Colorado tribe to sue governor and regulator over sports betting exclusion
Southern Ute Indian Tribe accuses Jared Polis and the Colorado Division of Gaming of attempting to increase tax revenues by “manipulating” the market
Colorado’s Southern Ute Indian Tribe has filed a lawsuit against both the state’s governor, Jared Polis, and its sports betting regulator, the Colorado Division of Gaming (CDG).
The lawsuit, filed in the US District Court of Colorado on July 9, claims both parties sought to exclude the tribe from operating its own online sports betting platform in order to maximize state tax collections.
The dispute centers around how the existing tribal gaming agreement worked alongside the legislation introduced in the Centennial State in 2020 after Colorado voters approved online sports betting by a narrow margin at the end of 2019.
According to the 1995 gaming compact between the state of Colorado state and the Southern Ute Indian Tribe, the tribe has the authority over its own operations and can conduct gaming providing the activity and bet amounts are similar to those statewide.
The agreement also stipulates the tribe can keep all proceeds from its operations, and is not subject to pay a 10% tax rate on net betting proceeds to the state.
When sports betting legislation was passed in the state, the Southern Ute Indian Tribe set up its own sportsbook accepting on-reservation bets, and, as per the terms of the compact, its sportsbook was regulated by the Southern Ute Division of Gaming, rather than the state and the CDG.
The lawsuit claims that the state only objected to this plan right before the new legislation was introduced in 2020, and wanted the tribe to apply for a state licence which would be subject to taxation, in spite of the existing compact agreement.
The suit went on to say that Colorado state also pressured the tribe’s sportsbook vendor with a “threatening” letter claiming the tribe was disobeying state law because people could place bets off-reservation.
The Southern Ute Indian Tribe would also be protected by the Indian Gaming Regulatory Act of 1988, established to regulate gaming on Indian lands.
The lawsuit stated: “This attempt to bring tribal gaming under state regulation is illegal, offensive and pointless.
“The tribe is a sovereign Indian nation that has occupied its homeland since time immemorial and, as such, enjoys a sovereign right to regulate its own commercial activities as it sees fit consistent with its binding Gaming Compact with Colorado.”
As part of the claim, the tribe also proposed that the state’s attempt to exclude it from the online sports betting market is a ploy by Polis to increase tax revenues.
The lawsuit continued: “Governor 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.”
Polis’ office said it would not comment on pending litigation.
The lawsuit follows the precedent set in Florida earlier this year, when West Flager argued that Florida’s Seminole Tribe’s gaming compact was in violation of the Indian Gaming Regulatory Act.
The case was ultimately thrown out by the US Supreme Court, and mobile sports betting app Hard Rock Bet, operated by Hard Rock Digital, continues to enjoy a de facto monopoly in the Sunshine State.