Oklahoma Indian tribes that have gaming compacts with the state have overwhelmingly rejected Governor Kevin Stitt’s offer to extend those agreements for eight months, until August 31, 2020. Leaders from 32 of 35 tribes said no to the offer; they contend the 15-year compacts will automatically renew on January 1.
Stitt wants to renegotiate the compacts so the state can receive a larger share of casino revenue. He said Class III gaming will be illegal after January 1.
At a December 17 news conference, Stitt said, “To protect all the hard-working Oklahomans and the tribal members who are employed at more than 100 casinos across our great state, I am announcing today that the state of Oklahoma will be requesting tribal leaders to join me in signing an extension to the gaming compact. The language in this extension will allow each side who signs the extension to retain their legal position.”
The temporary extension, Stitt said, will “give us plenty of time to sit down and continue these negotiations.”
He said the Oklahoma Indian Gaming Association would “continue to tell you that certain things have been done that make the compact auto-renew, but I’m here to tell you no contract auto-renews into perpetuity. I’ve been meeting with tribal leaders around the state who want to negotiate a new compact and one thing is abundantly clear. Contrary to what the TV commercials and some of the newspapers are reporting, the tribes are not united on this issue.”
Later, however, along with leaders of the 32 tribes, Oklahoma Indian Gaming Association Chairman Matthew Morgan said, “We stand united today against the proposed extension by Governor Stitt as utterly unnecessary, given the automatic renewal.” Morgan said Stitt should stop this self-created crisis, accept automatic renewal and come to the table with a reasonable proposal that would provide value for the tribes and the state. “I had hoped to see better leadership from him on this issue,” Morgan said. He stated Oklahoma tribal casinos will be open for business as usual on January 1.
In response, Stitt said, “I am disappointed that the tribes turned our offer down and refused our requests to negotiate new compact terms that better address the parties’ changing needs. I will continue to work to protect the state’s interests, and I hope that those running the casino industry will negotiate with the state in good faith as these compacts demand.”
Currently under the state gaming compacts, tribes pay between 4 percent and 10 percent in casino net revenue in exchange for exclusive rights to operate casinos in the state. Those fees generated nearly $139 million in payments to the state in 2019 on $2.3 billion in gambling revenue. Stitt wants to raise the tax rate to 25 percent.
Both sides appear to indicate the dispute will end up in federal court. Stitt acknowledged he is finalizing an agreement with a law firm experienced in tribal litigation. He also recently announced he will take over gambling negotiations with the tribes from Attorney General Mike Hunter in order to present “one unified voice” in negotiations.
Some tribal leaders have suggested they may be willing to renegotiate exclusivity fees, but first they want Stitt to acknowledge the compacts automatically renew. “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,” Choctaw Chief Gary Batton said.
Chickasaw Nation Governor Bill Anoatubby commented, “Unlike contracts, compacts are solemn agreements between two sovereigns that remain in force until both parties agree otherwise.” Anoatubby said the tribes had received a legal opinion from a former solicitor general “that reinforces our confidence that the compacts automatically renew on January 1.”
The 2004 legislative report was sent by House Speaker Charles McCall to the Republican caucus. It states, “The compact will expire January 1, 2020, but will automatically renew for 15 years,” according to the 2004 Session Highlights prepared by the Oklahoma House of Representatives Research Division. “The fees and penalties may be renegotiated at that time.”
But Stitt’s Communications Director Baylee Lakey said, “Why would you have a termination date and then in the same breath say ‘never-mind,’ without any mention of events that would trigger a renewal? The only reasonable legal conclusion is no triggering events have occurred and therefore the compacts expire on January 1, 2020.”
Stitt recently said commercial operators are interested in coming into Oklahoma. “Commercial operators have proactively reached out and shown interest in Oklahoma’s market. One operator explicitly told me over the phone he’d sign a deal tomorrow at an 18 percent fee, and this business person is eager because his offer is a low rate for what his casinos are paying on average across the nation,” Stitt said.
After California, Oklahoma is the nation’s second-biggest tribal casino market with revenues of $4.5 billion, according to the American Gaming Association.
