Colorado Tribes Will Likely Appeal Federal Ruling Prohibiting Online Sports Bets

Colorado Tribes Will Likely Appeal Federal Ruling Prohibiting Online Sports Bets

Two Native American tribes' attempts to run internet sportsbooks were denied by a federal judge in Colorado's US District Court.

Federal Judge Gordon Gallagher supported the state's argument that tribal gaming in Colorado must be restricted to sovereign land in a decision rendered on Thursday, October 23.  The Southern Ute Indian Tribe, later joined by the Ute Mountain Ute Tribe, filed a lawsuit against Colorado and Governor Jared Polis (D) in July 2024, claiming that the state had not engaged in sincere negotiations for online sports betting rights with Native communities that have Class III gaming compacts that permit them to run tribal casinos on Indian lands.

The state of Colorado ordered online tribal sportsbooks to shut down following the introduction of the commercial mobile betting sector in May 2020.  According to state lawyers, the tribal Class III compacts permit only state-approved gambling on tribal property.

The tribes filed a lawsuit, arguing that federal courts have established a precedent that permits online sports bets to be classified as tribal gaming as long as the computer server that facilitates the wager is located on sovereign territory.

The judge disagrees with the Florida ruling

In 2023, Florida federal courts agreed with the Seminole Tribe, the US Interior Department, and Governor Ron DeSantis (R) that internet sports betting is considered tribal gambling if the sportsbook's computer server is located on Seminole property.  Gallagher didn't agree.

"This court finds that the gaming occurs where the bettor is located — in this context, the location of the bettor is the only determining factor for whether gaming is on Indian land,” Gallagher wrote.

According to the judge, only tribal gaming on Native property is permitted by the Indian Gaming Regulatory Act (IGRA).

"If the bettor is on Indian land, the gaming activity is on Indian land and IGRA applies. If the bettor is off Indian land, e.g., in Denver, the bettor is not engaged in gaming on Indian land and IGRA does not apply,” Gallagher opined.

Regarding internet sports betting, the judge further stated that the state did engage in good faith negotiations with the gaming tribes.  He noted Colorado's decision to permit the tribes to participate in online sports gambling, provided that they consent to be governed by the Colorado Division of Gaming and share 10% of their gross revenue, just like commercial operators.

“The tribes are sovereign nations in their own right. However, their ability to offer gaming is confined by IGRA, as is any waiver of immunity by the State of Colorado,” Gallagher continued.

Appeal  Most likely

The district court's decision is probably going to be appealed by the tribes.

"The tribe respects Judge Gallagher and appreciates the time he has given to this issue. We believe a different result is mandated by federal law and will be evaluating how to move forward in the coming weeks,” a statement from the Southern Ute Indian Tribe read. “The tribe’s gaming compact with the state is unmistakably clear — the tribe can engage in all Class III games ‘that are explicitly authorized by the laws of the state.'”

Gallagher's decision pleased Polis' office.

“We deeply respect the government-to-government relationship the state has with the Ute Mountain Ute and Southern Ute Indian Tribes. We are glad that the court ruled in the state’s favor to ensure Colorado can continue to manage sports betting in a way that works best for Coloradans and our state and continue funding important water projects around the state,” the governor’s office said.