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Army Veteran Owned | Expert Surety Bonds Since 2004
Have a question? +1 815-826-6324 (815-8-BondAI) phil@AmericasSuretyBonds.com
Army Veteran Owned | Expert Surety Bonds Since 2004
A Colorado sportsbook has to show the Division of Gaming it can pay every winning bet, and the Director decides which financial instruments are good enough. A surety bond approved by the Director lets you meet that obligation without tying up the full amount in cash, and the bond is written to the Colorado Limited Gaming Control Commission in the amount the Division approves.
Colorado sports betting operators must be able to pay winning bets at all times under Rule 6.9 of the Sports Betting Regulations, 1 CCR 207-2. Winners must be paid within 24 hours of a bona fide demand by account credit, cash or check, or by a bond approved by the Director or the Director's designee. The obligee is the Colorado Limited Gaming Control Commission. There is no fixed bond figure in the rules, so the amount and wording come from the Division's approval.
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Applicants often look for a flat bond figure. There isn't one. Colorado's Sports Betting Regulations, 1 CCR 207-2, do not set a dollar amount for this bond. Rule 6.9 requires every master licensee, sports betting operator and internet sports betting operator to keep enough financial reserves to pay the bets it accepts, and the Division approves the method and the instrument. Get the required amount and bond wording from the Division of Gaming before the bond is written.
The reserve must cover the operator's outstanding sports betting liability, which the rule defines as the total of player account balances, money taken on events not yet decided, and winning wagers owed but not yet paid. The rule lists cash or cash equivalents kept apart from operating funds, an irrevocable letter of credit, payment processor reserves and receivables, or a combination. The reserve method has to be submitted to and approved by the Director or the Director's designee before it is used, and the Division can inspect the reserve accounting on request.
The same rule says winners must be paid within 24 hours of a bona fide demand by account credit, cash or check drawn on a chartered bank, or by a bond approved by the Director or the Director's designee, within a reasonable time frame as approved if by bond. That Director approval is what this bond depends on.
Under Rule 3.4 the license runs for two years and the issuance fee is nonrefundable and set by the annual fee schedule. Rule 3.5 requires each original sports betting operator applicant to pay a $10,000 deposit to the sports betting fund before the background investigation starts, and caps the combined license, investigation and background check fees at $125,000. Renewal applications for sports betting operator licenses must reach the Division 120 days before the current license expires. A late renewal is not treated as timely, so plan the bond renewal around that date too.
The surety sets the premium as a percentage of the approved bond amount after reviewing the company's financial statements, ownership and credit. Larger bonds for national operators are usually underwritten on corporate financials.
The rules do not set a flat amount. The reserve has to cover your outstanding sports betting liability, and the Director approves the method and instrument. Get the figure from the Division of Gaming before the bond is issued.
The Colorado Limited Gaming Control Commission. Ask the Division for any specific wording it wants on the bond.
No. Rule 3.5 requires that deposit to cover background investigation costs. It is paid to the sports betting fund and is separate from your reserves.
The license lasts two years. Renewal applications for sports betting operator licenses must reach the Division 120 days before the license expires.
Rule 6.9 lists segregated cash, an irrevocable letter of credit, payment processor reserves and receivables, or a combination for the reserve. Whatever you use must be approved by the Director first.
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