On July 9, the Southern Ute tribe filed a federal lawsuit against the state of Colorado, alleging the government acted in bad faith by making tribes jump through administrative hoops to participate in sports betting.
Melvin Baker, the chairman of the Southern Ute tribe, spoke about the issue at his annual address to the state on Ute Day for the past two years.
When Colorado approves any sort of gaming, tribes have the same rights.
“[The tribe] is not subject to any tax or fee. Why? Because under federal law, we can only use the money for public welfare,” said Baker.
The tribes are not subject to state taxes. That means all of the tribes’ profits have to go toward their communities, not the state. That’s according to the Indian Regulatory Gaming Act. The tribe argues that a 10% tax levied on all sports betting ledgers shouldn’t apply to them.
Chairman Baker said that because the state waited until after legislation was passed to consult the tribe, their relationship had been damaged. He said this at a recent meeting of the state committee on Indian Affairs.
“The state had the opportunity to reach out to the tribal council on a government-to-government basis. While the legislation was being drafted and considered, it never did. The administration waited until the last minute to raise objections to tribal sports betting inhibiting our ability to compete. That is bad faith,” said Baker.
About 90 miles west of the Southern Ute reservation is the Ute Mountain Ute Casino in Towaoc, Colorado. According to Chairman Manuel Heart, the casino is critical to the tribe’s economic development plan.
“We are the largest employer in Montezuma County, and currently the casino’s our largest enterprise,” said Heart.
Heart told legislators in 2023 that all of the funds that they raise from gaming are critical in funding their tribal government and that the 10% tax that the state imposed on all sports betting doesn’t line up with the Ute Mountain Ute’s tribal sovereignty.
“Time is money. It is urgent that the state of Colorado understand and respect our position as tribal sovereigns, not as a regulated business entity within the state of Colorado,” said Heart.
The Ute Mountain Ute tribe has not joined the Southern Ute tribe in taking legal action against the state yet. Colorado’s Division of Gaming says it’s their policy not to comment on pending litigation.
However, a state representative told the Colorado Sun this summer that online tribal sports betting could appeal to statewide gamblers and reduce the amount of tax revenue they collect.
That revenue would go toward state water infrastructure projects. Taxes collected from sports betting in Colorado are expected to generate over 30 million dollars next fiscal year, according to reporting in the Colorado Sun.
Southern Ute tribal chairman Melvin Baker says that while the state has been making efforts to increase communication with the tribes, they have to continue advocating for themselves year after year.
“We did talk about that last year, but we just have not seen any movement… we always have to remind them we are the two federally recognized tribes in the state of Colorado. It shouldn't be that hard,” said
Governor Polis and the state of Colorado have until the end of July to respond to the lawsuit. A court date hasn’t been set yet.
