There is a new controversy that Colorado lawmakers are introducing into the state, potentially bringing significant changes to how operators in the betting industry handle their promotions. The infamous Bill 1311, whose aim is to eliminate tax deductions on the colloquially called “free” or promotional bets, may do away with a powerful tool used by proprietors to draw in new customers. These free bets and bonuses are often appealing to newcomers who look for the best deals. Lawmakers claim that by not changing this rule, the state is losing out on a lot of potential revenue.
Gamers, however—whether they use digital wallets, or even experiment with cryptocurrency—are increasingly demanding faster, more secure, and more flexible payment options that align with the seamless digital experiences they expect from modern gaming platforms. In fact, adding new secure payment methods has become one of the most popular ways for online casinos to operate in the U.S., including Colorado, due to their convenience and the ability to fund accounts instantly. These incentives are especially crucial for online casino platforms where users frequently play with credit card, as they expect not just speed and ease in transactions but also substantial value in return through offers. Still, as the market matures and users become more sophisticated, the expectation of being able to seamlessly play using various methods—especially at trusted, regulated casinos—is becoming standard. Sites that offer this convenience are increasingly preferred by users who value privacy, transaction speed, and ease of deposit.
At the same time, a new controversy is unfolding in Colorado, where lawmakers are pushing forward Bill 1311, a legislative proposal that could significantly alter how operators structure and advertise their promotions. The bill aims to tighten regulations around bonus offers and promotional credits, potentially limiting what operators can offer and how they market to users.
Current Colorado law states that sportsbooks operating in the state are allowed to deduct the value of promotional credits and free bets from their taxable revenue. This law, enticing newcomers into the gambling world, has been a huge boon to the industry, helping to drive substantial growth since sports betting’s inception in the state in 2020. But the dialogue is beginning to shift, with a greater focus on funding for important public projects.
Not everyone is against the bill, however. Those in favor claim that without this change in tax legislation, the state is missing out on millions of dollars won from sports promotions that are currently deducted. If Colorado removes the tax deduction, it could lead to a windfall of $12 million every year. This could be used to directly fund water conservation, drought preparedness programs, and agricultural development. Colorado is a pretty dry state, and like many others in the western U.S., is increasingly concerned about water usage within its borders.
The new legislation has already been passed by a Senate committee and has been set aside for the moment for further discussion. If lawmakers decide to pass the bill, they will join the growing number of states that are becoming tougher on their tax policies for gambling.
On the other side, some argue vehemently that by taking away promotions and passing on these new costs to the players, the state’s plan for new revenue could backfire spectacularly by discouraging investment in the market. The gambling industry has become increasingly competitive, and many companies rely heavily on various bonuses, including welcome bonuses, free spins, and even some risk-free bets. With fewer promotions, the industry could see less consumer engagement, leading to lower tax revenue overall.
There is also the issue of the ripple effect on local advertising. With promotional bonuses often serving as a central feature in various gambling marketing campaigns, fewer tax incentives to offer may cause companies to spend less on local ads. This, in turn, could inadvertently negate the benefits those advertisements have provided to Colorado’s economy.
Despite these arguments, many state officials believe the long-term benefits outweigh the various risks. It has already been seen that the sports betting industry in Colorado can not only survive but also thrive. The state reported an 80% increase in revenue in February 2025 alone, year over year—even if the total number of wagers was slightly lower. In the minds of many, this proves that the market has matured and doesn’t need the same kind of help it did in its infancy.
Regardless, tax policy seems poised to remain contentious not only in Colorado but throughout the country. To maintain profits, operators will have to play a balancing game between attracting new customers and managing costs. Lawmakers, on the other hand, continue to look for ways to turn the thriving casino market into tangible public benefits. Bill 1311 has now entered that calculation, and its passage could radically shape the future of promotional betting in the state and beyond.