The State of Colorado, led by Gov. Jared Polis, is asking for a dismissal of a lawsuit filed by Ute Tribes which seeks to permit them to offer online sports betting statewide.
This is the second time the state has filed a motion to dismiss the lawsuit, brought jointly by the Southern Ute and Ute Mountain tribes. The tribal nations claim they have the right under the federal Indian Gaming Regulatory Act (IGRA) to offer statewide online sports betting. Their suit came in the wake of West Flagler Associates’ failure to persuade federal courts to rule against the “Florida Model” of online wagering. Under that interpretation of IGRA, bets can be considered to take place on tribal land if that’s where the receiving servers are, regardless of where the bettor is.
Currently, only commercial operators with a state-granted gaming license can provide online sportsbooks in Colorado.
The Ute contend that Colorado wants to freeze out the tribes from online sports betting because commercial operators are required to pay 10% in taxes on such activity, but federally-recognized tribal nations such as themselves are exempt from paying taxes on the revenue. That argument has not been tested in court. The Ute also cite an agreement in Florida between the Seminole Tribe and that state’s governor that arguably gives the Seminole a monopoly on licensed sports betting. That situation is wrapped in controversy, however.
Amended complaint forces a do-over
A second motion to dismiss by the State of Colorado was made necessary due to at updated complaint filed by the tribes in February. The state’s argument is essentially unchanged, stating that the Ute tribes have a lack of standing to sue the state. The motion to dismiss also says the tribes failed to make a valid claim under the Indian Gaming Regulatory Act.
Polis has previously said that the tribes are attempting to “undermine the State’s ability to govern” by filing the lawsuits. According to the Governor, the state alone has the right to establish regulatory framework for online gaming. Under state regulations in place currently, the Ute tribes would be required to apply for a license and operate under the same sets of rules as any commercial sportsbook.
A decision from the United States District Court of Colorado will determine whether the lawsuit can continue. If so, the Ute tribes could potentially join the crowded sports betting market in the state. There as close to 20 licensed sportsbooks in the Mile High State.
At one point, the Sky Ute tribe, which is a party in the federal lawsuit, operated its own sportsbook in Colorado. It was available statewide but shuttered in 2023, citing competitive pressures, without having faced a legal challenge.
