Colorado sports betting delivered a major funding boost to statewide water projects in 2025, as higher wagering activity translated into increased tax revenue directed toward conservation and infrastructure.
With sportsbooks generating more taxable revenue, the state was able to expand financial support for long-term water management efforts under the Colorado Water Plan.
Colorado Sports Betting Revenue Flows Into State Water Plan
Roughly 93% of Colorado sports betting tax revenue is now allocated to the Water Plan, providing a steady funding source for projects tied to drought mitigation, population growth, and water supply sustainability. The growing revenue stream has allowed Colorado to invest more consistently in large-scale initiatives, including the Gunnison Water Supply Project and the Colorado Connectivity Channel.
Officials say the expanded funding has improved the state’s ability to plan multi-year infrastructure upgrades while maintaining ongoing conservation programs. As sports betting activity continued to rise throughout 2025, the impact on water-related funding became increasingly visible.
How Proposition JJ Changed CO Sports Betting Revenue Distribution
The funding increase traces back to voter approval of Proposition JJ in November 2024. The ballot measure removed Colorado’s previous $29 million cap on annual sports betting tax collections, allowing the state to retain all tax revenue from Colorado sports betting apps instead of issuing refunds once the cap was reached.
By eliminating the cap, Proposition JJ created a direct link between sports betting growth and water project funding. What began as a regulatory change in late 2024 became a major financial driver in 2025, as expanding sportsbook activity generated additional dollars for conservation and infrastructure across the state. Continued growth in Colorado sports betting could lead to additional funding gains for water projects in 2026.
