Colorado Seeks Dismissal of Tribal Lawsuit Over Sports Betting Regulation

Colorado is asking a federal court to toss a lawsuit filed by the Southern Ute and Ute Mountain Ute Tribes. 

Tribes Sue Colorado Over Sports Betting Rules, State Asserts Legal Immunity

The tribes are challenging how the state oversees their sports betting businesses. The state’s lawyers say the Eleventh Amendment protects the officials named in the lawsuit from these kinds of legal actions, reported the Colorado Public Radio. This includes Governor Jared Polis and Christopher Schroder, who heads the Colorado Division of Gaming. The lawyers argue this protection known as sovereign immunity means the court should dismiss the case.

The Southern Ute Indian Tribe started a legal battle against Colorado this year claiming the state wrongly controlled their sports betting operations. The Ute Mountain Ute Tribe later added their name to the case. These tribes believe that when people outside tribal areas place bets through their sportsbooks, it should count as if the bets happened on the reservation. This would mean these transactions would not have to pay Colorado’s state gaming taxes. The tribes see this as a question of their independence thinking their tribal jurisdiction should cover these online bets too.

However, Colorado disagrees with what the tribes say. The state’s lawyers filed a 17-page document on October 15. They argue that the lawsuit has no basis and that the court cannot even hear the case. Colorado’s legal defense relies on a 1996 US Supreme Court decision about the Seminole Tribe of Florida. This ruling found that the Eleventh Amendment protects states from tribal government lawsuits in federal courts. Also, the state says that the Indian Gaming Regulatory Act (IGRA), which controls tribal gaming, does not support what the tribes are claiming.

Colorado Calls Lawsuit Claims Hypothetical and Filed Outside Legal Timeframe

In its motion to dismiss, Colorado stressed its own right as a state to control sports betting within its borders. The state argued that this right carries equal weight to the tribes’ claimed control over gambling on their lands. Colorado points out that the tribes’ arguments are hypothetical because the Southern Ute Indian Tribe chose to shut down its online sports betting platform, Sky Ute SportsBook, in July 2023. The state also claims it tried to work with the tribes to solve potential rule conflicts and never limited their sports betting operations.

What’s more, Colorado claims that the lawsuit is too late and falls outside the time limits set by law. While the IGRA does not give a specific deadline for these kinds of claims, the state says that under Colorado law, the tribes missed both the two-year and three-year windows that might apply. As sports betting has become more popular, Colorado saw over $370 million in bets for August alone showing how much is at stake in this legal fight over controlling tribal gaming activities.