you feel if we told you that Mr. Fracking, the oil and gas trickster himself, Josh Penry was a consultant pushing for the passage of Prop DD? Makes you wonder why that is, doesn’t it?”
Funding for the “No on DD” campaign is nonexistent; the only issue committee registered with the Secretary of State, Coloradans for Climate Justice, shows no fundraising or expenditures to fight against the measure.
More opposition has come in recent weeks, led by Jeff Hunt of the conservative Centennial Institute of Colorado Christian University. Hunt said in a statement on Oct. 9 that sports gambling “damages the foundation of athletic competition and invites corruption. Every pitch, every shot, every swing, every score will be bet upon. It should be rejected."
The strongest voice against Proposition DD may be Republican state Sen. Jerry Sonnenberg of Sterling, who came out against Prop DD just last week.
Sonnenberg had long been neutral on DD, but he decided against supporting the measure, based on concerns that the legislature would use the money for something other than water storage, a critical need for his district.
"Let’s assume that we can trust the Legislature to spend this money on the 'water plan,'" Sonnenberg said. "Will that money be used to build storage? Or will it fund other projects such as removing water from agriculture for recreation or in-stream flows or urban growth? A past director of the Colorado Water Conservation Board has been quoted as saying that some rivers need to be 100% owned by the state to meet the agency’s conservation goals. That scares me and it should scare agriculture."
The Associated Press contributed to this report.