Judge Dismisses Colorado Tribes’ Online Sports Betting Case

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Judge Dismisses Colorado Tribes’ Online Sports Betting Case

U.S. District Judge Gordon Gallagher has dismissed a lawsuit filed by the Southern Ute and Ute Mountain Ute Tribes over their right to operate online sportsbooks across Colorado under the approved 2019 Proposition DD.

The decision ends a 15-month legal battle that centered on the tribes’ authority to offer statewide online wagering without state taxation.

The tribes accused the state of demanding the same 10 percent tax imposed on commercial sportsbooks for wagers placed outside tribal lands. They argued that this violated federal protections and their tax-exempt status under the Indian Gaming Regulatory Act (IGRA).

Judge Gallagher’s ruling clarified the court’s stance, stating, 

“This Court finds that the gaming occurs where the bettor is located… If the bettor is on Indian land, IGRA applies. If the bettor is off Indian land, IGRA does not apply.”

This interpretation effectively limits the tribes’ online sports betting reach to reservations. It also reinforces Colorado’s existing sports betting structure, which taxes and regulates wagers made anywhere else in the state.

Why Judge Gallagher Ruled Against the Colorado Tribes

Judge Gallagher concluded that “gaming occurs where the bettor is located,” not where the tribal servers process the bet. His ruling reflected a broader understanding of how digital wagering operates beyond traditional land-based gaming.

The court noted that IGRA was written “in a simpler technological time when both the gambler and the game were likely in the same place at the same time.” This observation highlighted how current federal law has not evolved to address modern, mobile-based gambling systems.

Governor Jared Polis’ office welcomed the ruling, stating, “We deeply respect the government-to-government relationship. 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.”

For the tribes, the dismissal significantly restricts their ability to launch or expand statewide mobile sportsbooks without state oversight or taxation.

What the Decision Means for Colorado’s Betting Landscape

Judge Gallagher’s decision further cements Colorado’s control over online sportsbooks and reinforces the state’s regulatory authority. While the tribes can still operate gaming activities within tribal lands, statewide online wagering remains under state jurisdiction.

The outcome underscores the legal divide between traditional tribal gaming and modern digital betting markets. 

As online sportsbooks continue to grow in popularity, similar disputes may emerge in other states navigating the intersection of federal tribal law and online gambling regulation.

Looking to explore your own options? Check out our list of top-rated online sportsbooks available in your state.