With voters having legalized sports betting, the Colorado Division of Gaming (“Division”) is gearing up to launch the industry on May 1, 2020. In order to meet this aggressive deadline, licensing and rulemaking have already begun.

Licensing

On November 27, the Division released the licensing application for the five types of sports betting licenses: (1) master; (2) sports betting operator; (3) internet sports betting; (4) vendor major; and (5) vendor minor. The application is the same for each license type and can be found here, though the license fees and background deposits differ.

Master License: Because Colorado’s law ties the sports betting operator and internet sports betting operator licenses to the state-licensed casinos, the master license is the sports betting license held by the casino. Casinos holding a master license may conduct sports betting operations on their own, or may contract with third parties to do so. Given that there are currently 33 casinos, the maximum number of master licenses is also 33.

Sports Betting Operator and Internet Sports Betting Operator Licenses: The sports betting operator license is held by the operator of the brick-and-mortar retail sportsbook located in the casino. This license may be held by the casino itself or by a third party with whom the casino has contracted to undertake the operations. The internet sports betting operator is held by the operator of the individually branded sports betting website, known as a skin. This license, likewise, may be held by the casino itself or by a third party with whom the casino has contracted to undertake the operations.

Vendor Major and Vendor Minor License: The emergency rules require that vendors who are employed for, contracted with, or acting on behalf of a sports betting operator or an internet sports betting operator must also be licensed. Vendors are divided into two categories: major and minor. Major vendors are those who: (1) manage, administer, or control wagers that are initiated, received, or made on the sports betting system; (2) manage, administer, or control the games with which the wagers are initiated, received, or made on the sports betting gaming system are associated; (3) maintains or operates the software or hardware of the sports betting gaming system; or (4) provides products, services, information or assets to a sports betting operator or an internet sports betting operator, and/or receives a percentage of gaming revenue from the operator’s sports betting gaming system. Minor vendors are those who provide services for or act on behalf of a sports betting operator or internet sports betting operator, and is not otherwise classified as a major vendor.

Application Deadline

To be eligible to go live by May 1, 2020—with grant of a temporary license—applicants must submit complete applications to the Division no later than Jan. 15, 2020. Applications for a third-party sports betting operator or internet sports betting operator license must also include the contract between the third-party operator and the master licensee. Complete applications include not only the sports betting application, but also any and all other associated business applications, associated person applications, limited ownership applications, and institutional investor certifications, as required by the Division. In lieu of an associated person application, the Division will accept the IAGR multijurisdictional personal history form accompanied by the Division’s Colorado rider.

Rulemaking

On December 7, the Division released its draft sports betting rules, which can be found here. On December 9, the Division began two and a half days of stakeholder work groups, the members of which can be found here. The Division split the stakeholder work groups into five topics: (1) general rules; (2) compliance; (3) technology; (4) integrity and information; and (5) responsible gaming.

The draft rules cover the following topics:

  • Rule 1 – general rules and regulations
  • Rule 2 – powers and duties of commission and director
  • Rule 3 – applications, investigations, and licensure
  • Rule 4 – taxes, fees, and distributions
  • Rule 5 – authorized sports betting activities
  • Rule 6 – rights and duties of licensees
  • Rule 7 – requirements of sports betting operators

The Division is accepting comments on the draft rules from stakeholder work group members and members of the general public until December 20. Comments from members of the general public may be submitted to the following email address: dor_gamingweb@state.co.us.