Southern Ute Tribe sues Colorado over online sports betting rights

The Southern Ute Indian Tribe has filed a lawsuit against the State of Colorado over online sports betting rights, Chairman Melvin J. Baker announced at the first meeting of the American Indian Affairs Interim Study Committee. The lawsuit seeks "to ensure fair access to economic opportunities that were voted into law by Colorado voters in 2019," the tribe said.

The Southern Ute Indian and Ute Mountain Ute Tribes claim they have been "unfairly blocked" by the Colorado Department of Revenue from engaging in online sports betting despite longstanding compacts explicitly allowing them to do so. After years of unsuccessful negotiations, the tribe is seeking a preliminary injunction in federal court to compete in the online sports betting market, which has primarily benefited non-Indian private entities since 2020.

“Faced with this ongoing injustice, the Southern Ute Indian Tribe is now taking the unfortunate but necessary step of legal action. This is the first time we have been forced to file a lawsuit against the State of Colorado in decades,” Chairman Baker said.

“This lawsuit is not a decision we take lightly. It is about securing a fair resolution and ensuring the State lives up to its obligations to the Tribes as outlined in agreements and federal law. We will fight tirelessly to hold the State accountable for its commitments.”

The gaming compacts, in place for almost 30 years and approved by the federal government, permit the tribes to engage in gaming activities and bet amounts identical to those authorized in Colorado. However, since the approval of Proposition DD by Colorado voters in 2019, which legalized online sports betting, the tribe says it has been prevented from accessing these economic opportunities.

The state's opposition stems from federal law, which prohibits the taxation of tribal gaming activities and mandates that any revenue be used for tribal governmental operations and the welfare of tribal members, the tribe's statement said.

According to the Southern Ute Indian Tribe, the state has "actively overlooked the millions of dollars of annual investments that reflect the tribe’s commitment to supporting and improving the well-being of Colorado residents and addressing service gaps."

Instead, Colorado has "relentlessly sought to unfairly prevent the tribes from accessing these opportunities, including by wrongly threatening vendors supporting tribal sports betting operations and by trying to force the tribes to forfeit their sovereignty," the tribe alleged.

“Not only does the state refuse to recognize the agreements we made that ensure access to these economic opportunities, but they ignore our significant investments that we make every year in southwest Colorado – including protecting Colorado water quality,” Chairman Baker added.

"We invest in water, clean air, healthcare, housing, broadband, and so much more for our tribal members and for the 12,000 Coloradans who within the boundaries of the Southern Ute Indian Reservation with benefits that resonate to residents in surrounding communities. The tribe is also the largest employer in La Plata County. We pride ourselves on being partners to the State of Colorado."

According to the tribe, Colorado state legislators had an opportunity this year to refer a measure to the 2024 ballot to amend the 2019 law and increase taxes on sports betting. However, they have not fixed the issues excluding the Tribes from this market. 

In contrast, after implementing sports betting in 2022, the State of Kansas amended its law the following year to allow tribal gaming entities to participate in online sports betting, recognizing an initial competitive disadvantage.