After the U.S. Supreme Court struck down PASPA, did Colorado need a constitutional amendment, or just a statute, to legalize commercial sports betting?
Plain-English summary
In May 2018, the U.S. Supreme Court struck down PASPA, the federal law that had blocked most states from legalizing commercial sports betting. Murphy v. Nat'l Collegiate Athletic Ass'n, 138 S. Ct. 1461 (2018). The Colorado Department of Revenue, which oversees the state's gaming, lottery, and racing divisions, asked the AG two questions:
- Is sports betting blocked by Colorado's constitutional ban on "lotteries" in Article XVIII, § 2? If yes, a constitutional amendment would be needed.
- Is sports betting blocked by Colorado's criminal-code ban on "gambling" in § 18-10-102? If yes, a new statute would be needed.
AG Cynthia Coffman answered no to the first and yes to the second. The constitutional analysis turned on Ginsberg v. Centennial Turf Club, 251 P.2d 926 (Colo. 1952), a 1952 Colorado Supreme Court case holding that wagering on horse and dog races is not a constitutional "lottery" because the bettor can apply skill in selecting bets based on available information. The AG saw no material difference between betting on horse and dog races and betting on other sports, so neither type of betting falls within Article XVIII, § 2's lottery prohibition.
The criminal-code analysis was simpler. Section 18-10-102(2) defines "gambling" to include risking value on the outcome of "an event, including a sporting event, over which the person taking a risk has no control." Sports betting fits that definition, and none of the five statutory exceptions (bona fide skill contests, business transactions, expressly authorized acts, social wagers, crane games) applies to commercial sports books. So under existing 2018 statutes, sports betting was illegal, and legalization required new legislation.
That legislation followed within months: Proposition DD passed in November 2018, authorizing sports betting tied to limited gaming licensees, with implementing statutes in Title 44.
Currency note
This opinion was issued in 2018. 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.
Background and statutory framework
The constitutional question turns on Article XVIII, § 2, which has been part of the Colorado Constitution since 1876 and bans "lotteries" with carve-outs for bingo, lotto, raffles (added 1958), and a state-supervised lottery (added 1980). The Colorado Supreme Court's Ginsberg decision defined a "lottery" as an activity in which "consideration is paid for the opportunity to win a prize awarded by chance," with chance as the "controlling factor in the award." In re Interrogatories of Gov. Regarding Sweepstakes Races Act, 585 P.2d 595, 598 (Colo. 1978).
Ginsberg held that horse-and-dog-race betting is not a lottery because bettors can review program information, past performance data, jockey records, and other facts before placing a wager. The element of skill in selecting the bet means chance is not "controlling." Coffman extended the same logic to other sports: today's bettors have schedules, team records, players' past performance data, head-to-head data, injury reports, facility conditions, and weather information available to them, even more information than the Ginsberg horse bettors had. So skill is involved, chance does not control, and sports betting is not a "lottery."
The criminal-code analysis ran on parallel tracks. Section 18-10-102(2) defines "gambling" to include risking value for gain "contingent in whole or in part upon lot, chance, the operation of a gambling device, or the happening or outcome of an event, including a sporting event, over which the person taking a risk has no control." Three points emerge:
- The phrase "in whole or in part" means even partial dependence on chance suffices, so the Ginsberg skill argument that defeats the lottery analysis does not save sports betting from the gambling statute.
- The statute expressly names "sporting event" as a covered category.
- Bettors have no control over the outcome of the game itself.
Coffman walked through the five statutory exceptions and concluded none applies to commercial sports betting:
- "Bona fide contests of skill, speed, strength, or endurance" applies only to actual participants, not bettors. Charnes v. Cent. City Opera House Ass'n, 773 P.2d 546 (Colo. 1989).
- "Bona fide business transactions" applies to securities, insurance, and indemnity contracts, not wagering.
- "Expressly authorized by law" applies to pari-mutuel horse and dog racing under § 12-60-501, but sports betting was not yet authorized.
- The "social relationship" exception (Houston v. Younghans, 580 P.2d 801) applies to friendly wagers, not commercial enterprises.
- "Crane game" (claw machines) is irrelevant.
Common questions
Q: Why is sports betting "gambling" but not a "lottery"?
A: Different definitions. A "lottery" under Colorado precedent requires chance to be the controlling factor in the outcome. Where bettors can apply meaningful skill in selecting wagers based on available information, chance is not controlling. The criminal code's "gambling" definition is broader: any wager whose outcome turns "in whole or in part" on chance counts, and a sporting event over which the bettor has no control is included by name. So skill defeats the lottery analysis but not the gambling analysis.
Q: Did fantasy sports get treated the same way?
A: No. Fantasy sports are separately regulated under Colorado's Fantasy Contests Act, § 12-15.5-101 through 112. The 2018 opinion expressly excluded fantasy sports from its analysis.
Q: Does this opinion legalize sports betting?
A: No. AG opinions interpret existing law; they do not legalize anything. The opinion concluded that as of August 2018, sports betting was illegal under Colorado's criminal code. The legislature could change that with new statutes, which it did via the 2019 implementation of Proposition DD.
Q: What about social wagers among friends?
A: Outside the scope of this opinion. The "incidental to a bona fide social relationship" exception in § 18-10-102(2)(d) was not analyzed here because the request was about commercial sports betting, not pickup-game pools.
Q: How did the U.S. Supreme Court strike down PASPA?
A: The Court used the anti-commandeering doctrine. Murphy, 138 S. Ct. 1461. PASPA forbade states from passing laws authorizing sports betting. The Court held that this controlled state legislative decisions in a way Congress is not permitted to do under federalism principles. Congress could regulate sports betting directly under the Commerce Clause, but it could not order state legislatures what to enact or not enact.
Citations and references
Statutes:
- § 18-10-102(2), C.R.S., "gambling" definition
- § 18-10-102(2)(a)-(f), C.R.S., exceptions to gambling
- § 18-10-103(1), C.R.S., gambling offense
- Colo. Const. art. XVIII, § 2, lottery prohibition with carve-outs
- Colo. Const. art. XVIII, § 9, limited gaming
- 28 U.S.C. §§ 3701-3704, PASPA (struck down 2018)
- 18 U.S.C. § 1084(a), federal wire act
- 31 U.S.C. § 5363: unlawful internet gambling
Cases:
- Murphy v. Nat'l Collegiate Athletic Ass'n, 138 S. Ct. 1461 (2018), PASPA struck down
- Ginsberg v. Centennial Turf Club, 251 P.2d 926 (Colo. 1952), racing not a lottery
- In re Interrogatories of Gov. Regarding Sweepstakes Races Act, 585 P.2d 595 (Colo. 1978), controlling-factor test for lotteries
- Charnes v. Cent. City Opera House Ass'n, 773 P.2d 546 (Colo. 1989), partial chance suffices for gambling
- Wilson v. People, 84 P.2d 463 (Colo. 1938), pre-legalization horse-race bookmaking conviction
Source
- Landing page: https://coag.gov/attorney-general-opinions/
- Original PDF: https://coag.gov/app/uploads/2019/07/no-18-02.pdf
Original opinion text
CYNTHIA H. COFFMAN
Attorney General
MELANIE J. SNYDER
Chief Deputy Attorney General
LEORA JOSEPH
Chief of Staff
FREDERICK R. YARGER
Solicitor General
STATE OF COLORADO
DEPARTMENT OF LAW
Office of the Attorney General
FORMAL OPINION of CYNTHIA H. COFFMAN, Attorney General
No. 18-02
August 2, 2018
Michael Hartman, Executive Director of the Colorado Department of Revenue, requested this Formal Opinion under § 24-31-101(1)(b), C.R.S.
This Formal Opinion analyzes state constitutional and statutory provisions to determine whether current law authorizes commercial sports betting in the State of Colorado. The Opinion concludes that although commercial sports betting is not subject to state constitutional restrictions, it falls within the definition of prohibited gambling under Colorado's criminal code, making it unlawful. Consequently, to legalize commercial sports betting in the State, a statutory change, but not a constitutional amendment, would be required.
QUESTIONS PRESENTED AND SHORT ANSWERS
Question 1: Is commercial sports betting subject to the prohibition on "lotteries" in Article XVIII, Section 2 of the Colorado Constitution, such that a state constitutional amendment would be required to authorize commercial sports betting in the State?
Answer 1: No, a state constitutional amendment would not be required. While Article XVIII, Section 2 imposes various restrictions on "lotteries," commercial sports betting does not qualify as a lottery. The Colorado Supreme Court has ruled that betting on horse and dog races is not a lottery, and there is no material difference between betting on horse and dog races and betting on other types of sporting events. Commercial sports betting therefore falls outside the restrictions in Article XVIII, Section 2.
Question 2: Is commercial sports betting "gambling" under Section 18-10-102(2), C.R.S., such that new legislation would be required to authorize it in the State of Colorado?
Answer 2: Yes, commercial sports betting is currently prohibited as illegal gambling under Colorado's criminal code. New legislation would be required to authorize commercial sports betting in Colorado.
BACKGROUND
Beginning in 1992, a federal law known as the Professional and Amateur Sports Protection Act, or "PASPA," prohibited most States from enacting laws to license or authorize commercial sports betting. Pub. L. No. 102-559, § 2, 106 Stat. 4227 (1992) (codified at 28 U.S.C. §§ 3701-3704). While four States were exempt from the prohibition, the majority, including Colorado, were not. Recently, however, PASPA's prohibition against commercial sports betting came to an end. In May, the United States Supreme Court struck down PASPA in its entirety, ruling in favor of the State of New Jersey in its attempt to legalize commercial sports betting in selected locations within the State. Murphy v. Nat'l Collegiate Athletic Ass'n, 138 S. Ct. 1461, 1468, 1485 (2018).
The Court based its decision on the anti-commandeering doctrine, a constitutional principle that preserves the balance between state and federal power by, among other things, prohibiting Congress from regulating what laws States must or must not enact. Under this doctrine, although Congress may directly regulate an activity such as commercial sports betting and preempt state laws that contradict federal regulation, it may not "command state legislatures to legislate." New York v. United States, 505 U.S. 144, 178-79 (1992).
Following the Murphy decision, there has been heightened interest in commercial sports betting among the States. The Department of Revenue, which houses the Division of Racing Events, the State Lottery Division, and the Division of Gaming, has received inquiries regarding the legality of commercial sports betting in Colorado.
ANALYSIS
PASPA has not been the only potential impediment to legalized commercial sports betting in the State of Colorado. Colorado's constitution has always included a prohibition on lotteries. Colo. Const. art. XVIII, § 2. Colorado's criminal code, meanwhile, prohibits various forms of "gambling." §§ 18-10-101 through 108, C.R.S.
For purposes of this Formal Opinion, commercial sports betting means wagering money or anything of value on the outcome of a sporting event, or a portion of a sporting event, for the chance of a monetary gain or an item of value, where the bettor has the opportunity to exercise skill in selecting the wager.
I. A state constitutional amendment would not be required to authorize commercial sports betting in Colorado, because commercial sports betting is not a "lottery" that is subject to the restrictions in Article XVIII, Section 2 of the Colorado Constitution.
A. Commercial sports betting is not a "lottery" under Article XVIII, Section 2 because participants are able to exercise sufficient skill in selecting their wagers such that chance is not the "controlling factor" in an award.
A "lottery," according to the Colorado Supreme Court, is an activity in which "consideration is paid for the opportunity to win a prize awarded by chance." In re Interrogatories of Gov. Regarding Sweepstakes Races Act, 585 P.2d 595, 598 (Colo. 1978); see also Ginsberg v. Centennial Turf Club, 251 P.2d 926, 929 (Colo. 1952). Whether a game is a lottery turns on the role that chance plays in the outcome. "[I]f chance is the controlling factor in the award," the game is a lottery.
Wagering on a sporting event falls outside this definition. Ginsberg, 251 P.2d at 929. In Ginsberg, the Colorado Supreme Court concluded that chance does not control wagering on horse and dog races because the bettor can select a bet based on a review of information about a race and the prior records of its participants. The Court emphasized the availability of relevant information for a bettor's review, including race programs that provide post position, approximate odds, jockey's name, and class of race.
While Ginsberg focused on racing events, the Court's analysis and holding apply equally to commercial sports betting. Sports bettors can use skill to choose who they believe will win a sporting event or whether some sub-event will occur. In selecting their bets, today's sports bettors have far more information available than the bettors in Ginsberg did. This information includes schedules; team records; players' past performance data; past head-to-head data; injury reports; facility conditions; weather conditions; and more. Under Ginsberg, because a bettor can exercise skill in reviewing this information and selecting a wager, the element of chance is not the controlling factor in commercial sports betting.
B. Commercial sports betting does not fall within the definition of "bingo," "lotto," or "raffles," which are types of "lotteries" subject to special restrictions under Article XVIII, Section 2.
Article XVIII, Section 2 specifically defines these games. "Bingo" and "lotto" are games where "prizes are awarded on the basis of designated numbers or symbols on a card conforming to numbers or symbols selected at random." "Raffles" are games "conducted by the drawing of prizes or by the allotment of prizes by chance." Commercial sports betting does not satisfy either of these definitions.
II. Because commercial sports betting is prohibited "gambling" under Colorado's criminal code and does not fall within any of the code's exceptions, new legislation would be required to authorize commercial sports betting in the State.
Colorado's criminal code prohibits "gambling." §§ 18-10-102(2) & -103(1), C.R.S. Generally, "gambling" includes "risking any money, credit, deposit, or other thing of value for gain contingent in whole or in part upon lot, chance, the operation of a gambling device, or the happening or outcome of an event, including a sporting event, over which the person taking a risk has no control." § 18-10-102(2), C.R.S. Under this definition, commercial sports betting clearly qualifies as gambling.
This conclusion is consistent with Colorado case law. See Wilson v. People, 84 P.2d 463, 465-66 (Colo. 1938); Leichliter v. State Liquor Licensing Authority, 9 P.3d 1153, 1155 (Colo. App. 2000).
The five exceptions to the gambling definition (bona fide contests of skill among entrants, bona fide business transactions, acts expressly authorized elsewhere, transactions incidental to bona fide social relationships, and crane games) are each addressed and found inapplicable to commercial sports betting. Charnes v. Cent. City Opera House Ass'n, 773 P.2d 546, 551 (Colo. 1989) (skill exception applies to entrants, not bettors).
CONCLUSION
The Colorado Constitution does not prohibit or otherwise restrict commercial sports betting, but commercial sports betting is impermissible gambling under Colorado's criminal code. New legislation, but not a state constitutional amendment, would be required to authorize commercial sports betting in Colorado.
Whether or not to amend state statutes to authorize commercial sports betting is a policy question for the General Assembly and the voters of this State.
Issued this 2nd day of August, 2018.