The Southern Ute and Ute Mountain Ute Indian Tribes have renewed their push for equal participation in Colorado's online sports betting market. Their latest appeal follows a federal court setback, meanwhile they also face an environmental emergency after a major gasoline spill on tribal land.
Key Takeaways
- Colorado tribes are challenging restrictions that limit their participation in online sports betting.
- A federal judge ruled that wagers placed off tribal land fall under state control and taxation.
- The Southern Ute Tribe is addressing a large petroleum spill without state financial support.
In 2020, Colorado voters approved the legalization of online sports betting. Both tribes introduced digital sportsbooks soon after. The Colorado Division of Gaming (CODOG) later issued cease-and-desist orders to both, citing noncompliance with state licensing rules.
CODOG instructed the tribes to apply for licenses, which include a 10% tax on revenue. However, they refused, stating that it would undermine tribal sovereignty.
A federal judge dismissed the tribes' lawsuit in October, siding with Colorado's stance that mobile wagers placed off reservation are subject to state regulation. Tribal leaders said the decision prevents them from competing fairly and cuts off potential funding for community and environmental programs.
The ruling coincides with the Southern Ute Tribe's efforts to address a gasoline spill near the Animas River. The tribes have used their own resources for cleanup, claiming that state sports betting tax revenues intended for water protection have not been shared with affected communities.
Nebraska launches petition drive for mobile sports betting ballot measure
The situation in Colorado is part of a larger debate about who should control online gambling: tribes or states. This is an issue that other states are also facing. In Nebraska, supporters are trying to get voters to approve mobile sports betting through a ballot initiative in 2026.
It follows the failure of similar legislation this year. Lynn McNally, CEO of the Nebraska Horsemen's Benevolent and Protective Association, said that gaming partners and operators have chosen to pursue a ballot amendment instead.
WarHorse Gaming, which operates casinos in Omaha and Lincoln, is leading the effort. The measures will require approximately 120,000 and 90,000 signatures, respectively, to qualify.
McNally added that revenues from mobile sports betting would fund the state's property tax relief fund, mirroring how casino tax proceeds are currently allocated.
Federal court denies tribal injunction against Kalshi
As states and tribes continue to wrestle with online betting jurisdiction, the growing intersection between financial markets and gaming is also drawing legal scrutiny. In California, Kalshi has won a reprieve in a separate legal battle after a federal judge rejected an injunction sought by Native Indian tribes.
The Blue Lake Rancheria, Chicken Ranch Rancheria, and Picayune Rancheria tribes had accused Kalshi and Robinhood of offering illegal Class III gambling through sports-related prediction markets.
U.S. District Judge Jacqueline Scott Corley ruled that Kalshi's contracts are regulated under the Commodity Exchange Act, not the Indian Gaming Regulatory Act. Corley stated that Kalshi's registration with the Commodity Futures Trading Commission (CFTC) indicates that its contracts do not constitute unlawful internet gambling.
The judge emphasized that oversight of such contracts belongs to the CFTC and that any broader concerns about prediction markets should be addressed by Congress or federal regulators.
