The house always wins

SB23-259 will enable more problem gambling in Colorado


Colorado’s 74th General Assembly was one the most contentious sessions in recent history. In the midst of debates on local zoning policies and tax refunds, a bill managed to pass in its third reading on the evening of May 6: Senate Bill 23-259, or Extension of Credit for Limited Gambling, passed 33 to 32 in the House of Representatives.

The bill —which still requires the Senate to vote on House amendmens before it can head to the governor’s desk — allows casinos to extend lines of credit of at least $1,000 to gamers. But the consequences for Coloradoans could prove far more dire. It ignores the inherent complexity of addiction, which demands legal boundaries to counter it, instead allowing casinos to operate with impunity. 

Keeping gambling recreational depends on going into it with a clear plan. Sticking to a budget and a time limit, playing solely for entertainment and treating winning as a bonus can help players stay within their boundaries. The Prevention Action Alliance recommends never gambling on credit, as it can enable customers to spend beyond their limits without realizing the full obligations of the financial contract they’ve entered into. 

SB23-259 requires customers to apply for lines of credit beforehand, denying credit to those with outstanding warrants, unpaid child support debt, unsettled debt to the state or restitution from a state-level criminal case. However, there are no other explicit guidelines for casinos in determining whether a person is creditworthy. There are no limits on who a casino can approve outside the definition of being “creditworthy.” A potentially life-altering debt obligation needs to come with a detailed accounting of its terms and conditions, including its impacts on a person’s credit score.

Moreover, SB23-259 dictates that customers can take out lines of credit totaling $1,000 or more — nearly half of Colorado’s average monthly rent (and a third in Boulder). Upping the ante will encourage customers to spend more money than they can afford on an activity that is inextricably linked with addiction. 

One needn’t look further than Nevada’s gambling regulations to see how casino-offered credit lines — of smaller amounts — can impact people’s lives. Nevada has allowed gambling for over 85 years, but many of its regulations haven’t integrated 21st-century psychology. Nevada has one of the highest rates of gambling addiction in the United States. Casinos there can offer “casino markers,” or interest-free lines of credit to customers they deem creditworthy. 

However, these credit lines must be paid within 30 days, after which the casino can pull funds from the customer’s banking account, since the Nevada state Legislature gave casino markers the legal status of checks. If the account doesn’t have sufficient funds, the customer has five days to send the funds — after which the unpaid debt becomes a criminal case — either a misdemeanor if the debt is under $1,200, or a felony if it’s over $1,200. SB23-259 doesn’t establish criminal penalties for unpaid credit lines, but it does require customers to repay them within 150 days —  after which casinos can pursue “all remedies at law to recover unpaid credit” in addition to interest and recovery costs. Since there’s no maximum interest rate outlined in the bill, casinos can charge whatever rate they want to customers, depending on how creditworthy they are. Operating without any of the comparatively stringent laws of the banking industry means casinos can effectively operate as loan sharks. 

On the heels of Colorado’s nascent sports betting industry, it’s not hard to see how easier access to gambling can enable addiction. There are no regulations dictating how sportsbooks can advertise or entice customers to use their platforms, which has led to the widespread adoption of gamified mobile app betting, with enticing betting offers that can double a wager and keep a user hooked even longer. This design can be especially addictive for young adults raised with technology at their fingertips, which made the University of Colorado Boulder’s recently terminated partnership with sportsbook PointsBet all the more problematic. 

Colorado didn’t prioritize treatment for addictive gambling until 2022, when a bill passed the state Legislature to fund a grant program to treat problem gambling. Concurrently, there’s been a 45% increase in calls and a 225% increase in texts to the Problematic Gaming Coalition of Colorado since 2020, yet there’s still only five counselors in the state certified to treat gambling addiction. 

So, what will SB23-259 achieve? While its sponsors argued the bill would make gambling easier for wealthy customers who don’t want to carry cash, the truth is more complicated. Consumer-centric safeguards in an industry whose victims tend to suffer in silence have lagged behind the flood of addiction in-app gambling has caused — and SB23-259 only builds on this divisive legacy by empowering casinos and ignoring the guidelines the state’s own coalition on problematic gambling set forth. It’s not clear whether the bill will be affected by the coalition’s self-exclusion program, either, which allows Coloradoans with a history of addictive gambling to surrender their check-cashing privileges and club memberships at gambling facilities. But given the bill’s recent passage and potential variability among casino credit-granting procedures, it might not be possible to “cut off” pathological gamblers from credit entirely. Of the estimated 128,000 pathological gamblers in Colorado, only 600 have signed up for the self-exclusion list.

Much like the legalization of sports betting, SB-259 will allow gambling companies to extend their influence deeper into their customers’ pockets. This bill might not make gambling instantaneous, like the legalization of sportsbook betting, but its danger lies in making financial realities obscure — much like the accumulation of credit card debt, its intangibility makes it that much easier to accumulate.

At the same time, this law comes on the heels of a record year for American gambling, with more than $549 billion in revenue reported by casinos and mobile gaming apps in 2022. Colorado has shied away from addressing gambling addiction for decades, keeping it under-regulated as the industry has grown. State legislators have a responsibility to protect as many people as possible, especially in an industry that’s shown itself to prey on people’s worst instincts and erode the boundaries between recreation and addiction. Without detailed and enforced laws within the gambling industry, Colorado may bear a greater resemblance to Nevada in the coming years — beholden to an overpowered economic machine that doesn’t just play the game, but makes the rules. The house always wins, even as some go bankrupt.

This opinion does not necessarily reflect the views of Boulder Weekly.