Lawsuit alleges Southern Ute Indian Tribe frozen out of sports betting

The Southern Ute Indian Tribe is suing Gov. Jared Polis and the director of the Colorado Division of Gaming, claiming the administration froze the tribe out of the state’s sports betting market as officials tried to control and tax the Sky Ute Sportsbook platform.

The federal lawsuit filed in U.S. District Court on Tuesday against Polis and Director Christopher Schroder details a yearslong conflict between Southern Ute Indian and Colorado officials about whether sports betting falls under existing tribal agreements for gaming.

Colorado voters narrowly approved sports betting in November 2019 and it became legal to wager on professional sports at casinos and through verified apps in May 2020.

In the complaint, attorneys from Denver law firm Greenberg Traurig claim a 1993 agreement authorizes the tribe to conduct gaming as long as it’s in line with gaming activities identical to those allowed elsewhere in Colorado – including sports betting.

But since shortly before sports betting became legal in Colorado in May 2020, state officials have acted in bad faith toward the Southern Ute Indian Tribe, seeking to exert authority and collect taxes on the tribe’s sports betting platform, the lawsuit claims.

State leaders did not try to meet with Southern Ute Indian officials until just before sports betting became legal and subsequently tried to pressure the tribe’s vendor, threatening the company’s license if it provided “off-reservation services” to the tribe.

State officials sent similar letters to the vendor working on the Ute Mountain Ute Tribe’s sports betting platform, the lawsuit claims.

“This attempt to bring tribal gaming under state regulation is illegal, offensive and pointless,” attorneys for the Southern Ute Indian Tribe wrote in the complaint. “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.”

The lawsuit claims that Polis administration officials were motivated by money – namely the 10% tax the state collects from other sports betting activities but which Southern Ute Indian officials say it cannot collect from the tribe under federal law.