Colorado Senate Advances Bill to Tighten Betting Rules

The Colorado Senate has passed a bill to introduce new rules for sports betting sites, as part of efforts to strengthen oversight of the state’s online gambling sector.

Senate Bill 26-131, which was passed by a 20-14 vote, would ban sportsbook companies from accepting more than five separate deposits from an individual within a 24-hour period. Operators would also be barred from restricting betting activity solely because a user is financially successful, unless there are concerns about suspicious behavior or indicators of a gambling disorder.

The legislation would also ban Colorado betting operators from sending push notifications or text messages about betting or making deposits, prevent the use of marketing material that includes bigger payout promotions or instructions on how to bet, and prohibit running sports betting promotions between 8 am and 10 pm, as well as in live sports events.

Credit card deposits would also be banned, and companies would be obliged to submit annual operational data to the state, which would be compiled by the state regulator, the Colorado Division of Gaming, and published in a public report every three years starting in 2029. Violations of certain provisions would be classified as misdemeanors, with penalties of up to $25,000.

The Senate had also considered a ban on prop bets, but this was dropped when lawmakers cited estimates projecting an annual tax revenue loss of up to $800,000. Senate Bill 26-131 will now move to the House for further debate.

Lawmakers Call for Federal Action on Prediction Markets

Meanwhile, a group of Democratic federal lawmakers has urged the Commodity Futures Trading Commission (CFTC) to adopt new rules for prediction markets, due to concerns about insider trading and the expansion of event-based contracts.

Coming on the back of increasing pressure on the sector, a letter signed by several senators, including Senator Jeff Merkley of Oregon, the CFTC was urged to address what the senators described as the growing risks linked to platforms such as Kalshi and Polymarket, requesting action from the regulator to prevent insider trading and ban certain types of contracts tied to events, including elections, military actions, sports, and government decisions.

The request follows increased scrutiny of prediction markets after several high-profile incidents, including cases involving alleged insider trading and bets placed ahead of geopolitical events. At the same time, prediction market companies have come into conflict with state gambling regulators over whether their markets should be regulated as sports betting. Data cited by the Congressional Research Service shows sports-related contracts account for as much as 90% of their trading.

The CFTC has been more active in recent weeks in upholding the right to regulate prediction market companies as federal financial exchanges, including legal action in the state of New York, where regulators have attempted to block these companies from operating.