Two Native American tribes in southern Colorado are speaking out against a recent federal court decision that bars them from offering online sports betting. The Southern Ute and Ute Mountain Ute Tribes said the ruling reflects a “troubling legacy” of broken promises between governments and Indigenous nations, renewing old tensions over sovereignty and fairness in state relations.
The dispute began after Colorado voters narrowly legalized sports gambling in 2019. Since then, the state has seen wagering and tax revenue soar—bettors spent more than $99 million online in September alone. But while commercial casinos in Central City, Black Hawk, and Cripple Creek benefit, tribal casinos remain excluded from this growth.
Court Sides With State in Online Gambling Dispute
Six months after legalization, both tribes launched online betting platforms—Sky Ute SportsBook in Ignacio and another at the Ute Mountain Casino in Towaoc. Soon after, the Colorado Division of Gaming (CODOG) sent letters to their vendors warning that they were “participating in sports betting in Colorado on behalf of the Southern Ute Indian Tribe without complying with Colorado gaming law.”
CODOG advised the tribes to apply for the same state license that commercial casinos use, which includes a 10% tax on net gaming revenue. The tribes declined, arguing their existing gaming compacts already allowed them to operate such platforms. They shut down their sportsbooks and sued the state instead.
Judge Gordon Gallagher dismissed the case last month, writing that “Colorado’s actions made their sports betting operations challenging and more expensive, effectively freezing them out of the sports betting market.” He ultimately ruled that any bet placed off tribal land falls under state authority.
“Colorado explicitly authorized sports betting, a Class III game, throughout the state,” the tribes said in a joint statement. “But the State immediately stymied the ability of the Tribes to engage in that activity despite clear authorization under the Gaming Compacts, and instead, elected to benefit out-of-state gaming interests over its relationship with the Tribes.”
Broader Tensions and Environmental Concerns
The tribes’ frustration has been compounded by the state’s response to a separate issue—a nearly year-old gasoline spill near the Southern Ute Reservation that has contaminated groundwater and forced residents to leave their homes. “We are confident that had this spill been in Denver instead of a remote, rural part of the state, the response would have been more robust,” the tribes said, criticizing what they view as neglect.
A spokesperson for the governor’s office replied, “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… and continue funding important water projects around the state.”
National Context
The dispute reflects a broader challenge across Indian Country. Tribal gaming operates in 29 states, encompassing 532 facilities run by 243 tribes that collectively generated nearly $44 billion in fiscal year 2024. But several states, including California and Oklahoma, still lack legal sports betting.
Neighboring Arizona allows tribes to offer online wagering only under state regulation and a 10% tax rate, while New Mexico’s tribes remain self-regulated and untaxed. For Colorado’s tribes, the latest ruling underscores how technological change and legal ambiguity continue to complicate the balance between state oversight and tribal sovereignty.
Source:
“2 Colorado tribes fire back at state, governor after court ruling walls off online sports betting”, cbsnews.com, November 9, 2025
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