Legal Scrutiny Follows Record Year for Colorado Sports Betting

Colorado sports betting reached record highs in 2025, with wagering activity and tax revenue both setting new benchmarks across the state.

However, alongside that growth, came increased legal and regulatory scrutiny. Several enforcement actions and court rulings highlighted compliance issues across the Colorado sports betting market as betting activity continued to rise.

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Enforcement Actions and Court Rulings

In November 2025, BetMGM Colorado was fined by state regulators for accepting prohibited college sports proposition bets. The violations were tied to wagers placed during the 2023 NIT and the 2024 NCAA women’s basketball tournament, events that fall under Colorado’s restrictions on certain player-specific college betting markets.

Legal challenges also reached the federal level. In late 2025, a judge dismissed a lawsuit filed by the Southern Ute and Ute Mountain Ute Tribes, who argued that Colorado’s regulations improperly limited their ability to offer online sports betting outside reservation land. The court ruled that wagers placed off tribal land remain subject to state regulation and Colorado’s 10% sports betting tax.

In January 2026, DraftKings Sportsbook became part of a multi-state class action lawsuit that includes claims tied to Colorado. The case centers on allegations that the operator failed to properly enforce mandatory cooling-off periods when users attempted to increase wagering and deposit limits. The lawsuit remains ongoing.