Colorado Limits Free Bets, Reworks Responsible Gaming, Punts On Cashless Wagering

December 16, 2022
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Colorado gaming regulators have adopted rules to drastically reduce tax deductions for free bets over the next three years, while approving a redesigned self-exclusion program and new responsible gaming requirements for casinos and online sportsbook operators.

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Colorado gaming regulators have adopted rules to drastically reduce tax deductions for free bets over the next three years, while approving a redesigned self-exclusion program and new responsible gaming requirements for casinos and online sportsbook operators.

The updated regulations approved by the Colorado Limited Gaming Control Commission on Thursday (December 15) allow operators before January 1, 2023 to continue calculating free-bet deduction as part of their net sports proceeds each month and carry over any unused free play credits accumulated on or before November 30, 2022.

Beginning January 1 through June 30, 2023, no more than 2.5 percent of the total amount of free bets can be deducted, declining to 2.4 percent on July 1, 2024, then 2 percent on July 1, 2025, before capping deductions at 1.75 percent on July 1, 2026.

Sports betting operators will also be banned from carrying over to the next month any free bets placed more than the deduction allowed for any month, or carry forward any unused free-bet credits accumulated before January 1, 2023.

During the meeting, Dan Hartman, director of the state’s Division of Gaming, noted that the new rules come after the state legislature approved a bill earlier this year to bring down free bet deductions.

The four-member commission also approved rules governing responsible gambling and simplified self-exclusion from both land-based casinos and mobile sports betting statewide.

In addition to offering self-exclusion, land-based operators must allow for patrons to opt-out in writing from direct marketing of gaming promotions, player club and card privileges related to gaming, on-site check cashing and complimentaries.

All advertising and promotional offers under the updated state regulations also must be accurate and transparent, any offers or bonuses cannot be described as “free, unless they absolutely are free.”

The redesigned Colorado state-wide self-exclusion program would allow casino gamblers and retail and mobile sports bettors to self exclude for the one-, three- or five-year terms offered.

The state-wide database would be distributed to all licensed sportsbook operators and land-based casino operators in Colorado and replace the current system that requires a problem gambler to sign up to self-exclude with each sportsbook or casino.

Also, self-excluding customers would be notified that self-excluding could result in exclusion from the same operators in different states.

Under two new rules approved for both sports betting and casino gaming, operators will have until April 1 to submit a responsible gaming program to the regulator, which must outline the licensee’s commitment to a “robust responsible gaming platform.”

Beginning October 1, 2023, and annually thereafter, licensees are required to submit any updates to their plans.

Among other details, regulators want the plans to include details of the use of player data and technology to aid in identifying potential problems gamblers.

“Detail should be provided on how the operators or a contracted third party’s technology will provide automated triggers on potential problem gamblers,” reads the rule, which is similar to new best practices for responsible gaming set to take effect in New Jersey in January.

“The list should provide detail on what triggers are being identified … (and) what plans the licensee is engaged in to continually update and learn the best way to identify problem gamblers” online or in their casino.

On Thursday, regulators also made permanent a rule creating a program to administer more than $2.5m in cash grants from the state’s Responsible Gaming Grant Fund. The funding is intending to train counselors and help provide treatment and recovery services in Colorado.

Peggy Brown, founder of Colorado Advocates for Problem Gambling, was supportive of the grant program and the division’s effort to implement a more robust responsible gambling model.

“This is all very rapidly changing,” Brown said. “It is something that is impacting the citizens of Colorado’s lives. We know what is going on with problem gambling in Colorado.”

The state Division of Gaming plans to submit grant applications to the commission for their review and approval by March 1.

Hartman confirmed the division has received several grant applications but has been asking some applicants for more information.

“It’s a unique program,” Hartman told the commission. “While the program is new, we find we are going back and forth just to make sure we have enough details when we present it to you.”

He also apologized for the filing late on Wednesday night of updated proposed regulations to enable cashless wagering in Colorado land-based casinos.

Hartman said he wanted to update the draft rules after attending the National Council of Legislators from Gaming States Conference over the weekend in Las Vegas.

In the end, the commission agreed to delay approval of the division’s cashless wagering proposal and allow the regulations to go through another round of stakeholder meetings. The proposed cashless gaming regulations are expected to be back before the commission next year.

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