In July, Colorado’s Southern Ute Indian Tribe filed a lawsuit against the state, claiming that the state is roadblocking its attempts to offer online sports betting. Now, the Ute Mountain Ute Tribe has joined the fight, filing its own legal action against the state.
A 2019 proposition made sports betting legal in Colorado. Since then, the tribes have alleged that the state has blocked their attempts to enter the market.
The dispute is over the requirement that tribes pay a 10% tax on revenues, something they claim is prohibited under federal law.
Key Highlights
- Ute Mountain Ute Tribe joined the Southern Ute Indian Tribe in suing Colorado.
- Dispute with the state is over taxes, which are illegal to levy against tribes under federal law.
- Kansas handled a similar issue through legislation early this year.
Ute Mountain Ute Tribe Files Lawsuit Against Colorado Over Sports Betting Denial
On September 30, the Ute Mountain Ute Tribe issued a press release stating that it is joining the Southern Ute Indian Tribe in filing legal action against Colorado.
The lawsuit stems from what the tribe claims are the state’s attempts to block its access to online sports betting.
According to Ute Mountain Ute Tribe Chairman Manuel Heart, “The State must live up to its obligations to our Tribes as outlined in agreements and federal law. Because of this ongoing injustice, we are also now taking the unfortunate but necessary step of legal action to correct this.”
The State is wrong to lock our Tribes out of these economic opportunities, and they must be held accountable for their actions to hold back our Tribes.”
Enough is enough. This unfair treatment must end now. Our Tribes are demanding immediate action to rectify this injustice and ensure the State fulfills its obligations.
– Melvin Baker, Chairman of the Southern Ute Indian Tribe
Chairman Melvin Baker of the Southern Ute Indian Tribe commented, “Enough is enough. This unfair treatment must end now. Our Tribes are demanding immediate action to rectify this injustice and ensure the State fulfills its obligations.”
Both tribes are asking for a federal injunction to allow them access to the Colorado market, which non-Indian enterprises have had exclusive access to since 2020.
Colorado Wants to Tax Tribal Revenues Despite Federal Law Prohibiting It
The sticking point between the tribes and Colorado is taxes. State law requires anyone offering online sports betting to pay a 10% tax on profits.
This requirement has led to the state denying tribes access to sports betting as the tribes claim they are tax-exempt.
Under federal law, tribal gaming cannot be taxed, and all proceeds are to support tribal government operations and members.
Proposition DD was passed in 2019, legalizing retail and online sports betting in the state. The law included a 10% tax on revenue for all participants.
Sports betting went live in 2020, but in the four years since, the state has not permitted tribes to participate over the taxation.
Tribes Have Asked for Legislative Solution Similar to Kansas
The tribes do not appear unreasonable in their requests for inclusion, even pointing to how Kansas handled a similar situation.
Kansas legalized retail and online sports betting in 2022 but did not provide appropriate provisions for those activities.
That was corrected in April of this year when the Kansas Legislature voted to amend the state’s gambling compact with the Iowa Tribe of Kansas and Nebraska to permit fair access.
Back in July, Southern Ute Indian Tribe Legal Services Director David Smith stated, “Most states that have implemented sports betting talked to their Tribes at the time they implemented it to make sure there was an even playing field. And Colorado didn’t.”
Looking at the facts, it appears that both tribes have a good case against the state. There are also simple solutions to allow for equal participation by tribes.
While it is too early to know how the courts will rule, it would seem likely that the tribes have the upper hand in this case.
We would not be surprised to see the state legislature address the matter early in the next legislative session to avoid a lengthy court process. The next legislative session begins January 13, 2025.
Sources
https://news.worldcasinodirectory.com/colorado-tribes-file-lawsuit-for-fair-access-to-online-sports-betting-115473
https://www.southernute-nsn.gov/2024/09/30/for-immediate-release-ute-mountain-ute-tribe-joins-southern-ute-indian-tribe-in-legal-action-to-receive-fair-treatment-by-state-09302024/#:~:text=Southern%20Ute%20Indian%20Reservation%20%E2%80%93%20Facing,by%20the%20State%20of%20Colorado.
https://news.worldcasinodirectory.com/southern-ute-tribe-sues-colorado-over-online-sports-betting-dispute-114211
https://www.cpr.org/2024/07/09/southern-ute-tribe-lawsuit-against-polis-over-sports-betting/
https://www.yogonet.com/international/news/2024/04/03/71554-kansas-legislature-greenlights-iowa-tribes-compact-amendments-for-sports-betting
