Government , Business

Gov. Stitt taking hard line with tribes over gaming compacts

Photo caption: The Osage Nation's Casino & Hotel in Tulsa. SHANNON SHAW DUTY/Osage News

In what normally takes years to negotiate, Oklahoma Gov. Kevin Stitt is giving Oklahoma tribes less than five months to renegotiate their gaming compacts that have been in existence for nearly 15 years.

“… since there has been no governmental action of the State, or court order authorizing electronic gaming in the State since the effective date of the Compact, I have been advised that the Compact will not automatically renew,” Stitt wrote in a July 5 letter to Principal Chief Geoffrey Standing Bear.

“Obviously, because of January 1, 2020, termination date, it is imperative that we reach an agreement and obtain the approval of the Department of the Interior prior to the end of 2019, so that the Osage Nation may continue to lawfully conduct certain class III games in Oklahoma after that date,” Stitt wrote.

In a July 8 editorial published in the Tulsa World, Stitt wrote that Oklahoma’s gaming market was the third largest in the country and that tribes make an estimated $4.5 billion in annual revenue. He also wrote that Oklahoma’s current gaming compacts with tribes had the lowest revenue-sharing percentage in the country. He wants to increase the tribal revenue share from 4 to 6 percent to 15 to 20 percent.

Standing Bear said what Stitt is proposing would devastate the Osage Nation.

“What the Governor is requesting will devastate our school, cultural programs, health programs, and harm all the progress we have made these past few years. I have reached out to some of the other tribal leadership this morning and there is great disappointment across Oklahoma Indian Country,” he said. “I have alerted all of our very capable attorneys, including our Washington D.C. attorney, our Oklahoma gaming lawyers and our Attorney General. 

“I also sent notice to the Speaker and the Osage Nation Congress this morning … the Osage Nation must commit all resources to protect our gaming operations,” he said.

In 2016, Standing Bear reached out to then-Gov. Mary Fallin to begin compact negotiations and the result of those negotiations were amendments to allow for ball and dice games, such as roulette. His proposal at the time was that the tribes and state maintain the same percentages and formulas going forward for the new compacts. Stitt stated in his letter that the automatic renewal of the compacts was not an option.

According to the American Gaming Association, tribal exclusivity fees paid to the state between 2006 and 2016 topped $1 billion. According to the Tulsa World, gaming generates nearly $9.8 billion a year for Oklahoma’s economy, tribal and commercial entities operate 141 casinos across the state, gaming supports about 75,000 jobs and provides $4.3 billion in supported wages.

Gaming Compacts

The Indian Gaming Regulatory Act of 1988 and Oklahoma statute define the gaming compact process for Oklahoma tribes. The Osage Nation’s current gaming compact was finalized in 2005 and is nearly identical to that of the Cherokee Nation and the Muscogee (Creek) Nation. The Osage, Cherokee and Creek compete in the Tulsa gaming market. According to the Nation’s current gaming compact, the Nation pays approximately $504,000 per year to Fair Meadows race track in Tulsa; $1.5 million per year to the Oklahoma Horse Racing Association and $5.5 million to the state for a total of $7.5 million per year.

According to the IGRA and Oklahoma statute, once a tribe and state come to an agreement on a gaming compact it must be sent to the Secretary of the Department of Interior for approval. The compact must also be approved by the governing body of the tribe, which would be the Osage Nation Congress. Then, the Oklahoma state legislature and state senate must approve it before its finalized and made into law. 

There are three classes of tribal gaming and two of those classes don’t require a compact with the state to operate. Class I (traditional/cultural games) and Class II (bingo) is regulated by the tribe and does not need a state gaming compact. Only Class III gaming, which includes Vegas-style games such as slot machines, roulette and table games, require a compact negotiated with the state.

Standing Bear, a seasoned attorney in federal Indian law, said the first compacts in Oklahoma were suggested in 1989 and weren’t concluded until 1994. A second effort began in 1997 and those negotiations weren’t concluded until 2006. He said there are so many different mechanisms to the compacts and that’s why they can take years to negotiate.

 

This article was updated on Aug. 10, 2019, to reflect the ball and dice amendments made to Oklahoma gaming compacts.