Known for its beautiful landscapes and majestic mountain ranges, Colorado has been a bulwark of gambling since the Gold Rush days when thousands of people flocked to the state in search of wealth and prosperity. Gambling was a common occupation among frontier inhabitants throughout the 19th century. Doc Holliday, Wyatt Earp, and Bat Masterson were only a few of the famed cardsharps who frequented the saloons in the Centennial State.
Gambling went unregulated in these early days but a lot has changed since then. Colorado is now home to legal horse racing, sports betting, lotteries, and full-fledged casino gaming. While reasonably lenient, the state’s regulatory framework protects the public and remains consistent with the social interest.
Commercial gaming is densely concentrated in Central City, Cripple Creek, and Black Hawk, all of which have acquired a status of historic towns. The three cities are home to over thirty commercial casinos where visitors can play anything from slots and video poker to table mainstays like roulette, blackjack, craps, and baccarat.
Two tribal casinos operate in the southwestern part of the state near the border with New Mexico in Towaoc and Ignacio. The gaming sector is a major contributor to the local economy, providing jobs to thousands of residents and fetching over $403 million in annual tax revenue.
State laws are significantly less permissive when it comes to interactive gambling, however. Colorful Colorado joined the ranks of states with legal sports betting in late 2019, allowing locals to post their wagers both online and in-person at retail sportsbooks. Daily fantasy sports also enjoy a legal status but online casino gaming and poker remain illegal in the Centennial State. Lotteries are available in a retail format only.
Gambling Laws in Colorado
Several forms of casino gaming are legal in Colorado on condition operators have obtained authorization from the local regulators. The Division of Gaming within the Department of Revenue and the Limited Gaming Control Commission are the two agencies tasked with administering the local regulatory framework and observing for compliance with state gambling laws.
Colorado Revised Statutes (CRS)
Limited Gaming Act of 1991
Amendment 50
Colorado Compacts with Tribal Nations
Colorado Revised Statutes (CRS)
The Colorado Revised Statutes (CRS) define gambling in Section § 18-10-102, describing it as staking money or anything else of value on events partially or entirely based on chance for personal gain. The person risking the money generally lacks control over the outcome of the event. Professional gambling is defined further on in the same section as encouraging or instigating gambling participation for the purpose of deriving profits from the bettors.
The definition excludes contests where the participants earn rewards based on personal qualities like speed, stamina, and skill. Carnival games, sporting contests, and races are some of the exemptions from this category. People who earn their living from skill-based games like poker are not labeled as professional gamblers. The term rather refers to individuals who profit from offering unauthorized or prohibited gambling products.
The legal forms of gambling in Colorado include state-operated lotteries, social gaming, pari-mutuel betting on horse races, charitable games, raffles, and licensed casino gaming. Those who violate the law risk charges for misdemeanor, petty offenses, or felonies under Section § 18-10-103 of CRS. Individuals who engage in gambling are committing petty offenses.
Those who engage in professional gambling are committing a class 2 misdemeanor. The same goes for those who possess illegal gaming devices or equipment. Repeated professional gambling offenses count as class 5 felonies. Petty offenses constitute the least serious crimes and as such carry lenient sentences of up to ten days jail time and/or maximum fines of $100 under CRS § 18-1.3-503.
Class 2 misdemeanors are deemed more serious and the sentencing reflects it. Therefore, persons convicted of professional gambling face imprisonment of up to 120 days and/or maximum fines of $750. The sentences for repeated violations of this kind are even harsher as the offenders risk spending one to three years in jail along with paying maximum fines of $100,000.
Limited Gaming Act of 1991
The Centennial state-approved restricted casino gaming in 1991 with the passage of the Limited Gaming Act. The legislation allowed for the legal provision of slots, poker, and blackjack at authorized commercial casinos in Cripple Creek, Central City, and Black Hawk. Lawmakers imposed certain limitations on these activities to minimize their potential harmful effects on society.
Commercial casinos in the three cities could only operate from 2:00 am to 8 am and players could not risk more than $5 per single wager. The gaming venues were further restricted to the commercial districts of the above-listed cities. The Limited Gaming Act also established the Division of Gaming within the Department of Revenue, which was tasked with the licensing and supervision of authorized commercial casinos.
Amendment 50
In 2008, Amendment 50 introduced several important changes to the Limited Gaming Act. For starters, it enabled residents of the state to vote for raising the limits on single wagers from $5 to no more than $100. It also allowed the locals to approve additional table games like craps and roulette and extend the operation hours of the licensed casinos.
Gaming venues in the state can service customers 24 hours a day as a result of the changes. Last but not least, Amendment 50 led to the creation of the Limited Gaming Control Commission within the Division of Gaming. It outlined its membership structure, powers, and duties.
Colorado Compacts with Tribal Nations
In addition to the thirty or so commercial casinos, the southwest region of the state is also home to two casino-style gaming venues operated on tribal reservation lands. The primary piece of legislation that governs tribal gambling is the 1988 Indian Gaming Regulatory Act (IGRA). Under this legislation, state governments can agree on compacts with federally recognized tribes and allow them to legally provide gambling games within their reservations.
Ute Mountain Casino was the first native gaming venue to start operations under the terms of a compact with the Ute Mountain Ute Tribe. It authorizes the tribal nation to provide Class III gaming on the premises, including blackjack, poker, keno, slot machines, and pari-mutuel wagering.
The second compact is with the Southern Ute Tribe which offers Class III games at the Sky Ute Casino in Ignacio. The Southern Ute can host craps and roulette games in addition to slots, poker, lotteries, keno, and blackjack. Neither tribe is subject to taxation but IGRA requires them to use the gaming revenue for the tribal welfare and economic development.
The two native businesses are under no obligation to report their profits to state authorities. The compacts can remain effective in perpetuity unless the parties involved willingly decide to terminate them. The two sovereign nations have agreed not to exceed the $100 maximum limit on single wagers under the Limited Gaming Act. Nonetheless, tribal operators can litigate higher limits at their tables if they deem fit.
The Division of Gaming, along with the Limited Gaming Control Commission, observes for compliance with the compact terms on a state level. The Native Indian Gaming Commission is tasked with on-site regulation of Class III tribal licensees in Colorado.
License Types and Requirements
Six types of gaming licenses are available in the Centennial State. Vendor licenses are required for the manufacturing, import, sale, and distribution of slot machines within Colorado borders. Slot machine permits require renewal every two years. Businesses who seek to operate slot machines on their premises must apply for operator licenses with a validity of two years. Such businesses can only offer slot machines obtained from licensed manufacturers.
Commercial casinos where both slot machines and gaming tables are available require retail licenses from the local gambling regulator. Individuals employed in the field of gaming must submit applications for support licenses. Separate key employee permits are issued to individuals placed in charge of the gambling activities on the gaming floor.
And finally, there are associated equipment supplier licenses issued to individuals who sell, distribute, and import associated gaming equipment in Colorado. For clarification, the term “associated equipment” refers to machines and systems used for monitoring, collecting, and reporting gambling-related transactions. The term excludes gambling devices and equipment like slot machines, card shufflers, and roulette wheels, for instance.
Retail licenses are issued for specific authorized locations only and are non-transferable. Retail licensees may transfer their operations to another location with the approval of the Limited Gaming Control Commission. The regulator can grant temporary or conditional permits to interested operators.
Background Checks
Renewal, Suspension, and Revocation
Miscellaneous Requirements and Restrictions
Background Checks
All applicants undergo rigorous background checks to determine their suitability. Candidates must prove they are of good moral character and possess sufficient experience in the field of gaming. The regulator has the right to reject applicants with previous convictions for gambling-related offenses, theft, and other misdemeanors.
Candidates who had their gaming licenses revoked or suspended in other jurisdictions are less likely to gain the approval of the Limited Gaming Control Commission. Gambling premises owners must receive certificates of compliance from the local fire and building authorities.
Renewal, Suspension, and Revocation
All of the above-listed licenses require renewal after two years. Candidates with rejected applications can reapply again after one year. Those who have been turned down twice must wait at least three years after their last rejection. The regulator can revoke or suspend the licenses of those who fail to comply with the licensure terms. Violators may also incur fines ranging from $5,000 to $100,000.
Miscellaneous Requirements and Restrictions
Key employees cannot partake in any gambling activities in the establishments they work for. Retail operators are prohibited from employing shills for the purpose of enticing or encouraging patrons to gamble. Slot machines should have a theoretical return to player of at least 80%. Table games must be conducted in line with the rules approved by state voters, which is to say wagers should not exceed $100 per hand or round. Licensed operators and retail casinos are prohibited from extending credit to their customers.
Social Responsibility Policies
Section 44-30-809 of the Colorado Limited Gaming Act prohibits residents under the age of 21 from participating in casino gambling. Underage individuals cannot loiter on the gaming floor or sit at the tables without playing, either. Employees whose job is to conduct gambling games should also meet the minimum legal age requirement.
Policies at Commercial Casinos
Policies at Tribal Casinos
Policies at Commercial Casinos
State authorities allocate 2% of the tax money collected from commercial casinos for gambling addiction prevention and treatment. The percentage corresponds to approximately $100,000. The gambling operators can treat customers on the casino floor to complimentary alcoholic drinks. The Centennial State lacks law-mandated programs for self-exclusion. There are no restrictions on gambling-related advertisements and other marketing materials.
Policies at Tribal Casinos
Tribal gaming operators in some states allow persons aged 18 to partake in gambling but this is not the case in Colorado. The minimum admission age at Sky Ute Casino and Ute Mountain Casino coincides with that for commercial gaming (21 years old). There are no self-exclusion programs at the two tribal casinos.
Unlike their commercial counterparts, the native operators do not offer free alcoholic beverages to players. Patrons who are visibly inebriated cannot partake in the gambling activities. Their compacts do not contain any provisions that explicitly impose concrete marketing restrictions. The Southern Ute compact only prohibits deceptive and false advertising.
Legal Status of Online Casino Gaming
When it comes to remote gambling, only online sports betting and daily fantasy sports enjoy legal status in the Centennial State. Daily fantasy sports received authorization after House Bill 20-1286 passed into law as the Fantasy Contests Act. Operators who provide such contests must register with the Colorado Division of Gaming which oversees these activities.
Smaller operators with less than 7,500 active registrants are subject to yearly audits conducted by third-party testing agencies. All licensees must verify their customers’ identities to ensure they meet the minimum age requirement. Only players aged 18 or older can engage in daily fantasy sports.
Customers also have the option to exclude themselves from participation in the contests. Additionally, the operators must store players’ funds in segregated accounts. A registered player can have no more than one account with each licensed operator. Operators who fail to comply with the regulatory requirements risk civil fines of up to $1,000 per violation under Section 44-30-1611 of the Fantasy Contests Act.
Online casino games are not yet legal in Colorado but this does not stop Coloradans from playing at offshore websites that carry licenses from other jurisdictions. Such operators are outside the scope of the Colorado Division of Gaming and the Limited Gaming Control Commission. Players who gamble with them often lack consumer protections and have no legal recourse if they fall prey to abuse or fraud.
Colorado Gambling Regulators
The Colorado Division of Gaming (CDG) and the Colorado Limited Gaming Control Commission (CLGCC) are tasked with the oversight of the local gambling industry. The two agencies enforce the implementation of state gambling laws, issue licenses, collect, and distribute tax funds. The two work together to preserve the integrity and honesty of the local gaming sector. The CLGCC consists of three commissioners, a chair, and a vice-chair, all of whom have been appointed by the Colorado Governor. It has authority over all limited gambling licensees operating within the state.
The local law requires the commissioners to come from different professional and political backgrounds. Up to three of the five members can belong to the same political party. The CLGCC members can serve no more than two four-year terms. Commission meetings are due each month so that CLGCC members can discuss expenditures, gaming revenue, and taxes, among other subjects.
The Division of Gaming oversees registered daily fantasy sports operators in the state. Operating as part of the Colorado Department of Revenue, it transferred some of its regulatory responsibilities to the CLGCC after the passage of the 1991 Limited Gaming Act. The Division maintains a registry of all licensed DFS operators it supervises. At the time of writing, there are 35 licensees on the list, including major names like DraftKings, FanDuel, and RealTime Fantasy.
Conclusion
Despite the low limits on single bets and the other restrictions, Colorado is home to a mature gambling market that generated over $1.23 billion of gross revenue in 2021 from commercial casinos alone. Gambling operations have a massive impact on the local economy, with sportsbooks bringing in more than $6.6 million to the state coffers within their first year of operation. Full-fledged online gaming is not yet legal in the Centennial State but this does little to prevent Coloradans from playing at offshore online casinos.
Policies at Commercial Casinos
State authorities allocate 2% of the tax money collected from commercial casinos for gambling addiction prevention and treatment. The percentage corresponds to approximately $100,000. The gambling operators can treat customers on the casino floor to complimentary alcoholic drinks. The Centennial State lacks law-mandated programs for self-exclusion. There are no restrictions on gambling-related advertisements and other marketing materials.