The Colorado State Auditor has finally concluded its lengthy investigation of local gaming regulators and the findings are of concern. The discovery was published on Monday, revealing several instances of mismanagement and outright negligence.
As it turns out, domestic sportsbooks are not always as legitimate as they seem.
Ongoing Regulatory Malpractice
In the two years since launching CO 18+ sports betting sites, only four operators have qualified for and obtained permanent gambling licenses. This becomes alarming because an additional 35 sportsbooks continue to host unrestricted wagering in the state.
These brands have yet to undergo extensive background checks and have not yet paid the fees required to earn a permanent license. Meanwhile, bettors have played billions of dollars in wagers assuming the usual safety and legitimacy of an in-state book.
It gets worse from here. The audit also found that sportsbooks were misreporting earnings on state tax filings. And the disparity accounts for more than a few nickels and dimes.
In one instance, the audit identified an unnamed operator who had documented $1.4 million more in daily wagers than what was recorded in its tax form.
As per the Monday report, Colorado lost out on an estimated $706,000 in sportsbook revenue taxes between May 2020 and April 2021. By now, that figure is sure to have doubled.
Too Many Fingers To Point
Colorado falls on the lower end of the spectrum when it comes to tax rates for sportsbook operators. The state claims a mere 10% of earned revenues from mobile sports betting sites and in-person retailers alike.
Knowing this, it is completely unacceptable for sportsbooks to be skimming money off the top. Likewise, it is outrageous that the state’s regulatory agencies were unable to identify these miscalculations before they became a problem.
Who is to blame here? Well, everyone. It was unwise of lawmakers to approve an early launch with temporary licenses. Many predicted the issues we see today, long before they ever came to fruition.
Then, of course, the regulators take most of the fall. The Division of Gaming and Colorado Limited Gaming Control Commission completely neglected millions in finances.
Even if the sportsbooks were indeed acting maliciously, regulators have no evidence of intentional wrongdoing.
What To Know Moving Forward
The state gaming commission is now working with the Governor’s office to tighten its practices and amp up surveillance. Still, it doesn’t seem like anyone will face punishment for what happened.
Residents in other non-legal betting states should take this story as a word of warning. A speedy launch and a successful launch are not the same. Bettors in the US shouldn’t feel rushed to approve sports betting legislation that doesn’t benefit them.
Our website has a variety of 18+ online sportsbook reviews to help you find a reliable site to start using right now. Whether or not your state offers domestic betting, you can still access live odds from any device.
Head to the ribbon for more information.
Source: The Denver Post
