Colorado Legislative Council Staff



(replaces Fiscal Note dated January 9, 1998)

Cash Funds Exempt Expenditure Impact

Drafting Number:

Prime Sponsor(s):

LLS 98-461

Rep. Dyer



Bill Status:

Fiscal Analyst:

March 20, 1998

House Appropriations

Janis Baron (866-3523)



Summary of Legislation


FY 1998/99

FY 1999/2000

State Revenues

General Fund

Other Fund



State Expenditures

Compulsive Gambling Prevention Fund (CFE)

Cash Funds Exempt Transfer — Department of Law

$ 213,002


$ 415,032


FTE Position Change

1.0 FTE

1.0 FTE

Local Government Impact — None.


NOTE:  See Background section of this fiscal note for an explanation of Department of Revenue activities related to compulsive gambling; some of which duplicate requirements of this bill.

            As amended, the bill includes a number of provisions relative to compulsive gambling prevention as noted below:

Department of Public Health and Environment (DPHE)

               directs DPHE to implement a Compulsive Gambling Prevention Program and requires the State Board of Health to adopt rules for the program’s implementation;

               authorizes DPHE to provide grants to organizations and entities to:

                  —     establish and maintain a toll-free hotline to provide crisis counseling and referral services;

                  —     present educational programs on excessive gambling;

                  —     promote public awareness of the dangers of problem and compulsive gambling;

                  —     research the effects of gambling in Colorado; and

                  —     establish treatment programs and support services.

Other Pertinent Provisions of the Bill

               requires that the expenses of the Compulsive Gambling Prevention Program be included as an expense of the State Lottery Fund;

               creates the Compulsive Gambling Prevention Fund within the State Treasury (subject to annual appropriations by the General Assembly);

               requires on and after January 1, 1999, landlord licensees (bingo and raffles), retail gaming licensees, racing licensees, and Lottery sales agents, to post in a conspicuous place, notices identifying compulsive gambling crisis counseling and referral services and provide the toll-free hotline number;

               specifies dimension and requirements of the notice;

               requires on and after January 1, 1999, the toll-free telephone number of the compulsive gambling crisis counseling and referral service be imprinted on any Lottery ticket or share (provides for exceptions relative to ticket supply); and

               includes an effective date of July 1, 1998.


            Similar legislation, HB 96-1148, Concerning Compulsive Gambling Prevention, was postponed indefinitely on February 13, 1996. After this bill was proposed and subsequently defeated, the Department of Revenue (State Lottery Division, Limited Gaming Division, and the Division of Racing Events), indicates it began to proactively address the issue of compulsive gambling by:


            1.   Contracting with Gemini Research, Roaring Spring, PA, to conduct an impact study on gambling and the problem of gambling in Colorado — completed August 1997 at a cost of $65,000.


            2.   Requiring State Lottery retailers and retail gaming licensees to post a notice identifying a toll-free telephone number for compulsive gambling information. Currently calls are being routed through Nebraska, but the Department of Revenue has begun negotiations with Texas.


            3.   Imprinting current “scratch” tickets with the warning “Play Responsibly”.


            4.   Beginning discussions with the Department of Human Services, Health and Rehabilitation Services, to explore referrals of compulsive gamblers to community mental health centers.

State Expenditures

            The Department of Public Health and Environment will require $213,002 and 1.0 FTE in FY 1998-99 and $415,032 and 1.0 FTE in FY 1999-00 to implement the bill’s requirements. Components of these costs are discussed below.

            Advisory BoardAlthough the bill does not mandate an advisory board, DPHE will convene an eight-member advisory board, to engage community agencies, individuals, and prevention providers on the matter of compulsive gambling. It is estimated that the board will meet eight times in FY 1998-99 and four times in FY 1999-00. Costs per meeting are estimated at $500 (8 meetings x $500 = $4,000 in FY 1998-99; 4 meetings x $500 = $2,000 in FY 1999-00). [NOTE: DPHE indicates that the following advisory committees have been created without statutory requirements: Sexual Assault Prevention Advisory Committee; Child Fatality Review Committee; and Colorado Diabetes Advisory Council. It further indicates that an advisory committee would be created to consider the implications of compulsive gambling as a matter of good public policy.]

            Personal ServicesDPHE will require 1.0 FTE Planning Grants Specialist III, with expertise in addiction and compulsive gambling, to administer the statewide program. Responsibilities include: providing technical assistance and oversight to contractors; overseeing the grant(s) awards process; and coordinating activities of the advisory board. Personal services and operating costs for FY 1998-99 are identified at $54,082 and $49,782 in FY 1999-00.

            Grants to OrganizationsFor FY 1998-99 it is anticipated that emphasis will be placed on assessing the problem of compulsive gambling in the state. Thus, the only grants awarded will be for the toll-free hotline and the impact analysis study. The fiscal note assumes that the toll-free hotline will be operational only six month of FY 1998-99 (January 1, 1998 through June 30, 1998). Costs for the toll-free hotline are estimated at $100,000 for FY 1998-99 and $200,000 for subsequent years. The impact analysis study will require $53,000 for research and data collection, and report production ($13,250 in FY 1999-00). It is estimated that approximately $150,000 will be required in FY 1999-00 for public education programs for children, public awareness programs, and treatment programs. Thus, grants to organizations will require a total of $153,000 in FY 1998-99 and $363,250 in FY 1999-00.

            Legal ServicesDPHE indicates that it will require 40 hours of legal services at the hourly rate of $48 per hour (40 x $48 = $1,920) for rules promulgation. This cost was omitted in the initial fiscal note.

            Source of Funding — Because the bill requires the Compulsive Gambling Prevention Program to be an expense of the State Lottery Division, this fiscal note assumes that cash funds exempt State Lottery Fund moneys will be transferred to the Compulsive Gambling Prevention Fund, for appropriation by the General Assembly, and all funds shall remain cash funds exempt.

Expenditures Not Included

            Pursuant to the Joint Budget Committee’s budget policies, the following expenditures have not been included in this fiscal note:


               health and life insurance ($2,211);

               short-term disability costs ($104); and

               indirect costs ($17,805).

Spending Authority

            The fiscal note indicates that the Department of Public Health and Environment should receive an appropriation of $213,002 and 1.0 FTE authorization from the Compulsive Gambling Prevention Fund. Additionally, the Department of Law should receive an appropriation of $1,920 cash funds exempt.

Departments Contacted


            Public Health and Environment