Oklahoma Governor Kevin Stitt recently declared he wants to renegotiate tribal gaming compacts when they expire on January 1, 2020, so they will reflect “market conditions for the gaming industry”—implying he wants tribes to pay a higher percentage of casino revenue in exchange for exclusivity.
Cherokee Nation Principal Chief Bill John Baker wrote a response to Stitt in a recent op-ed in the Tahlequah Daily Press. Baker said the compacts “have fueled our home state, public education and job creation for more than 15 years.”
However, Baker pointed out, Stitt’s position “ignores the history of tribes in Oklahoma and the many contributions made by tribes, including the Cherokee Nation, to our state. The ability of tribes in Oklahoma to thrive as sovereign nations is one of the state’s greatest competitive advantages. It would be a serious mistake for our state government to engage with tribes like we were just any another industry, ignoring our unique economic, cultural and governmental contributions.”
Kolby KickingWoman, in Indian Country Today, echoed that sentiment. He wrote, “The question deserves to be asked, if tribal casinos were Amazon or Microsoft, would they be courted or taxed heavily? The former was offered more than $2 billion in tax incentives from the state of New York when they were deciding whether or not to build their new headquarters there.”
Currently under the compacts, tribes pay exclusivity fees of 4 percent to 10 percent of a casino’s net revenue. Since 2004, tribes have paid $1.28 billion to Oklahoma in exclusivity fees; they set a record in fiscal year 2018, paying nearly $138.6 million to the state, up 3.48 percent from the prior fiscal year. The money has been distributed to the Education Reform Revolving Fund, General Revenue Fund and Department of Mental Health and Substance Abuse Services. In addition, according to the Oklahoma Indian Gaming Association, tribal gaming contributes $7.2 billion to the state economy, and gaming employees have paid out almost $325 million in payroll-related taxes, including $33 million in income taxes to the State of Oklahoma.
KickingWoman wrote, “That’s not enough for this governor.” He explained, “Tribal leaders say the compacts will renew for another 15-year period whereas Governor Stitt says the compact will terminate. He wants to renegotiate the compacts and raise the exclusivity fees to a range of 20 percent to 25 percent.” Stitt wrote that is the rate for exclusivity fees in “most other compacts in the country.” But KickingWoman said, “There is little evidence to back up that claim.”
Stitt also called Oklahoma’s fees “the lowest in the nation.” Chickasaw Nation General Counsel Stephen Greetham said Stitt’s statement “is simply not true.” Greetham said that as of June 2015, only 14 out of 276, or 5 percent of tribal-state gaming compacts nationwide, had rates that high. The most common gaming compact rate is zero, Greetham said, with 107 compacts, or 39 percent, at that rate. He added 56 percent have a rate of less than 10 percent.
Greetham called Stitt’s position “unfortunate.” He said, “Tribes have operated in good faith and abided by the compacts for 15 years. The way we look at it, the state of Oklahoma has derived enormous benefit.” He added that Stitt’s comments implied the tribes are not doing their fair share, and that the tribes and state government have an adversarial relationship, which is not true. He claimed Stitt “ambushed” the tribes to create a crisis where none exists.
Stitt spokeswoman Donelle Harder responded that, of the 169 compacts nationwide existing five years ago that included revenue-sharing, 164 involved payments related to gaming revenue. She said the majority of those compacts had maximum rates higher than Oklahoma’s Class III machines. Harder added Stitt is proud of the various ways tribes contribute to Oklahoma’s success. “He wants to expand that opportunity for them with a compact that reflects market practices,” she said.
The Inter-Tribal Council of the Five Civilized Tribes, representing more than 750,000 Native Americans, approved a resolution and released a statement rejecting the governor’s plan. Stitt responded he was elected to provide a “fresh eye to all agreements.” He stated, “I am committed to open discussions with all tribal partners and to achieving an outcome that spurs more funding for public education, grows opportunity for the tribes and is a successful partnership for the state and future generations of Oklahomans.”
At the recent convention of the Oklahoma Indian Gaming Association, Chairman Matt Morgan noted that Stitt has no legal standing to demand a larger share of gaming revenue from the tribes, unless the state gives the tribes something in return. Morgan said that could be sports betting. “Tribes are ready to have that discussion. The ball is in the governor’s court,” he said.
