Oklahoma governor stands alone in tribal gaming compact negotiations

Wednesday, December 18, 2019  

Oklahoma Gov. Kevin Stitt (R), a citizen of the Cherokee Nation, is growing increasingly isolated as he continues to demand a larger share of gaming revenues from tribes.

State lawmakers from both parties had already voiced doubts about Stitt's Class III gaming compact negotiation tactics. Then on Tuesday, the state's lead legal official -- Attorney General Mike Hunter, a fellow Republican -- announced that he will no longer take part in the disputed talks, leaving the governor standing alone in his controversial quest.

The development led Stitt to cede a tiny bit of ground to the tribal nations who already contribute millions of dollars to the state. During a news conference on Tuesday, he said he wanted to sign an "extension" of the compacts while discussions continue.

At the same time, he refused to concede on the major sticking point in the dust-up. He continues to insist that the agreements expire on January 1, 2020, thus threatening tribes unless they agree to his point of view.

"If we do not take action, all Class III (Las Vegas-style) gaming activity will be illegal on January 1, 2020," Stitt said at the news conference, The Oklahoman reported. "This creates tremendous uncertainty of Oklahoma tribes, for those conducting business with the casinos, for casino patrons. I cannot put Oklahomans in this position."

“Tribal leadership has been clear from the beginning — if he acknowledges auto-renewal, we’ll sit down and negotiate with him. But clearly he does not want to do that," Morgan said. Thank you, @AP @apseanmurphy @sfchronicle .https://t.co/0RFjqnALX1

— OK Indian Gaming (@okindiangaming) December 18, 2019

Immediately following Stitt's appearance, the Oklahoma Indian Gaming Association held its own press conference in front of the iconic Allan Houser sculpture at the State Capitol in Oklahoma City. Tribes do not accept the January 1 deadline because they believe the compacts automatically renew if a new agreement can't be reached.

“We don’t need an extension to operate after January 1,” said OIGA Chairman Matthew Morgan, a citizen of the Chickasaw Nation, the tribe with the largest gaming enterprise in the state, The Tulsa World reported.

Tribal leaders also said the idea of a temporary extension to their Class III gaming compacts was new to them. They remain open to discussions with Stitt, who took office in January, but remain adamant that he accept their interpretation on the automatic renewal.

“Tribal leaders remain open to negotiations about exclusivity fee rates,” Choctaw Nation Chief Gary Batton said in a press release distributed by United for Oklahoma, a group formed by tribes to show their united front on the matter. “We have not received a formal proposal from the State. We have always been open to a fair and reasonable discussion on rates and still are today as long as Governor Stitt is willing to honor the plain language of our existing agreement, which includes automatic renewal.”

Since 2004, when voters approved Class III gaming, tribes have paid $1.28 billion to the state, according to the Oklahoma Gaming Compliance Unit's most recent report. The money is derived from a percentage of electronic gaming revenue, as well as table game revenue.

"For the first $10 million in revenue, tribes pay 4 percent to the state; for the next $10 million, the payment is 5 percent; and for revenues more than $20 million, the payment is 6 percent. Tribes pay 10 percent of the monthly net win from table games," the report reads.

The state defines such payments to be "exclusivity fees" and the tribes share revenues based on the promise that they are the exclusive operators of Class III games like slot machines, as well as table games like blackjack and poker. Bringing in non-Indian operators would violate the pledge, a situation that has led to court battles elsewhere.

Such provisions are common in Class III gaming compacts even though revenue sharing is not explicitly authorized by IGRA, which became law in 1988. In reviewing agreements, the BIA looks to see whether a state has promised tribes something "meaningful" in return, such as exclusivity.

Revenue sharing rates range from a low of 0 percent to a high of 25 percent, according to a Government Accountability Office report from 2015. Although Stitt has pointed to rates on the higher end of the scale, the majority of the compacts examined by the GAO at the time fell in the same range as Oklahoma's current agreement -- somewhere between 10 percent and 14.9 percent -- and below.

Attorney General steps aside from Indian gaming negotiations (The Oklahoman December 18, 2019)
Gov. Kevin Stitt calls on tribes to sign extension to continue gaming negotiations (The Tulsa World December 18, 2019)
Stitt: State won’t reach new gaming agreement before Jan. 1 (CNHI News Oklahoma December 18, 20190
Stitt takes lead on gambling talks, offers tribes extension (The Associated Press December 18, 2019)
Tribes balk at offer to extend gaming compact (The Journal Record December 17, 2019)
Governor asks tribes to sign gaming compact extension (The Oklahoman December 17, 2019)
Attorney General Mike Hunter withdraws from tribal gaming compact negotiations (The Tulsa World December 17, 2019)

Oklahoma governor threatens tribes with non-Indian gaming (December 11, 2019)
Deadline approaches in tribal gaming compact dispute in Oklahoma (December 4, 2019)
Tribes and state of Oklahoma remain far apart when it comes to gaming (October 29, 2019)
Oklahoma turns to private law firm for help with tribal gaming compacts (September 16, 2019)
Editorial: Oklahoma governor right to demand more revenues from tribes (September 3, 2019)
Bill John Baker: Tribal governments ensure Oklahoma’s success (July 25, 2019)
Cheyenne and Arapaho Tribal Tribune: Battle brews over gaming compacts (July 15, 2019)
Kimberly Teehee: The strength of Oklahoma lies in its people (July 11, 2019)