Lawmakers drop prop bet restriction in Colorado gaming reform

Colorado legislators have voted to remove a proposed ban on proposition bets from a wider sports betting reform measure, revising the scope of Senate Bill 131 after concerns over revenue impact and industry response.

The amendment, approved Tuesday, eliminates a provision that would have restricted wagers on specific in-game events, commonly known as prop bets, while preserving other regulatory components of the bill.

The decision followed projections that banning prop bets would significantly affect state revenue tied to sports wagering activity. Earlier estimates placed the potential loss at $2.4 million to $2.6 million in the first fiscal year, largely affecting allocations designated for water projects.

With the provision removed, lawmakers now expect the fiscal impact to decline to about $800,000.

The Colorado Division of Gaming reported that sports betting activity in the state exceeded $6.5 billion in total wagers in 2025, underscoring the scale of the market.

Sen. Matt Ball, a sponsor of the measure, said the adjustment was necessary to limit financial exposure and maintain the bill’s broader framework. He also acknowledged external pressure during the legislative process, telling Axios Denver: “The gambling industry has ‘a lot of money, and we’re drastically outspent, and that definitely has an impact on bills, this one included.”

Industry and market access concerns

Operators had cautioned that removing prop bets could affect user acquisition and retention, given their popularity among bettors, particularly in parlay wagers.

Lawmakers also considered the possibility that restricting these bets could redirect players to offshore platforms that continue to offer such products but operate without comparable consumer protections.

A prop bet allows wagers on specific elements of a game, including individual player performance or discrete outcomes during live play. These bets are often placed in rapid succession, contributing to higher engagement levels.

Ongoing debate over responsible gambling

While the prop bet restriction was removed, Senate Bill 131 retains provisions aimed at addressing gambling-related risks. Among them is a ban on the use of credit cards for sports betting transactions.

Lawmakers estimate that this measure will account for the remaining $800,000 in projected revenue reduction. The restriction is intended to limit wagering with borrowed funds and standardize existing practices, as several operators in Colorado already do not accept credit cards.

Research cited during legislative discussions has linked micro-betting formats, such as prop bets, to compulsive gambling behavior. Concerns have also been raised about the potential for athlete manipulation, prompting the National Collegiate Athletic Association to call in January for the elimination of such wagers.

Despite those concerns, Ball said he opted to remove the ban with limited debate to preserve other elements of the bill, including restrictions on promotional bonuses.

Attention now turns to how the remaining provisions will evolve as the bill advances. Lawmakers and industry stakeholders are expected to continue discussions, particularly around advertising limits and other consumer protection measures, as the legislation moves forward.