Signing two new gaming compacts

Oklahoma Governor Kevin Stitt has made a casino revenue-sharing deal with two of the Native American tribes in the state. Meanwhile, the governor is still in the middle of an ongoing legal dispute with ten other tribes over gaming compacts. 

Stitt inked new gaming compacts with the Comanche Nation and Otoe-Missouria tribes during a signing ceremony with the representative leaders at the state Capitol. The agreements will be in place for 15 years once they get approval from the United States Department of the Interior. 

Speaking about the new deals, Stitt said: “This modernized gaming compact expands opportunities for our tribal partners, enhances revenue for the state from Class III and covered games, and will strengthen state-tribal relations for generations to come.”

Specifics of the deals

As a result of the newly signed compacts, the two tribes will be able to offer sports betting options to patrons. The Comanche Nation is allowed to open casinos in Love, Grady, and Cleveland counties. The Otoe-Missouria Tribe can have new gambling facilities in Payne, Noble, and Logan counties.

exclusivity fees to the state ranging from 4.5% to 6% of the casinos’ net revenues

The two deals will see Oklahoma receive a 1.1% cut of the total money wagered. In a similar arrangement to what was previously in place, the tribes will also pay exclusivity fees to the state ranging from 4.5% to 6% of the casinos’ net revenues. However, if new casinos are built by the tribes, the fee could rise to 13% of revenues. 

Ongoing lawsuit dispute

The state also remains in a battle with ten other tribes in Oklahoma. Three of the biggest tribes in the state filed a lawsuit against the governor at the end of 2019. These were the Choctaw, Chickasaw, and Cherokee nations. Subsequently, nine others joined the suit, including the Comanche Nation and the Otoe-Missouria Tribe.

The main argument in the filing is whether or not the previous gaming compacts from 15 years ago should have renewed automatically on January 1, 2020.

Mediation between the respective parties is in progress, with an extension to the process given by a federal judge until May 31. 

Questionable legal basis

The chairman of the Oklahoma Indian Gaming Association, Matt Morgan, does not believe Stitt had the legal authority to grant the revenue-sharing agreements. He believes the governor authorized legal sports betting and new casinos “based on a claim of unilateral state authority”, without having the engagement of the state legislature. According to Morgan, this is not what state law allows. 

Stitt does not have the legal authority to allow casinos to offer sports betting

Oklahoma attorney general Mike Hunter also echoed claims that Stitt does not have the legal authority to allow casinos to offer sports betting. While the governor can negotiate tribal compacts on the state’s behalf, he can only authorize gaming activities already authorized by the Oklahoma Tribal Gaming Act. Hunter said: “Sports betting is not a prescribed ‘covered game’ under the act.”

A big moneymaker

Casinos are a lucrative source of revenue for the tribes in Oklahoma. It was 15 years ago that they were given an exclusive right to operate gambling facilities in the region following a public vote on the issue. There are now dozens of casinos around the state, generating revenues of more than $2bn annually.

Tax revenue going to the state in 2019 from tribal casino operations totaled $150m, most of which was used to fund public schools.