The fallout from the Florida sports betting legal battle is finally having ripple effects in other markets.
Just a few weeks ago, the United States Supreme Court opted not to hear an appeal regarding the lawsuit over the 2021 Florida gaming compact. As a result, the court cemented the model that allowed the Seminole Tribe to monopolize the Florida online sports betting industry.
Industry experts believed this allowed tribes in other states to gain power over their industry.
A tribe in Colorado has indeed opened that door.
Last week, the Southern Ute Indian Tribe in Colorado became the first tribe to officially cite the Florida precedent in its efforts to offer online sports betting throughout the state.
Colorado tribe claims legal right to offer online sports betting
On July 9, the Southern Ute Tribe filed a federal lawsuit claiming Colorado was illegally blocking it from participating in the state’s online sports betting marketplace. The tribe argues its gaming compact with the state allows it to legally facilitate statewide online sports betting.
The tribe’s primary argument in the lawsuit is that its nearly 30-year-old gaming compact permits it “to conduct any gaming activity lawful within the state of Colorado and to exercise its own licensure and regulatory authority.” Residents in Colorado approved a ballot measure legalizing sports wagering in 2019; the state’s online sports betting market launched the following year.
The Florida precedent is referenced in the Southern Ute’s lawsuit as the means by which the Colorado tribe believes it may legally offer online sports betting beyond the grounds of the Southern Ute Indian Reservation.
Lawsuit cites Seminole Tribe’s ‘hub and spoke’ model
Gaming compacts allow for gaming activities on tribal lands. However, the outcome of the Seminole Tribe’s case extended gaming options to include statewide online sports betting. The case established the legality of the “hub and spoke” model. This framework allows users throughout the state to engage with the tribe’s online sportsbook as long as the operation’s servers are physically located on tribal lands.
The citation referencing the Florida decision is in a section of the Southern Ute’s lawsuit arguing that the tribe should be permitted to offer online sports betting across Colorado:
“There is nothing in the text or structure of (the Indian Gaming Regulatory Act) that would prohibit a tribal-state gaming compact from authorizing online sports betting that would enable customers to access sports betting facilities located on a tribe’s reservation from personal devices located elsewhere or to otherwise expand tribal sovereign and authority beyond what is mandated by IGRA.”
Colorado tribe doesn’t appear open to revenue sharing
The court will decide whether the Southern Ute tribe’s argument has merit in the fall. The US District Court in Colorado set an Oct. 10 preliminary scheduling conference.
There are some differences between the Colorado and Florida tribes’ compacts. The Seminole Tribe negotiated its gaming compact with Florida in 2021 to explicitly allow it to offer statewide sports betting. The negotiation included a revenue-sharing provision. Under the terms of the compact, the tribe gives 10% of revenue from its Hard Rock Bet sportsbook to the state of Florida.
The Southern Ute Tribe claims that Colorado has blocked it from participating in online sports wagering because the state would not receive any type of revenue sharing. The tribe claims that the federal IGRA requires all gaming profits to remain in the tribal community.
Those claims would make the likelihood of the Southern Ute Tribe renegotiating its gaming compact to include revenue sharing improbable. And for gaming compacts to be renegotiated at all requires the willingness of both parties to engage in discussions.
So, for now, the Colorado tribe’s most immediate hope for getting the green light for sports betting may come via the lawsuit.
