Coloradans voted Tuesday to approve Proposition JJ, a ballot measure that allows the state to keep all of the sports betting tax revenue it collects and use those dollars for water projects.

Proposition JJ had received 76.3% of votes in favor and 23.6% opposed at 7:59 p.m. when The Associated Press called the race. 

Since 2019, the state has kept up to $29 million and returned any additional revenue to sports betting operators. Tuesday’s decision removes that cap, allowing the state to keep all sports betting tax revenue and opening up more potential funding for water projects. 

It’s a big step forward for addressing Colorado’s water needs, said state Sen. Dylan Roberts, a Democrat from Frisco who co-sponsored the bill that put Proposition JJ on the ballot.

“This is an exciting and important day for Colorado’s water future,” Roberts said. “I am very grateful that the voters of Colorado have agreed that we need to continue to invest as much as we can into this important endeavor.”

The 10% tax on sports betting operators’ proceeds was established in 2019 when voters legalized online and in-person sports betting by passing Proposition DD. 

In the fiscal year that ended June 30, the $29 million limit was exceeded by about $900,000, according to preliminary data, and it’s expected to be exceeded again in the current and next fiscal years, too.

Now Colorado can keep the excess revenue it collects.

The revenue will primarily help fund projects like improving canals and headgates that bring water to farms and ranches throughout the state, helping endangered fish habitat, supporting water-based recreation needs, and funding conservation projects and drought plans.

It will also help fill a looming funding gap. The Colorado Water Conservation Board, the state’s top water policy agency, estimated it will be asked to fund about $3.85 billion in loans and grants over the next 30 years. But with current funding, it is about $1.5 billion short.

So far, the state’s grant program has been extremely competitive, which has meant good projects were left without funding, said Cole Bedford, chief operating officer at the Colorado Water Conservation Board. 

Even with Proposition JJ, the water agency can’t fund every project, but it will have more flexibility to meet more water needs with the additional funding, he said.

Water providers and agencies — from big water providers on the Front Range, including Denver Water and Parker Water and Sanitation District, to the Colorado River Water Conservation District on the Western Slope — are grateful to see voters prioritize water-focused funding.

“I think the beauty of Proposition JJ … was that it benefits every base around the state,” said Zane Kessler of the Colorado River District.

In southwestern Colorado, water organizations have identified needed projects that are ready to implement — if they have millions of dollars of funding, said Steve Wolff, general manager of the Southwestern Water Conservation District.

In the Arkansas River Basin in southeastern Colorado, more dollars available at the state level could help fill funding gaps for the Arkansas Valley Conduit, a $1.4 billion project that will deliver drinking water to 39 water systems east of Pueblo, said Chris Woodka, senior policy and issues manager at the Southeastern Colorado Water Conservancy District.

“Colorado’s future depends on the ability to deliver clean drinking water to a growing population, irrigation water to grow food and healthy streams for recreation and wildlife,” Woodka said. “The additional funds from Proposition JJ will be a part of that picture.”