Oklahoma Gov. Kevin Stitt Believes Gaming Compacts Should Vary

Posted on: May 5, 2020, 10:12h. 

Last updated on: May 5, 2020, 11:33h.

Devin O'Connor @CasinoorgDevinO Read More
Expertise: Asia Pacific Gaming, Commercial Gaming, Legislation, Politics.

Oklahoma Governor Kevin Stitt (R) doesn’t believe gaming compacts should be universal for the state’s 35 federally recognized tribes that operate casinos.

Oklahoma Kevin Stitt gaming compacts
Oklahoma Gov. Kevin Stitt says tribal casinos should be taxed differently. (Image: Reuters)

The three most powerful Native American groups in Oklahoma – the Cherokee, Chickasaw, and Choctaw nations – sued Stitt on January 1. The trio, which was later joined by several other sovereign tribes, argues Stitt is wrong in declaring the expiration of their gaming compacts.

The governor argues the 15-year legal arrangements expired on the first day of 2020. The tribes say they automatically renewed on the same revenue-sharing terms.

The tribes’ lawsuit against Stitt was ordered into meditation by a federal judge. The dispute was to be resolved by March 31, but is being delayed by the coronavirus pandemic. Oklahoma has been one the states on the forefront of reopening nonessential businesses.

Different Pacts for Different Tribes

Oklahoma has been receiving between four and six percent of revenues generated by slots, the final rate dependent on each tribe’s total win from the machines. The tribal casinos additionally share 10 percent of their gross gaming revenue (GGR) from table games.

Stitt is seeking to greatly increase that rate on the three tribal bigwigs. The Republican first-term governor, who is a member of the Cherokee Nation himself, believes the rate should be at least 25 percent.

Unlike the Class III gaming compacts that Stitt asserts expired January 1, the governor says new terms shouldn’t be universal. Instead, the governor thinks casinos located in more populated areas, as well as along highways that flow into Texas – a nongaming state – should be required to share more of their slot and table game money.

Stitt reached new compacts with the Otoe-Missouria Tribe and Comanche Nation last month, two economically challenged tribes.

Under the new terms, the two tribes share between 4.5 percent to six percent of their GGR with the state. They’ll pay 13 percent on Class III gaming at any new casino facility they build, and if sports betting becomes legal, will give the state 1.1 percent of the total amount wagered.

Lawyers representing the two tribes said it was a win-win for the nations.

Both of these tribes are hurting. They are already needy tribes that have significant unmet government expenses,” Rob Rosette, an attorney who represented both of the Native American groups, told The Frontier.

“This new compact will provide badly needed money to those tribal government coffers,” he added.

Funding Gap

Stitt is facing an estimated $1.4 billion budget shortfall in the coming years. An increase in tribal casino payments won’t bridge the gap, but would help.

The state received nearly $139 million from tribal casinos in the latest fiscal year (2018). But currently, 88 percent of that money is earmarked for public education. The bulk of the remaining fees go to the state’s General Revenue Fund.

The casinos owned and operated by the Cherokee, Chickasaw, and Choctaw nations make up the lion’s share of GGR in Oklahoma’s gaming industry. The three collectively paid more than $90.6 million in exclusivity fees during the 2018 FY.