- Sports betting launched in Colorado on May 1 as planned despite the COVID-19 pandemic.
- May was a challenging month for the entire Colorado gaming industry with all of the state’s casinos closed and few sports available on the betting board.
- Despite these difficulties, Colorado took $25.5 million in sports bets in the month of May.
Colorado’s first month of sports betting is in the books and given the unprecedented circumstances due to the COVID-19 pandemic the results are pretty impressive. The official figures from the Department of Revenue won’t be available for a few more days but preliminary indications show that Colorado’s sportsbooks took $25.5 million in wagers during the month of May. Despite the attempts of a few utterly clueless mainstream media outlets trying to spin this is a negative it’s difficult to view this figure as a disappointment given the challenges faced by the entire sports betting industry during the pandemic. In fact, with the myriad challenges that Colorado faced both before and after the launch the May revenue numbers are downright remarkable.
We’ve been extremely bullish on the Colorado sports betting industry since the beginning and the fact that the state was able to launch on schedule was a serious accomplishment in itself. While third party observers suggested that the state’s sports betting launch schedule was untenable due to the coronavirus pandemic the state never wavered from the May 1 start date. It did require some impressive work from the Colorado Division of Gaming–their offices were closed on March 17 and despite having to conduct business remotely they were able to process license applications and finalize the catalog of betting sports to keep the timeline on track.
CHALLENGES ABOUNDED AS COLORADO LAUNCHED SPORTS BETTING
Given the challenges that the entire industry faced as Colorado launched sports betting there was every reason to temper expectations. Not only was the entire gaming industry in a state of shutdown with all casinos closed the timing of the pandemic had put properties behind in their plans to launch retail sportsbooks. What had been expected to be a busy opening day became a significantly smaller event as only four betting apps were available on opening day and throughout the first month of action in the state. Although Colorado did the right thing and allows players to sign up remotely there’s a lot of marketing to an existing customer base that goes on at the casino level. With casinos set to reopen this week this valuable marketing channel should produce some increased sports betting app signups that will be reflected in coming months.
The bigger issue for Colorado as they launched sports betting was the same one that the entire industry wrestled with in the months of April and May–nothing on the board to bet on. The majority of the world’s sports leagues suspended or cancelled play in mid-March as the coronavirus pandemic escalated. The sparse schedule of betting sports was clearly underscored by the fact that Russian and Ukrainian table tennis quickly became the biggest betting sport in Nevada. Along with table tennis, the big betting events were several UFC cards, Korean baseball and esports. By late May, NASCAR was back in business and as we reach mid-June many of the major international soccer leagues have resumed play. The NHL will resume play at some point in the coming months and chances are good that the NBA will be back as well.
Let’s back out a bit and consider what Colorado did in the month of May. Without the benefit of an existing client base the four operational sports betting apps signed up enough players to produce $25.5 million worth of wagering action. This was done without the benefit of any major sports with the majority of betting on niche events like the UFC, esports, table tennis and Korean baseball. Since it was the first month of betting there was an educational ‘learning curve’ for recreational players in the state many of whom weren’t aware that sports betting was available as of May 1. Any of these issues would have been a legitimate reason for Colorado to stumble out of the gate but that didn’t happen.
THE ROAD AHEAD IN JULY, AUGUST AND BEYOND
Although the current scale of the Colorado sports betting industry is minuscule, the revenue performance in May does provide the first external validation that it’ll eventually be huge. By the end of 2020, there should be around 20 betting apps in operation and the retail sportsbook operations in in the casinos of Central City, Black Hawk and Cripple Creek will be up and running. Meanwhile, a greater number of novice and casual sports bettors will become aware of the wagering opportunities available to them in Colorado.
If the COVID-19 pandemic has taught us anything it’s that the only thing that is certain is uncertainty. Even in this climate, however, chances are good that there will be a NFL and college football season which will spark business even more. In fact, if everything works out just right it could be a time of unprecedented sports betting activity with the return of the NHL, NBA and maybe Major League Baseball. On top of that, the major tournaments in golf will be played in the fall and the Kentucky Derby and Preakness will be run in September and October to set the stage for the Breeders’ Cup.
There are plenty of challenges ahead for gaming businesses all over the world in general and sports betting in particular. It’s unclear how the requirement for ‘social distancing’ will impact traffic in Colorado’s casinos and even though they’re reopening this week they won’t be at full capacity. For now, they’ll have to deal with a reduction in the number of customers they can have on the premises and there will be no table games in the immediate future. State gaming and health officials will certainly try to limit crowds which will prevent players from watching games in sportsbooks. On top of everything, there’s always a chance of a renewed COVID-19 outbreak that would require a new shutdown period.
There’s no doubt that this is a tough time for Colorado to launch sports betting and that challenges will abound going forward. On the other hand, there’s so much on the horizon to look forward to. Watching the retail sportsbook scene develop in Colorado will be fascinating. So too will the competitive dynamic of the state with major players from Nevada, Europe and elsewhere converging on the market. Within a year, it’s not unrealistic to suggest that Colorado will have the most competitive sports betting ecosystem in North America. At this point, the fact that Colorado sports betting is up and running and bringing in millions in revenue despite massive challenges is an impressive accomplishment.