Ute Mountain Ute Tribe joins legal battle over Colorado online sports betting rights

Jenny Ortiz October 1, 2024

SiGMA news

Ute Mountain Ute Tribe joins legal battle over Colorado online sports betting rights

The Ute Mountain Ute Tribe has joined forces with the Southern Ute Indian Tribe in legal action against the state of Colorado, alleging that both tribes have been unjustly barred from engaging in online sports betting.

According to a press release, the tribes claim that Colorado’s Department of Revenue has stonewalled their attempts to participate in the economic opportunities created by Proposition DD, passed by voters in 2019 to legalise online sports betting.

Chairman Manuel Heart of the Ute Mountain Ute Tribe voiced his frustration, stating, “The State must live up to its obligations to our Tribes as outlined in agreements and federal law. We are taking the unfortunate but necessary step of legal action to correct this.” Chairman Melvin Baker of the Southern Ute Indian Tribe echoed the sentiment, demanding immediate action to rectify the injustice.

Allegations of unfair treatment

The legal dispute centres around the tribes’ inability to enter the online sports betting market, despite agreements made in state-Tribal gaming compacts that have been in place for nearly 30 years. The Southern Ute and Ute Mountain Ute Tribes assert that the state has violated these agreements by restricting their participation in online sports betting, even though the tribes are legally entitled to the same gaming opportunities as other entities in the state. The tribes are seeking a federal injunction to allow them to compete in a market dominated by non-tribal businesses.

One significant obstacle the tribes face is the state’s inability to tax Tribal gambling operations, a point that has led to ongoing friction. The U.S. Indian Gaming Regulatory Act prohibits state taxation of Tribal gaming revenue, which is required to be used for Tribal government operations and the welfare of Tribal members. This tension has resulted in the exclusion of the tribes from an industry that has generated millions in revenue for Colorado.

Legal precedent and federal law

In their legal filings, the tribes referenced federal court decisions from Florida that support their position. The rulings in favour of the Seminole Tribe’s “hub-and-spoke” model determined that wagers placed outside of Tribal land but processed on it are legally considered bets on Tribal land. This interpretation could strengthen the Ute tribes’ argument that they should be allowed to operate online sports betting beyond their reservation boundaries under the 1995 gaming compact.

The state’s resistance, highlighted by a 2020 email from the Colorado Division of Gaming, suggests that online betting off Tribal lands would violate state law. “The Division recognises the Tribe’s freedom to govern Tribal sports betting on Tribal lands,” the email stated, but it also expressed concerns about bets placed within Colorado that were processed on Tribal lands.

Call for amicable resolution

Experts have pointed to the potential for a negotiated solution, like those reached in other states like Florida and Kansas, which have successfully amended their laws to allow Tribal participation in online sports betting.

However, despite the option for a compromise, such as the state’s proposed 10 percent fee on off-reservation wagers, both tribes are pushing for full participation in the online sports betting market. The legal battle continues as the Ute Mountain Ute and Southern Ute Tribes await a response from the state.