The Southern Ute Indian Tribe has sued the state of Colorado over an online sports betting dispute. [Image: Shutterstock.com]

Southern Ute to file lawsuit in District Court

The Southern Ute Indian Tribe in Colorado has taken legal action against Governor Jared Polis and the state gaming division.

The tribe filed a lawsuit in the District Court of Colorado on Tuesday, arguing that they have been unfairly prevented from operating an online sports betting platform in the state.

“The Southern Ute Indian Tribe has been forced to file a lawsuit in federal court against the state of Colorado because the administration refuses to honor express commitments the state made to the tribe,” said Tribal Chairman Melvin J. Baker.

the State is powerless to tax the Tribe or require the Tribe to pay any revenues whatsoever to the State”

The lawsuit, against both Gov. Polis and Colorado Division of Gaming Director Chris Schroder, argues that the dispute comes down to tax revenues, stating that Polis “has improperly sought to exclude the Tribe from the Colorado sport betting market because the State is powerless to tax the Tribe or require the Tribe to pay any revenues whatsoever to the State.”

“Governor Polis has sought to manipulate the market so he can extract the maximum amount of taxes from sport betting activities with no care, concern or respect for the negative economic consequences for Colorado’s Tribal communities.”

Tribe alleges breach of 1995 agreement

A compact dating from 1995 allows tribal nations in Colorado to conduct gaming operations so long as they have similar games and betting limits to other legal options in the state. As a result of the compact, the Southern Ute Indian Tribe opened the Sky Ute Casino Resort, which is otherwise regulated by the tribe themselves rather than the state.

allowing Colorado residents to make off-reservation bets from anywhere in the state.

However, the Southern Ute claim that they were not adequately consulted when Proposition DD was passed by voters in 2019, which allowed legal online sports betting in the state. A Sky Ute sportsbook was established, allowing Colorado residents to make off-reservation bets from anywhere in the state. However, officials argued this should require a state license, which would subject it to a 10% tax rate and potentially clash with federal law concerning tribal gaming.

As a result, the Southern Ute argue that Polis delayed the application until other organizations had flooded the market, unfairly locking them out of the opportunity. The Sky Ute sportsbook closed down in 2023.

Familiar dispute over online sports bets

The dispute over whether online bets placed off reservations are considered to be on tribal land or not is not a new one. The case bears some similarities to a recent dispute involving the Seminole tribe in Florida, who have exclusive rights to online sports betting in the state.

The lawsuit asks the court to consider whether the governor and Colorado Division of Gaming’s decisions have been fully compliant with the Indian Gaming Regulatory Act, and demands an injunction to prevent the “anti-sovereignty approach” to interference in tribal gaming.

“We like to resolve our differences amicably”, continued the statement from Baker. “We have spent years trying to do so, but here we have no choice.”