Could out-of-state wagering companies accept Colorado residents' horse-race bets by internet or telephone?

Plain-English summary

In 2008, the Colorado Attorney General concluded that out-of-state companies could not accept telephone or internet pari-mutuel wagers from Colorado residents unless the bets went through a track or simulcast facility licensed by the Colorado Racing Commission.

The opinion relied on C.R.S. § 12-60-703.5(2)(a), which covered wagers made by "messenger, telephone, telegraph, facsimile machine, or other electronic device" on races held in or broadcast in Colorado. The AG read "electronic device" to include the internet and the computers used to access it.

Because Youbet.com and XpressBet were not licensed by Colorado, the opinion said it was illegal for them to accept the covered wagers and for Colorado residents to place those wagers with the companies.

Currency note

This opinion was issued in 2008. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Historical significance for affected readers

Racing regulators

At the time, the opinion treated the Colorado license requirement as applying to internet and telephone pari-mutuel wagering, even when the wagering company's hub operated in another state.

Wagering companies

The companies' licenses from other jurisdictions did not satisfy the Colorado statute discussed in the opinion. The AG focused on whether the accepting facility held a Colorado Racing Commission license.

Colorado bettors

The opinion stated that residents could place the covered electronic wagers only when a Colorado-licensed track or simulcast facility received them.

Common questions

Did the statute expressly use the word internet?

No. It referred to telephone and "other electronic device." The opinion said the internet and the computer used to reach it fell within the familiar meaning of that phrase.

Did an Oregon or California wagering license make the companies lawful in Colorado?

No. The AG said the relevant wagers had to be accepted by a facility licensed by Colorado.

Did the opinion cover both horse and dog racing?

The background described both, and the statutory analysis addressed pari-mutuel wagers on races conducted in or broadcast in Colorado.

Was the statute ambiguous enough to require broader interpretation?

The opinion called the license requirement "clear and unambiguous." It addressed only the possible ambiguity in the phrase "electronic device."

Background and statutory framework

XpressBet and Youbet offered Colorado residents telephone and internet accounts for pari-mutuel wagering through hubs outside Colorado. The Division of Racing Events asked the companies to close Colorado accounts and sought a formal opinion after they disputed the agency's position.

The AG applied Colorado's ordinary rules of statutory interpretation. Because section 12-60-703.5(2)(a) limited electronic wagers to Colorado-licensed associations or simulcast facilities, the companies' out-of-state operations could not accept the wagers described in the request.

Citations discussed

• C.R.S. § 12-60-703.5(2)(a) (2008), the licensing provision governing telephone and electronic pari-mutuel wagers
• Colorado Dept, o f Revenue v. Woodmen o f the World, 919 P.2d 806, 809 (Colo. 1996), cited on giving effect to legislative intent
• People v. Andrews, 871 P.2d 1199, 1201 (Colo. 1994), cited for applying clear statutory language without additional interpretive rules
• Water Quality Control Div. v. Casias, 843 P.2d 665, 666 (Colo. App. 1992), cited for familiar and generally accepted word meanings

Source

• Landing page: https://coag.gov/attorney-general-opinions/
• Original PDF: https://coag.gov/app/uploads/2019/08/No.-08-3-The-Legality-of-Pari-Mutuel-Wagering-by-Colorado-Residents-by-Telephone-Internet-or-Other-Electronic-Devices.pdf

Original opinion text

John W. Suthers

STATE OF COLORADO

Attorney General

DEPARTMENT OF LAW

C y n t h ia H . C o ffm a n

Chief Deputy Attorney General

O f fic e o f t h e A t t o r n e y G e n e r a l

S t a t e S e r v ic e s B u il d in g

1525 Sherman Street - 7th Floor
Denver, Colorado 80203
Phone (303) 866-4500

D a n ie l D . D o m e n ic o

Solicitor General

FORMAL
OPINION

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OF
JOHN W. SUTHERS
Attorney General

No. 08-03
AG Alpha: RVRAAGBCP
November 21,2008

Dan Hartman, Director of the Division of Racing Events and Roxy Huber, Executive Director of the Department of Revenue, have requested an opinion as to the legality of pari­ mutuel wagering by Colorado residents by telephone, internet or other electronic device.

QUESTION PRESENTED AND ANSWER
The question presented by the Division of Racing is:
Does current Colorado law prohibit Youbet.com and XpressBet, Inc., both foreign companies, from taking pari-mutuel wagering made by Colorado residents via the telephone, internet or other electronic device? Answer: Yes. Colorado law prohibits companies outside of Colorado from taking pari-mutuel wagering made by Colorado residents via the telephone, internet, or other electronic device.

BACKGROUND
Two non-Colorado companies, XpressBet, Inc. and Youbet.com, provide Colorado residents the opportunity to participate in pari-mutuel wagering on horse and dog races via the internet and via telephone. XpressBet claims it holds a valid multi-jurisdictional hub license issued by the Oregon Racing Commission, which permits it to open accounts and

place wagers on behalf of residents located in states in and outside Oregon through its Oregon-based call center and “totalizator” hub. Youbet states that it has wagering hubs in both Oregon and California. In January 2007, the Colorado Division of Racing Events (the “Division”) sent letters to both XpressBet and Youbet requesting they close the pari-mutuel wagering accounts for any and all Colorado residents, cease opening such accounts in the future, update their websites to reflect the fact that internet wagering is prohibited in Colorado, and notify the Division in writing that they have folly complied with the requests. XpressBet wrote to state it disagreed with the Division’s position regarding internet-based pari-mutuel wagering, but agreed to temporarily suspend all wagering activity on behalf of its Colorado account holders pending resolution of the dispute. Youbet, on the other hand, both disagreed with the Division’s position and refused to cease accepting wagers from Colorado account holders. On February 13, 2007, the Division requested an informal opinion regarding the legality of pari-mutuel wagering via the internet, telephone or other electronic device (essentially the same questions asked here). In response to that request, this office informally opined that such wagering is prohibited by Colorado law. The Division now seeks a formal opinion on this issue.

DISCUSSION
Colorado law is unambiguous in its requirement that all pari-mutuel betting, including betting by telephone, the internet or other electronic devices, be conducted through facilities licensed in Colorado. Since they are not licensed in Colorado, Youbet.com and XpressBet therefore may not accept such wagers from Colorado residents. Colorado law provides that pari-mutuel wagers made “by messenger, telephone, telegraph, facsimile machine, or other electronic device” on races conducted in or broadcast in Colorado may only be accepted by “associations or simulcast facilities licensed by the
[Colorado Racing Commission.” C.R.S. § 12-60-703.5(2)(a) (2008). The goal in construing a statute is to discern and give effect to the intent of the legislature. Colorado Dept, o f Revenue v. Woodmen o f the World, 919 P.2d 806, 809 (Colo. 1996). Where the language is clear and unambiguous, the courts will not resort to interpretative rules to discern their meaning. People v. Andrews, 871 P.2d 1199, 1201 (Colo. 1994). Words and phrases in a statute are to be construed “according to their familiar and generally accepted meaning.” Water Quality Control Div. v. Casias, 843 P.2d 665, 666 (Colo. App. 1992). Section 12-60-703.5(2)(a) is clear and unambiguous in its requirement that all pari­ mutuel wagers made over the telephone or over the internet on races held in or broadcast in Colorado must be made with facilities licensed by the State of Colorado, so no further

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interpretation is needed. See Andrews, 871 P.2d at 1201. The only term that could possibly be considered ambiguous is “electronic device,” in that it may be argued whether the internet is an “electronic device.” An analysis of the terms and an understanding of how individuals access the internet resolve this potential ambiguity. The internet itself is a series of electronic devices. See Merriam-Webster Collegiate Dictionary, 654 (11th Ed. 2003) (defining internet as “an electronic communications network that connects computer networks and organizational computer facilities around the world”). Further, to place pari­ mutuel wagers over the internet, one needs an electronic device, a computer, to access the internet. So, both the individual placing a pari-mutuel wager over the internet and the person accepting that wager must use an “electronic device” to access the internet. According to the “familiar and generally accepted meaning” of the term “electronic device,” the internet, and the tools necessary to access the internet, are “electronic devices” as that term is used in § 12-60-703.5(2)(a). Casias, 843 P.2d at 666.

CONCLUSION
The law in Colorado is clear that pari-mutuel wagers placed over the internet or by telephone are permitted when received by a track or simulcast facility licensed by the State of Colorado. Because Youbet.com and XpressBet are not licensed by the Colorado Racing Commission, it is illegal for Colorado residents to place pari-mutuel wagers with those entities and for those entities to accept pari-mutuel wagers from Colorado residents. Issued this 21st day of November, 2008.

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