Colorado voters approved Proposition JJ yesterday (6 November), a measure that allows the state to retain all sports betting tax revenues and direct them toward water infrastructure projects.
The measure was supported by over 75% of the voters, according to the official results. The passage of the bill should greatly increase the financial support the projects receive.
Colorado legalised sports betting in 2019 through the passage of Proposition DD. With it, the state introduced a 10% tax on sports betting revenues specifically to address the state’s water needs.
The state capped what it would take to fund the water project, retaining up to $29m annually since then. Any excess funds were returned to sports betting operators – in its most recent fiscal year, Colorado returned $900,000.
However, the passage of Proposition JJ removes the limit, enabling the state to retain the full amount of sports betting tax revenue. This can consequently increase funds allocated to water projects.
This decision came in support of the Colorado Water Plan, which was established in 2015 and recognised that there was a critical funding shortfall in water infrastructure needed to meet demands brought on by Colorado’s rapidly growing population and increasingly strained water resources.
The Colorado Water Plan was supposed to address the state’s long-term water problems by placing a premium on conservation and protecting natural resources to maintain sustainable access to water. However, despite its ambitious scope, the plan has faced chronic funding shortcomings.
Falling short of expectations
Officials in Colorado have described the Water Plan as “chronically underfunded,” saying it risks hamstringing the state’s ability to meet future water demands. The plan is due to be updated periodically to account for evolving needs and population growth projections, meaning funding will be an ongoing need.
The program has raised an estimated $79m since the legalisation of sports betting in May 2020. To date, the money has been distributed for water conservation, infrastructure, agricultural efficiency programs, and more efficient residential water use.
The successful use of these funds led to the arrival of Proposition JJ in 2023. The measure was crafted to allow Colorado to continue using these tax revenues for water conservation and infrastructure without returning excess revenue to taxpayers.
With an eye toward 2050, when Colorado’s population could reach 9 million, the plan outlined the substantial financial investments required to maintain a stable water supply, projecting a multi-billion-dollar need for water infrastructure. This urgent funding requirement became the driving force behind Proposition DD and, subsequently, the approval of Proposition JJ.
The success of Proposition DD has underscored the potential of sports betting taxes as a revenue source for essential projects. In addition, the approval of Proposition JJ represents a continued commitment to leveraging these funds for the benefit of Colorado.
This is good news for the Colorado Water Conservation Board, which leads the state’s water policy efforts. The agency projects it will need to provide around $3.85bn in loans and grants over the next three decades, but faces a shortfall of approximately $1.5bn.