Lawsuit may produce Supreme Court opinion on tribal gaming

The Southern Ute Indian Tribe and Ute Mountain Ute Tribe appear likely to appeal the dismissal of their lawsuit against the state of Colorado over whether their gaming compacts allow them to offer online gaming to residents statewide. The dispute could give the United States Supreme Court a second opportunity to weigh in on the application of the Indian Gaming Regulatory Act of 1988 in regard to online casino games and other forms of gambling.

In Southern Ute Indian Tribe and Ute Mountain Ute Tribe vs. Polis, et al, the plaintiffs argued that Colorado's statutes barring them from offering online sports wagering everywhere in the state violated the terms of the gaming compacts between the tribes and Colorado in addition to the Indian Gaming Regulatory Act (IGRA) of 1988. Also at issue is a 2023 ruling by different federal courts.

In 2023, appeals courts in Florida found that online gaming happening under the purview of the Seminole Tribe of Florida's gaming compact with the state throughout Florida does not violate IGRA as long as the servers that process the wagers are located on Seminole lands. The IGRA requires that gaming taking place in accordance with such compacts must happen on sovereign lands the associated tribe(s) control.

This framework, which has been called "hub and spoke," did not pass muster before federal judge Gordon Gallagher. On Oct. 23, Gallagher granted Polis' motion to dismiss the Ute tribes' case.

In his order to dismiss, Gallagher wrote that "this court finds that the gaming occurs where the bettor is located — in this context, the location of the bettor is the only determining factor for whether gaming is on Indian land."

According to Tom Hesse of CPR News, the Ute tribes are weighing their options to appeal the dismissal. Should this litigation continue, it might give the US Supreme Court more reason to issue an opinion on the legality of "hub and spoke" that could have long-term ramifications for apps and promos like the DraftKings Online Casino promo code.

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The US Supreme Court declined to take up an appeal of the 2023 case that has established a favorable precedent for hub and spoke in Florida. If this lawsuit out of Colorado moves forward, it might create more need for a Supreme Court opinion on the subject.

One of the primary reasons the Supreme Court decides to hear a case is when doing so could resolve differences between opinions of appellate courts. The lawsuit the Utes have brought against Polis could form such a deviation.

A potential Supreme Court decision could form a strong precedent that would either enable or defeat tribes' use of the hub and spoke model for online gaming nationwide. For brands like Fanatics Casino, that could cause adjustments to potential expansion paths.

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Barring intervention from Congress, a Supreme Court opinion favorable to the hub and spoke model would give US online casinos an alternative to seeking expansion through state legislatures. More tribal gaming authorities and online casino operators could theoretically replicate relationships that currently exist in Connecticut.

For example, DraftKings Casino is available everywhere in Connecticut via a relationship with the Mashantucket Pequot Tribal Nation. In theory, any tribal gaming entity with a valid compact under IGRA would be able to offer online casino games anywhere in the states they have compacted with as long as the servers operating the casinos are located on tribal lands.

At this point, that path is purely hypothetical and in the distant future, even if it does come to fruition. Companies like DraftKings and Fanatics are surely watching to see how an appeal of the Ute tribes' lawsuit dismissal moves forward, though.

Derek Helling