Oklahoma Governor Stitt Says Tribal Operations Illegal After Jan 1, Chickasaw Threatens Legal Action

Posted on: December 6, 2019, 06:12h. 

Last updated on: December 9, 2019, 03:16h.

Philip Conneller @casinoorgphilc Read More
Expertise: Gaming Business, Regulation, Tribal Gaming.

Oklahoma’s tribal casino compact negotiations could be heading for court after Governor Kevin Stitt said operators would be breaking the law if they continue to offer class III gaming beyond January 1, 2020.

Oklahoma casinos
Governor Kevin Stitt wants 25 percent of the tribes’ revenues, but the tribes say he is offering them nothing in return. (KFOR.com)

Tulsa World reports that, on Thursday, Stitt questioned how the tribes could operate beyond that date without a legal contract.

Earlier in the week, the Chickasaw Nation, Oklahoma’s largest gaming operator, complained to the US Department of the Interior that Stitt’s actions represented an “intolerable risk” to the tribe and reserved the right to take legal action against the state.

Talks Collapse

The word from the tribes is that negotiations stalled within hours of getting underway in late October, after the state immediately demanded arbitration and the tribes immediately refused.

Their position is that their compacts, signed in 2004 by 35 of the state’s 38 federally recognized tribes, were expected to roll over on their January 1 expiration.

That claim is backed up by former governor Brad Henry, who negotiated the original model compact with the tribes. He said in October that his administration wanted the tribes to be tied to the agreement beyond the first term.

The model compact states the agreement will renew if “licensees or others are authorized to conduct electronic gaming in any form other than parimutuel wagering on live horse racing.”

In October, the Oklahoma Horse Racing Commission approved all horse track gaming and racing license applications for calendar year 2020, which includes electronic gaming. The tribes’ lawyers argue that this demonstrates, in clear language, that the law is on their side.  

Cash Squeeze

Nevertheless, Stitt is determined to squeeze more money out of a tribal casino market that is the second-wealthiest in the US. Last year, the tribes contributed $138.6 million to state coffers on revenues of $2.3 billion.

“The truth is on our side,” Stitt claimed Thursday. “I feel so confident that Oklahomans can see right through a certain industry, the casino industry, saying, ‘These go on forever.’ That can’t be true.”

The state’s share of gross gaming revenue (GGR) from slots and other electronic games starts at 4 percent and rises to 6 percent when an operator’s GGR exceeds $20 million. For table games, including craps and roulette, it’s ten percent.

Stitt has claimed that Oklahoma tribes pay the lowest revenue-share percentages in America — a dubious assertion when you consider that Arizona-based tribes pay between one and eight percent and in Minnesota they pay nothing.

Law and Logic

The tribes have said they are prepared to negotiate, but only if they receive something in return. Stitt has said he wants 25 percent of class III gaming revenues, which includes slots and table games. But it’s unclear what the state is bringing to the table in return.

The fact is our compacts renew and that our gaming will be as lawful in January 2020 as it is in December 2019,” Stephen Greetham, senior counsel for the Chickasaw Nation, told Tulsa World. “Governor Stitt’s position is not supported by law, logic, or the compact’s plain language.

“Those are the terms the state offered to us 15 years ago, and it is beyond untenable for it to arbitrarily and at the 11th hour suddenly say it didn’t mean what it said,” he added. “Oklahoma is better than that, and the state-tribal relationship deserves better than that.”