Southern Ute Tribe Sues Colorado over Sports Betting Market Exclusion

The Southern Ute Indian Tribe has taken legal action against Colorado Governor Jared Polis and state gaming officials, accusing them of unfair exclusion from the sports betting industry.

Colorado sued by Southern Ute Tribe over sports betting market exclusion.

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Tribal Chairman Condemns State’s Reversal on Tribal Compact

The tribe argues that their Sky Ute SportsBook was wrongly blocked by the state, which sought to impose taxes not applicable to tribal gaming under federal law. A 1993 compact allows the Southern Utes to offer any games that are legal in Colorado, provided they are similar to those authorized elsewhere in the state. This agreement facilitated the opening of Sky Ute Casino Resort, which operates independently from state regulation.

After Colorado voters approved sports betting in 2019 through Proposition DD, the tribe aimed to launch their online sportsbook. However, just before sports betting became legal statewide in May 2020, state officials insisted the tribe apply for a state license and comply with a 10% tax. The tribe argues this demand violates their compact and federal law.

Tribal Chairman Melvin J. Baker expressed his frustration with what he described as a reversal of previous commitments by representatives of Governor Polis’ administration. Speaking to local media outlet CPR, Baker explained that the tribe felt compelled to file a lawsuit. He also noted that the delay in the state’s response to their online sportsbook locations allowed competitors to gain an advantage, harming the tribe’s economic interests.

Related: Influence of Indian American Casino on the Gambling Landscape

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Tribe Seeks Court Ruling to Safeguard Rights

The lawsuit, filed in the US District Court of Colorado, claims the state acted in bad faith, aiming to maximize tax revenues at the tribe’s expense. The tribe insists they are exempt from state taxes on gambling establishments, with their revenues dedicated to tribal welfare and governmental operations, as mandated by Congress. Legal services director David Smith emphasized that gaming profits support crucial services for tribal members due to their limited taxing authority.

The tribe alleges that the state’s actions were unjust and detrimental to their business. They claim Colorado threatened to revoke US Bookmaking’s license if Sky Ute SportsBook did not shut down by 2023. Similar pressure was reportedly applied to another sportsbook provider serving the Ute Mountain Ute Tribe.

The tribe’s complaint points out that other states have collaborated with tribal nations in implementing sports betting laws to ensure fair competition. For instance, Kansas revised its legislation to support tribal sports betting after initially failing to consult with tribes. The Southern Ute Tribe seeks a court declaration affirming the legality of their sportsbook and an injunction to prevent the state from imposing revenue-sharing requirements.

The lawsuit references a recent US Supreme Court decision favoring the Seminole Tribe in Florida, which upheld the tribe’s right to offer online sports betting under comparable circumstances. The Southern Ute Tribe hopes for a similar outcome, allowing them to operate their sportsbook without state interference.


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