Colorado Follows Trend of May Sports Betting Handle Increase with Revenue Decrease

The US legal sports betting industry has been a tad tough to figure out as we head deeper into the summer. The May numbers from participating jurisdictions have been inconsistent so far - some are reporting handle increases, others have seen dips in their overall sports betting activity, some have experienced spikes in their revenues and others have seen profits plummet during the month of May.

Colorado is on the board with their May legal sports betting numbers and they, too, are reporting mixed results. It comes as a bit of surprise that Colorado's May handle actually saw an increase during this time of expected decreases. But with the rise in betting activity came an all-too-familiar drop in revenues from the increased handle.

Colorado followed the similar May pattern as New Jersey, Indiana, Mississippi and Washington DC which reported handle increases and revenue decreases. All were the opposite of two other US legal sports betting Heavyweight states Michigan and Pennsylvania that saw overall betting activity in their states dip in May and revenues actually post a month-to-month increase.

A Closer Look

Colorado sportsbooks has an OK month, not near record-setting but enough to keep the state in the second tier of legal sports betting states. PlayColorado reported a $248.97 million overall sports betting handle in May, a 1.8% increase from the $244.45 million sportsbooks in the state took in during April.

As mentioned, Colorado was one of the lucky states to post an increase in betting activity in May but unfortunately a decrease in revenues for sportsbooks were reported. Gross gaming revenue (GGR) in Colorado for May were $15.15 million, which is a healthy 13.7% drop from April's $17,563,939 revenue figures.

Along with the drop in revenues came a troubling dip in tax contributions made by sportsbooks to state and local tax coffers in Colorado. The state's sportsbooks paid out $635,641 in taxes in May, down a whopping 41.3% from the $1,082,611 in taxes collected in April.

Keeping Colorado Afloat

The Colorado legal sports betting scene would be nowhere if not for their mobile platform. Once again it was responsible for almost the whole Colorado May handle. $246.49 million of the $248.97 million total sports betting total, or 99% came from mobile betting apps in the state during May.

Retail, which should become more of a factor with the post-COVID return of tourism contributed slightly less than 1% of the total May handle.

As far as sports go, it was basketball that kept the Colorado legal sports betting industry afloat once again in May. A total of $86,905,263 was bet on hoops during May with baseball contributing $49,058,252 to the total handle, hockey $15,496,450, table tennis $10,253,385 and soccer $9,854,188. "Other" sports generated $16,750,931 and parlays were responsible for $43,662,693.

Table tennis popped up again as a top-5 betting sport in Colorado. It has been and continues to be a shock for all that follow the legal sports betting industry across the US.

Peeking Into the Crystal Ball

May's handle increase, albeit small, was due largely to the playoff runs of both the Denver Nuggets of the NBA and the Colorado Avalanche of the NHL. Both are out of their respective league championship tournaments, so Colorado bettors will be forced to lean on other sports to get their wagering fix.

It remains to be seen if Euro 2020 or the Olympics will have an impact on Colorado’s bottom line.

It looks as though Colorado sportsbooks will have to endure 3 or so more months of disappointing sports betting handles. The NFL season is just around the corner and will provide the state's sportsbooks with an enormous spike in betting activity. Until that time, Colorado sportsbooks will be in "tread water territory" with no more handle increases expected until September.