(Colorado Newsline) The Southern Ute Indian Tribe in Colorado is suing Governor Jared Polis and the state’s gaming division over the administration’s resistance to allowing the Tribe to operate its own online sports betting platform after the state legalized the gaming practice.

The lawsuit, filed in U.S. District Court of Colorado on Tuesday, alleges that the administration’s actions essentially blocked the Tribe from the sports betting market due to disagreements over how existing tribal gaming agreements would interact with the recently-legalized type of gambling.

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“Governor Polis has improperly sought to exclude the Tribe from the Colorado sport betting market because the State is powerless to tax the Tribe or require the Tribe to pay any revenues whatsoever to the State,” the lawsuit reads. “Governor Polis has sought to manipulate the market so he can extract the maximum amount of taxes from sport betting activities with no care, concern or respect for the negative economic consequences for Colorado’s Tribal communities.”

A 1995 compact allows tribal nations to conduct gaming that is legal in Colorado as long as the activity and bet amounts are similar to other ones in the state. That compact is what allowed the Tribe to open the Sky Ute Casino Resort in southwestern Colorado, which is managed by the Southern Ute Division of Gaming, not the state.

Colorado voters approved sports betting through Proposition DD in 2019. As a result, the Tribe moved to set up its own sportsbook where people from anywhere in the state could make on-reservation bets.

The lawsuit alleges that officials did not raise concerns about the plan until just before the May 2020 statewide legalization. They wanted the Tribe to apply for a state license, which would subject it to taxation. The state also pressured the Tribe’s sportsbook vendor with a “threatening” letter alleging the Tribe wasn’t complying with state law because people could place bets off-reservation, it says.

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“This attempt to bring tribal gaming under state regulation is illegal, offensive and pointless,” the lawsuit reads. “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.”

Polis’ office said it would not comment on pending litigation.

The crux of the issue, the lawsuit alleges, is that the Tribe is not required to pay a 10 percent tax like other sports betting entities because of the 1995 compact. Because the state wouldn’t get that revenue from new tribal sports betting operations, the Polis administration sought to delay their entry into the sports betting market until it was saturated with other companies that are subject to the tax.

The Sky Ute Sportsbook closed in 2023.

“Through actions taken by the state, we have been prohibited from successfully engaging in this new economic opportunity. This is unfair,” Tribe Chairman Melvin J. Baker told the Colorado American Indian Affairs Interim Study Committee on Monday. He asked the committee to consider legislation that would affirm the Tribe’s right to engage in sports betting.

The lawsuit asks the court to consider the legality of the Tribe’s sportsbook and an injunction requiring the state to stop interfering with tribal sports betting.

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