Summary#

HB 26-1418, the Online Add-on Transaction Fee Youth Service Enterprise, was vetoed by the governor; it is not law. It would have amended several Colorado laws and created two government-owned businesses inside existing state agencies. Its stated goal was to fund youth mental-health services, out-of-school programs and educational-rights enforcement with fees on certain online-game add-on purchases.

• Starting January 1, 2027, covered platforms would have to impose and collect a fee of 5% on each add-on transaction, then send the money to the state. An add-on is a purchase that gives a player an advantage or alters or enhances a game; buying initial access to a game is excluded.
• The fee would apply to platforms meeting several conditions, including earning most of their annual revenue from online gaming and handling personal data for games reasonably likely to be accessed by youth. Internet providers and telecommunications carriers that only provide connectivity are excluded.
• Two enterprises would direct the money: one inside the Behavioral Health Administration (BHA) for mental-health programs, and one inside the Department of Education for out-of-school grants and educational-rights enforcement. They could issue revenue bonds and hire contractors without following the state Procurement Code; the agencies would have to provide office space and staff.
• In each state fiscal year, the first $8 million in fee revenue would go to the mental-health enterprise fund; additional fee revenue would go to the youth-programming enterprise fund. The mental-health enterprise could adjust the fee from October 1, 2027, and would have to keep it reasonably tied to the costs of listed services.
• From the mental-health fund’s fee revenue, no more than 3% could be used for administration; the remainder would be divided 40% for peer-navigator grants, 35% for crisis-response teams and 25% for the youth mental-health services program.
• Covered platforms would also have to show prices in U.S. dollars at checkout for gaming services, products or features reasonably likely to be accessed by minors. Violations would be deceptive trade practices.

What it means for you#

• Online gaming platforms: A platform meeting the bill’s definition would have to collect the fee on every add-on transaction on that platform, not just purchases made by young people. The bill does not say who ultimately bears the cost or require a separate fee display.
• Young people and families: From January 1, 2028, the youth mental-health services program would be run and funded by the mental-health enterprise with BHA collaboration. It would reimburse providers for up to six sessions per youth, increased from three under the bill’s description of the existing program. The bill would also create short-term crisis services for eligible youth and their caregivers.
• Grant applicants: Eligible entities—including tribes, colleges, local or state agencies, school districts and nonprofits—could apply for peer-navigator grants if they provide specified mental-health programming. The enterprise would decide awards after receiving recommendations from Serve Colorado.
• Out-of-school program providers: The bill would add mental-health and well-being services to the eligibility requirements for that grant program and give the youth-programming enterprise a role in awarding grants.
• Children and families seeking educational-rights help: The Department of Education would have to use money from the youth-programming fund to enforce children’s educational rights. The bill makes complaint-taking conditional on a separate bill, Senate Bill 26-125, becoming law.
• Current law: The supplied material includes the amendments but not the full laws being amended, so I could not verify all existing rules or programs against current law.

Money#

The bill would appropriate $294,984 in general-fund money for the 2026–27 fiscal year, and $225,250 from the two enterprise funds for legal services; no estimate of total fee revenue or program costs is provided.

• The general-fund appropriation included money for Revenue Department staff, tax-system support and legal services.
• The bill would let each enterprise use up to 3% of annual fee revenue for administration. The agencies would also have to provide staff and office space, but the bill gives no cost estimate for that support.
• The bill says fee revenue would be under $100 million total in the enterprises’ first five fiscal years. That is a statutory finding in the bill, not a revenue estimate in the supplied material.

What is unclear#

• “Youth” is defined by reference to another law, which was not supplied, so its precise age range could not be verified here.
• The bill does not specify how platforms would determine that a game is reasonably likely to be accessed by youth, or how the fee must be shown to customers.
• It does not say whether platforms may pass the fee on to buyers, or how the cost would otherwise be shared.
• The mental-health enterprise’s board membership is not specified in the supplied text; the governor would appoint its members.
• The bill gives no estimates for how many youth would be served, how many grants or crisis teams would be funded, or whether fee revenue would cover the listed services.

Case for#

• The bill appears intended to raise money from companies that earn revenue from online gaming, then use it for youth services connected to mental health, crisis support and structured out-of-school activities.
• A possible argument for the dedicated fee is that it would provide a continuing source of money for specified programs rather than relying only on annual appropriations.
• The bill sets grant eligibility rules, required crisis-team services and reporting requirements for the peer-navigator program.

Case against#

• One concern is that a 5% fee on every add-on transaction could raise the price paid by players, but the bill does not say whether platforms would pass the fee on.
• The fee could be adjusted after October 1, 2027, and the bill gives the enterprise discretion to set the amount within a cost-recovery requirement. The text does not provide a detailed process for measuring those costs.
• The two enterprises could issue revenue bonds, and the bill exempts their contracts for professional and technical services from the Procurement Code. The text does not set out further limits on those powers.
• The bill creates several programs and duties but provides no overall cost or revenue forecast, making it hard to judge whether the fee would be enough to fund them.