March 17, 2026 · Finance · 40,563 words · 18 speakers · 225 segments
The Senate Finance, Ms. Riedebusch, will you please take the roll?
Senators, fall. Excused. Bright. Here. Present. Here. Excused. Present. Here. Here.
Thank you, everybody. We have a good quorum, and let's just go in. We're going to be doing the confirmation hearing for the banking board. We're going to start with that. Then we will be moving on to hear SB 26-128, Sales and Use Tax Destination Management, and then on to SB 26-131. But let us start with our banking board folks. I believe Cara Hunter is here to introduce both Megan Harmon, who I believe is remote, and Kimberly Gardner. So let's get started. Come on up. Welcome to Senate Finance. Thank you guys for being here. We really appreciate it. And we're going to start with Bank Commissioner Cara Hunter.
Thank you. Got it. Okay, let's start over. So good afternoon, Madam Chair and members of the committee. My name is Kara Hunter, and I serve as the Commissioner for the Division of Banking. The Division of Banking is responsible for the supervision and regulation of state charter commercial banks, state charter trust companies, and licensed money transmitters operating within the state. And also, we oversee and administer the Public Deposit Protection Act, which protects public deposits held by both state and national banks. Today I'm pleased to appear before the committee with two individuals who are before you for confirmation to the banking board, Kimberly Gardner representing Empower Trust Company and Megan Harmon representing the Eastern Colorado Bank. Both nominees bring valuable experience and perspectives from the banking and trust industry and we appreciate the opportunity to present them to you for your consideration. Thank you for your time today. We would be happy to proceed in whatever manner the chair prefers.
thank you well why don't we start with our person who is here in person this miss kimberly gardner please uh introduce yourself and tell us why you are willing to do this job and thank you
for stepping up to do it thank you madam chair and thank you members of the committee for your consideration today um i'm kimberly gardner i am the chief legal officer of empower trust company and i have been on the banking board for approximately two and a half years i took a vacant role and now I'm up for reappointment. So I appreciate the governor's confidence in reappointing me and appreciate all of your consideration here today. I've been with Empower for approximately nine and a half years working with the trust company, which is a Colorado state chartered trust company. So I have many years of experience working with that. Prior to that, I worked at the attorney general's office and prior to that, I worked for Colorado Para. So this role on the banking board brings kind of a unique perspective based on all of my experience first with the trust company and then also with administrative boards because at the ag's office i represented some of the dora boards so it's neat to be able to come back and actually be on one of the boards i i think the banking board serves a very important purpose in ensuring the safety and soundness of all of the colorado chartered banks trust companies and money transmitters and I would be honored to be reappointed to the board If there any questions I can answer for you I be happy to do so
Well, thank you. We will come back to questions, but first we're going to hear from Megan Harmon. And please introduce yourself and tell us about yourself, and thank you for being here and for stepping up into this role as well.
Thank you, Madam Chair, and thank you for members of the committee for hearing me today. I'm Megan Harmon. I'm the Chief Operations Officer with the Eastern Colorado Bank. I'm based in Colorado Springs. Our bank has been around for 81 years, and I've served for 25 years as an officer of the corporation. I was appointed to Chief Operations Officer in 2007. My experience with the bank has been to oversee operations, including the payment systems, the administration of our Public Deposit Protection Act, activities that need to occur to make sure that we're in compliance. And I serve on our compliance committee, our IT steering committee, executive committee, and various committees in the bank that give me a wide breadth of experience within our small community bank. I have served on the state banking board this last four years and thoroughly enjoyed my appointment. I've got to see some wonderful things happen with some different legislation that we've encountered, learned so much about our system. I love the fact about the way the board comes together to keep our banking system secure. I've loved working with the trust companies, the money service businesses, and feel that it's just a wonderful way for me to get my time back and offer what expertise I can to the state banking charter of institutions that we have in Colorado. I appreciate your consideration for my reappointment, and I'll take any questions if there are any at this time. Thank you.
Thank you. Members, do we have any questions for our nominees? Okay. You guys must have answered everybody's questions, so thank you so much.
Vice Chair Marchman. Thank you, Madam Chair. I move to the full Senate with a favorable recommendation, the reappointments of Megan Harmon and Kimberly Gardner to the Colorado Banking Board.
Thank you. That's a proper motion. Ms. Rudabish, will you please take the roll?
Aye. Aye.
Marchman? Aye.
Yes.
Congratulations. And Vice Chair Marchman?
I would recommend the consent calendar.
Is there any objection to the consent calendar for these appointees? Seeing none, you will be on the consent calendar, which means your nominations will likely go very speedily through the Senate. Thank you both for being here today, and we really appreciate you stepping up. We know these volunteer jobs are sometimes very time-consuming, and we know that we appreciate you lending your expertise to the state to fulfill them. So thank you so much. Thank you. Okay. And that brings us to our first bill, SB 26128, with Senators Snyder and Senators Kirkmeyer.
Senators Snyder, I assume you are going to go solo or are you expecting Senators Kirkmeyer? I was expecting Senators Kirkmeyer. I haven't texted her, but.
Okay. Give me a moment. We'll give you a moment. Thank you We are here to hear SB 26128. Who would like to go first? Senator Snyder.
Well, thank you, Madam Chair. Thank you, members, my fellow members of the Finance Committee for hearing Senate Bill 128 today. So I'm not sure if you're familiar with destination management companies, so just a brief primer. These are companies that bring a lot of events and really promote tourism in Colorado. You know, if a large, say a large company or a small one, I'll take Google for an example, they say, hey, we want to do a ski vacation in Colorado. These companies would then set up the entire program for them, book the hotel rooms, hire the caterers for the special events, the liquor for cocktail parties, sleigh rides, you name it, all the things that they might be interested in experiencing while they're here in Colorado. And these companies serve a valuable purpose. A company like Google, they don't want to get in all that administrative stuff and organizing. They just say, hey, you take care of all this and send us a bill. So as I said, they provide a unique and crucial role in keeping Colorado's tourism industry competitive and thriving. They're really truly a unique kind of an entity in what they do. There was some challenges in the years past from local governments looking to see if they could assess taxes on the fees and the services that they provide. Ultimately, they are unsuccessful because it was, could not be justified why sales and use tax should be assessed to those, which we don't charge sales and use tax on labor, on services. We charge it on things purchased. And they pay all applicable sales tax, sales and use tax, when they purchase those items. There's a lot of evidence in statute that these companies are not subject to sales and use tax. These companies do not have a wholesaler license. It's not like they're buying at a wholesale price and selling it back to somebody else at a retail price. So that is really not an issue. When their clients purchase at full retail, sellers purchase those products or remit the required sales tax when the initial purchase is made. If they are required to pay taxes on what the service fees that they assess to the ultimate client, it will put Colorado at a severe disadvantage. I think it would be very fair to say that these DMCs would start looking elsewhere to steer their clients toward. And these companies, we sent out a fact sheet, I don't know if you all had a chance to look at it, but you know, It generates about million in revenue and they pay million in state sales tax And this bill would protect the tens of millions of dollars that Colorado impact and preserve existing sales tax revenue Important to realize, they are not currently being taxed. If I can continue, I guess, we did have a long stakeholder call last week with the Department of Revenue, and we were very open. They first told us that there were some definitional deficiencies that they thought was a bit circular. We said we were absolutely happy to work on definitions. They said there might be some administrative and implementation problems, and we said we'd be happy to work on that, and I continue with that promise. I do think there's a better way for these companies to report what they're doing so it would be crystal clear. We did get our fiscal note. It's zero. And they even mentioned that to the degree that they have received overpayments of taxation, that was because some of the DMCs were not fully understanding what was taxable and what wasn't. So if anything, there's been overpayments by some of these DMCs not fully understanding that their labor, their services are not a taxable event. With that, I will invite my learned colleague.
Okay, learned colleague Senator Kirkmeyer.
Thank you. Again, no fiscal note. And it's a little confusing because the Department of Revenue wants to say that the bill is expected to minimally reduce sales and use tax revenue, which is subject to TABOR. I'm trying to understand that one when they also go on to say that as these destination management corporate companies provide this service, and when they buy goods, they pay sales tax. So they're not trying to get out of paying sales tax. They just don't want to pay sales tax on the services that they provide. That's what this boils down to. So, again, we're just trying to make sure that they don't get double tax. A local government did conduct an audit of destination management companies with the intent of trying to classify them as a retailer and thus their service fee be subject to sales and use tax, but hey, guess what? The effort by the local government was ultimately unsuccessful because they could not justify imposing a sales and use tax on legitimate services that destination management companies provide. So, hence the reason for the bill. We just want to make sure that it's clear in statute that these are service providers, that they are paying sales tax on the goods that they buy when it requires sales tax be paid. And we just want to make sure that there isn't essentially a double tax going on here and that it's clear for them and that we don't ruin a business that, you know, is in our state that helps bring even more tourism activities to our state. Because remember, tourism is one of the top three economic drivers in our state. And right now, you know, just coming over from the Joint Budget Committee, I can tell you that's pretty darn important. So, again, no fiscal note. They're not paying the tax now. We're just making sure they don't.
Please let the record reflect that Senator Mullica is here and Senator Snyder. Thank you. Thank you, Madam Chair.
You know, I think sometimes for simplicity's sake, let's just use two examples. So you hire a carpenter to build you a new deck, right? He goes out, he buys his materials at Home Depot or whomever. He might have a contractor discount or not. That's really not relevant here. Gets the materials, builds the deck, gives you a bill. That bill is going to be broken down. Here's what I spent on materials with the sales and use tax receipts, showing sales and use tax receipts. paid there and then they'll say and here's the labor and here's your total bill and currently we don't tax that labor what if this is if DOR institutes this tax on them it would be like taxing them when the client the customer pays that bill and it would be on the entire amount of the contract same thing with a server say a server has a party come in they have a wonderful meal you get your bill and then you add 20% on as a gratuity, let's say, that gratuity is not taxed with sales and use tax. This would be like adding that in to the total amount. So I think that just for simplicity's sake tells you exactly what the DMCs are facing and why the need for this bill to clarify that they are a service provider. They pay all applicable sales and use tax, but they should not be taxed on their services. Thank you.
Members, do we have questions, comments for our sponsors? Seeing none, that brings us to the end of our intro phase and on to the witness phase. Bill sponsors. There are four witnesses on your bill. There's one against and three, four. Would you like them all brought up together, or would you prefer to have them in separate panels? Four is a good number. Okay, well, we'll bring everybody up together then. And if you are here to testify on this bill, you probably know who you are. Let's bring you up. Josh Penz, Jeremy Bronson, Nicole Marsh, and Andrew Klosterman. And we're going to start with Mr. Penz, because I know you represent the Department of Revenue, and then we will go to all of our forewitnesses, if that's acceptable. So, Mr. Penz, thank you for being here.
Thank you, Madam Chair, members of the Finance Committee. I'm Josh Penz from the Department of Revenue, and I'm here today to respectfully request that you oppose Senate Bill 26-128 for three reasons. First, the bill represents a concerning shift in sales tax policy by changing how and when the goods are taxed. Second, treating these retailers differently may have a negative impact on state-administered local sales taxes. And third, this exemption, if adopted, will be one more way that the state sales tax differs from self-collecting home rule cities. We agree that nearly all of the items defined as destination management services are non-taxable services. However, the list includes providing goods to support the listed services. Providing goods in exchange for consideration is a taxable retail sale, and businesses making retail sales are retailers. This approach ensures uniformity, consistency, and fairness. All retail sales are taxed at the price paid by the final consumer and at the point where the goods are delivered to the final consumer. Taxing at the wholesale level means that the difference between the wholesale and the retail price will not be taxed. If the wholesaler does not collect a sufficient sales tax, destination management companies must self-impose and pay a use tax, and use taxes have historically had high rates of underreporting. Finally, proper tax collection will rely on the ability of suppliers and the department to properly classify businesses based upon their primary activity. State-administered local taxes have an even higher risk of erosion. Local tax bases will erode because the tax will be applied at the wholesale level. However most state local jurisdictions are not permitted to impose general use taxes Furthermore there a higher risk that the wholesale purchase will occur in a jurisdiction different from where the goods are delivered to the DMC customers This would shift the tax to the wholesale locality and may even incentivize purchasing from non-collecting out-of-state retailers. We believe it is unlikely that self-collecting homeroom municipalities will adopt similar exemptions. exemptions. Unless and until they do, this will be one more disparity between the state and these cities. This disparity will burden suppliers, and the DMCs themselves will not fully realize the relief they're seeking. If this bill is enacted, it is likely the first of many. There are undoubtedly other types of mixed sales and service businesses that would prefer to pay tax when they acquire property. We believe the approach taken to date is the best and therefore respectfully request that you oppose Senate Bill 26-128. Thank you for your time. I'm happy to answer any questions.
Thank you. We'll go through our entire panel, then we'll go to questions. So we're going to start on my left and go to my right. Oh, if you guys have a preferred order, why don't you do that order? Just introduce yourself before you speak.
Good afternoon, Madam Chair and members of the committee. My name is Nicole Marsh, and I'm the founder of Imprint Events Group, a Denver-based destination management company with roots in Colorado since 1969. Thank you for the opportunity to speak today in support of Senate Bill 26-128. DMCs are local partners helping bring meetings, conferences, and corporate events to Colorado. When a company chooses Denver, Colorado Springs, or the mountain communities, with their program we design and manage the experience and coordinate dozens of Colorado businesses, transportation companies, entertainers, venues, caterers, restaurants, and more. We pay tax on the taxable goods and services we provide or we purchase from these supplier partners. To give you a quick example, one program we produced involved more than 30 Colorado vendors. The event budget was $150,000, but the overall economic impact was $1.5 million once hotels, restaurants, transportation, and activities were included. Similar to Visit Denver and other destination marketing organizations, we travel around the country and around the globe, promoting Colorado as a place to host meetings and events using our own resources and our own money to do so. The reality is that attracting and booking these events is highly competitive. Companies evaluate multiple destinations, and states like Texas and Arizona already have passed legislation clarifying the tax treatment of DMCs. If Colorado becomes more expensive and less competitive, these programs can easily move elsewhere. Senate Bill 26-128 simplifies and clarifies the work we provide as a professional service. We already pay sales tax on taxable items we purchase. This bill ensures that our professional service is not taxed again simply because of how we bill our programs. When we lose even one program to another state, the impact is measured not just in revenue, but in hotel stays and lodgers tax, restaurant visits, and business for dozens of Colorado small businesses. Passing Senate Bill 26-128 helps ensure Colorado remains competitive for meetings and events while protecting the many small businesses that benefit from our industry. Thank you again for your consideration.
Thank you very much. And who would like to go next? Sir, please introduce yourself, and you have your three minutes.
Thanks, Madam Chair and members of the committee. My name is Jeremy Bronson. I own Occasions Catering, Denver's longest-serving catering company, and I'm also a founding board member and the policy chair of the Colorado Event Alliance. The purpose of SB 26-128 is straightforward and in the clear interest of Colorado. Plain and simple, the service that destination management companies provide is just that, a service. This bill seeks to avoid having that service erroneously subjected to sales tax DMCs are specialized general contractors who design comprehensive event programs and hire and coordinate all the vendors necessary to create a seamless guest experience, just like Nicole described with the example she mentioned. And this bill simply allows DMCs to bill their clients the way that the clients have asked to be billed without risking that simple act creating an additional tax liability. The Department of Revenue has said that the bill represents an erosion of tax revenue, but again as both Senators Snyder and Kirkmeyer mentioned, it's a zero dollar fiscal note and so we know that it's not affecting current sales tax revenue. They've also said it creates a bad precedent, but really it is just treating DMCs like the way construction general contractors have been treated for almost a century under Colorado law. DMCs act as contractors, construction companies act as contractors. It's a proven model that works well and is fair to all parties. And I just want to remind the members what's at stake here. DMCs often get to choose and direct whether they bring their clients to Colorado or whether they send them to another state that is happy to host them and eager for their revenue dollars. An average million dollar DMC program generates 10 million dollars in local economic impact. Losing just one of those programs wipes out the entire theoretical marginal sales tax revenue that could be collected if this bill were not clearly, if this clarification were not clearly made. So this bill is right for sales tax revenue, for small businesses in Colorado, and for the states, very important travel and tourism industry. We hope you'll all support it. Thanks very much.
Thank you. And please, sir. Thank you very much,
lady chairman and the committee. My name is Andy Klosterman. I am the president of the Colorado Event Alliance, and I own a company called Peak Beverage here in town as well. We're 14 years of age for our company. Personally, my company generates maybe 10 to 15 percent of our total overall revenue from DMCs. And the entire event infrastructure relies upon these types of companies to exist in to expand on that the entire hospitality industry. So if you imagine a destination management company as the first stop for any outside organization or company of sufficient size that does their event at convention centers or large event venues or restaurants or anything like that in town, the first stop is typically a destination management company like Nicole has. Recently Nicole shared a story with me about her going to Dubai to advertise to the people, to the businesses there to bring business here to Colorado. So if you think about the entire hospitality ecosystem of Colorado, DMCs are literally at the top of that ecosystem and everything kind of flows through from there. Their hotel bookings, the restaurants that they go to, going downtown to go to the shops and then coming back to Colorado a year or months later with their family because they like the business experience that they had while here in Colorado. I also wanted to reference the reason that this bill came about was because we were talking with other folks in other states that have been successful in passing this legislation. As DMCs as an entity become more popular in the United States it important for Colorado to know that this issue became more and more paramount And so because it's already passed in Arizona and Texas as examples, what we don't want to happen is that when we're showing essentially bids from Los Angeles and Dallas and Phoenix and Denver, that Denver's bill essentially to an organization like Google or the orthodontic society or something like that will have an 8.25% or whatever the sales tax markup would be. It will make Colorado look very disparate in terms of getting that business to us here in the state. So with that, I'd ask for your strong support of this bill and to support Colorado's hospitality industry that really begins with DMCs. Thank you.
Wonderful. Members, what questions do we have for our panel? Senator Snyder.
Thank you, Madam Chair. And I just had a couple questions for Mr. Penns, who I've worked with for many, many years. Are you familiar? Do you know that we have bringing in amendment L-001, specifically removing the language about goods in support of the activities described? So when I heard your testimony, I was wondering if you had benefit of that amendment and if that would change your analysis. Mr. Pence.
Thank you, Madam Chair. Senator Snyder, I haven't seen that amendment yet. But, yeah, if what we're talking about is that we're removing goods from the exemption, that's our principal concern, is that we see these folks, when they sell goods, we see them as retailers. We're not arguing that the services that they provide are taxable. We're just saying that like any other service provider that sells goods, with respect to that sale of goods, we believe that they're a retailer and they ought to collect a retail sales tax on the price charged for that good.
Senator Snyder. Thank you for that clarification. I do believe this amendment will address exactly what you're talking about there. And then as we... Senator Snyder. Thank you. One final question. So we talked about how the fiscal note is zero on here, and I was just going to read a little language out of that fiscal note. It says, therefore, by defining DMCs as service providers, a bill does not alter the number of times sales tax is required to be paid. Rather, it clarifies and by whom the sales tax is required to be paid. DMCs when they purchase taxable goods or services on behalf of their client and not the client purchasing DMC services. As a result, the bill will reduce sales and use tax revenue only to the extent that a DMC was erroneously paying sales tax on both their purchases and sales. So I guess my question would be, are you aware of anybody, any of these DMCs having actually paid taxes on their services? and do we owe them a refund?
Mr. Pence? Thank you, Madam Chair. Senator Snyder, I'm not aware of whether they have been paying tax on their services. I hope they have not because we agree that, like other service providers, their services are non-taxable. The key for us is that when services and sales of goods are mixed, the services need to be separable from the sale of goods and separately stated. And so, for example, when you go to an office repair shop, right? They charge you a price for the parts that they installed on your car and a price for the labor. And as long as that labor is separately stated, we're not going to tax that. We are going to tax, ask that they collect tax from you as the purchaser on the full price that they charged you for those parts. And that price is going to include their markup for overhead, for labor, for profit. That markup price that they charge is different from the price that they pay at wholesale, and we're going to want tax on that price, but not on the price of the service to install that part onto your car. Thank you.
Further questions? Senator Marchman, Vice Chair Marchman.
Thank you. So, Mr. Pence, I'm just a little confused because the fiscal does say zero, and yet you identified three expenditures that could creep up in this and you'd like us to oppose the bill because of that. So I'm wondering if you could quantify what each of those three components would lead to since it's not on the fiscal note. Mr. Pence.
Thank you, Madam Chair. Vice Chair Marchman, the only cost of those three to the state would be the difference between the wholesale price when they buy the goods that they're selling to their customers and the retail price that they would charge to their customer. That would be the difference to the state. The other two are, well, the second one would be a difference to the locals. The locals that follow, that are state administered, follow the state base. So they would also have that spread between the wholesale and the retail prices. the locals could also suffer if the goods are bought in one city and delivered to the DMC's customers in another city because if they're paying tax at the wholesale level, they're going to pay tax in that city that they bought it in rather than the city that it's delivered. The third point is that one of the things that was mentioned earlier was that the way this came up was from a local audit. That's got to be a home rule city that's doing a local audit, right? They will not follow this exemption. They would need to adopt this exemption at the local level. And if they do not, we'll have that further disparity, which is something that this General Assembly, the simplification of the sales and use tax in our state, is something that we've been studying for many years. And so furthering that disparity between the state and the home rule cities concerns us from a simplification perspective.
Vice Chair Marchman. Thank you. That's helpful. And then I understand, I think I heard Texas is one of the states that is doing this. I'm just curious, Texas, I'm from Texas, like it's a really big state with a lot of complications. I'm just wondering if Texas has been able to do this, what's keeping us from doing it, if that makes sense. Who would like to take that question? Is that for Mr. Penns? I was asking.
Mr. Penns. Thank you, Madam Chair, Vice Chair Marchman. I'm not familiar with Texas' statute or how they've done this. I will say that Texas is a state-administered state, and so Texas, the state comptroller collects all of the state and local taxes, and those are all based on the state base. So they would not likely have those second and third concerns that we have But yeah they may have given up some of the spread there between the wholesale and the retail prices Okay Thank you
Yeah, go ahead, Senator Snyder. Thank you, Madam Chair. And for the other three witnesses, I do agree that there's a little bit of lack of clarity in the systems that you use as far as billing and ultimately give to the client. Would you be willing to look at perhaps a more simplified or more easily explained type of reporting system? This is something that we had offered to work with the Department of Revenue on. We didn't really get any interest in that. But I do think that for purposes of clarity and to avoid these kinds of discussions, there could be some opportunities. I'm just curious how your existing billing structure and business model works and if there would be room for improvement in how you report to revenue.
Ms. Marsh. Yes, I'm happy to answer that. Right now we bill how the client asks us to bill, so there's not a consistent way. One company might want everything bundled into I have a $200 per person budget, I need to show it as a $200. One might say I have $100,000 and I need to show it that way. Some of them want every line item broken down, others want our fee separate. So there's not a consistent way. We bill how our client asks us. In the initial discovery call, it is, how would you like to see our services billed? And they say, I would like to see it this way, because that is what their company or their boss or whomever is asking for it to see. So I think there's a little bit of a challenge. Happy to try to work around it, but a little challenge, because we want to do what's best for the client in providing that service and how they'd like to see it done. Thank you. Thank you.
I do have a question. I'm going to push back a little bit on you folks with the Colorado Event Alliance because you're telling me, oh, well, you know, you're going to be in a disadvantage to Texas and a disadvantage to Arizona. Are you aware that Colorado, of the states that have sales tax, which is 45 of them, has the lowest sales tax in the country? So we're at 2.9% sales tax, and Arizona is at 5.6%, and Texas is at 6.25%. So, I mean, it always gets my back up when people start to threaten Colorado with their business. It's like, you're charging too much tax. We are the lowest in the entire country, say for the five that probably just charge extra property tax. Are you aware of this?
Mr. Bronson. Hi. We are certainly not here to ask Colorado to raise sales tax, to raise its rates. And we're just trying to do all we can to try to make sure. The site selection conference that was here a few months ago really did indicate that Colorado struggles to be competitive. Maybe it's fair to say that that is not solely on the basis of sales tax. I think that that's true. But we, this, our industry is one that there is a great deal of competition in all forms related to costs from state to state. So we really applaud all the work that the legislature does to try to keep sales tax rates down and invest taxpayer resources wisely. And still, this is a real issue that the destination management companies grapple with on a regular basis as they are working with their clients and trying to support Colorado destinations. Thank you.
Any other questions for our witnesses? Oh, I'm sorry. Mr. I'm sorry. Closterman. Closterman. Yeah, thank you.
In addition to that I guess if you picture the orthodontic society or whatever coming into town they not seeing sales tax I guess lined out in terms of like what state has less sales tax or more What we're trying to do is avoid the disparity of showing sales tax on, let's say, the bill's $100,000 in four different markets. This would show $100,000 plus sales tax, which other markets would not show. So it's almost the perception of that rather than the actual case of sales tax itself, if that makes sense. Okay, thank you.
Any other questions for our panel? Seeing none, you may be excused. Thank you so much for being here today. We appreciate it. Is there anybody else in the room who wishes to testify on this bill? Speak now or forever hold your peace. That brings us to the end of the amendment phase. Let's bring our witnesses back up for the amendment phase. And it sounds like you do have an amendment. Senator Snyder.
As a matter of fact, we do have an amendment. Thank you.
Would you like to move your amendment and tell us about it?
I move L001 to Senate Bill 128.
Okay. Please tell us about it. Did you want to? Go ahead.
So as you heard from Mr. Penns, There was something in the bill that made it a little unclear whether or not goods and services would be combined in certain circumstances. So what this amendment does is strikes that language from page 3, lines 19 and 20. It's making it very clear we're just talking about the services and not the goods at all under this bill. So I think it's a clarifying amendment, and it, I believe, addresses DORs, one of their concerns. Thank you.
Is there any objection, or are there any questions about L-001? Is there any objection to L-001? Seeing none, L-001 is adopted. Do you have any further amendments?
No, ma'am.
Members, do you have any amendments for this bill? Seeing none, the amendment phase is closed. Who would like to close first? Senator Kirkmeyer. I'll start. Thank you, Madam Chair. Appreciate it. First of all, I just want to say that these destination management companies, they're not wholesalers. So when they go purchase goods, so let's just think kind of one of the things all the way through. They're purchasing, let's say they're setting up a dinner, a big, huge dinner for a client, and they go purchase flowers. They pay the sales tax on the flower. They're not going to the wholesaler and getting the flowers and arranging them themselves and then delivering them. In that case, they should pay sales tax, but they are not. They are ordering from a floral shop and saying, hey, we need flower arrangements for all the tables, and they pay sales tax on it. Then they may go to the hotel or the convention center or wherever it is, and they set up the dinner, and they pick out the dinner for the client, and whatever sales tax is required on that, they pay the sales tax. They put all that together in a package, and then they put their fee on it for the service that they provide it by going through and organizing this big, huge dinner for this convention. What we're saying is there is no sales tax paid on that service provision. This just clarifies that there would be no sales tax paid in the future on it because it is a service. They are not a wholesaler They are providing a service They are not marking up the goods Like if they put together a ski package for a corporation they not marking them up and reselling them as their own good They are selling the package all together, and they put their fee on it for the service that they provide. That's what we're just trying to clarify and make sure it's clear here. So, again, there is no sales tax. Our law is very clear. There is no sales tax on service providers, and we would like to make sure that it stays that way. That's what this bill is about, just clarification. Thank you. Ask for an aye vote. Thank you. Senator Snyder.
Thank you, Madam Chair, and thank you again to the committee, and thanks to our witnesses who came in and testified. I think I started out by saying we've been trying to work with DOR. They originally expressed concerns with the definitions. They thought it was a little bit circular. We were happy to work through that with them. They said there might be some administrative difficulties, although I think the fiscal note tells us that that's not the case. But nevertheless, we did offer to work with them, see if there's something we could do to ease the administrative burden. Frankly, they were not interested in that either. So it's really a unique space for me when I am at odds with Mr. Penz, who I have great admiration for. But I think the taxing landscape and the commercial space, the lines are getting a little bit blurred between what is a service, what is a good. And I think as Senator Kirkmeyer said, these are not a case of where they're buying it wholesale, selling it retail. These are not people that have wholesale licenses. I think we heard testimony from one of the witnesses that the clients prefer the bills in all different kinds of manners. So even though I've posited that maybe we could get a little more uniformity there, I don't think that really lends to their business model. But I do think we can improve what DOR is looking at and make it clear to them what is subject to sales and use tax that's already been paid, what is clearly a service or labor that is not subject to tax, and we commit to continuing that process in order to make this even a better bill. And with that, I would ask respectfully for an aye vote. Thank you.
Members, questions, comments? Senator Bright. Thank you, Madam Chair, and thank you, Bill Sponsors, for bringing this. As the owner of a service-based industry, I can see the camel nose underneath the tent. so to speak here. And I'm glad that you're highlighting this space because this definition definitely needs to be prescribed, identified very clearly so that everyone can see what's going on. So I appreciate you bringing it. I'll be in favor of this bill and anything else that helps to identify very clearly the boundaries here. Thank you. Other comments? I will just say I almost wonder if this bill isn't the result of some kind of misunderstanding because we all seem to agree that services should not be taxed, right? We know that this is Colorado. That's a whole different debate whether somebody wanted to tax services or not. And it sounds like it's mainly a reporting issue. It's like, well, if you're going to tell us what you report accurately with these things in this category and these things in this category, everybody would agree. It sounds to me like that's where we are and so I appreciate that you're going to continue to work with them on this bill because I just wonder if we're all agreeing on most of the things, what the need is here. But I will be a yes for today because I want you to keep working on that. So with that, Senator Snyder, an appropriate motion would be to move your bill to the Committee of the Whole.
Thank you, Madam Chair. I move Senate Bill 128 as amended to the Committee of the Whole with a favorable recommendation. Thank you.
Ms. Rudebush, will you please take the roll?
Senator Spall. Aye. Aye. Yes. Aye. Aye. Yes.
Congratulations. You are on to the committee of the whole. And I would ask Senator Snyder if you would want to be on this consent calendar because will you be continuing to work on this?
Or would?
If I can confer for a minute. Madam Chair.
Senator Snyder. I would recommend this bill for the consent calendar. With full knowledge that it still has a hole in the chamber to go through, so we can continue to work even if we're on consent. Thank you.
Is there objection to the consent calendar? Seeing none, this bill will be on the consent calendar. Thank you very much, sponsors. Thank you, committee. Thank you. And that brings us to our second bill, SB 26131, Sports Betting Protection, with our senators who seem to be here in the room already, Senators Ball and Pelton B. Okay. And then they've asked for these folks to come up in that order on opposition. Is that acceptable to you? So I think we can do that. I'm just going to sit down. I'm just going to sit down because I feel a little luck of the Irish. Don't get embarrassed. With him on the TV, it's not going to make us look too bad. You said you got it at a thrift store. Thank you, Bill Sponsors. Who would like to go first? Senator Pelton. Thank you, Madam Chair and members of the committee for considering. Sorry. Is that like one of those sports apps? Yeah, I'm not going there. Not going there. All right. Thank you Madam Chair and members of the committee. This is a bipartisan effort that reflects the geographic and political diversity of our state. I represent Northeast Colorado communities where common sense personal responsibility and accountability aren just talking points they a way of life My co represents urban and suburban districts but we come together around a shared concern At its core this bill is about balance When Colorado voters passed Proposition DD, they made a clear decision to allow legal sports betting for adults with the understanding that it would be regulated, limited, and support critical water projects across the state. That decision deserves our respect. And I believe strongly in personal responsibility. Adults should be free to make their own choices, including whether or not to place a bet. But personal responsibility only works when the system itself is fair, transparent, and not stacked against people. What we've seen in recent years is an industry that has grown rapidly, far beyond what many Coloradans expected. The volume of advertising, the ease of placing bets from a digital phone, and the constant push to engage new users, especially younger users, has changed the landscape. You don't have to be a sports bettor to see it. You just have to look around in your community. In the parts of Colorado I represent, when folks get into financial trouble, there's not always a net to catch them. And increasingly, we're seeing young people, particularly young men, being drawn into sports betting in ways that can lead to real financial consequences. So this bill takes a balanced approach. 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. We have an obligation to ensure that a legal product isn't being marketed or structured in a way that creates preventable harms. We can uphold personal responsibility while also setting clear boundaries. two things that are not in conflict, and they are complementary. This bill reflects that balance. I respectfully ask you to support Senate Bill 131, and then I'll turn it over to my co-prime. Thank you. Senator Ball. Thank you, Madam Chair, and thank you, members of the committee. I'd first like to thank the coalition that has come together behind this bill. You'll hear from many of them today, but we have a number of organizations that care a lot about mental health, and kids, from teachers to parents to people who have experience with gambling addiction, who you'll hear from today, and I want to thank them all for their hard work on this bill. Colleagues, sometimes I think that we forget that gambling is an addiction. It is in the DSM-5. It is like alcoholism. It is like substance abuse. They all operate on the same reward pathways in the brain, they all lead to a loss of control and compulsive behavior. They all cause people to prioritize the substance or the thing over that person's responsibilities and their relationships with other people. With gambling addiction, there's a lot of shame because you're not high, you're making decisions. And so people feel like they should have been able to control themselves. So instead of asking for help, people try to fix it. And that means betting more money. It is the only addiction where you think that the cure for your addiction is doing that thing one more time. Losses pile up so people double down and they double down until suddenly you can't pay your credit card anymore because you barely have enough money left to pay the mortgage. And because there are no visible physical signs, it is very easy to hide. It happens alone. It is isolating it is dark and it is seriously intertwined with depression and suicide Unlike almost any other addiction there is a very strong link between gambling addiction and suicide Half of people who are addicted to gambling consider suicide One in five report attempting it. That's astronomical. And that impact is not just limited to someone who is addicted to gambling. It also impacts their families, the community around them, society as a whole. sports betting leads to an enormous increase in domestic violence over a 25% increase in bankruptcies auto loan defaults and these are all things that have a social cost by some estimates for every dollar that we take in in tax revenue from gambling we spend three to four dollars as a society in social costs 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. The first year after Colorado legalized online sports betting, calls to our problem gambling hotline, that means people are at the end of their rope, they are calling for help, increased by 45%. That was year one. At the time, it was a $1 billion industry in Colorado. It has now grown to $6 billion. Five to eight million people in this country are now struggling with some type of problem gaming. 10 years ago, the numbers were much, much different. It was around 2 to 3 million people, 1%. It's now 2 to 3% of Americans. If you ask Colorado, 73% of them agree that legalized sports betting has made problem gambling worse. And I don't think this is a shock to anybody because it has literally happened in front of our eyes. I watch a lot of sports. If you watch sports, you will see, because the average fan sees every 13 seconds, some mention of sports betting. It is constant. We are bombarded with it. And the scale of the industry has exploded. We have gone from basically no industry in 2018 to $13 billion in 2019 to over $120 billion annually today. FanDuel and DraftKings now each generate between $4 and $7 billion per year in revenue. I think this has all happened basically for two reasons. The first, most obviously, is we legalized it. We referred this to the ballot. We voted on it. People approved it. And we legalized online sports betting. But importantly, we really did not put any restrictions in place. There's a book that came out last year called Losing Big. It's been featured on the Today Show. It focuses a lot on Colorado. And it talks about the rushed process that we went through to write the regulations to implement Prop DDE. because we started collecting revenue almost immediately. And of the initial working group, of the 57 people in that working group, 51 came from the industry. They wrote the rules, and we did not write many rules. And then the second thing that has happened is that what people voted on is very, very different than what we have today. When we voted on this, the image was a bet that you make on Sunday on the Broncos. Somewhat famously, the very first bet placed in Colorado was Alec Garnett putting, I think it was $20, on a Broncos game. But online sports betting apps now are very different. They have basically become a casino in your pocket. And that is both because you can bet on absolutely anything. It can be whether the next pitch is going to be a ball or a strike. It can be on Eastern European table tennis. And it's also because of the push notifications. And again I would like people to think about this like any other substance A push notification to someone who is addicted to gambling is like coming up to an alcoholic several times throughout the day and saying have a drink have a drink have a drink And when you combine that with the ads, what you get is what is unfolding before our eyes today, which is a public health crisis. And so I think the question that we have to ask ourselves as a state is, are we going to let a public health crisis unfold and not do anything about it? and I think we need to have the moral backbone to answer that question, no. With all kinds of things that cause addiction, we have dealt with, as a society, and come to a place where we think we've got the right amount of protecting people, but allowing people to do that thing. That happened with smoking first. It was a long fight. It was an industry that was embedded in American culture, had a lot of money. It happened with alcohol. It happened with cannabis. As a state, we have struggled with that. We legalized cannabis, and then I think afterwards realized, actually, this has some consequences, this has some harms that we need to take into account. We have unleashed online sports betting, and now we need to be responsible. We need to actually put some restrictions in place that place a little bit of friction so that it is not so easy to become addicted. Because what is happening right now is a crisis, and it is happening with young men in particular, high schoolers, college students, who are becoming addicted at record rates. And that's what this bill is about preventing. We're going to have some great panelists. I won't go into too much detail at the bill. I just want to say two last things, which is we will be bringing some amendments today that will address some of the advertising restrictions. I'm happy to talk about these now or later. But those will pair back that section to focus really on advertisements directed at kids. What we're doing is mirroring what we do for cannabis, having those same rules in place for online sports betting. And then the second thing I'll mention is we have some guests who've flown in here today on our first panel in support of the bill who are national experts on this issue, and I would just encourage everyone on committee to take advantage of the expertise that we will have today. Thank you so much for your time, and I encourage an aye vote. Thank you. Members, would it be helpful for our bill sponsors to go through the amendments now so that we know what will be coming. I think it might be. Can you please do that? Who would like to take that? Senator Ball. Yes, thank you, Madam Chair. So we have, I believe, four. And before that, it looks like Senator Mullica has a more immediate question. I have a question. Yeah. I might pass them out and then I can. Right. Great. Okay. So we have Katie for her. I'll make the stack. Here. Thank you. Thank you. One more. Okay, I think now everybody has a copy of all of the amendments. Thank you for your patience. Senator Ball, please walk us through them. Thanks, Madam Chair. So we have L-001, 3, 4, and 5. I'll cover the first three, and then my colleague from the Eastern Plains can cover the last one. So Senate Bill, or sorry, Senate Bill. Amendment L-001 is the amendment that I was just talking about. So we are removing what was in the original bill, which was essentially a ban between daylight hours for advertisements. What L001 does is it aligns this with the rules we have in place for cannabis, which are that you can't have an advertisement where you know that the audience is 70% or less adults. Basic idea being that we're trying to restrict advertisements where a large percentage of the people watching are kids. So that's L001. L003 is clarifying the reach of this section. so Colorado doesn't have the ability to regulate for instance broadcasts that start in other states like the national championship game for instance broadcasts elsewhere that you watch on a network on TV this clarifies that the advertising restriction is about broadcasts that originate inside the state that was always true but we're just making that clear and then the last thing L004 is it adds a severability clause We're very, very confident that L-001 and L-003 take care of any potential First Amendment issues. Again, these are aligning with rules that have been in place and are constitutionally sound, but we're adding L-004 as a severability clause, just taking a belt and suspender approach. Do you want to cover L-005? Senator Pelton. Thank you, Madam Chair. And we had lots of discussions about this advertising piece between the two sponsors for quite some time because we noticed that, especially after we got an email from the broadcasters about how it could be a First Amendment violation. So we're doing the best we can to make sure we stay without violating that. So L005 basically was brought to me trying to, the Colorado River District came to me and was concerned that we are creating, instead of creating a floor like we are with the water money being transferred to the water plan, they felt like there's a chance we could create a ceiling. So this would essentially solve that or try to solve that where we strike where it says to extend the unexpected and unencumbered money in the fund permits. So that's what we're trying to accomplish with this one. Thank you. Members, do we have any questions now for our bill sponsors about the amendments or anything else? Senator Mullick I think your hand was up first Thank you Madam Chair Thank you Bill Sponsors for bringing the bill I think I really appreciate your comments because I think you coming at it with a good heart And I do think that there are legitimate issues that need to be addressed here. And I would argue that I don't think it's just young men. I think it's young women as well. And I believe there is addiction issues that can arise from this. And I don't think that that's made up by any means. I think my question is, you know, I tend to be on the side of restrictions. I've ran things around like flavored tobacco. And, you know, we've had conversations in this committee with the lottery system here in Colorado and online gaming, you know, that I have some strong opinions on. I think the thing with this that I'm interested in is that this went to the voters. um the voters spoke and um and in this position that we have i'm very conscious uh conscious of uh overriding the will of the voters and what are they wanting and and um and and not necessarily i think that's what the whole bill does because i agree with you senator uh ball that uh there's a lot of restrictions that you're trying to put in um but there's a portion of the bill that's elimination around prop betting. And obviously this was allowed from legislation from the voters. And so that's not just restrictions, that's elimination. And, you know, I'm a big proponent of how do we keep these products from our youth and how do we make sure that they're not utilizing them? How do we make sure that this is being done in the most responsible way, just like we do for cannabis, just like we do for alcohol, just like we do for these other products? but we haven't passed a bill to eliminate beer in the state or a type of something necessarily. And I think that there is a piece of this bill that is eliminating and not just putting restrictions. And I just want to try to see if you can address that a little bit, because that's where some of my heartburn is coming from on the legislation and issues that I'm having, is that I'm a big proponent and supporter of what you're trying to do on the restrictions. I'm struggling on the elimination, though. Senator Ball.
Thank you, Madam Chair. A couple of responses to that, and I appreciate the question, Senator Maloka. So just to be clear, prop bets were not in the ballot language. This wasn't something that voters saw when they voted on this. There was a mention of prop bets and restrictions on that for college athletes that was in the referred legislation, but this wasn't something that was front and center. And prop bets at that time also were really, really different. I mean, sports betting has existed for a long time, but basically for the last 100 years, you could only do it in person in Nevada. And so a sports book was really just placing bets on games. Prop bets existed, but they didn't exist like they do now. The type of really high-velocity, algorithmic, you have a constant menu of both prop bets and parlays. That just wasn't a thing. I mean, when sports betting was first legalized, what existed was daily fantasy sports. So I think what we're talking about putting restrictions on is actually something that very clearly wasn't on voters' minds, because that product in its current form just didn't exist. What we're seeing now is something that I don't think anybody reasonably anticipated at the time that they voted in 2019.
Thank you. Vice Chair Marchman.
Thank you Thank you Madam Chair and thank you Bill Sponsors for this bill I did just want to go back to what I just heard Senator Mullica because this is what trips me up to We can refer measures to the voters, and we do that by running a piece of legislation, and then either it passes or it doesn't, but if it passes, it gets sent to the voters. And so I'm looking at that, and the definition of sports betting operation means a licensed wagering operation in which bets are placed on sports events through any system or method of wagering, including single game bets, teaser bets, parlays, over-under, money line, pools, exchange wagering, in-game wagering, in-play bets, proposition bets, other than those related to college sporting events, or straight bets. So I go back to, I assume that our voters are, in fact, educated about what it is that we're putting out. If this was in our legislation, it was in the blue book, too, about prop bets. I'm sure we could go check that out. But that's what I'm struggling with because I feel like if we want to take prop bets out, we owe it to the voters to go back to them and ask them to take that part out. So that's my hiccup in this, is I very much believe in the words we put on paper and what we put in front of the voters. And I think we were really clear in this policy that PropBet would be included.
Senator Frizzell. Oh, I'm sorry. Did you guys want to respond to that? I apologize. Senator Frizzell.
Thank you, Madam Chair. So I'm curious, and I have to confess I do not have an app because I'm super cheap and I don't gamble. But we've had this conversation around age verification before. We had this conversation in the last session when there was a bill to add age verification to porn sites, online porn sites. and everybody lost their minds. Okay, not everybody. I didn't. I thought it was a great idea. But there were people who literally lost their minds over the idea that, you know, a miner would have to actually demonstrate that they were of age to access material that they are legally not able to. So and one of my parallels that I drew to that is sports betting. So these apps, because they have very stringent, as I understand it, and as it's been explained to me, very stringent requirements to demonstrate your age. So when we're talking about minors accessing and being able to use these sites, why, what's not working? Can you help me understand what's not working? I mean, those are the parents who are like, oh, here, use my ID or whatever. I think it's really, I mean, so I'm not, I just don't understand why this isn't working, because this is the only thing that we require people to prove their age in order to access.
Senator Ball. Thank you, Madam Chair. That's a great question. You know, I'll defer, I know we're going to have some representatives of the industry to talk about how they verify. I know we'll also hear from some people who've been addicted to sports betting or mothers of people who bet underage so maybe they can shed a little bit more light on how you get around it I heard lots of different stories whether it parents who are giving their kids access willingly to kids who are spoofing the system somehow or getting access to their parents' phones. I would say, at the end of the day, we know it's happening a lot. I mean, 60 to 80 percent, according to some surveys of high school kids have placed a bet on sports in a one-year period. I mean, it's really rampant. I've heard countless stories from everyone from teachers who see kids with a phone out in the middle of high school class and they need to tell them to put it away to moms of college kids who come home because they've put $15,000 on their credit card on a Friday and they're underage. So I would say part of the reason it's happening is because it is a product marketed towards that demographic. and when you have like sports stars and Kevin Hart and it's pumped to you in your social media feed because your content is curated for you as like a 16-year-old male, that's where it really takes root. There have been surveys of high school students who all say they hear about it in two places, word of mouth and the ads. So however people are getting across the age verification threshold, they are, but I think the bigger reason they are is because this is pumped at, this demographic, constantly. And the adolescent brain is just not fully developed. I have a seven-year-old son, and when he sees the ads come on, he wants to start a lemonade stand. He's really into making money from a lemonade stand. And he sees the ads come on, it's like he gets a bonus bet, and he can make $500, and they're going to give him some amount for free to get started. It hooks on to the way his brain works. So that, I think, is the bigger reason why we just see such an uptick among this population.
Thank you. More questions. Senator Snyder.
Thank you, Madam Chair. I recently have been serving on the Education Committee, and all we hear is about how kids are not proficient in math, but apparently they're able to navigate online betting site. Getting back to the proposition bets, I think, if I heard you correctly, you said that was not in the ballot measure, but I'm looking at some language right here, which clearly puts it in there. So I'm just wondering if the voters spoke, and I'm assuming probably erroneously that they read the entire measure before voting on it, but it does say including the individual performance statistics of athletes in a sport event or combination of sporting events. And then, if you'll bear with me, it also says prohibited sports events only with respect to proposition bets, a collegiate sports event. So it's a little awkward, but I think that's saying that proposition bets were allowed. And my understanding is that every proposition bet that's put up is approved by the Gaming Commission. Is that your understanding?
Senator Ball. Thank you, Madam Chair. To take your last question first, it's a great question, and I know we're going to have someone here from the Division of Gaming, so maybe they can speak to that. I know our Division of Gaming doesn't collect information about, or not much information about, proposition bets from the big sports bettors. I think they could probably speak a little bit more to what's approved and what's not, information they do have. To clarify on the prop bets point, I think I was just talking about whether the language is in the enabling legislation or what a voter sees when they vote on it. I would just add, though, we've made changes to this statute before. This is not the first time the legislature has come back and made changes. We made some last year. In fact, last year we came back because we had been giving, effectively, a tax break to the industry. Initially, we walked that back. I don't think at the time, I don't recall, but don't think at the time there were a lot of objections to that because that had been part of what voters initially approved. And that's true for a whole host of things. I think it would be a pretty bad precedent to start if we weren't willing to make changes that are in line with the spirit of what voters passed. I could quote much more language that's in the ballot and the enabling legislation on responsible gambling and placing restrictions in place to make sure that we don't have runaway gambling and runaway addiction. that's all over the enabling legislation. So I think it would be perverse if we didn't allow ourselves to do that because of a mention of Proposition Betts in the statute that we have already made changes to.
Senator, oh, do you have a follow-up?
Two quick ones.
Go ahead, Senator Snyder.
You mentioned the broadcasting piece, which I know I've expressed to you some of my concerns. It seems like you have a way forward, but how do we regulate, Let's say a national company, and many of these members of the Sports Betting Alliance are national companies. They place a national ad for the Super Bowl, but it would not comport with what's in your bill. How do they charge for that, and then do they exempt the four television markets that serve Colorado? Denver, Colorado Springs, Grand Junction, and I believe New Mexico serve Southern Colorado. So I'm just trying to figure out how that would work if you get a national advertising contract, but then you have to, do they have to then just say, okay, it won't run in Colorado, and then the local stations would hopefully sell their own advertising to replace that air? I'm just trying to figure out how that works.
Senator Ball.
Thank you, Madam Chair. So that's the thinking behind L002, which talks about the origination of the broadcast. So, I mean, short answer to your question is no. If this is the Super Bowl and let's say the last Super Bowl, right, aired in California, broadcast on most major networks, there's nothing, I think, constitutionally that we could do that would, you know, restrict that broadcast since it's originating outside the state and being broadcast into it. This is not unique. In Massachusetts, for instance, they are just moving to a regulation where there's a 25%, 75% breakdown. We made our 70-30 to align with cannabis, since that's something that we already do as a state, so there's been some consistency here in state law. But it's not unheard of to have restrictions that apply to, like, an in-state broadcast, right? These also apply to social media in a different way than something that, like a sports game outside the state that's broadcast in.
One final question.
Senator Snyder. This might be more apropos for your co-prime sponsor, But I know the last part of the bill, we fund our Colorado water plan with proceeds and revenues derived from sports betting. And so the way I read it, the floor for every year will be the previous year's contribution to the water plan. So I guess I concerned mostly if there a dip and I don think we expecting a dip but you never know how things can work out If there is a dip below the previous year contribution would that mean that the general fund would have to make up that difference in order to adhere to the law
Senator Pelton.
Yes.
Thank you, Madam Chair.
It would be completely up to the JBC at that point, but yes, that's what it would be. But it would be up to the JBC whether they fund it or not. Okay.
Thank you. Senator Kolker.
Excuse me. Thank you, Madam Chair. Just to follow up a little bit on the prop bet, in the actual ballot measure, it doesn't say anything on the Secretary of State's website about prop bet. It does say it in the blue book. It does say it in the enacting legislation that referred the measure. But it was referring to, as was stated before, college athletics. We're talking about, and below, we're talking about amateurs. And so I think there's some guardrails that need to be put on, and I think that we have the authority to do that based on the proposition, as long as we're still allowing the gambling to continue. I mean, what it says in Prop DD, authorized and tax support spending, shall states be increased by $29 million annually to fund state water projects and commitments and to pay for the regulation of sports betting through licensed casinos by authorizing a tax on sports betting of 10% of net sports betting proceeds and to impose a tax on a person's license to conduct sports betting operations. If you're just looking at the ballot at that time, that's what you're seeing. If you're looking at the blue book, you're seeing proposition bets. I personally don't want to see proposition bets, all of them, outlawed. I personally would like to see team prop bets continue. I know there's some consternation about prop bets on individual players, especially what that could lead to pressure on those players, outside pressures. And I think that's up to the governing entities also to oversee that. I know that our department that oversees this may have some say into that. So there are a few things in this bill that I'm okay with, credit cards, no credit cards to purchase. I'm okay with the five limit deposits in 24 hours, a little bit on the prop bets.
But my question, as was brought up before, was the notifications. the notifications can be turned off on this. Why do we have to outlaw that if they have a toggle switch? Are we addressing that? Senator Ball.
Thank you, Madam Chair. I appreciate the question, Senator Colker. I know you and I have talked a lot about the prop bet piece. And I'll just add, this is the first committee to hear this bill. This bill will have a long path through the legislature, and we've told the folks who you'll hear from today in the Sports Wedding Alliance that we're very open to having conversations about any part of this bill. To your question on push notifications, I think it comes back to what I said in my opening, which is our strategy, if you take it so far, is really we put the onus on the person who might have an addiction to ask for help That true for our programs that we fund For instance there are programs if you get to a point where you can pick up the phone and call the gambling hotline or raise your hand for help. There are programs for you. The problem is it takes a lot to get to that point, and there's no friction until you get to that point. So the importance, I think, of not putting it on the user is that you're talking about people who are addicts, who are not going to turn that feature off because they are sucked into this dopamine rush and this dopamine cycle. And so it's really important. I mean, again, this is like having someone who's constantly offering you a drink if you're addicted to alcohol. It's really important to take that out because that really fuels a lot of addictive behavior.
Senator Pelton.
Thank you, Madam Chair. And we've had this discussion a lot since this bill started about push notifications back and forth, back and forth. And when we met with the Sports Betting Alliance, we had several discussions about that as well.
Thank you. And Minority Leader Simpson.
Thank you, Madam Chair. Thank you, sponsors. I wanted to follow up with some of the questions from Senator Schneider about funding the water plan. So we've twice gone to the voters about sports betting and funding the Colorado water plan. So the magnitude of that is somewhere in the neighborhood of $100 million a year for the next 20 years, $2 billion worth of infrastructure and projects have been identified. We're funding it roughly now at about $30 million. I'm just seeking clarity the question about it says we're going to put in statute the amount must be no less than the amount transferred to the water plan implementation cash fund in the previous state fiscal year.
So I think, Senator Pelton, you're aware.
I mean, we're going to put in statute that it has to close. I guess we're betting that these impacts won't drive the revenue below what we're receiving right now. But if it does, we're putting in statute you have to close that gap. I guess it's not completely up to the JBC, but somebody has to find the revenue, whether it's in general funds or some other cash fund. we're putting in statute that it can't drop below that. I just make sure we're on the same page that you said it's up to the JBC, but statute says you have to close that gap.
I'm looking for Claire.
I'm Senator Pelton.
Thank you, Madam Chair.
No, I mean, that's kind of what we had this discussion about because we didn't want this bill to affect the water plan and the monies because that's so important. But when we were having that discussion, we didn't realize how much money or how much this was going to go up every year when you look at your fiscal note. And then we also didn't realize how small amount of money it was going to be taking from the water plan money. I think it says $2.4 million on one year, but it has an increase of $61 million, or it goes up from $61 million to $67 million to $72 million. And so when we were having this discussion, I asked to make sure that we weren't going to be losing money in the long run. And yes, it does say that in statute, that they will have to find funds. But there's been cases before that we did not fund certain funds and that the JBC could not make that decision or did not make that decision. Or I would point back to you on Amendment 23 when we didn fully fund education either There certain ways So again I feel like it up to the JVC to make that funding
Minority Leader Simpson, did you have a follow-up? Okay. Do we have any more questions for our sponsors, or shall we move on to all of the testimony? We do have several. Oh, Vice Chair Marchman.
I just have one question. If you could explain the logic of the five-time transaction instead of like setting a frequency instead of an amount. Because it feels like, I guess it's just a little blip and it changes the impulse control maybe right as you're doing it. But it just seems like we want to set an amount rather than just five times. It feels like someone could work around that is what I'm trying to say. I'm just curious your logic on that.
Senator Ball.
Thank you, Madam Chair. It's a great question. And we talked about different approaches. There's some different ideas around there, around everything from affordability checks and actual amounts. You know, I think part of what we're trying to navigate is, Senator Pelt alluded to it, but you don't want to be too paternalistic. You're talking about trying to separate, you know, the type of bets that people can do if they don't have an issue from the type of bets that are really fueling addictive behavior. And so the number of times is really directed at the specific problem of chasing losses. What most people who bet professionally or advise gamblers will tell you is you should just set a budget. So you get like $500 for a week or a month, and then however long that gets you is what you bet. The problem with gambling addiction is you do that, and then you want to break it. After you've lost that 100, you want to go back and you want to put in more and more and more. Five times is a lot in a 24-hour time period. So by the time you get there, you're re-upping because you have a problem and you're losing more money than you initially were comfortable betting. So that's the real purpose behind it. To your point, though, we did not restrict the total amount that you could bet. You can go in on any given Sunday and bet $2,000 on a Broncos game. That's fine. There's no upper limit. It's really about that compulsive behavior of making repeat deposits.
Thank you so much. And with that, I think we're going to move into our witness testimony. Thank you, sponsors. Witness testimony phase. And we're going to have the opposed witnesses first, followed by the amend witnesses, followed by the witnesses in favor. So our first panel that I'm going to call up are Stanton Dodge, Jen Anderson Andrew Moreno and Richard Taylor and okay Richard is online okay unless you have a preferred order we're going to start on my left and go to my right and then on to the wall so sir we will start with you and everybody, yeah, we'll have three minutes. We're just at that sort of cusp of where we go for two or three minutes. So if you don't feel like you need the whole three minutes, we will not be offended. But please, introduce yourself. I appreciate that.
Madam Chair Kipp and members of this committee, thank you for the opportunity to testify today. My name is Andrew Moreno and I represent Bet365, one of the world's leading online sports betting operators and a committed presence here in Colorado. we employ more than 500 people at our downtown Denver headquarters. We have been proud contributors to the state's economy since we have gone live in the state in 2022. We are not alone. DraftKings, FanDuel, and Fanatics collectively employ hundreds more Coloradans in this state. This is a genuine growing industry that is creating quality jobs and generating meaningful tax revenue for the state. We take the concerns of Senate Bill 131 very seriously. Problem gambling exists, and protecting vulnerable consumers, including young people, is a responsibility we share. BET365 has a long track record of working constructively with legislators and regulators across multiple jurisdictions to develop targeted, evidence-based solutions to exactly these problems. We and the rest of the SBA want to be that partner here in Colorado. Our concern with this bill, however, is that its provisions are blunt instruments that would cause significant unintended harm to consumers, to operators, and those who do business with operators, and to the state, without necessarily achieving their stated goals. We would respectfully ask this committee for the opportunity to engage in a structured and substantive dialogue, to bring data to the table to identify where targeted interventions can make a real difference, and to craft solutions that protect at-risk individuals without penalizing the overwhelming majority of responsible bettors and the businesses that serve them. We were brought to this conversation late in the process, and we recognize the legislature's urgency. But good policy takes good information. We are ready to provide it and to be genuine partners in getting this right. Thank you.
Thank you.
Ma'am, please proceed.
Yeah, it's a little gray button on the table. It's sort of our hazing ritual here. My apologies.
Madam Chair, members of the committee, my name is Jennifer Anderson. I am a Colorado resident, a former regulator, and the Director of State Government Affairs for Fanduel. We are testifying in opposition of this bill. Fanduel shares the concerns related to underage access and problem gambling that this bill seeks to address. Preventing unauthorized access to our platform, particularly by underage users, is central to our mission and is a critical differentiator between licensed operators and unregulated operators. Responsible gaming is a core business priority at FanDuel because we believe it is the right way to create a sustainable business and industry for decades to come. FanDuel invests millions of dollars annually in tools, policies, research, and partnerships designed to promote safe play and minimize risk. However, we do not believe this bill will promote these policy objectives. The Colorado Division of Gaming has made responsible gaming a priority through both rulemaking and legislation, including a 2022 law that this General Assembly passed, which established a statewide self-exclusion program and funding for prevention, treatment, and education to date $11 million in grants have been given out in just four years. As a result of these efforts by the state, Colorado is home to a legal and regulated market that puts consumer protection at the forefront. Each licensed operator is a taxpaying, law-abiding, and fully compliant corporate citizen. Offshore and illegal operators do not provide these same protections, making it important to distinguish regulated operators from those acting outside the law. Maintaining a clear distinction between these markets is critical. policies such as banning certain bet types or imposing broad advertising restrictions risk blurring that line limiting consumers awareness of regulated options and potentially pushing activity toward unregulated platforms where protections, oversight, and state revenue do not exist. Our shared goal is to ensure that Coloradans continue to have access to a safe, regulated environment for sports wagering. I just want to address, this has been a rushed process for us. We saw the bill about three weeks ago, and my understanding is if it passes through this committee, it will go to the floor. We hope that this committee will continue to spend time workshopping this bill before passing it out. You all have made a lot of great points this morning, and we appreciate the thoughtfulness you're taking with consideration to these policies. And I'm happy to answer any questions the committee may have.
Thank you. Please hold for questions, and sir, please continue. Yes. Mr. Chairwoman Kipp and members of the Senate Finance Committee, I want to thank you all for the opportunity to testify today. My name is Stanton Dodge, and I serve as Chief Legal Officer and Secretary of DraftKings. And I've been a Colorado resident for over 30 years. I first served the state as law clerk to the Honorable Larry Marquez on the Colorado Court of Appeals, and then served 12 years combined as a member of the 18th Judicial District Nominating Commission and the Supreme Court Nominating Commission. DraftKings is a digital sports, entertainment, and gaming company that offers daily fantasy sports, regulated sports betting, and digital media. Our sportsbook operates in Colorado and in 28 other states, as well as Washington, D.C., and Puerto Rico. DraftKings opposes Senate Bill 26-131. We, too, share the Committee's goal of protecting Colorado consumers, but a blanket ban on proposition wagers will not achieve that objective. Instead, it risks pushing betters toward the unregulated offshore operators that offer no consumer protections, no integrity monitoring, no responsible gaming tools and resources, and they pay no taxes in Colorado. Instead, we encourage the committee to pursue evidence-based solutions that keep Coloradans in the regulated market. Since legalization, as was noted, Colorado's regulated sports betting market has generated more than $100 million in tax revenue for the state. And proposition wagers are a significant driver of that success. Last fiscal year alone, sports betting generated a record $37 million in taxes. And I was here at the beginning, and the estimate was $21 million. That was the ceiling we initially set, because no one thought we'd ever go past that. And $33.5 million was directed to the Colorado Water Conservation Board. Proposition wagers account for approximately 30 to 45 percent of operator revenue statewide, eliminating them would put an estimated $10 to $15 million per year in the water plan funding at risk, which is roughly 25 to 33 percent of the program's annual grant capacity. We estimate that the cumulative effect of the bill would reduce sports betting tax revenue to the state by as much as 50 percent. These figures are in stark contrast to the highly caveated legislative fiscal note, which severely underestimates state revenue tax impact to be a mere $2.5 million per year. At a time when 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. We respectfully urge the committee to vote no on Senate Bill 26-131. And I would like to add that operators were most certainly opposed to the reduction and the deduction of promotional credits, which, like prop bets, is expressly authorized by the voters. Thank you, and I'm happy to answer any questions. Thank you Please hold for questions and then we go to Richard Taylor on the wall Please unmute yourself And you have three minutes Excellent Thank you And good afternoon Chair Kipp and members of the Senate Finance Committee For the record, my name is Richard Taylor, and I'm the Director of Responsible Gambling for BetMGM. I want to thank you for the opportunity to testify and highlight our Responsible Gambling program. BetMGM has a dedicated Responsible Gambling team, which I have the privilege of leading. They receive advanced training throughout the year to ensure that they can provide patrons with the support and assistance that they may require, including account closure and self-exclusion. BetMGM also uses sophisticated third-party age gating and identity verification services resembling those used in the highly secure banking sector to ensure that all patrons are 21 plus. All patrons must create an account and verify their age and identity using multiple factors. Strong passwords and multi-factor authentication help to prevent any unauthorized access. BetMGM offers a suite of responsible gambling tools, including deposit, spending, wager, and loss limits, as well as time reminders, short-term cool-off, and self-exclusion. These tools are not just offered passively. We actively promote their availability and encourage all users to take advantage of them as part of a balanced gambling experience. Bed and Gym is also proud to partner with KindBridge Behavioral Health, which is a telehealth company that provides treatment and services through licensed and certified mental health providers who specialize in treatment for gambling addiction. Through this program, we are able to provide our patrons who self-exclude or those whose accounts we close based on our own concerns as an operator with a direct link to mental health intake and group services at no cost via telehealth, which I think is very important considering many folks live in rural areas and areas away from large and major cities. Unlike certain prediction market platforms, online sweepstakes, and unregulated sites that target underage audiences in their marketing campaigns, we actually use our celebrities to promote responsible gambling and healthy play. In 2024, we debuted our first responsible gambling commercial starring NHL player Connor McDavid, which aired on various platforms, including TV, to promote awareness of our responsible gambling tools. We recently followed up that successful ad with a new ad called Mullet Over, which also features Connor McDavid, which asks viewers to think critically and to be self-aware about how they bet and use our platform. Today, billions of dollars are wagered annually on illegal and unregulated sites that are easily accessible to minors and lack the same responsible gambling protections that we provide on our platforms. BetMGM understands and appreciates the concerns around online sports betting and its impact on individuals who may be at risk for developing gambling related problems. The company shares these concerns, which is why we've built a responsible gambling program that I'm very proud to lead. I want to thank you for your time today and I welcome any questions. Members, you have questions for this panel. Senator Frizzell. Thank you, Madam Chair. So this is really for any of you, but I'm going to ask you all the question that I asked one of the bill sponsors earlier. My understanding, can you just talk to us about the age verification process for your apps and what a user has to do to actually engage in wagering a bet Who would like to take that question Sure Mr Dodge Yes. Thank you. So we start out by requiring all sorts of information from prospective customers and then use financial institution level, know your customer technology to see if it all adds up or not. And if it doesn't, then we'll actually ask someone to provide us with their ID, get on a video screen. If that doesn't match up, then we don't let them play. And, you know, there have been comments about, you know, the youth is sports betting, and I can tell you, it's not happening in the regulated market. Whenever you hear about that, these folks are using the illegal, unregulated market, because they don't do any of that stuff. Oh, okay. And I'm going to just follow up with her question. It looks like you guys want to answer it, too. But I'd also like you to tell me a little bit more about this illegal, unregulated market, because I don't play in this space. So who would like to go first? I could just provide a little bit. Okay, and so I'm sorry, Mr. Moreno, correct? Correct, yes. Okay. Just to provide a little bit more context as to what they know your customer process looks like, generally speaking, you give your name, your address, and your social security number. That is then verified by, as Mr. Dodge said, a service like LexisNexis, which is a lot of what our companies use that matches that information and validates the identity. Again, if it goes through any kind of an issue, you are then asked to upload further documentation and potentially even take a photo with you next to your license. And services like LexisNexis are used by the federal government, for example, by login.gov. So these are very trusted resources that we're using. And I'm sorry, did you wish to weigh in to Ms. Anderson? Madam Chair, I can just answer the next question if that would be helpful. That's fine. Do we have additional questions for this panel? On the regulated market? Ms. Anderson. Madam Chair, Senator Frisell, members of the committee, you asked about the unregulated market and what that looks like. It is actually very easy to find. I, like you, do not bet, but it's not on the dark web. You just Google sports betting in Colorado and a bunch of illegal sites come up. Some are big sites that are live in other countries. They look very legal. They look very legitimate, but they do not have the consumer protections, the safeguards for responsible gambling, and they're not subject to Colorado's laws. It is very hard to enforce laws against these sites because they're offshore. So there are a whole host of jurisdictional issues in enforcing Colorado's laws against these online sports betting sites. Excuse me, when you say they're not subject to Colorado's laws, you're telling me they are violating Colorado's laws. I think there's a distinct difference there, is that correct? Madam Chair, yes, they are violating Colorado's laws. They're just not in Colorado, so there's jurisdictional issues with holding them accountable for that. Thank you. Senator, Vice Chair Marchman. Thank you, Madam Chair. does the division of gaming ever weigh in on the types of bets that you are allowed to provide? Who would like to take that? And let's also remember Mr. Taylor is up on the wall. Oh, yeah. Hi, Mr. Taylor. Who would like to take that question? Mr. Moreno. Thank you. Yes, the division does frequently or actually all the time weigh in. we have all of our wagers approved by the division as part of the approval process that's in their regulatory regime. Can I follow up on that question? Because when I was meeting with somebody the other day on this, it was the categories of betting, not the individual bets, correct, that are approved by the Department of Revenue? Yeah, correct. New betting types are brought to them for approval on a rolling basis. It's types and categories, not specific bets. I think that's an important distinction. I'm sorry, Vice Chair Marjorie. Please continue. That's good. Can you talk? We've talked a lot about the prop bets. Can you talk a bit about what protections are in place for prop bets if you have that specific level of information? It looks like Ms. Anderson, you want to answer that? Madam Chair, Senator Marchman, members of the committee, yes, of course. So with prop bets, and to expand on the last answer, they are approved by, well, the category is approved. However, there are limitations on the types of prop bets that they will approve, and those are in rule. And some of the prop bets that they will not approve include bets where the outcome is a negative outcome and one individual can impact it. So the example I would give is like you can bet on whether someone will hit a home run, but you cannot bet on whether they will not hit a home run because that would be, you know, more subject potentially to an integrity issue. We work with leagues. We have done a lot, the industry has done a lot to continue to evolve with prop bets. But I will say, you know, it's a huge part of our market. They appeal to all demographics, not just one specific. And we do also estimate that the revenue impacts would be very significant from banning prop bets, much higher than what is in the fiscal note. Thank you. Minority Leader Simpson. Thank you, Madam Chair. Thank you all for being here today. I'm trying to think how to – look, this isn't my cup of tea either. I don't have an app on my phone. Sports betting is allowed in 30 states, I think, across the United States and D.C. And I don't know which ones you all operate in, but where I'm headed with this is do you have the ability, do you tailor – and I'm thinking about the efforts of targeting folks that are having addiction problems or challenges. Do you all just respond to legislatures like ours or like how, how can you or think about customizing different, in different states are there different challenges for how to craft something maybe individually for each state or do you, it's a broad effort across your entire spectrum. that's a little confusing question but I'm trying to figure out how to get get at addressing addictions and how you all operate in that space. Ms. Anderson it looks like you want to take that. Madam Chair, Senator Simpson, members of the committee it is a great point. We it is at times very challenging to customize. Obviously we use an app it takes time and money to develop app having a patchwork of regulatory you know frameworks across the country is not easy. we have accepted that but I will say some of the issues that were raised by Senator Schneider earlier with regard to advertising is a great example of that like a regional or national broadcast or buying advertising would be very challenging even with these amendments the l I believe the one that says it only applies to broadcast originating within the state L003 in my mind that applies to the live broadcasting ban and we still have L001 which is just generally advertising and it does place some significant restrictions on advertising and that would be hard to comply with because that would be one where the example was given where we buy our advertising in markets, not just by state. Thank you. Senator Bright. Thank you, Madam Chair. Thank you for being here today. The question is more relating to, and anyone can answer, we're worried about underage folks slipping through the cracks. And so can you describe to me a process that you might go through, understand the age verification to start the process, but let's say that you identify this after the fact and you detect underage gambling after the fact. What sort of measures do you have to detect that, and then what's the process to get them out? We'd like to take that question. Mr. Moreno. Thank you, Senator. So we use an early risk detection system, which monitors for a lot of different types of behaviors, and to Senator Simpson's point there as well, this detection system on our part looks for a different range of behaviors, and some of that could be we suspect this individual to not necessarily be who they say they are. If we do detect that and have reason to believe that this individual will be underage or shouldn't be on the platform, we immediately off-board them and they forfeit all of their wallet. To Senator Simpson's point before about crafting specific intervention programs for individuals in Colorado, our risk detection system is part of our RG plan that is submitted to the division every year. So that's something that the division is aware of and that we make sure we work with them on to ensure it's doing exactly what we want it to do. Thank you. Any further questions, sponsors? I do have one more, and this might be one of those third rails that you might prefer not to answer, but you guys threw a lot of numbers out there, right? You said that $11 million at one of your companies gets invested in grants to Prumbling Gambling, that overall $100 million has been generated in revenue for the state of Colorado, that in tax revenue it was $37 million for the state of Colorado, which is all great. So give me an example of how much this compares to in terms of, like, what are the profits? I mean, I don't even know how to judge those numbers without knowing the context. Who would like to take that? Okay. Madam Chair, members of the committee, it may surprise you to know that actually sports betting profit margins are not that high, as opposed to other types of gaming. One of the reasons is that we don't have control, as much control as if we were offering a lottery product or a game of chance. You know, there can be upsets, there can be wins. We can lose more than we win as the house. So in the end, we only take home about $1.50 on every $100 bet. So our business model is really tailored to where we need a broad player base, which is good for responsible gaming. We do not want just a small amount of players playing a lot. and that means that we end up really promoting just play but not necessarily big bets So that that question But I did want to clarify on the grant program that actually Colorado money the million That comes from taxes on regulated gaming in Colorado, but that goes into a hold harmless fund, and then it gets transferred over and is given out in grants. The most recent one in January was $3.7 million. Actually, it might have been February, last month. And that has, in the time since sports betting has been legalized, there have been so many more mental health services for problem gambling in this state. Veteran families, they can get free counseling, telehealth anywhere, no matter where they live across Colorado. That was unheard of before sports betting was legalized. So I just want to say there has actually been a lot of good and a lot of money set aside for problem gambling. And again, that is the bill that you all passed in 2022. That was not part of the original legalization. Okay. Was there a number in there somewhere I missed? I'm sorry. And like what kind of profits does the gambling industry make out of the sports betting gambling in Colorado to generate $37 million in revenue or $100 million overall since we've legalized it? I can only answer as to the amount of taxable revenue that we paid to the state last year. It was $2.6 million, and we only represent 8% of the market here. Okay, thank you. Senator Bright. Thank you, Madam Chair. One last question that sparked after our conversation from Minority Leader Simpson. Every state's got their own laws regarding this, and you guys have to tiptoe around 50 different policies. I would imagine some of them are fairly similar. Some of them aren't. I'm not an expert in IT, but I know that there are VPNs where you can mask where you're at, whether it's onshore or offshore, what state you're at, et cetera. How do you guys work within those laws to make sure that you're complying with the state? Who would like to take that question? Mr. Moreno. Oh, and are you trying to raise your hand, Mr. Taylor? No, I was itching my eye. It's allergy season out here in Los Angeles. Okay. Sorry. Mr. Moreno. We use a variety of third-party vendors that allow us to track and try to track down anybody who's using a VPN. Similar to a situation if an individual was an underage person, if they're using a VPN, we immediately off-board them from our platform. It is a cat-and-mouse game. There are always new technologies being invented, invented and that's why we're always on the lookout for as good a partner as possible to help us in stopping that kind of activity. Thank you. Any additional questions for this panel? We do have one more opposed panel so I'm sure there will be opportunities for additional questions. Okay seeing none thank you all for being here we really appreciate it. Panel two is Tim Murphy, Cory Fox, Cameron, I'm going to get it wrong, Anuma, and Chris Schroeder. Okay, we will start with our in-person witnesses, if that's acceptable. And do you have preference who goes first? Good morning, good afternoon, Madam Chair. Christopher Schroeder on behalf of the Division. I am here for any questions that the committee may have today Thank you The Department of Revenue to be specific Yes correct The Colorado Division of Gaming with the Department of Revenue Thank you very much Thank you. Okay. We will hold for questions then. Sir. Okay. Good afternoon, Madam Chair and members of the committee. My name is Cameron Onuma. You got it right. And I serve as a policy director for the Sports Betting Alliance, whose members operate licensed, regulated sports betting platforms across the United States and here in Colorado. I'm here today in opposition to Senate Bill 131 because it creates a clear trade-off for Colorado. Less funding for water, weaker consumer protections, and more room for illegal and unregulated operators. First, water. Since voters approved sports betting, the regulated market has generated more than $100 million for Colorado's water plan, including over $30 million last year alone. That strengthens drought resilience, restores watersheds, and supports infrastructure across the state. The restrictions in this bill would reduce activity in the regulated market that we believe could cut water funding by upwards of 40% year over year. And the bill, nor any of the amendments, identify replacement funding sources. Secondly, illegal unregulated sportsbooks. Senate Bill 131 regulates only legal licensed operators here in California, here in Colorado, who are represented here today. Illegal offshore operators, even new entrants under federal regulatory frameworks, remain completely untouched. Illegal sites do not verify age and identity the way that legal operators do. Unlike the legal market here in Colorado where an individual must be 21 years or older to wager, federally regulated prediction market platforms permit individuals 18 years or older to trade on sports wagering events. I believe the sponsor conceded that earlier today on a webinar on Zoom. Illegal and unregulated sites do not fund responsible gaming programs, and not a single one of these operators contribute a single dollar to Colorado or Colorado water projects. And finally, and I think most importantly, youth protections. Nielsen data shows that over 90% of sports betting television broadcast advertising targets audiences aged 21 and older. licensed operators follow strict, responsible marketing standards designed to specifically protect minors, including bans on advertising on college campuses. Advertising partly ensures that those who choose to wager are of age and have awareness of where to do so legally, which is so critically important to this conversation. This bill essentially eliminates that critical mechanism and places legal operators at an advantage. In closing, Colorado created a regulated sports betting market to protect consumers and fund important priorities like water. Every dollar this bill takes out of the regulated market is a dollar that leaves Colorado's water plan, weakens consumer protections for Coloradans, and cedes the ground to illegal offshore operators who answer to no one. For these reasons, we respectfully ask for your no vote, and I wish you guys a happy St. Patrick's Day. Thank you. Please hold for questions and we'll go to our online witnesses. First up, Tim Murphy. Good afternoon, Chairwoman Kip and members of the Senate Financial Committee. Thank you for the opportunity to testify today. My name is Tim Murphy. I'm a senior director and advisor to the chief responsible gaming officer at DraftKings. I could spend an hour discussing our responsible gaming, but I know time is limited and I'll focus on a few key points that show how seriously we take this responsibility as a regulated operator. Just to ground this in real data, all the numbers I'm about to share reflect our 2025 work and are included in the infograph that you may have already seen. First, we invest in people. We have more than 50 employees dedicated full-time to responsible gaming. Over the past year, that team conducted approximately 92,000 manual reviews of customer activity. Second, we focus on engagement. We sent over 44 million responsible gaming messages in encouraging customers to visit our Responsible Gaming Center and use available tools. That's where customers can set deposit, wager, loss, and time limits, or take a break through cooling off periods or self-exclude. And customers are using those tools. The Responsible Gaming Center was visited more than 58 million times and limit usage increased 52% year over year. Third, we use technology to support this work. We use data-driven insights to identify patterns that may signal a need for customer engagement and account review. And importantly, before anyone can even access the platform, our identity verification systems help prevent underage and fraudulent access. We've blocked more than 1.4 million attempts at account openings. And we don't do this alone. We partner with organizations like Cambridge Health Alliance. We're a founding member of the Responsible Online Gaming Association, and we've committed over $1.5 million to state councils across the country, including Colorado's, to support prevention, education, and treatment. We also partner with Cambridge the same way as Mr. Taylor just described in his testimony. As Colorado considers this bill, we encourage a focus on evidence-based safeguards that protect consumers while keeping them in the regulated market. When players leave that market, they lose protections and can end up on illegal offshore sites with none in place. Thank you for your time. I'm happy to answer any questions. Thank you. And then to our last witness Corey Fox on this panel. Sorry, I didn't mean to imply the last. Good afternoon, Madam Chair and members of the committee. I'm Corey Fox. I'm the Senior Vice President of Public Policy and Sustainability at FanDuel, which includes oversight of our responsible gaming program. Preventing unauthorized access to our sports betting platform, particularly by underage users, is crucial to our mission as a regulated operator and is a key differentiator between licensed operators like FanDuel, SolstraftKings, and MGM and others you've heard from, and unregulated online gambling operators. As discussed a little bit previously, our strict Know Your Customer process verifies identity and age and requires customers to provide their name, address, date of birth, and social security number before an account can be established. We work with leading verification and geolocation providers to validate this information and identify potential proxy vetting account sharing, or fraudulent activity. After account creation, we further monitor to ensure that the account holder is operating the account. FanDuel also takes measures to prevent advertising to people under 21 by only purchasing television broadcast slots for the 21 plus demographic, applying 21 plus targeting and no kid content filters for streaming, and leveraging age verification technology through digital advertising partners. We do not and will not advertise on college campuses or work with talent under the age of 21 While licensed operators adhere to these standards offshore operators in sweeps casinos have limited if any age verification and KYC processes and aren bound to any rules around advertising to minors. Individuals of any age can utilize online sweepstakes casinos and sportsbooks and bet on illegal offshore betting websites regardless of their age. For this reason, we go well beyond limiting access and advertising to those who are under age and prioritize customer education and prevention by working with a range of external partners. As we discussed a little bit, we commend this General Assembly for passing HB 22-1402 just a few years ago, which created a grant program which has provided almost 11 million dollars since 2023 to fund problem gambling prevention, education, and treatment. As a result, today in Colorado, no matter where you live, you have access to telehealth resources to treat problem gambling. FanDuel has also partnered with ambassadors like former NBA player Randy Livingston and his wife Anita Smith to create a program to educate parents, coaches, mentors, and others about the risks, excuse me, and warning signs of underage gambling. As a legal regulated operator, we take our responsibility seriously to ensure that our products are not accessible to those who are not of the legal age. Vandal has also provided funding to the Problem Gambling Coalition of Colorado and supports Colorado-based causes through the National Council on Problem Gambling. We've worked with our partners at Kindbridge Research Institute to support their Stigma Stand Down program, a Colorado statewide initiative dedicated to providing education and mental health support for active duty service members, veterans, and their families. I'll stop there in the interest of time. I know I just ran out, but there's actually a lot more that we're doing that we would love to discuss with you. And I think there was a lot discussed earlier that shows there's some more fact finding to be found on how sports maps are regulated today in Colorado. So I'd love to answer any questions. Thank you. Members, do we have questions for this panel? Senator, thank you, Madam Chair. And I'm not sure who's best to answer. So I'd actually like to address my question to Mr. Schroeder. so I pulled up my app store on my phone and just said sports betting and so I'm kind of looking through there's a super long list many of these I've never heard of I mean I've heard just through advertisement of the folks that we've heard from today, but there's Boom, Onyx, Thrills, Novig, Pick 6, I think I've heard of them. But it's like I haven't even finished scrolling yet. How do I know which of these are regulated by the state of Colorado? Mr. Schroeder. Thank you, Madam Chair. And to clarify for the committee, the Division of Gaming is here in a neutral position just to answer questions. Thank you. Senator, there's a wide array of reasons for that. The division has on their website all of the regulated operators that are in Colorado that are permitted to operate in Colorado. There's also many in the App Store that you just mentioned. Some won't work in Colorado because of certain geofencing requirements that regulator operators have to abide by, and some are just illegal operators that if you close down one, the very next day they open up with a new name and a new image. So there could be a wide variety of reasons why you will see that in the App Store. Some are regulated in other jurisdictions and those might not have a license in Colorado and when that happens they unable to to activate in Colorado thank you can you tell me what activate in Colorado means mr. Schroeder thank you chair so when it comes to activating as far as making an account so you might have an operator that works in New Jersey for instance but when you try to make an account here in Colorado, it won't work because you're not geofenced within New Jersey or wherever it's regulated as far as a regulated operator goes. We only have certain operators that are required or that can operate in Colorado. Those pass rigorous tests. We also do inspections to make sure that they only work within Colorado and not over the border, such as in Nebraska or Wyoming if they're not regulated there. But there's a wide array of different operators that are both legal and illegal. And I'm wondering if you can help me understand. I don't mean to ask questions if anybody else has them, but I am trying to understand this unregulated market that they're telling me exists. Is this a thing? And if so, how does Colorado go after it? And are we successful? Yes, thank you, Chair. The unregulated market is a terrible thing for the regulated industry for much of what was talked about today. When you shut down one, one appears overnight. We have a problem right now in every state where they take the intellectual property of casinos that are regulated in the states across the U.S., and they have a link that says, visit our website, you can play online gaming, regulated by the Colorado Division of Gaming or regulated by certain Blackhawk casinos. That's something that the common player would think is legal because it says it's legal. But when you visit that website, it's going to an offshore account, and it's an illegal website. So when we reach out to social media companies or when the industry reaches out to social media companies and says this is an inappropriate use of our intellectual property, they're shut down, but a new company is formed overnight with a new name, and it's something that constantly plagues the regulated industry. Thank you. Senator Snyder. Thank you, Madam Chair, and thank you all for being here. Mr. Schroeder, so you're with the Division of Gaming, and we've heard talk about the prop bets. So walk me through how you regulate. Do they have to get every prop bet they're going to put up approved by the division before that happens? Mr. Schroeder. Thank you, Madam Chair. Senator, every wager before it can be first offered in Colorado has to be submitted to the Division of Gaming. We review every single wager. Sometimes it's a broad category. Sometimes it's a broad sport. Sometimes it's a specific wager. But everything comes to the Division of Gaming, and we will inspect that to ensure it meets our regulatory requirements, that it cannot be manipulated easily by one person, that it's not a negative wager. For example, we would not permit a wager about will there be a fight in this game because it's not sport-related. We also wouldn't allow a wager such as will this individual strike out because that's a very easy thing. to happen, right? It's very easy to pretend to, I would argue, swing and miss if I was playing baseball. Very easy, and nobody would recognize it. So we do easily manipulate wagers we don't permit. We also don't permit wagers that are not sports related. So how long the national anthem takes to sing would not be permitted. Also, what color is the Gatorade that poured over the winning coach head would not be permitted either Senator Snyder Okay and then to my knowledge there only one day a year where there no professional sports I believe it's the Monday before the Tuesday baseball all-star game. So how does that happen in real time? Like, for instance, tonight, I believe the Nuggets are hosting the 76ers. So when would a company propose to you the prop bets that they want to put on that game tonight? When do you approve it? What's the timeline for something like that? Mr. Schroeder. Thank you, Madam Chair. Senator, prop bets can be any approved wagers. So any of those wagers would have been approved ahead of time, and then the operators can implement those specific prop bets through a number of combinations. But we only approve the actual wagers that are placed, and they're done well ahead of time. If it's not something that comes to us, such as maybe there was a MMA fight coming up and something changed in that and they couldn't get approval. They just would not be permitted to make that wager on their platform. The Division of Gaming inspects those operators to ensure that they are in compliance, and when they are not in compliance, we would take appropriate disciplinary action. Okay, thank you. Thank you. Minority Leader Simpson. Thank you, Madam Chair. A question for Mr. Fox or Mr. Murphy. The responsible gaming effort or program, is it dynamic? Does it look like today what it looked like in 2022, or are you nimble enough to respond and change? And again, all in an effort to try to limit or reduce the unintended consequences. I'm just curious how that effort unfolds. Which one of you would like to take that? Can I take a stab at it? Yeah, Mr. Fox, please. Thank you so much. It's a great question. So it has absolutely been dynamic. As we learn more about how our users engage with the FanDuel Sportsbook and the product, we've rolled out new tools to support them and support them managing their play over time. So a couple of examples of that are about a year and a half ago, we rolled out MySpend, which is a product that's right in the customer flow that shows customers a detailed breakdown of their personal spend on the platform in the prior month. This helps sort of break the cognitive issues that sometimes happen to gamblers where they convince themselves they won when in fact they lost or convince themselves the results were different. It shows them in clear terms how they were playing on the platform last month. We've had great uptake with that. Something like 50% of our users during the NFL season take a look at that at some point. Another tool that we rolled out last year is called real-time check-in. That's a tool that predicts for every user for every day how much they're likely to deposit on the site. And if they attempt to deposit significantly more, it checks in with them and says, are you sure you want to deposit that much? Consider lowering your deposit amount or setting a deposit limit going forward. So those are some of the tools that we've built in the period since 2022. The other area that we're focused on is in the background, we are looking at all of our users' activity and trying to identify those who are displaying signs of risk and then evaluating their accounts to see if we should take action there. I'll stop there and let Tim answer. Sure. Thank you, Mr. Murphy. Sure. Thank you, Madam Chair. And Senator, to answer your question, to add on to Mr. Fox's testimony, besides the tools that have changed since 2022, in Colorado, there's a use of technology that's improved over time. And I would say, as in the regulated market, we partnered with... Harvard's Cambridge Health Alliance to come up with, like, what are the best ways and what should we be looking at behavior-wise when we're looking to set triggers for behaviors to look at, for us to say, like, maybe we should engage with that player. So I think it's a lot of our partnerships to really turn to professionals in this area that it's huge in the regulated market to always stay ahead and do the best we can with this responsible gaming. Thank you. Thank you. Senator Frizzell. Thank you. Sorry. I just need to, I want to clarify my earlier question and just ask. If you're a 16-year-old, can you find a sports betting app that you can access and place a bet on? Who would like to take that question? I'm happy to take it. Mr. Fox. So I think, unfortunately, the answer is likely yes. Certainly not in the regulated market. As we've described, there are clear laws and regulations in Colorado to ensure that everyone who's on our site is over the age of 21. But in the unregulated market, there are a number of sites that recommend if you'd like to explore, we can send you some information. One of the biggest ones is called Bovada. My Bookie is another one. There are many illegal, unregulated sites that offer play for users at younger ages, either explicitly or because they don't have adequate technologies to make sure that they're preventing underage access. Thank you. Mr. Schroeder, as a follow-up to that, can you please tell me if your department has discovered much in the way of underage gambling with regulated gambling here in Colorado, sports gambling? Thank you, Madam Chair. The division can definitely provide the committee with how many incidents have occurred since sports betting has began. We track that information. As far as a number, I couldn't give you any number off the top of my head. I couldn't even estimate if it's high or low, zero or one. I would have to get you that information and provide it to you. What I can say is any violations that the division discovers or is made aware of, we take disciplinary action to the Limited Gaming Control Commission, who has broad discretion to issue any disciplinary action they seem fit towards that operator and towards that license holder. So you don't know if underage gambling has been happening or not, or do you know if there are any violations? I guess I'm a little bit confused, but if you just need to get the information back to us, that's fine too. I'm happy to provide you if there is any violations that have been brought forward. Okay. I do have this question for the folks in the industry. I asked a question in the last panel asking, like, what kind of profit we're talking about because I don't really have the context. A quick Google search says regulated sports gambling companies in Colorado generated approximately 587.5 million in gross gaming revenue profits before taxes expenses in 2025 derived from a total handle of $6.5 billion, representing roughly 9.2 average hold. Anyway does that sound accurate or does that sound inaccurate to those of you in the industry I don have the numbers in front of me but that seems like a reasonable that seems possible to me Yes Thank you Mr Fox Madam Chair I can Mr Murphy I don have numbers to provide today on that front. Okay. Thank you. I'm just trying to get an idea in context when we're talking about this. And I guess the other interesting number to me was that it says that total gross revenues from last year were 587.5 million, up from 475 million in 2024. Do you know if that's, on average, how much they're increasing over time, year over year? I mean, the numbers that Senator Ball provided us at the beginning of the hearing were somewhat staggering. Does that sound correct to you, Mr. Anuma? Madam Chair, we can get you whatever numbers the committee needs to make an informed decision here. I do think that this is an important moment to point out process here. You have the legal operators who were informed about a piece of legislation that has been worked on for quite some time just three weeks ago. And so had we been brought in from day one and been able to collaborate with the Department of Gaming, with the author, we could have made sure that you all had the right information to make informed decisions. We're happy to follow up with the committee with any financial information that would allow you to make an informed decision. Thank you very much. That's very helpful. I appreciate it. Seeing no further questions for this panel, let us move on. Thank you so much for being here. We appreciate it. In an amend position, we are bringing up Matt Brill, Justin Sasso, Kristen Hartman, it says it is registered amend, but it's not with the SBA. Kristen Hartman, sorry, trying to read the notes that people have left me. Okay. We have two of those folks online, so we'll start with Mr. Brill. Please proceed. Thank you, Madam Chair and members of the committee. I'm Matthew Brill. I'm a partner at Latham and Watkins LLP, where I serve as chair of the firm's communications practice and a member of the Supreme Court and appellate practice. I submitted a detailed letter yesterday setting out why I believe SB 26131 is drafted as unconstitutional, and I'd like to focus here on some key reasons why the First Amendment is implicated. The overarching principle I want to emphasize is that while states have relatively broad power to regulate sports betting itself, the First Amendment imposes very stringent limits on Colorado's ability to regulate advertising because it's protected speech. Our primary concern with the bill stems from the proposed restrictions on broadcast advertising for sports betting, whether the originally proposed ban between 8 a.m. and 10 p.m. or during a live broadcast or the amended approach that would target programming with a 70-30 ratio of adults to children. These advertising restrictions, however formulated, have several significant flaws. First, the state would have to meet a heavy burden of showing that an advertising band directly and materially achieves the state's goal of reducing problem gambling. And I don't believe the state can meet that burden. Notably, the Supreme Court has encountered a number of similar advertising restrictions in a case called Greater New Orleans Broadcasting. It looked at restrictions on advertisements for casino gambling and struck them down largely because there was no credible evidence that banning advertising impacts the demand for gambling services. The Supreme Court reached the same result in striking down restrictions on advertising of the price of alcohol Put simply there needs to be a causal link between advertising and problem gambling and that causal link has not been established through sufficient evidence Another problem is that even if there were some evidentiary basis, singling out broadcast advertising is a significant problem. It constitutes speaker-based and content-based discrimination, which is inherently suspect, and it makes the bill ineffective and irrational. Most notably, if we're talking about problem gambling among youth, youth are typically online on social media platforms and other digital platforms. So targeting broadcast television and perhaps broadcast radio is not an effective means. And the Supreme Court has repeatedly said when you target only one aspect of a problem, it violates the First Amendment. Lastly, the Supreme Court has emphasized that states and the federal government must consider less restrictive means that burden less speech. And here there are many other measures that can impact problem gambling. We've talked about in this hearing age verification. You've touched on other measures that could be public education campaigns. There can be a variety of measures that are much less restrictive of speech. And the Supreme Court's precedent's command that states utilize those measures before banning speech like advertising. I'd be happy to answer any questions. And, you know, we have concerns about all of the speech and advertising restrictions in the bill. but principally the restrictions on broadcasting cause the greatest concern. Thank you. Before we go to our next witness, I want to make sure that anybody in the room who wishes to testify and who might not have signed up comes forward now, and we will have you go at this. I'm sorry. Did I say that? I'm sorry. Opposed and amend. We will get to our support panels right after this. But opposed and amend, this is your last call. But while we are waiting, Mr. Sasso, please go up. Good afternoon. Thank you, Chairman. Chairwoman Kiffin, members of the Senate Finance Committee, thank you for the opportunity to testify as well. My name is Justin Sasso. I represent the Colorado Broadcasters Association, whose members include over 300 local radio and TV stations serving communities across our state. We appreciate the intent behind Senate Bill 26-131. However, the advertising restrictions in the bill, including the proposed amendment L-001, raise serious practical, legal, and policy concerns, and we respectfully ask that those provisions be removed or revised. First, the bill does not fully reflect how broadcast television and radio operate. Local stations, particularly television affiliates, do not control all of the programming they broadcast. A significant portion of our content comes from national networks and syndicated programming delivered through integrated distribution systems. So local stations generally receive those feeds as complete programs, including advertising, and they don't have the technical ability to selectively remove or replace individual advertisements without disrupting the broadcast. In addition, affiliate stations operate under binding network agreements that govern the carriage of programming. So requiring Colorado stations to alter or block advertising embedded in those feeds could actually place them in conflict with those agreements and with the established structure under which broadcast programming is distributed nationwide. Second, I want to address the amendment that would prohibit advertising in media outlets where 30% or more of the audience is reasonably expected to be under the age of 21 unless targeted controls are used to prevent those individuals from seeing the advertisement. That standard does not reflect how broadcast radio and television even function. Broadcasters do not have the ability to measure audience composition in real time, nor do we have the capability to target or exclude viewers within a broadcast signal based on age Audience information for broadcast is based on independent rating services general demographic estimates It not precise real data that would allow a station to determine whether a program exceeds a specific percentage threshold for viewers under 21. So local stations also operate under federal licenses issued by the Federal Communications Commission and already have long-standing obligations to serve the public interest in air programming reasonably for the communities they serve. So the amendment wouldn't impose a level of demographic targeting and control that the broadcast system was never designed to provide, and then local stations can't implement without disrupting programming or risking noncompliance. Finally, local broadcasters rely on lawful advertising revenue to support newsroom operations, emergency coverage, local programming. Across the country, we're already seeing the loss of local newspapers, shrinking newsrooms, and fewer reporters covering state and local issues as advertising dollars move to digital platforms. Those same pressures are now affecting local radio and television. Removing an entire category of legal advertising from Colorado broadcasters will further weaken the financial foundation that supports local journalism and public service programming. For those reasons, we respectfully ask the committee to remove the advertising restrictions from SB 26131 and reject Amendment L-001. Thank you. Happy to answer any questions. Thank you. Senator Frizzell. Thank you, Madam Chair. And so, Mr. Brill or Mr. Sazo, thank you for your testimony. I just, so you've obviously seen L-001, and I think I know your response to this, but I just want to be very, very direct and clear. Does this amendment change, because you're here in an amend position, right? So does this amendment help you at all in coming to a neutral or support or oppose position? For both of them? For either one. Either one. Mr. Brill, will you go first? Sure. It doesn't change my opinion. And the fundamental problem under the First Amendment is the state has a burden to establish a causal relationship between advertising on television and problem gambling. And that causal relationship must be shown regardless of the means you choose to restrict advertising, whether it's a ban that exists all day in the evening or a ban on advertisements on certain programmings. And in addition to the – there's a legal and constitutional dimension to the administrability and vagueness problems that Mr. Sasso identified. The Supreme Court and the courts of appeals have consistently said that there must be precision and workability under the First Amendment or else you chill speech. So it not only doesn't solve the main causal problem, but it actually introduces some additional problems because it's very difficult to understand and implement. Thank you very much. Do we have any additional questions for this panel? Vice Chair Marchman. Thank you, Madam Chair, and thank you guys for being here. I understand what you're saying about that's not how broadcast works. You don't really get to control the composition of your audience so that you would be in compliance with L-001. So as I look at the fiscal note, I see that LCS has already accounted for like 990 hours of legal services or about a halftime person. I'm assuming that's how, if this bill were to be in effect and you as broadcasters are not able to do it, how is it just you go to court on that or what does that look like? If we put out... this bill, but you're not in a position to actually be able to, in good faith, follow it. Who would like to take that question? I'm happy to. Mr. Brill. Or Mrs. Sassler. You know, certainly our goal is to avoid litigation. And I think that the goal of this dialogue is to educate the committee about the relevant precedent, the very important constitutional limits. I don't know. I think the question suggested that if we were unaware of the audience composition, we might be in compliance. That's not how I would understand the restriction. I think it could be understood to impose liability because of a violation. So we're certainly concerned about being held to legal standards that we think violate the First Amendment and present significant administrability problems. Thank you. Any further questions for this panel? Okay, let us move on. Thank you for being here. We really appreciate it. We're going to move on to our witnesses that are in support. First up, we're going to have Breanne Dura-Shawal, Les Burnell, and Jeff Hunt. And I think I pronounced your name wrong. Is it Shwa-ol? It has a phonetic thing here, and I'm not doing it right. I'm going to let you just introduce yourself. Madam Chair, that's just fine. Thank you for the opportunity to be here with you all today. For the record, my name is Briandra Shawal. I'm an international problem gambling expert and advocate, and I'm the director for the National Campaign for Fair Gambling. Research tells us that when you live within 10 miles of a casino, the likelihood of developing a gambling problem increases by 90%. So what happens when Colorado created by default a casino on every phone and every home here within the state? I like to begin all of my remarks similar to this with a powerful quote to hopefully humanize this issue. But given the nature of the discussion that just transpired, I figured we might start with a headline. It reads, a psychiatrist tried to quit gambling betting apps. Excuse me. A psychiatrist tried to quit gambling. Betting apps kept her hook. This story was featured in the Wall Street Journal. And if you read this powerful story, you'll learn that a mental health trained professional found herself receiving hundreds of messages every single day, inducing her and feeding her with free bets to keep her hooked. And when she admitted that she couldn't afford her mortgage, they gave her more bets to play with. There are 9 million Americans that are struggling with this important public health disorder. And it's costing the United States $14 billion annually to address those social costs. The federal government, however, doesn't invest one penny into the preventing or treatment or research of this disorder, leaving the responsibility to you as a state. And unfortunately, earlier we heard that Colorado has increased their contributions to addressing this public health issue. Yet you still remain one of the worst in the nation, contributing some of the fewest dollars. One in ten Americans have placed a sports bet. Yet, in a recent survey, 43% of Americans say that sports betting is a bad thing for society. And when asked about advertising, 63% said it should be outright banned. The opponents to this bill, the proponents of light-touch sports betting regulations, will tell you that problem gambling only affects a minuscule percentage of the population And with that with too many regulations you will scare folks off into the big bad illegal market But what about the harm that happening today and on their platforms Maryland, a state like yours, found that 5.7% of their total population has a gambling problem. And then about 50% of their sports bettors are experiencing some level of harm. The industry cited all of their great responsible gambling programs, Yet data from Massachusetts indicates that only 4% of users use those very tools. And another operator you heard from assured you that underage individuals aren't getting on. Except in Ohio, they accepted 620 bets, totaling $2.78 million. I could go on and on. The social costs and the human lives that are in wake here deserve better. thoughtful consideration about how to protect Coloradoans, those that have been harmed and will be harmed, is greatly appreciated. Thank you for this opportunity. Thank you. Please hold for questions. We will go to our witnesses that are remote. Les Burnett is first. Please introduce yourself, and you have three minutes. Madam Chair and committee members, I'm Les Burnett, and I'm the National Director for Stop Predatory Gambling. We're a national nonprofit organization with all members in all 50 states. And we pull from the political right and the left to bring about major gambling reform in this country. And we don't take financial contributions from gambling interests. So to start off with, there's no single act of state 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. So to put some context around SB 131 in terms of a bigger picture, both political parties in our country and in Colorado talk about the affordability issues and the impact they're having on everyday citizens. Let's look at the impact that the institution of predatory gambling today is having on your constituents. So we tallied up all the financial losses that are happening to online sports gambling, to your casinos, and to the state lottery into one number. So over the next five years, your constituents are on course to lose more than $9 billion of their personal wealth to the state's casinos, commercialized sports, gambling, and the state lottery combined. In 2025, your constituents lost more than $1.76 billion of personal wealth to forms of gambling sanctioned by the state. And put that down into a number standpoint, that breaks down to $3,353 of personal wealth that your constituents are losing. So in my three-minute testimony, your constituents will have lost $11,000. That's the kind of wealth that we're talking about. That's a lot of eggs in people's lives. That's a lot of rent checks. So affordability starts with this government program. And then one key fact that isn't mentioned here, Danny Funt, who's a Washington Post reporter just published a major book that everyone in the legislature and every state should read called Everybody Loses. He had a fact in there that one out of every hundred sports bettors makes money. That means 99 out of 100 of your constituents who are gambling on sports are losing money. So this is a con. The idea that we wouldn't put any restrictions on encouraging these companies to lose, these citizens are losing huge amounts of money to a game that essentially is rigged to them is beyond the role of government. We should be stepping in and helping these folks. And the last couple of key points I wanna mention here, just more, we hear a lot about illegal gambling, the illegal market. None of your testifiers showed that illegal gambling has gone down in Colorado with the introduction of sports gambling The opposite has happened You have an increase in illegal gambling as a result of Colorado legalizing this. That's part of the con. And the last thing, I just want to briefly talk about this referendum I heard people talk about. In 2019, that wasn't driven by your constituents. That wasn't a citizen's movement for sports gambling. That was driven by powerful financial interest, the gambling interest, rammed that bill through. They spent $4 million against no paid opposition and they squeaked past. So this idea that we can't touch the voters, it was rigged, it was proposed as we're going to pay for water in Colorado. So let's be honest about that sports gambling referendum. So thank you for the opportunity to testify. Thank you. Please hold for questions. Next up, Jeff Hunt. Chair, members of the committee, thank you for the opportunity to testify. My name is Jeff Hunt. I'm here in support of Senate Bill 131. Colorado has seen an explosion in online sports betting since legalization. According to this bill's own finding, more than $6.3 billion was wagered in 2025 alone, a 130% increase in just a few years. But the real concern isn't just the volume, it's who's being affected. Young men, especially ages 18 to 34, are being targeted and drawn into a system that is fast, constant, and increasingly difficult to escape. More than half of young adults have participated in sports betting, and among high school students, as many as 60 to 80 percent report gambling in the past year. This isn't causal entertainment anymore. It's a system that encourages constant deposits, bombards users with push notifications, and promotes so-called risk-free bets that aren't actually risk-free, and the consequences are real. We've seen a 45 percent increase in calls to problem gambling hotlines. Research shows sports betting is linked to lower savings, declining credit scores, and higher rates of bankruptcy and debt. This bill takes responsible, targeted steps to address those harms, including limiting excessive deposits in short timeframes, ending predatory push notifications, restricting misleading advertising, especially when kids are watching and prohibiting credit card betting, which fuels debt-driven gambling. These are not extreme measures. These are guardrails, the kind we should have had from the very beginning. Let me be clear, we're not calling today for the banning of sports betting. It's about protecting Colorado families, young people, and communities from abuse and exploitation. Right now, we've effectively placed a casino in every young man's pocket without adequate safeguards. Senate Bill 131 begins to fix that. I respectfully urge your support. And I'll finish with this. Some great quotes from Dave Ramsey. The fastest growing addiction that is destroying young men in their 20s is online sports gambling. Fan duel is a portal to hell. DraftKings ain't king of anything except their pocketbook. They're screwing an entire generation of young men. You don't win. They're spending billions of dollars. It's out of your kid's freaking pocket. This is evil stuff right here. Support Senate Bill 131. Thank you. Thank you, members. Do you have questions for this panel? Senator Mullica.
Thank you, Madam Chair. I've got a question for Mr. Hunt, and thank you for being here and seeing you before in committees. I know you have a radio show and I get to see you on social media sometimes And in those experiences in hearing you testify before I've heard you testify about the government needing to leave folks alone a little bit and not intrude and advocate for smaller government, those types of things. And so I look at this bill, and in speaking to the sponsor, obviously, I think there is a role for the government to play for restrictions and protections in place. But there's also a component of this bill that involves elimination of a certain thing, of prop bets. and we and and look we've had debates in other areas in this building around let's use for example something i've been involved with which is flavor bands for vaping products and tobacco products uh you know and there's strong feelings about that and there's arguments to be made that look just because a 16 year old may be doing something doesn't mean the 40 year old shouldn't have the ability to make the choice of what they do or don't do uh with their own time or their own life. And I think that's an argument that comes from maybe a more conservative side, potentially, oftentimes. And I know you tend to be a little more conservative. And so I guess my question to you is, is what role does the government play here? You know, if we're good enough for the goose, why are we not good enough for the gander here if we don't want the government to intrude in certain areas, but we do want the government to be able to come in, in this case, and eliminate a product that potentially law-abiding, responsible adults are utilizing because there is a population that may be not utilizing it in the right way.
Mr. Hunt.
Senator, I appreciate that question, and I would support your ban on flavored tobacco as well for the same reason here that when you combine an addictive activity with the power of the free market, we encourage, because I am a capitalist, I know the power of the free market to basically go get as many users as they possibly can. And here's where I support the government stepping in to provide restrictions is because as a taxpayer, I often have to pay for the consequences of these types of addictive activities, right? So when people are having to declare bankruptcy or their credit scores collapse and we end up having to step in with social programs, Well, I didn't choose to engage in sports gambling, but I have to pay for the consequence of it. That's where I support the government stepping in and providing some guardrails and restrictions on these activities so that, frankly, as a taxpayer, I'm not on the hook. Thank you.
Oh, Senator Mullica.
Thank you. Just a follow-up, and I appreciate that. And thank you for that, Mr. Hunt. I'm looking at the good senator from Sterling, questioning if maybe we need to, him and I can run a flavor ban here either later this year or next year with your support, obviously. But it's not even flavor bans. We can take that argument to alcohol as well, you know, or other addictive substances. You know, I still, I guess I still struggle with, because I have heard from you before, Mr. Hunt, like that the government doesn't, you know, the smaller government is good. It doesn't belong in all these spaces. And government doesn't always know best. And so I still, I guess I would, if you can elaborate, because you've said those words, I've heard, you know, how does the government know best in this instance, but not in other instances? Mr. Hunt.
Yeah, Senator, fair question. I should have you on the show for a longer time. I think it would be a lot of fun here. But look, I've been one of the leading proponents for restricting marijuana, for instance, in the state and some of those other things. And I've been very public by saying that in many cases, prohibition works. And I'll give you a perfect example of this. Fentanyl, for instance, kills 100,000 people a year. Fentanyl. And you can take one of those and die from it, right? It kills 100,000 Americans. Terrible. Tobacco, on the other hand, which takes an entire lifetime of use to die from, kills four times more people than fentanyl. So why is that? Well, in one case, we restricted, heavily restricted the use of fentanyl while we allowed for the commercialization of tobacco. and you can go read my Twitter feed that I basically said that listening here today is like listening to the tobacco companies of the 60s going out there and saying these gaming companies going, oh, we don't directly target kids, but we all know that they want them as users. They're motivated to get them as users and they have a financial incentive to get them as users. So, yeah, they might not be advertising on Barney, but when they see Kevin Hart out there, they know exactly what they're doing. They're reaching kids and warming them up to the idea of becoming lifelong users. So when you combine addictive activities and the power of the free market without much government oversight, and then you build a social safety net that I have to fund to clean up the mess, that's where I'm okay with the government stepping in and saying, no, we're not going to allow you to do this. I don't like the idea of needle exchange sites or those drug user sites that were promoted in Denver at one point for the same reason. When it comes to addictive activity and we pair it up with the power of the free market, we empower these companies to go out there and get as many users as they can. And I'm tired of watching Colorado decline as a result of it.
Thank you for that, Mr. Hunt. I really appreciate that.
Thank you.
You don't come on the show any times.
Thank you. Sounds like you guys will have a good conversation. Anyways, other senators, any questions for this panel? I do have a question, I think specifically for Ms. Duraschwal, and I'm going to pronounce it hopefully better, and then Mr. Burnell. I am really curious about this question between the regulated market and the unregulated market and how much of the problem do you think is in each? and pronounce it for me one more time.
Shawal. Dura-shawal. Shawal. Shawal. Okay. Madam Chair, thank you for the question. This is the one point where the legal regulated industry and I agree. The threat of the illegal market, it's bad. It's not good for consumers. I worry about children accessing those platforms. The answer to our universal concerns around the illegal market is not to legalize more gambling or to somehow not have any stringent regulations or standards for the privilege of having a gaming license here in this state. There has been no evidence that with increased regulations to protect consumers that there is a growth in the illegal market If you look at other public health issues for example such as tobacco when we've seen an increase in taxation or regulation, what happened was there was less engagement with harmful participation. See, the industry is heavily reliant on gambling problems. 71% of revenues at 51% from sports betting come from those that are addicted. I care about the harm that's happening in the legal market. And the question or the solution is not to lessen regulations in the legal market. It's to go after those bad actors. You can never compete with people who have a flagrant disregard for the law. Thank you.
And Mr. Burnell, would you like to comment on that as well?
Sure. Sure. Just to, you know, my background is in politics. I'm not a policy expert. And so I look at this issue. There's no grassroots movement in Colorado for this because there's no merit to this. This is driven by powerful financial interests who have used the political system. So part of that has been this narrative, which we refer as a phony narrative around illegal gambling. And this isn't me saying this in the New York Times, the Sunday New York Times did a front page four part series in November of 2022 on the rollout of online gambling across this country. And a big part of that was just unveiling the myth or the con of illegal gambling. It showed it was it was a bit of PR narrative pushed by the American Gambling Association and then the Sports Betting Alliance to create fake momentum to push through online gambling laws across this country. So just ironically, I would point this out. We actually have a letter that we cite all the time in 2022 to then U.S. Attorney General Merrick Garland, the American Gambling Association, the national trade lobby for the industry, four years after after sports gambling was legalized, wrote a letter to the USAG calling him on him to crack down on illegal gambling because the incredible spike that was happening in illegal gambling in this country. Like the whole claim behind legalizing this product, one of the claims was we're going to wipe out illegal gambling. None of these lobbyists that have come before you have shown you facts that they haven't paid for that have shown illegal gambling has decreased. There's no independent facts that show that illegal gambling has increased in Colorado dramatically because you've normalized it by pushing this product. And the last thing I'll say to you, none of the data that you hear about illegal gambling, none of it is coming from the Colorado Department of Public Safety. It's not coming from the FBI. It's pushed by gambling lobbyists and gambling companies.
Thank you. And just I'm going to ask one question. Well, one question, but with two parts. So I'm going to let Ms. Dura-Shawel take that.
My questions are really, do you see underage kids participating in regulated markets, at least in Colorado? And secondly, given the growth from like 24 to 25, from $475 million to $587 million in profits from the gambling folks, is the year-over-year growth and the overall growth since we started this program, does that seem to you to indicate that more addiction is occurring? Madam Chair, thank you for the two-part questions. Undoubtedly children are gambling on the legal platforms here in this state If we are seeing data from other states providing clear evidence of hundreds if not thousands of children accessing these platforms, gambling millions of dollars, the same would exist here. They're the same companies with the same infrastructure. There's no doubt that this is happening on your legal sites. My concern is that why don't we have more of this data? and what action is being taken to stop this from happening. Some of the most powerful information we can have is through state agencies that hold these operators accountable. It's how I was able to provide data from Ohio and Massachusetts and Connecticut here today. Think of the power to craft policies that are responsive to the problems that are happening if you had that data yourselves. 36% of 11 to 17 year olds have gambled 1 in 8 boys have bet on sports A half of adolescent boys who gamble have seen that content online And the boys who view that material tend to spend more money Versus those that have not No doubt children are gambling here in the state And then the second part of the question was about I come with more data I like data. I apologize. In January of 2025, here in the state, $31.7 million was wagered on table tennis. Once upon a time, back when I got into this field, I was told that gambling was supposed to be entertaining, that it was supposed to be an experience, it was supposed to be social in nature. $31.7 million in 30 days on an event that no one knows the names of the players because it's happening in the middle of the night in another country, and it's all micro betting and props and in play, and it's just this instantaneous dopamine reaction to getting in on the action. Madam Chair, with all due respect, no doubt is the increase in revenue leading to the increase in harm here in the state. Remember, their revenue is the losses of Coloradoans. Thank you.
Additional questions for this panel? Thank you so much for being here. We appreciate it. Next up we will have Rob Minnick, Ashley Perales, Cody Sudmeyer, and Pavel Ivanov. And we will start with our in-person witnesses. And so should we go from my left to my right? Does that work or do you have a preference? Okay, please begin. The little gray button on the table.
Okay now? Hello? Yes, we can hear you. Good afternoon, Chair and members of the committee. My name is Ashley Perales, and I am here today to read testimony in support of Senate Bill 131 sports betting protections on behalf of Paula, a member of Mental Health Colorado's Brainwave Advocate Network. So here is her testimony. In my family, sports betting has led to impulsive reactions, which resulted in significant negative financial consequences, loss of self-esteem, and even dropping out of college. Yet these family members are still tempted to throw away everything to gambling, especially sports betting. These are not isolated cases They are part of a growing public health concern This bill is important because unregulated and highly accessible sports betting is causing serious harm to young people especially young men ages 18 to 29 Research shows that the human brain, particularly the prefrontal cortex responsible for decision making, impulse control, and risk assessment, is not fully developed until the mid-20s. Neuroscience research explains that the prefrontal cortex doesn't fully mature until around age 25, and the National Academies confirms that decision-making and impulse control systems are not fully developed until young adulthood, with males tending to develop more slowly. Because of this, young adults, especially young men, are more vulnerable to impulsive and high-risk behaviors. Researchers explained that this stage of development creates a heightened vulnerability to risk-taking because reward systems develop faster than self-control systems. Studies on gambling specifically show that young people are at significantly higher risk. One peer-reviewed study found that problem and pathological gambling are two- to four-fold higher in adolescents and young adults than in older adults. This means many young adults in the 18 to 29 range are still developing the very skills needed to regulate risky behaviors like sports betting. As one recent report noted, sports betting creates emotional cycles that can hit young men especially hard. The consequences are serious. Research shows that problem gambling is strongly associated with increased depression, anxiety, substance use, and financial harm. Young people often accumulate debt, damage their credit, and experience long-term instability. Families are also affected, facing stress, conflict, and economic hardship. For these reasons, I urge you to support Senate Bill 26131, establishing reasonable protections around sports betting that has been deliberately engineered to maximize engagement, will help safeguard the mental health and financial stability of individuals and families across Colorado. So thank you for your time and service.
Thank you. Sir, you're up.
Thank you, Madam Chair and committee members. My name is Cody Sudmire, and I'm the one out of the 100 that was referred to earlier. I've always loved sports. I've always loved gambling, frankly. And I'm a bit of a data nerd. So I combined these passions and aptitudes and got into sports betting. and at first maybe lost a little, but over time just kind of learned some things and tweaked my models and started winning fairly consistently. And what I found is at first I was the VIP because I was betting a lot. And literally ESPN Bet reached out to me and said, hey, I'm your concierge. You get access to all these new things because you've been betting so much. And I was like, this is great. I get to go to concerts and all these things. And then literally like the next day, I went to place a bet on ESPN. And frankly, I was placing bets like $1,000 a game kind of thing. And I was capped at like 10, 20 bucks. I was like, what is going on? So I reached out to my concierge and he says, oh, if they did that to you, then there's nothing I can do. And just doesn't want to talk to me at all. So I looked into this a little bit and this happens regularly. There is a pretty well publicized story by a gambler. I believe he's out of Chicago named Bo Wagner with our friends at Giraffe Kings. and Bo placed a $1,000 bet on who was going to be the highest scorer of an NBA game. The odds were 50 to 1 and he did his research and he was right. He won $50,000. DraftKings had the nerve to tweet out his, win to promote it to everybody that's on Twitter, but then the very next day cap him similarly. So they actually use it as example, look, you can win, and then, nope, not going to allow that anymore either. So seeing things like that, frankly, hearing a lot of, oh, we'd love to collaborate with you guys and find the best controls, that just hasn't been my experience at all. When you bring up issues, they give you the silent treatment. I've seen that quite a bit. They've told me, oh, they'll say it's a game of skill when it uses its purpose, or they'll say it's a game of chance when it doesn't. A little background here. When the lobbyists for the big ones, FanDuel DraftKings, were trying to get this legalized nationally back in around 2015, they compared it to sports fishing, and they said, hey, you can enter a competition today for a $100 buy-in, and if you win it, you may get $5,000 back or whatever. they said it's a game of skill it's different than a game of chance well then fast forward today and if you're one of the skill for skillful gamblers they're going to block you and so a lot of it's just a sense of fairness for me i'd love to weigh in i know i'm running out of time i do have some actually fairly moderate thoughts on just because i know these things really well i gamble fairly often um uh prop betting and some age verification things i i know um and then if Anybody who just wants to learn more on the topic, Michael Lewis, who wrote Moneyball, he has a great podcast, Against the Rules, Season 6, that talks about this a lot and some of the different things that come up. So just recommend that. Like I said, can answer a few questions on prop betting and age verification. Thank you for your time.
Thank you, and please hold for questions. Rob Minnick is up next.
Thank you, Madam Chair and Committee. My name is Rob Minnick, and I'm in recovery from a gambling addiction. I made my last bet November the 12th of 2022, and I'm happy to be here testifying. I started out with Daily Fantasy Sports when I was 18. It very quickly became sports betting, and I was hooked right away. By the end of my gambling, I was at a point where I wasn't just sports betting. I had moved on to casino games, and I had memorized the soundboard of a slot machine that I had played on to know with my eyes closed how much each bet had won or lost. My addiction progressed over the course of six years, but it started when I was just 18 years old. I've gotten a lot of notes sitting here for the last couple of hours, so I'm going to refer to them for the rest of this testimony. So on the topic of prop betting, we've heard a lot of things about the individual performances of athletes being discussed. But when I was prop betting, I was betting on who would win each individual point of a tennis match. So it's important to distinguish which ones are just fundamentally predatory towards the gambler themselves. And on that topic, I don't claim that the casino industry is 100 percent at fault for my addiction. I had to take ownership of that to get into recovery and maintain recovery. So I'm not saying there's one bad guy, one good guy, if you want to phrase it like that. But there is somewhere in the middle the point at which each side needs to take accountability. On the topic of advertising, the issue is that it normalizes gambling. If someone watches a Rockies game, they'll first have to suffer through seeing them losing by five in the third inning. And then they're subject to endless gambling promotions. And I find it to be laughable to think that seeing more gambling advertising in existence wouldn't lead more people to gamble. But, hey, I'm a guy that makes TikTok and YouTube videos about gambling addiction, and I'm not a lawyer, so what do I know? I also don't think they need to see an ad every 13 seconds to know where they can access legalized sports betting. But, hey, we're there as well. On the topic of underage gambling, responding to a previous comment that said that the youth are not betting in the regulated market, I love to tell you a little bit about my friend AJ who put himself into crippling debt and pushed himself towards suicide as a result of his gambling all before he turned 21 And that was done on PrizePix FanDuel and DraftKings Just a slip through the crack or a microcosm of what happening every single day in our country I don't know. There's no incentive for any of these platforms to off-board any customer, nor is there any incentive to follow through on any RG initiative. I mean, why would they want their company to lose money? There's no reason for them to do it. On the topic of the black market, if they're so overly concerned that people are seeking it out, they're kind of acting like their main customer is someone like myself who would seek out black market options in an environment where they wouldn't otherwise be able to gamble, like literally something a gambling addict would do. But then they say there's a very small percentage of the user base that's addicted. It just can't be both ways. I want to call attention to the fact that nobody that spoke against the bill represents the consumer interacting with the sportsbooks, only the corporation seeking to maximize profit. Though they spoke very eloquently as usual and did a great job at dodging your question about problem gambling funding versus overall profit, I guess that's why they get paid to be here and I don't. I want you to know that I'm here on behalf of the gambling addict who for so long has had nobody to care about what happens to them. We've had – who've had their lives upended in favor of unchecked corporate greed from a few very smart organizations. But I'm just a guy who makes YouTube videos for a living, and I want to say take this with a grain of salt. if the funding for your water projects can only happen at the expense of your most vulnerable citizens, maybe build some wells for the ones that go homeless in the process. Thank you.
Thank you so much. Please hold for questions. And next up, we have Pavel Ivanov.
You are still muted. Can you hear me now? We can hear you now. Please proceed. Beautiful. My name is Pavel Ivanov. My connection to the betting industry is that I used to make money there. I play sharp bets by finding wrong bookmakers' assessment of events and their outcomes. In fact, my accounts are fully limited to $10 to $15 per bet as I want too much, so I only used to do it. The people who came here to advocate against this bill kick out people who are not losing money. The only interest they pursue is profit and not the people they serve. They spend a lot of time today deflecting our attention from the bill and the protections it can provide to Cloradians, to offshore gambling companies that are already illegal. And I'm not a fan. They mention that they don't have control over how much they make, like casinos would. That is a lie. They have something called a week. They can set what is the spread between a 50% chance gain. On 50-50 bet, they choose whether they pay out 2x, which would leave them with nothing, no profit, but no loss, 1.8x, 1.5x, directly choosing how much they want to make, based on select market liquidity and confidence in the outcome. In this line of work, I met a lot of people who are struggling with gambling addiction, even among those who worked in the same field, understanding the mathematical impossibility to make money gambling. Thus, I am for this bill. I am very much furious that DraftKings had the audacity to push its players to email against it. If you would take a look, this is the email I received on my fully locked out account. I cannot place any good bets on that. but they did email me asking me to ask to not get this bill passed. They are literally asking the addicts to decline help that may save families and souls. I think it is a great bill that will greatly help those addicted to gambling, an inhumane industry that is made to learn how a human operates and extract wealth from anyone with promotions, addictive graphics, and other producer behavioral analytics they do. You know, they say that you can tell a politician is lying when they open their mouth. I have another rule of thumb for today You know how to tell this is a good bill The gambling companies today are against it You heard all the people against and all of them are paid today They do not do that because it's bad for the players. They do it because they'll lose money, because people will be less addicted and actually will be healthier as a result of this bill. Please do help this bill to move forward.
Thank you. Thank you. Members, do we have questions for this panel?
Minority Leader Simpson. Thank you, Madam Chair. Mr. Sudmire? Yeah. Yeah, I'm curious if you're still a gambler, and then open the dialogue. I'd like to learn your perspective about prop bets and underage gambling.
Mr. Sudmire. Thank you. I am still a gambler. I enjoy it, but I also recognize that, I mean, everything that's been said with the statistics are fair. I mean, you start diving into it, and you're like, man, I'm kind of on that winner side of it. that's just frustrated that you get blocked even when you win, so it's not even fair gaming. But on the other side, everything that's been shared, I think, yeah, that's the more important piece of all of this, which is spousal abuse and suicides and all this. There's all of this data on it. Frankly, you know, if you could snap your fingers and have it go away, you'd probably do that, just like you would with alcohol or tobacco. What do you do with that? That's tough. on the age verification I just wanted to talk about because I went back to my college Kansas State probably placed a bet while I was out there I can't remember and I started like at the bars we have this place Aggieville where all the students go to and I started asking them like are you guys sports betting what's going on here and they did say to be fair they said yes offshore is part of it no doubt but no bigger part of it than they have different things just like buying alcohol for underage. Like they'll get it, somebody logs in on their friend's phone and they just use that account forever going forward, like kind of cross-reference it a little bit. Sometimes they'll text groups and say, hey, so-and-so, you're over 21 places, bet for me. So that's kind of the mechanics behind a lot of that. Frankly, I don't know, a lot of that's just tough. I don't know if there's really what you can do about some of that. Prop betting's tough too, honestly. I think there's a lot to be done. some of them are just, it turns a game of skill into a game of chance where it's the most random nonsense that people bet on. Just speaking from my friends, my group, people love their prop betting. That would be a pretty big change here. A lot of people would not be thrilled about that. I think there's different kinds of controls you can put in place to not get rid of it altogether, but have some more reasonableness around it, frankly. Thank you.
Do we have additional questions for our panel?
Senator Colker. Mr. Sedmire, when it comes to prop betting, I've suggested to the sponsor a potential amendment of limiting prop betting from individuals, on individuals, but continuing it to teams. I know prop betting also is a big moneymaker or a big entertainment focus, too, for a lot of people. Can you give me some insight on, because I think prop betting, a lot of it is kind of like betting the field in craps. You know, it's kind of a fool's bet or betting the hard ways, you know, just the odds there. It is, but there's also ways in this entertaining. Now I a really big bettor I bet like 25 cents at a time So you know I do it for the entertainment You know I always bet on the team my team is playing so that if my team loses I feel a little bit better Okay. But it's, you know, a couple dollars maybe at the most. So where does the prop betting in that suggested amendment, I mean, what do you think about that?
Mr. Fedmeyer.
Yeah. Technically in the industry we call that a happiness hedge. when you bet against your team, so that's what that is. People love their player prop bets. My concern is you could get this, so much of this is really important. Even I think one thing that hasn't been talked about a lot is, it's not just the advertising, but if you turn on SportsCenter, DraftKings has their sponsored expert telling you how to win, and then after you win, they say, oh, no, we don't want your business anymore. But if you're losing, and I have a group of people, you know it's literally titled degenerates somewhat as a joke as distasteful as that feels and the one guy that loses more than anybody else he always shares these promos that he's getting to get back in the action they they they use that individual data to go after the people that are losing betters and they block the ones that are winning so I think that's just important to be said but yeah on the prop bets I think it's some of the things that you can look at is there needs to be better transparency with you start adding four or five legs to your bet, it gets a little squirrely on what odds you're actually getting and how it impacts the first one. I understand some of the reasons you wouldn't want an undersports bet, but it provides a little bit of a control that it's not, because what a lot of bettors are concerned about is if you can only bet on the over and then all of a sudden somebody gets a call from Vegas is the theory. I don't have zero evidence this actually happens, but then Vegas wins big because nobody could have bet on the underbed and that person went out in the third quarter with a gimpy ankle or something. So just a few things to layer on there. My concern is that it could get somewhat derailed because prop bets is a big chunk of the tax revenue for sure. I don't know if it moves the needle as much as some of the other controls that you guys are trying to implement in terms of the public good for what it's worth. Thank you. Members, any additional questions for this panel? Oh, Minority Leader Simpson. Thank you, Madam Chair. For any of the panel, particularly the gamblers or used to be gamblers, you referenced Mr. Sutmeier about being cut off because you were winning. Any anecdotal evidence of you or people you associate with being cut off because whatever mechanism the industry has to recognize you've just overextended yourself or you're like a continuous, I don't want to characterize this, but a continuous loser, are there instances where people are shut off because it's apparent in whatever mechanism the industry uses to say you're just not being responsible? Both of our folks online have answers to that. And let's see, let us start with Mr. Minnick. Thank you. No, there's no reason that would ever occur. Anything that's being stated, I've never seen it substantiated by any real numbers or evidence in terms of responsible gambling having a positive impact. I know that they go through clinical trials in the tools that they implement on the platforms. The issue is that someone with a gambling addiction would never use those tools because they would basically, by using that tool, you would be admitting defeat in the mind of someone with a gambling addiction. So when I was sports betting, I viewed it as part of my personal experience. It was one of my purposes. I wanted to become good at it, become successful at it and be one of the 1%. If I had to then say, I have a problem, let me call this number and then use this budgeting tool, that would mean that I, for some reason, sucked at gambling. I think a lot of young men in particular believe that gambling on sports is not actually gambling, but rather investing or a game of skill. um hey who am i to say what it really is but uh very confident that in my opinion it's gambling and no i don't think anyone's ever been restricted for being bad thank you mr ivanov uh i will support that um in fact because of the way that i was placing bets um specifically it's called arbitrage when you would put uh when you put money on one bookmaker for let's say you know team one and second for team two. And overall, you would always win regardless of which one will win. The account that would lose and sometimes and most of the time it will be one bookmaker that always loses money or rather I lose money on that account. Right. Let's say I put money on FanDuel and DraftKings. Let's say DraftKings always loses. DraftKings would never say, oh, hey, it looks like you lost 30, 40, 50 thousand dollars in the last month. And that's actually, you know, the numbers for my account. That's one account might have, you know, 40, 50, 60 thousand dollars loss. because the other one has, you know, that plus some more in profits. So I was able to, you know, sustain that because thankfully I thankfully was not an addict like some other folks who thankfully are recovering. But I never was contacted by those bookmakers where I would lose money for like, oh, hey, are you OK? It never happened. It only happened, my only accounts that was ever suspended or like, you know, put on hold by the bookmakers were the ones where I would place the winning bets where I expect the money to be. They would restrict that even during the placement of bets. They would argue that it is for your good, that we're concerned about you. It was never on the ones that were just a normal bet on normal market. It was always the one bookmaker that would make a mistake and I would make money on that. Thank you. Any additional questions for this panel? Thank you so much all for being here. We really appreciate your input on this important issue. Next, we have one more panel, everybody. Hang in there. Wendy Buxton Andrade, Liz Waddick, Max Karpinski, David Karnas, and Joshua Ewing. And I am being told nobody else has signed up to testify, so we're going to make the last call for witnesses also at this time. If you did want to testify and have not signed up, it is your time to fill that empty seat. But in the meantime, I know we are going to call Mr. Ewing last, but why don't we start otherwise here on my left. Good afternoon or evening, Chair and members of the committee. My name is Wendy Buxton Andrade, and I am here representing Mental Health Colorado in support of Senate Bill 26-131. For 73 years, Mental Health Colorado, the nonpartisan nonprofit organization, has been promoting healthier minds across the lifespan for all Coloradans. This bill will enable the Senate to establish some helpful protections around online sports betting in an effort to reduce gambling addiction Among other things this bill prohibits broadcasting and advertisement and promotions for sports betting operations from 8 a to 10 p or during the live broadcast of an athletic competition. This will help minimize impulse betting. This bill also prohibits credit card betting, which will help protect people who are vulnerable in the gambling addiction industry from incurring the kinds of high interest debt that sinks into the financial well-being of individuals and their families. Gambling is fun when you are winning, but in winning, there are rules. They are always those that lose, too. This would be a powerful industry here to protect its handsome profits. Online technologies are cleverly designed to maximize addiction behaviors, permitting deliberately engineered addictions, behaviors to produce financial ruins, and entrap people in debt to profit-tiering businesses. is an illness in our society that this bill will help attempt to cure. Good legislation protects our society, and this is a bill that will help protect our society. Please vote yes on Senate Bill 26-131 to protect the health of our society as well as our state. Thank you. Thank you, and we're going to come back to you, Mr. Ewing and ma'am. You are up. You are up. Yes. Good afternoon, honorable members of the committee and Madam Chair. My name is Liz Waddick. I'm a high school Spanish teacher and vice president of the Colorado Education Association, representing nearly 40,000 educators across the state of Colorado. And I'm here to express CEA support for Senate Bill 131. Every day, educators stand in front of students who are still figuring out who they are. young people who are impressionable, who look to the adults in their lives, and the culture around them to understand what's normal. As educators, we care deeply about the social and emotional health of our students, not just their academic performance. We think about them long after the bell rings. We worry about the pressures they face outside of our classrooms. And increasingly, one of those pressures is the normalization of sports gambling. We know which students are most vulnerable. The same boys we're trying to keep engaged in school and on the path to success are the primary target of the sports betting industry. And as a mother to a son, 12-year-old son, this is something that keeps me up at night. Adolescents with gambling disorders frequently experience school-related problems, impaired social and family relationships, substance abuse issues, depression, and anxiety. And when a student is preoccupied with bets, losses, and chasing winnings, they're not present in the classroom mentally or emotionally. And I really do think about the future, right? This, like, them looking at this before they're 18, right? Really sets them up. That's exactly the age that people keep talking about is 18. So they've been watching these ads, even if they're not betting. As educators, we're in the business of long-term outcomes. We play the long game for every child we teach. We see students graduate and enter adulthood with so much potential. The last thing we want is for aggressive unregulated betting markets to pull them into a financial crisis before they had a chance to build their lives I urge the committee to support Senate Bill 26131 Our students deserve an environment on and off screen that sets them up for success Thank you. Thank you. And I see, I think Ms. Hartman, you have joined us. We had you on a previous panel, but I believe you were in an amend position, but please go ahead and give us your three minutes. Thank you so much. Sorry, I was late. I am testifying on this bill in an amend position only because there's not an option that lets us ask questions or anything. But my biggest concern on this bill, among 27 other bills, is our ongoing dependency on the exploitation of vulnerable populations for profit and economic development. It is so lazy. There's nothing innovative about it. For example, here in Western Colorado, we have no NAMI. There's no NAMI organization in Western Colorado. We have no mental health hospital. We have a high suicide rate. We have high gambling. We have high addiction. Like I said, there are 27 addiction-based bills just this session. 10 alcohol, only two are impact, and one just died an hour ago. Nine sex bills, three gambling, three marijuana, two controlled substances. The day after a gambling bill passed last year or the year before, I remember, I was listening to the hearing. Everyone literally applauded the projected numbers. There is no way they could not know that those numbers were coming from gamblers and addicts. The next day after that bill, the Colorado Public Health Association issued a public health warning about the rise in gambling. So this double dipping, double playing, you know, one side against the other is beginning to feel a little bit like based on all these sin bills and addiction bills, Like the state is kind of doing a wannabe mob boss thing with the gambling and the alcohol and the sex and the marijuana and the substance. The Denver Post, I used to, I subscribed to the Denver Post and I used to get their email three times, their daily, that says, hey, your paper is ready. I stopped because there were two casino ads every single day. and as part of the master of public policy program that I'm in at CU I had to do a paper on online gaming and I learned a lot about Chumba Casino which is the big one that advertises that's pushing pushing pushing and Chumba Casino is owned by a guy in Australia and who's very involved in the global the reason I bring that up is we're sending these not only is there a gambling problem but we're sending these dollars out of the country. We're not even keeping them in Colorado. Does the need for online safety and friendly communities, whether consciously or unconsciously, combined with the casinos, I love the guy said we have a casino in our pocket and we've got alcohol drugs on every street corner. So, it's sort of like, what are we prioritizing? Women in Colorado with mental illness are incarcerated at over twice the rate of men. What are we doing? We're gambling, we're exploiting vulnerable populations. Ms. Hartman, could you please wrap up? Your three minutes has expired. Because of that, I do ask that not only do you take a look at all this dependency on these vulnerable populations while we can get health care and please consider all sides of it I agree We got a huge problem Thank you very much We appreciate it Mr Karpinski Thank you Mr. Karpinski. Thank you, Madam Chair. Good evening, Chair and members of the committee. My name is Max Karpinski, and I'm a social work student at MSU Denver, and I'm testifying today in support of SB 26131 sport betting protections. I am here as a concerned Coloradan who wants to make sure our state's sport betting market is safe and fair for everyone. We have seen how quickly sports betting has grown in Colorado. As previously mentioned, in 2025 alone, Coloradans wagered over $6 billion in online sports, a more than 130% increase from five years earlier. Young adults are betting more than they should. sometimes using money they don't have, and there is a growing issue with people struggling to control their gambling and subsequent mental health problems. SB 26131 takes real steps to protect people without shutting down the market. It puts limits on high-risk bets that are particularly addictive and aims to reduce potentially harmful behaviors. It also limits aggressive advertising during the day and live games, as their kids see and learn from and requires operators to report more data so the state can keep an eye on the industry. What I like about this bill is that it doesn't punish people who bet responsibly, but it does make it safer by putting in measures that will protect people from the adverse effects that gambling can have, such as stress, depression, anxiety, psychological distress, connectedness, and social functioning. My nephew is 20, and while he cannot legally participate in sports betting yet, he has already been exposed to other forms of gambling. Watching him interact with these games has made me realize just how easy it is to get financially involved when protections aren't strong enough. I worry about his future, and this bill helps prevent a problem before it starts. That's why I feel so strongly in support of SB 26131. Please vote yes, and let's make sure Colorado's sports betting markets is fair, responsible, and safe for everyone. Thank you so much for your time. Thank you. Please hold for questions. Mr. Ewing. You can't make me go after the sultry sounds of Mr. Karpinski. Come on, that's not fair. Thank you, Madam Chair, members of the committee. I'm Josh Ewing. I am the Executive Director of Healthier Colorado. I want to begin by acknowledging that sports betting in Colorado is generating significant revenue for important state priorities and providing a regulated alternative to illegal markets. The good news is nothing in Senate Bill 131 changes that. This bill does not roll back legalization, it does not prohibit betting, and it does not interfere with responsible adults who choose to participate. What it does is brings our policies up to speed with how this industry actually operates. Because the reality is sports betting is no longer just about placing a bet on a game. It is now embedded in the same digital ecosystem as social media, built on constant engagement, frictionless transactions, and increasingly sophisticated algorithms designed to keep users coming back. And I think it's worth asking a simple question of the committee. Does anyone here believe that this digital ecosystem has made us healthier? That we're better off because of the doom scrolling that we all do? No, of course not. We have seen the mental health consequences of platforms designed to maximize attention and minimize friction. That's not accidental, it is by design. But now, we've layered financial risk directly into the same model. We've taken something that already affects mental health and connected it to people's bank accounts. That raises the stakes in a very real way. And here in Colorado, providers are already raising concerns about increased problem gambling, particularly tied to the accessibility and speed of mobile betting. Some estimates suggest roughly one in six bettors may be at risk for problematic behavior. It's about recognizing that 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. It focuses on prevention, not prohibition. The guardrails in this bill are measured and reasonable, restricting credit card use, capping the number of deposits, prohibiting bonus payouts as promotional offers, restricting advertisements that can target kids, eliminating push notifications and text messages to drive continuous betting. Colorado voters made the decision to legalize sports betting, and Senate Bill 131 fully recognizes that. But voters did not lock in a static system forever. They authorized a regulated market, and a market was created in statute precisely so that it could evolve as conditions change. And conditions have changed. The technology has advanced, the scale and speed of betting have increased, and we are seeing early indicators of real public health impacts. As a sports fan, I understand the appeal of betting. I really do. And Senator Kolker, we should talk about your loyalty to your team after this. But Senate Bill 131 does not undo voter intent. It strengthens it by ensuring that legalized sports betting in Colorado remains not just successful, but sustainable, safer for individuals, safer for families, and better aligned with the long-term health of our communities. Thank you. I ask you to support Senate Bill 131 today. Thank you. Senator Mullica. Thank you, Madam Chair. It's good to see you, Mr. Ewing. Thank you for being back here in Finance Committee. Usually I've been used to seeing you in Health Committee. But you made a comment that this is not prohibition. But I would argue that there is a component that is prohibition, which is eliminating the prop bets. And obviously we've had a long debate today. But I guess walk me through your thought process because the bill pretty blatantly states that prop bets are not allowed. and to me that that's what prohibition is. And so I would love to have you expand on that if you would. Mr. Ewing. Thank you, Madam Chair. Thank you, Senator Mullica. My perspective is this. Betting will continue even if prop bets are eliminated entirely. I think you've heard from the sponsors that there's an openness to continue that conversation, but betting will continue even if prop bets are eliminated. What the bill does is takes a public health approach to what I would argue is a growing concern in our state for our young people. And we've talked a lot about boys and young men here today, but it is really everyone who is impacted by this. I am the dad of two young children, seven and four, who, when they see one of these advertisements on TV, it's like a tractor beam has grabbed them and I cannot get their attention. We are taking a public health approach in Senate Bill 131 to address a growing problem in our state. Betting will continue regardless of whether or not that provision stays in the bill I Senator Mullica Thank you Madam Chair Thank you for that Mr Ewing And you know I a father as well And I agree I think we should have restrictions. I think we should have guardrails like we do on a number of different areas, and I think that's the role to play. Again, I guess I'm still struggling to understand what we are accomplishing on prop bets. You're telling me that betting will continue. this bill calls for guidelines on what advertising looks like you know what that credit cards aren't being utilized a number of deposits and withdrawals that are allowed all I think appropriate conversations but like betting will continue but you are eliminating prop betting with this bill and again if if a person doesn't have a gambling problem if a person is following the law why should that person not have the ability to prop bet if they chose to? Mr. Ewing. It's a fair question, Senator. Thank you, Madam Chair. It's a fair question, Senator Mullica. I think it's why we have conversations. So the analogy came up earlier this week about limitations that exist when you go into a bar. Why do we have rules that say a bartender has to cut people off? There are common sense guardrails. that I actually think the majority of people generally support when it comes to things that have the potential for addiction. What we heard from the panel prior is that the prop bets are the riskiest bets out there. They're the ones that folks are doubling and tripling down on to try and win back losses. But there is zero skill in those bets. Those are the ones that are putting people at further risk, which is why I think you see them not just in Colorado in Senate Bill 131, but a target of conversations across the country and in Congress right now. So, you know, I think there's absolutely room for debate and discussion around the validity of the bill as it's drafted today on prop bets. But why is it included? Because it's harmful. And it is where folks who are struggling, folks who are dealing with addiction, are seeing huge challenges and risks. Senator Mullica. Thank you, Madam Chair. And I just have one more follow-up because I guess I'm going to push back and I'm going to challenge a little bit. Mr. Ewing. That's so unlike you. Page seven of the fiscal note, I'm going to read the top line of it. It says generally it is assumed that proposition bets have a higher win percentage than parlays, but a lower win percentage than other bets. So again, I'm not advocating for this, so please don't take it that way. Why are we choosing prop bets when right here in the fiscal note it says that parlays actually lose more than prop bets? Mr. Ewing. Thank you, Madam Chair. Thank you, Senator Mochla. I am not an expert on gaming, and so I can't evaluate parlays versus prop bets. Full transparency for the committee, I've never made a sports wager in an app or on one of these platforms. I did it the old-fashioned way by losing money to my friends over a poker game or something like that. I think it's a worthy topic of conversation. Perhaps we should include parlays. But I can answer the question specifically but I think the purpose is again to take a public health approach to putting common sense guardrails not prohibiting but preventing some of the worst harms. Vice Chair Merchman. Thank you, and thank you all for being here. I'm wondering if there have been other states that have taken away the prop betting like I'm going to go ahead and be honest when I got elected to the school board this was highly unpopular I'll tell you this I was determined we were going to close those high school campuses those kids had been going off campus and I wanted to close those campuses and there was something about toothpaste and a tube. And we didn't do that. The campuses are still wide open. We do have some guardrails in place. But all of that to say, God, I lost my train of thought. I was just about to ask about other states. Other states. Thank you. What have other states done around prop betting? And excuse my brain after four hours. I'm happy to. Mr. Ewing? Thank you, Madam Chair. Thank you, Senator Marchman. You don't have to apologize. My brain is mush as well. I'm not aware of other states who have taken this action on prop bets yet. I think yet is the key word. It's worth remembering that the Supreme Court only kicked this to the states and allowed for the legalization of sports betting less than a decade ago. This is a rapidly evolving policy area, and I think just this legislative session alone, there's dozens of similar bills being considered across the country. So I would say I'm not aware of any yet, but this is not going to be the only state where this is happening. I'm aware of at least a handful who are having a conversation this legislative session about it. Thank you. Additional questions? Okay. Thank you, panel. Really appreciate it. this brings our amendment phase to a close and we will bring our witness our witness phase to a close my brain is mushed too and we are moving on to the amendment phase which I know we have amendments because we've already gotten them up so we'll bring our sponsors back up you may take a senatorial slide which by the way Thank you. Thank you. Thank you Thank you. Welcome back from our Senatorial 5. We have, I believe, at least four amendments to run through. So, Senator Ball, you are a member of the committee today. Would you like to move each amendment? I believe you explained them up front, so we can probably have abbreviated versions of that. Senator Ball. Thank you, Madam Chair. I move Amendment L-001 to Senate Bill 131. That is a proper motion. Would you like to explain it any more? Senator Ball. I won't go into too much detail. We've talked about this amendment before. this is the amendment to change the advertising section to mirror the state's rules on cannabis advertising. I know we heard some concern from the broadcasters today, very open to continuing to discuss this. I know this is something that is implemented throughout the state, but certainly if there's things unique to this issue to work out in terms of logistics and implementation, happy to keep having those conversations. But that is what is an amendment L-004, and I urge an aye vote. Thank you. Is there any objection to L-001? They are seeing an objection. Ms. Rita Bush, will you please call the roll? Or are there any further questions on L-001? One. There are four amendments, and this is the first of them. My apologies. This is L-001. Does Simpson have a question? Senator Minority Leader Simpson, I believe, had an objection or a question.
Both, ma'am.
An objection and a question. Well, why don't you go for the question?
Thank you, Madam Chair. Sponsors, and I know there was a little bit of touch in this and comment in testimony, but the reference to in-media outlets, including social media, video, and television platforms, where 30% or more of the audience is reasonably expected to be under 21 years old. I'm not an attorney. How do entities have a reasonable expectation of how do they define that? How do you do that?
Senator Ball.
Thank you, Madam Chair. So I'll take a guess at that question. I'm happy to follow up with a little bit more expertise after this. I think it depends on the medium, but for a lot of the mediums we're talking about, the advertisers know a lot about their audiences, certainly much more than just their ages. certainly true for social media when you can tweak who you're advertising to to specific age brackets TV you have Nielsen ratings and Nielsen data. So I think there are a lot of data points that advertisers have here. Again, this is something that currently exists in some other states with slightly different thresholds, but that the industry is able to comply with or at least preparing to comply with. Happy to follow up a little bit more with details, but advertising, especially in the digital age, is sort of the opposite of an area where there's not a lot of data. If anything, it's an area where I think everyone has quite a bit of information about their audience. Thank you.
Additional questions? Oh, Minority Leader Simpson.
Thank you, Madam Chair. Any comment to Mr. Brill's reference? I think to know there has to be causal relationship between advertising and the unwanted outcome. Like, have you all thought about that? Is this going to be a challenge?
Senator Pelton.
Yeah, thank you for the question. Thank you, Madam Chair. So we had this discussion about tobacco and the tobacco regulations that they're not allowed to. Back in the day it was CAMEL and all the advertising and all that stuff that they used to do that the federal government regulated. We've had that discussion. I want to make sure that everybody knows that we're still willing to work on Section 4 because I certainly don't want any First Amendment violations like that they're talking on there about moving forward. So we have had discussions about working on Section 4 and continuing to work on it to make sure we can make everybody okay. Senator Ball. Thank you, Madam Chair. I'll also just say, as an attorney, I have litigated the First Amendment in many cases. This is not a case where I would have any concerns over the First Amendment. Tobacco is completely banned from the airwaves, has been by the federal government since the early 1970s. We have much more strict restrictions in place for commercial speech in many different areas. To your question, in our legislative declaration, this is everything from the bottom of page 3, starting on line 25, to the top of page 4 on line 7, is exactly the causal information that that gentleman was speaking about, and that is that there is very well-established data that advertising is particularly effective on children. and there's information on when kids are watching TV. All of that is currently in the bill, and with the tailored restrictions that we're introducing about ensuring that the audience has to have a certain percentage of children, I think we've more than cleared a First Amendment bar, especially when you consider some of the rules that have been upheld that are more restrictive than what we have in this bill.
Minority Leader Simpson.
Thank you, Madam Chair. Just one comment and follow-up to compare it to tobacco, I think is a false premise to go, Everybody who uses tobacco has a health impact. Everybody who sees advertising for sports gambling is not addicted and not a problem gambler. I think it's a false comparison to compare it to tobacco.
Vice Chair Marchman. Thank you, and I do appreciate you, the work you've done on this section. the thing that really stood out to me from what I heard from the broadcasters is they cannot meet this and that makes sense and so I'm wondering this was matched to cannabis but cannabis is probably not something we broadcast either so I'm just curious how they're supposed to do this when they can control who in their market Senator Ball Thank you Madam Chair So again this is something so yes there compliance with this that looks like this in cannabis
There's also rules in other states that are compliant with it that look a lot like this. There's the one I referenced in Massachusetts, right, where it's a 25%, 75% threshold. there's different ways of meeting that threshold I'm happy to keep continuing to have conversations with the broadcasters I will say I think part of what you hear and this was said explicitly by the testimony is this is a source of revenue and I think that's where a lot of this concern is coming from the First Amendment concerns the implementation concerns I think what's behind a lot of this is that it's the same as the sports leagues. This is a lot of money that pays for ad time, and I think what you're hearing is that broadcasters are concerned about that revenue because they have to sell ad spots, and some of those spots are taken up by online sports bettors.
Senator Kolker.
So I was just wondering, and I just Google, this is are we prohibiting alcohol to those under 21 years of age do we have laws that do that for alcohol because this is 21 that made me think of alcohol are we currently doing that senator ball thank you madam chair to be honest I am not familiar with the rules that we have around alcohol and it's different in in every industry sometimes there's restrictions on everything from like billboard placement to proximity to certain things like college campuses and stadiums. I don't know what the rules are for alcohol specifically. Senator Kolker. Thank you Madam Chair and it just popped up. I'm looking here and it says there's no federal laws and again this is got to take what I'm reading and follow up on that, doing that, but that there are self-regulatory codes monitored by the FTC, restricting advertising and TV shows where more than 28.4% of the audience is under 21. So it seems like they're able to do this. But again, I would need more information. Again, I can't, not always trusting of AI in my search here, but wondering, you know, if we could find more information about that before we actually implement this.
Senator Ball.
Thank you, Madam Chair. No, I appreciate that. I mean, again, I think we're certainly open to conversations, but to your point, Senator Kolker, yeah, this is something that the industry either complies with or complies with things that are very similar to this. And I also, you know, have a hard time, I think, believing these are going to be serious implementation issues, with the data when, you know, to your point, there's very data-driven decisions around audience composition that companies make decisions on all the time.
Senator Snyder. I thought you had your hand up. Senator Snyder. Oh, Senator Mullica. I thought they both had their hand.
Thank you. Okay. Oh, come on. Oh, I almost missed you. You faded into the background there. Thank you, Madam Chair. I appreciate that. Thank you for not forgetting about me over here in the corner. So I guess I reading this amendment and I struggling to understand kind of how it will be implemented Uh sponsors is you know I think about the Superbowl um and a lot of that is driven from a national perspective. And so if, uh, a sports betting organization pays its millions of dollars for a Superbowl ad, is this amendment essentially saying that if the Superbowl is on CBS? that in Colorado that ad that they paid millions of dollars to air nationally can't be aired in Colorado. And if it can't be aired in Colorado, then what's the replacement? I think that's all planned out. And I guess that leads me to my next question, but maybe I'll let you address that real quick.
Senator Ball.
Thank you, Madam Chair. Yes, a short answer, no, but that is part of the topic of L-002. so happy to talk about three, or maybe it's three, I'm sorry. Happy to talk about where it applies to. But again, the nationally syndicated broadcast that you're talking about, this would not apply to.
Senator Mullica.
Thank you, Madam Chair. So then that does lead me to where I think it does, which in three, which I know you still need to move, but it's been passed out to the committee, it does say broadcast originating within the state. and so let's play we can play a hypothetical game here the broncos are getting hopefully ready to build a new stadium from the sounds of it uh and the potential of hosting a super bowl in here in colorado or in denver and so does this so if if we host the super bowl per se hypothetically and this is in place, then sports bettors or sports betting agencies wouldn't be able to advertise during the Super Bowl?
Senator Ball.
Thank you, Madam Chair. It's a good question. I'm happy to dig into this more. I mean, again, I think it would probably depend on a lot of things to include the contract, where the broadcast is from. So happy to run down the answer to the question. off the top of my head, I don't want to give you a, you know, a false answer one way or the other. And, and. Senator Mullica. And I appreciate that because I do think that there's major impacts there. And obviously what we're trying to attract that, you know, and, and, and, you know, that's a hosting event, obviously, you know, I'm not seeing in the, in the near future, us hosting a World Series game, unfortunately, but, but that's a hosting event, you know, and so, but I could foresee there's broad impacts there if it's a nationally broadcast game of what that looks like and how that impacts and how it impacts our competitiveness as a state to potentially host something.
Senator Frivel.
Thank you, Madam Chair. I just wanted to ask, especially around this particular amendment, have you checked in with the Attorney General's Office on the legality of this because I have very grave concerns about, just in the way it's presented and the way it's written, how it can be enforced and what that actually looks like in practical application. So I just was going to throw that question out there.
Senator Ball.
Okay, Senator Ball. Thank you, Madam Chair. We'll save some for you. So we have spoken to the Attorney General. I don want to put words in the mouth of the Attorney General office The language that is in L we have not heard serious First Amendment concerns with Senator Fruvelda do you have a follow Yeah, I do. So, no, I mean, and this is beyond First Amendment. It's just like, how can this be reasonably applied? And the good senator from Thornton talked about this. It's like, okay, well, what if, what if, what if? And there's a lot of those questions. And so my concern is we get embroiled in this groundbreaking legislation that has some pretty big hurdles to overcome when it comes to actually being applied in the real world.
Senator Pelton.
Yes, thank you, Madam Chair. I completely agree with you. We were just having a conversation with the broadcast association's lobbyist outside about things that could be workable, things that could not be workable. There's a lot of things that he wants to continue to discuss with us. But for the most part, I mean, the unintended consequences we certainly don't want in this bill from the broadcaster, from this aspect. and knowing that there could be several mergers going on right now to combine radio stations and combined broadcasting stations, that we don't want to hurt them as well. To lose more voices, we're going to get less voices. So there's certainly more steps and more work that we need to do on this Section 4 of this bill.
Additional questions. Senator Colker.
I guess, is there currently any proof that they're currently advertising under 21 to over 30% of the market? You know, if they're under 21, is there any proof that this is a problem right now? Senator Ball. Thank you, Madam Chair.
Yes.
In surveys of high school kids and college kids who have reported sports betting, The top two ways that kids report first hearing about sports betting, getting hooked on sports betting, are ads and word of mouth. So we know that these ads are reaching kids. You heard some testimony on this. I have seen it firsthand. So, yes, I think it's abundantly clear that these ads are reaching kids because they're seeing them and they're reacting to them. Senator Kolker.
Right, but they could be watching a sporting event
where the majority of the audience is over 21 when they're doing that. This amendment says 30% under 20, more than 30% is under 21. So that's why I'm asking, I mean, are they watching Nickelodeon and seeing sports betting ads? Is that something that's happening right now outside of a sporting event that has a specific targeted audience under 21? I don't think that's happening right now. Senator, okay.
Senator Mullica.
Thank you, Madam Chair. And this question is for Senator Pelton, because I want to hear his answer to this. So we had an incident at the University of Colorado during orientation. I think it was freshman orientation where one of the sports betting apps, they were advertising during the freshman orientation and the university took action as soon as that happened when they realized the inappropriateness of that. Are we, I guess, Is there not a thought process that we let folks kind of self-police? I would love to kind of hear your thoughts because the university took action on that particular case, and I would assume that others saw that was inappropriate and they did something. I would love to hear your thoughts, though.
Senator Pelton.
I think the university took action because they're not supposed to be prop betting on the game, if I understand that correctly. Well, Senator Mullica. They're advertising the folks that are under 21. If you're a freshman coming in, you're 18. And so if we have an example of entities taking action in that case, is that not good enough, or what's your thoughts? Senator Pelton.
Thank you, Madam Chair.
If you're thinking that we – I mean, that's kind of the discussions that we're going to have to have moving forward on this to fix this or to work on Section 4 would be something like who will we set the fines for or who will we punish if this happens. And, I mean, that's something that we're going to have to keep moving forward because that was the discussion I just had with the broadcasting lobbyist outside is, like, how are they doing this in other states? And because I gave the example of Massachusetts as well. So, I mean, I would be perfectly fine with doing something where if they want to self-police, that's great, but we need to make sure that if they're not self-policing, there's something that gives them to make sure they are policing it. And I don't know if the Broncos will host the Super Bowl here, so I'm not sure about that. So I just wanted to make sure. Oh, I'm sorry. I'm sorry. Okay.
Okay, additional questions on L-001. Okay, there was an objection to L-001.
Ms. Rudebush, will you please call the roll?
Aye. No. No. Yes. No. No. Also no. Yes.
However, that amendment fails. So let us move on to the next amendment. Senator Ball.
A point of clarification, ma'am? Yes, Senator Mullica. How does that work? Because I think L3, is L3 attached to L1? Is L3 an amendment to L1? Or is it standalone? It is. Yeah. Madam Chair. Senator Ball. Since L-001 did not pass, however, to Senator Molica's point, we will not bring forward L-003 since it accompanies L-001.
Okay. So would you like to move your next amendment, whatever that may be?
Do I move five? You have to move it. No, no. Okay. Okay. Thank you, Madam Chair. Then let's go to, I move L-005 to Senate Bill 131.
Okay, that is a proper motion. Tell us about L-005.
I'm Senator Pelton. Thank you, Madam Chair. This is the amendment that we were talking about earlier with the minority leader was asking me about are we going to put into a statute about where the money has to come from This is to make sure that we not having a ceiling We're having a floor on this and to make sure that that is what the language says actually in the bill. This is coming from, this is trying to make the Colorado River folks happy because they came to visit me about this. So this was part of that discussion that we had. So that's what this amendment does. Thank you.
Is there any objection or are there any questions about L-005? Is there any objection to L-005? Seeing none, L-005 is adopted. Do you wish to offer L004?
No, Madam Chair.
Okay. Members, do you have any amendments?
Senator Frizzell. Thank you, Madam Chair. I do not, but I wish to call a senatorial five, please. Okay. Thank you.
We'll take a senatorial five.
Thank you. Thank you. Thank you Thank you Thank you. Thank you. Thank you Thank you. Thank you. Thank you Thank you. Thank you.
We are returning from our Senatorial 5. I believe we have now, wait, we've never closed the amendment phase. Does anybody here have any amendments on this side of the dais? Okay. Seeing no amendments, who would like to close first?
Senator Ball. Thank you, Madam Chair. I recognize it's almost 6.30, and everybody here has heard a lot, so maybe I'll just close by saying I'm a really big sports fan. I'm first and foremost a Colorado Rockies fan, which is really painful. but I also I watch every Broncos game I watch all the highlights of every Avs game and every Nuggets game and one thing we didn't talk about but that I worry about is the integrity of the game the sports leagues were actually the ones who pushed for a national ban on online sports betting because there were concerns about what sports betting does to the integrity of the game and the latest numbers that I seen is almost 50 now of Americans actually don trust that the integrity of the game And the latest numbers that I seen is almost 50 now of Americans actually don trust that the integrity of the game is true because there have been scandal after scandal after scandal that relate to things like players taking bribes to change their performance in games. This is something that happens because of the rise of online sports betting. And I worry as a fan that between that, between the oversaturation in ads, and between what I think is becoming the next generation of young people, mostly young men, who are being raised and indoctrinated to never watch a football game without pulling out your phone and betting on them. I worry about what we are doing to sports and what we are injecting into our society and the kind of harm that we are creating. So I thank the committee here for its time. We will continue to work on, this bill will go from here to appropriations. This is its first committee. It has many stops to go throughout the building. We will continue to work on section four around broadcasting. We would love to meet and talk more with the broadcasters. We'll also continue to work on the section relating to prop bets. I know there was a lot of discussion on that today. but colleagues there's a really big problem and I appreciate this committee's willingness to engage and I hope that we as a state can actually take a step forward on a problem that is impacting a lot of people's lives.
Senator Pelton.
Thank you Madam Chair. I just want to say that I just make the commitment to everybody in the audience that we're going to continue to work on this and we have one more committee to go through. So you're probably going to see some amendments in there continuing to work. So thank you. Thank you.
Committee, would you like to make comments?
Minority Leader Simpson. Thank you, Madam Chair. Trying to think about how to organize my thoughts here. But the bill, and we heard an abundance of testimony today about no prohibitions, but, I mean, Section 3 prohibits, Section 4 prohibits, Section 5 prohibits, an abundance of that. And the reference to that we have a really big problem, I would really like to have a better grasp of identifying the problem and what does success look like. So if the bill passes as introduced, what would you expect? Three years from now, two years from now, three years from now, five years from now, how would we define success? Do all these prohibitions lead to a better outcome or not? I'm not terribly comfortable that they do, but I would really like to be able to spend more time getting a better feel for that really big problem, more granular, and then applying these prohibitions to those problems to see if they have an impact, and a measurable impact that we could see an outcome that produces a better society for us. Really, I can't support the bill today as it's drafted. Thank you.
Senator Colker.
Thank you, Madam Chair. I do appreciate the work that's being done and hearing the testimony from people in favor of the bill. There are things in the bill that I can get behind. i can get behind restricting the push notifications even though i can turn them off but hearing from people who are addicted you know and that just something that um i can get behind that you know i So outlawing the push notifications the data reporting outlawing using credit cards
and then hearing from the gentleman who was talking about the prop bets, talking about ways that they make money. There was two people that testified they made money doing this, and they weren't addicted. And so the restricting, limiting their bets or their size and frequency and bets because of their financial condition or however it's worded in the bill. I can get behind those. The testimony also made me want to keep prop bets for individuals and for teams. So I'd love to know that we can work on that and maybe I'll bring an amendment in appropriations to do just that. So I'd love to hear you say that.
We'll do that.
So based on those, you know, the advertising, it's still right now is written because of that amendment. I think it's still outlined from 8 a.m. to 10 p.m. So I think that's something that needs to be worked on. So there's definitely, you know, some things that need to be done. I can see more positives than negatives, so I'll be a yes vote for this committee.
Senator Snyder.
Thank you, Madam Chair, and thank you to the sponsors. I think there's great intentions in this bill. I think there's a lot in this bill that could really improve the problems we heard about today. At the same time, there's a lot of parts of this bill that are problematic for me. I appreciate your commitment to keep working with the broadcasters. I think I had originally been of a mind that if we could amend that in a proper way, If we couldn't, I was really not planning to vote for the original bill. I think the prop bets is another area. I'm still very concerned about how this is going to interact with the water fund. We've got estimates here that we'll lose revenue to $2.7 million in the first year and outlying years. I understand the growth of everything might keep us above having to reach that situation. But I just think there's a lot of work left to be done on this. I'm going to take you at your word that you're going to continue to work on this. One of the closer votes I've taken in my time, I was on the fence. But I'll vote yes today with those promises and hope that you get it fixed and get it fixed right. Thank you.
Senator Mullica.
Thank you, Madam Chair, and thank you to the sponsors. Um, cause I do think that, like I said earlier, I think your intent is, is the right intent. And I've spoken with Senator Ball offline about this and, and appreciate where you're coming from and, and your beliefs and your passion on this. Um, I have to agree with a lot of the comments that have been made though. I think there's a lot of issues with this bill. So I think there's a lot of work that has to happen, uh, to it. Um, I think that we saw that just with the amendment that you brought on broadcasting. You know, I think it's a difficult thing to tackle here because a lot of what you're trying to mimic is done at the federal level. And so to bring that into the state level, you know, with the example of what if we're hosting or televising a national type thing here in the state, what does that mean? How is that addressed? I think that's going to be a really difficult thing to tackle, not necessarily against it. I just think that it's going to be a difficult thing to tackle. So if you didn't gather from a lot of my questions today and comments, I do have issues on the prop bedding component. And a lot of that stems from it just feels arbitrary. I don't know what we're trying to solve, you know, with that when the fiscal note says something different, that there maybe is more problematic areas or people lose more money doing other types of bets. Not quite sure why prop bets are being singled out here. I will say that, you know, Senator Colker made a comment about prop bets that that doesn't even get me there, you know. and it's something I'm really concerned about. You know, I think about an individual being able to bet on if their favorite, you know, football player scores a touchdown, you know. That wouldn't be allowed in your bill, you know. And so that's something that I'm really concerned about, and I'm not quite sure what we're accomplishing when I think that what you're talking about, you know, putting restrictions and parameters around it to try to maybe stop some problematic behavior from happening or folks who maybe shouldn't be accessing these platforms doing all that we can to make sure that doesn't happen. That's a prohibition to me, and I'm not quite sure if that accomplishes it. I've talked a lot with you offline about that, and you've given a commitment that you're going to address that. I'm going to trust you here. It's hard. I have some strong opinions on that. And so I'm going to be a yes for today, but I just want to be clear that if we can't get there, if you're not able to address that issue, I'm going to be a no on the floor. And so I really hope you do, because I do think that you're trying to address some real things here. But I'm hoping that we can get over some of the more controversial things and get those addressed. And so I appreciate it.
Vice Chair Marchman.
Thank you Madam Chair and thank you sponsors for bringing this bill. It is undeniable that there is harm that is being done and so I just really appreciate you bringing this to the forefront I have a lot of issues with this bill One of them is related to what voters wanted and we can say oh voters don read the blue book I the only one who reads the blue book Okay But voters don read the blue book. The blue book in Prop DD did call out prop betting. And then we doubled down two years later. And we said, hey, you guys, we're making so much more than $29 million. We're making way more than that. You guys still cool with this? And 76% of people said yes, just two years ago. And so even if we don't know if they thought they were voting on prop betting in 2019, they certainly knew what they were voting on in 2024. So that right there is a problem for me. I mentioned about the multiple deposits in 24 hours. I do kind of wish that was more of an amount than a frequency kind of thing. I love the reporting requirements in this. I think it's really important. We kept hearing data from people today, from the experts, and that is not Colorado data. That was national data. We need this data that's in this bill to be able to actually track kind of what Senator Simpson is saying, like this is the problem, this is the strategy we're going to try, and this is what it's going to look like when it's done. If we're not doing any data, we can't do that. And I'm just concerned, and I also like how it bans the use of credit cards. So frankly, I wish that we could lay this bill over because it's not about trust for me. I trust both of you, your lovely humans. But this is about what policy is in front of us on paper today, and this bill seems like it is just not ready for prime time. So my request of the sponsors would be to lay the bill over and let us take action at a later time. Otherwise, I'm going to be a no.
Other comments from the committee Senator Wright Thank you Madam Chair Thank you sponsors for bringing this
I just need to move a couple things off my conscience before this moves forward. There are many pandemics, I guess, that have attempted to be addressed by different lawmaking authorities. you could take alcohol we tried to address that a hundred years ago and yet alcohol continues to kill millions of people every year even with a hundred years of rules and laws and tweaking and modifications smoking again tried to regulate that for however long and yet it still compromises the health of people kills most of people every day you name it we want to try to make a law or rule about how to live by it for our adults and and i kind of shy away from that and i would also highlight that many folks in testimony as well as on this committee brought up the fact that they have kids and i have kids too My kids are 22 and 26, so they've just aged above 18. Well, they're adults now, right? And this bill is very specifically aimed at kids, very specifically. We want to have the impact there. Once they turn 18, once they turn 21, whatever, they're adults. They should be able to do whatever they want with their money or with their time or with their resources. and I'm not interested in the parts of the bill that try to regulate our life as adults in this space. My kids didn't get to watch TV. And so they didn't get to see ads about stuff that they shouldn't be consuming. If anything they were outside playing with their animals And if any addiction that they have it was an addiction to being outside and playing with their dogs And that still carries forward today And I wish the best for all families And I work in a space that is making sure kids have the best opportunity. And I realize that not every parent gets to be the best parent. And I'm not saying that I am the best. And I'm not saying my kids are the best. But I am saying that, yeah, let's look out for kids and let's make this space the best we can for our kids. I feel like the common denominator here is something other than regulating online sports betting. It's a lack of engagement within our family units. And I wish we could legislate that into place, but yet we're human beings. We're born not always to make the best choices. So with that, it'll be a no on this, but happy to engage in further conversation about this policy.
Okay. With that, Senator Ball, an appropriate motion would be to the Committee on Appropriations.
Thank you, Madam Chair. I move Senate Bill 131 as amended to the Appropriations Committee.
Okay. Ms. Rudabish, will you please take the roll?
Aye. No. No. Yes. Yes. No. Aye. No. Yes.
That's five to four. You are on your way to the Appropriations Committee. Thank you, everybody, for having a very long evening, and Senate Finance is adjourned. Thank you. Thank you.