Colorado Regulatory Agency Temporarily Suspends Betting Regulations for Exchanges
Let's Get Real About Colorado's Sports Betting Rules
Colorado's gambling regulators took a pass on voting for some proposed regulations around exchange wagering last Thursday, leaving companies like Sporttrade and Prophet Exchange on the sidelines. The meeting saw hours of discussion centered on "external market makers" and raised questions about taxation, licensing, and qualifications for these market makers.
External market makers (EMMs), as defined in the proposed regulations, are entities or individuals authorized by Colorado that have funds on deposit with an internet sports betting operator, placing and selling wagers on the exchange. The focus during the meeting was on how these EMMs would play a part in exchange wagering, a form of peer-to-peer betting.
Sporttrade and other interested operators can still press forward in Colorado. The LGCC has not prevented operators from offering exchange wagering if approved by the regulator, as it's legal under the current state law. According to LGCC staff, four operators have expressed interest in Colorado's exchange wagering, including one already operating in New Jersey, one already licensed in Colorado, one startup, and one "unique" entity. Those offering exclusively exchange wagering are in a holding pattern until the commission discusses it again.
After a 3-1 vote not to vote last Thursday, the commission didn't set a follow-up date for further discussions. Colorado's gambling marketplace, already one of the most open and competitive in the U.S., boasts about 25 live platforms. Industry insiders view Colorado's regulatory bodies as easy to work with and more open to stakeholder participation than in most other jurisdictions.
The Scoop on External Market Makers
Understanding EMMs is crucial for navigating the world of exchange wagering. EMMs play a vital role in creating liquidity and ensuring that the opposite side of a customer's wager is taken. Generally, regulatory bodies like the Colorado Limited Gaming Control Commission are responsible for ensuring compliance with state gaming laws and regulations, which may affect EMMs. However, specific rules regarding external market makers in exchange wagering are not detailed in the available information.
For more precise information, it's necessary to consult the specific regulations or contact the Commission directly. Laws like the Model Money Transmission Act could indirectly impact related financial transactions in the gaming sector, but it doesn't address rules for external market makers in exchange wagering directly.
Sporttrade and other operators will continue to explore their options in Colorado. Whether or not the commission eventually green-lights exchange wagering rules, competition is expected to heat up in the Centennial State's dynamic gambling marketplace.
Technology plays a significant role in sports betting, particularly with the rise of exchange wagering. External market makers (EMMs), authorized entities or individuals in Colorado, use technology to place and sell wagers on the exchange, creating liquidity and ensuring the opposite side of a customer's wager is taken. Regulatory bodies like the Colorado Limited Gaming Control Commission oversee the compliance of EMMs with state gaming laws and regulations in sports betting, although specific rules for EMMs in exchange wagering are not extensively detailed yet.
