Budget & Tax

Ray Carter | November 15, 2019

Governor, tribal officials discuss casino compact dispute

Ray Carter

Gov. Kevin Stitt said state-tribal negotiations over casino compacts have reached an impasse, but said he remains committed to an improved agreement that will require state casino operators to pay market rates for monopoly gaming rights.

“What does the casino industry pay in other states?” Stitt said. “What is market? That’s the fairest way to determine what the exclusive fee should be here in Oklahoma.”

Under federal law, the state can give tribal governments the monopoly right to run casinos and, in exchange, tribal entities must pay an exclusivity fee to the states.

Stitt noted the rate paid to the state by tribal casinos in Connecticut is 25 percent. The rate in New York runs between 18 percent and 25 percent, and the rate paid in Florida is 12 percent to 25 percent.

The fees paid by Oklahoma tribal casinos run just 4 percent to 6 percent on slot machines.

That’s a major difference that impacts state funding for a host of needs, the governor said.

“This affects education,” Stitt said. “This affects mental health. This affects roads and bridges.”

Not only are tribes in other states paying more, but Oklahoma tribes are willingly paying higher fees elsewhere.

Stitt, who is a member of the Cherokee Nation, noted the Cherokees are currently building a casino in Arkansas where they will pay rates between 13 percent and 20 percent. That Arkansas casino is located within about 30 minutes driving distance from an existing Oklahoma casino operated by the tribe, he said.

“I don’t think there’s any difference when we pull a slot machine in Oklahoma or you pull a slot machine in Connecticut that we should be that different in our exclusivity fees,” Stitt said.

A major sticking point in negotiations has been the contention of Oklahoma tribes that their gaming compacts auto-renew forever. However, Stitt noted the compacts include language that says “this compact shall have a term which shall expire on January 1, 2020.”

“These compacts expire,” Stitt said.

The governor noted some tribal governments, in three separate letters sent to former Gov. Mary Fallin, previously wrote of the need to renegotiate gaming compacts due to the pending expiration date.

“It just defies logic that a contract can go on in perpetuity, forever,” Stitt said. “That’s not a contract.”

In a separate news conference, tribal officials disagreed.

“The state offered a compact to the tribes 15 years ago,” said Stephen Greetham, senior counsel of the Chickasaw Nation. “The tribes accepted that compact. They have abided every word of that compact. And now in the 11th hour the state of Oklahoma is trying to create uncertainty.”

Matthew Morgan, chairman of the Oklahoma Indian Gaming Association, said Stitt was creating a “false narrative” and “mischaracterized the entire discussion that we’ve had.”

“We can’t pay more unless he offers more,” Morgan said. “And if he fails to offer more, we can’t provide them any more money. That’s just a tenet of federal law.”

However, during his press conference, Stitt said negotiations could include allowing Oklahoma casinos to offer sports betting.

Greetham said a provision of the gaming compacts causes them to auto-renew whenever casino gaming licenses are renewed at state horse racing tracks, which were not tribal-owned when the compacts were first signed 15 years ago. When the Oklahoma Horse Racing Commission relicensed slot machines at Fair Meadows, Remington Park, and Will Rogers Downs on Oct. 17, that caused the tribal gaming compacts to auto-renew, he said.

Two of those three entities are owned today by tribal governments. Only Fair Meadows is not tribally owned.

If no agreement is reached by the Jan. 1, 2020 expiration date in the compacts, Stitt hinted the state has legal options that could increase the pressure on casino operators, although he added, “that’s not my wish.”

“There’s things that the state can do,” Stitt said. “There’s things that the federal government can do if you are operating Class III gaming without a contract.”

Oklahoma’s tribal casino operators appeared to shrug off those potential consequences, saying Jan. 1 would be business-as-usual for state casinos.

Greetham said a court order would be required to shut the casinos down.

“Barring that, we’re just going to continue to operate and we’re going to continue remitting our revenue share payments to the state and we’re going to continue to grow as we’ve been doing for the past 15 years,” Greetham said.

“We’re confident in our legal reading of the compact and that we will continue to move like we have over the past 15 years in the same direction,” Morgan said. “We’ll be open for business. We’ll be offering Class III games. And we will continue to pay our exclusivity rate to the state.”

While Stitt highlighted the higher rates tribes pay in some states, Oklahoma tribal officials argued most compacts nationwide have lower rates, including many where tribes pay no fee.

Stitt countered that most of the no-fee casinos are not comparable to those in Oklahoma. Motioning to a picture of the Hard Rock Casino near Tulsa, which has a 454-room hotel and 2,600 slot machines, Stitt said, “There is no state in the country that has a casino like this that pays zero.”

Greetham later countered that a casino in downtown Minneapolis has a “zero revenue share rate, perpetual compact, never expires.” But the governor’s office later issued a statement saying, “The Tribes in Minnesota do not enjoy the same exclusivity benefits that casino operators in Oklahoma enjoy.”

The amount of money at stake in the debate is substantial.

Greetham said the only state where more money is spent on gambling than Oklahoma is California. And, when calculated on a per-person basis, Oklahoma leapfrogs California, he said.

“Per capita, in California, they’re getting about 90 bucks per citizen of the state,” Greetham said. “Here in Oklahoma, it’s closer to $407 per citizen. No other state pulls in numbers like that.”

Stitt vowed to continue to push for a better deal for all Oklahomans.

“I was elected to represent all 4 million Oklahomans, and to advocate for you and what’s right for the next generation,” Stitt said. “So I’m not elected or here to play favorites with any industry.”

Ray Carter Director, Center for Independent Journalism

Ray Carter

Director, Center for Independent Journalism

Ray Carter is the director of OCPA’s Center for Independent Journalism. He has two decades of experience in journalism and communications. He previously served as senior Capitol reporter for The Journal Record, media director for the Oklahoma House of Representatives, and chief editorial writer at The Oklahoman. As a reporter for The Journal Record, Carter received 12 Carl Rogan Awards in four years—including awards for investigative reporting, general news reporting, feature writing, spot news reporting, business reporting, and sports reporting. While at The Oklahoman, he was the recipient of several awards, including first place in the editorial writing category of the Associated Press/Oklahoma News Executives Carl Rogan Memorial News Excellence Competition for an editorial on the history of racism in the Oklahoma legislature.

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