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Colorado COULD win this, as there are precedents on both sides. The challenge on allegedly neutral laws and regulations is whether the eventual outcome was triggered on purpose. That may decide this case.

The famous peyote case is an example.

Look at voter qualification rules. Go far enough back to poll taxes and literacy tests. They sound neutral, but they were put in to suppress the black vote.

We hear endlessly about voter ID - which can be read as absolutely neutral - and people saying that somehow minorities will be discouraged from voting.

The SCOTUS unanimously rejected a rule in Wisconsin in 2025 that sounded neutral to many, but was so poorly written that it obviously singled out Catholics (whether on purpose or through stupidity didn't matter).

The SCOTUS can reject rules that are irrelevant to the purpose of the funds. That's why a state funding playground safety improvements could not reject funding those improvements on private school grounds.

Justice Barrett directly asked Colorado's attorney about the construction of the regulation, and didn't they know that it would affect Catholic schools or didn't they care?

From SCOTUSBlog:

Justice Neil Gorsuch, for example, asked “what would be left” of cases like Sherbert “if everything turned on express discrimination” against religion, while Justice Samuel Alito appeared dubious that the legislators who enacted the Colorado universal preschool law “would not understand what the effect of” the law’s requirements “would be.”

Similarly, Justice Amy Coney Barrett asked Norton why, if Colorado cannot expressly exclude religious schools from its program, it can “impose a condition” – the nondiscrimination requirement – that it knows “schools will be unable to agree to?” Barrett pointed to a New York Times op-ed written in the wake of Carson by law professor Aaron Tang, who she stated suggested that states counteract some of the effects of Carson by enacting nondiscrimination requirements.

Norton resisted any effort to link Colorado’s nondiscrimination requirement to an intent to target religious schools, stressing that there was no evidence of the legislature’s motives and (in response to a question from Jackson) that the requirement predated the inclusion of religious schools in the program.

Legally, this is not an easy case, IMO. Another source mentioned a NYT piece from a few years ago suggesting that liberal states should enact rules like these to get around the Supreme Court.

If the Court concludes that Colorado deliberately discriminated, Colorado will lose. If the Court concludes that the rule is sufficiently neutral and does not treat religious schools worse than other schools, Colorado will win. Colorado already has at least three votes.

It helps Colorado that the list of non-discrimination rules is long. A religious school cannot reject students of another religion. If Colorado rejected some types of discrimination but not others, the state's case would be weaker: why did you choose to ignore THAT discrimination but not THIS discrimination?

Ultimately, I don't think this case is that important in the fight over religion compared to others in the 2000s.