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Chairmen of Colorado’s two Native American tribes ask legislature to remedy sports betting inequity

The Ute Mountain Ute and Southern Ute tribal chairmen say they were left out of the conversation in 2019
Southern Ute Chairman Melvin Baker, right, and Ute Mountain Ute Chairman Manuel Heart are welcomed into the Colorado House chambers on Wednesday, Jan. 11, 2022, to address a joint session of the legislature. (Elliott Wenzler/The Colorado Sun)

The chairmen of Colorado’s two Native American tribes asked the legislature Wednesday in speeches at the Capitol to change the state’s sports betting laws so that they can cash in on the multibillion dollar industry.

The chairmen said in-person sports betting is allowed at the tribes’ respective casinos – the Ute Mountain Casino Hotel in Towaoc and the Southern Ute Sky Ute Casino Resort in Ignacio – but that the tribes haven’t been able to offer online sports betting like other casinos in the state.

Ute Mountain Ute Chairman Manuel Heart and Southern Ute Chairman Melvin Baker said neither tribe was consulted when the legislature in 2019 referred a measure to the ballot that year, Proposition DD, asking voters to approve sports betting.

“They never even talked to us,” Baker told The Colorado Sun.

Heart said there are conflicts between state and federal law. Under federal law, the tribes are required to use gambling proceeds for tribal services. Under Proposition DD, sports betting tax revenue is collected by the state and the majority of it is earmarked for water projects. Tribes do not pay state taxes on their gaming revenue.

“Time is money,” Heart said. “And since this has been passed in 2019, we’ve lost that much money with sports betting.”

Heart added that he wants the state to make an exception that would allow the tribes to earmark sports betting tax revenue for tribal water projects. “We have our own water issues,” he said.

Heart and Baker gave speeches to the legislature Wednesday under a 2022 bill that offered the tribes the opportunity for the first time to address state lawmakers on an annual basis. They asked the Colorado General Assembly to keep tribal issues in mind when working on policy.

“We can’t always agree on every issue but sometimes it’s better to disagree and work together,” Baker said. “It is the cooperation and willingness to work together that makes us all stronger.”

Since sports betting began in Colorado on May 1, 2020, more than $8 billion has been wagered within the state, generating tens of millions of dollars in tax revenue.

The Governor’s Office of State Planning and Budgeting and the nonpartisan Legislative Council Staff project that sports betting tax revenues will be as high as $24 million in the 2022-23 fiscal year, which began July 1. Of that money, $22.5 million would go toward the Colorado Water Plan, the project aimed at ensuring Colorado has enough water for its growing population amid climate change-induced drought.

The state collected about $12.4 million in sports betting taxes in the 2021-22 fiscal year, which ended June 30, about $11.4 million of which will go toward the water plan.

Bryce Cook, chief economist for OSBP, said the reason for the big forecast increase is that the legislature passed a bill this year limiting the number of free bets that sports betting operators can offer starting Jan. 1. Colorado imposes a 10% tax on casinos’ net sports betting proceeds. A free bet doesn’t generate any proceeds.

“We are asking you to resolve it this session through legislation, rectifying the inequity,” Baker said.

A fix may be possible. Several state lawmakers told The Sun on Wednesday that they are interested in finding a solution, but acknowledged that a remedy may be complicated. The sports betting issue lies at the intersection of state, federal and tribal law.

It’s also possible a statewide ballot measure may be needed to remedy the situation under the Taxpayer’s Bill of Rights, which requires voter approval of many tax changes.

State agencies have also been exploring a rulemaking fix that wouldn’t require legislative or voter approval.

“At this time, we do not have a comment and usually don’t comment on pending legislation or legislative proposals outside official testimony on the bill and/or fiscal notes,” said Meghan Tanis, a spokeswoman for the Colorado Division of Gaming.

Heart told The Sun that the tribes want the sports betting discrepancy fixed to shore up their future revenues.

“Fossil fuels are going out,” Heart said, explaining that’s where the Ute Mountain Ute gets much of its funding. “So where do we get revenues from? Right now for the Ute Mountain Ute Tribe, casino is one of our main sources of revenue coming in.”

Heart added: “We appreciate the efforts of the state. They have tried to find a solution but we have not been able to agree on a way to move forward that protects our sovereignty. We should not be regulated as a business entity in the state of Colorado.”

Former state Sen. Kerry Donovan, a Vail Democrat, worked on the legislation that placed Proposition DD on the ballot. She also sponsored the 2022 bill asking the tribal leaders to address the legislature. She said she had never heard the tribes’ sports betting concerns before.

“This is a perfect example of why (the addresses) are important,” she said.

Tribal leaders asked lawmakers in their addresses to consider several other issues, including the reintroduction of wolves in Western Colorado, which was approved by voters in 2020 and will begin in 2024.

“These wolves are considered sacred to native tribes and to our ecosystem, and at the same time, they are a threat to livestock holders, properties and cattle,” Heart said, asking that the state respect the Ute Mountain Ute tribe’s sovereignty should it start its own wolf management plan.

Heart also said he wanted to see tribal history taught in Colorado schools.

The 2023 legislative session in Colorado began Monday and runs through early May.

The Colorado Sun is a reader-supported, nonpartisan news organization dedicated to covering Colorado issues. To learn more, go to coloradosun.com.