Oklahoma Governor Wants Tribal Class III Gaming Shut Down Over Compact Dispute

  • Governor says gaming compact expired January 1, tribes claim it auto-renewed
  • Tribes sued on December 31, 2019 to get court to decide
  • State wants to negotiate new terms with higher gaming fees
  • Attorney General offered arbitration in November 2019, tribes declined
Oklahoma US 66 road sign
Oklahoma Governor Kevin Stitt has asked a federal court to shut down tribal Class III casino gaming while the validity of the gaming compact is still in dispute. [Image: Shutterstock.com]

Disagreement on compact expiration

Oklahoma Governor Kevin Stitt has struck back at the state’s Native American tribes, requesting that a federal court in Oklahoma City halt all Class III gaming at tribal casinos.

Class III gaming, as defined by the Indian Gaming Regulatory Act (IGRA), includes most of what falls under “casino gaming”, such as slot machines, blackjack, and roulette.

The move is a response to a lawsuit filed by the Chickasaw, Choctaw, and Cherokee tribes on December 31, 2019. The three tribes argue that their gaming compact with the state automatically renewed on January 1, 2020, and have asked for a court to rule on the matter. Gov. Stitt believes the agreement expired.

The difference in opinion originates from the wording in part 15.B of the 2004 compact. The document states it expired on January 1, but the tribes believe the text later in the paragraph dictates that the compact auto-renews for 15 more years.

State wants higher gaming fees

The state of Oklahoma prefers an expiration because it wants to negotiate new terms. In the 41-page response filed in court, it said: “Continuing to conduct class III electronic gaming in the absence of valid Gaming Compacts with Oklahoma has resulted, is resulting, and will continue to result, in unjust enrichment to the Tribes.”

The main issue at hand is the gaming revenue share rates the tribes pay to the state. The rates vary, but they generally range from 4% to 10%. Gov. Stitt wants to see those numbers bumped up significantly.

“They want to continue getting the best deal in the country and pay 4% to 6% when market is closer to 25%, so that’s what this is all about,” the governor told Tulsa’s KTUL ABC 8. He added:

This is about them not wanting to pay more, right? Let’s just call a spade a spade.”

Dispute continues on renegotiation

Matt Morgan, Chairman of the Oklahoma Indian Gaming Association, stated his organization has not received a proposal regarding desired rates from the governor’s office. He added that while there are some tribes up in the 20% to 25% range, most are in the single digits.

In a press statement, Gov. Stitt said of the tribes, “They promised to renegotiate fees and exclusivity, regardless of whether the compacts renewed or expired. Unfortunately, most tribes have refused to renegotiate any part of the compact, unless the State first conceded that the compacts automatically renew indefinitely.”

Oklahoma received $139 million in gaming exclusivity fees from tribal casinos in the 2018 fiscal year.

Tribes rejected arbitration in November

In October 2019, 200 leaders from 31 Oklahoma tribes met with members of Gov. Stitt’s staff and Attorney General Mike Hunter at the Grand Casino in Shawnee to discuss the compact. They were unable to resolve their differences.

In November, AG Hunter offered to go to arbitration with the tribes, but they refused. In arbitration, an independent third-party listens to both sides and makes a decision in favor of one or the other.

arbitration is not presently justified”

The tribes responded to Hunter in a letter, saying, “The state’s argument against renewal is not supported by any facts or law and arbitration is not presently justified.”

They added they were willing to listen to a higher rate proposal, provided they are extended “a meaningful state concession of proportionate value.”