Oklahoma governor, tribes clash over casino gaming revenue

July 10, 2019 - 3:35 pm
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Leaders with Oklahoma's powerful Native American tribes are voicing frustration with the state's Republican governor after they say he caught them off guard with plans to force renegotiations for a bigger piece of the billions of dollars tribal casinos generate each year.

In an editorial Monday in the Tulsa World, Gov. Kevin Stitt suggested the existing compacts, which call for tribes to pay between 4% and 10% of a casino's net revenue in "exclusivity fees," should be reevaluated now that the gambling industry has matured in Oklahoma.

"In this case, that means sitting down with our tribal partners to discuss how to bring these 15-year-old compacts to an agreement that reflects market conditions for the gaming industry seen around the nation today," wrote Stitt, who also is a citizen of the Cherokee Nation.

Casino gambling is a booming industry in Oklahoma, with 130 casinos dotting the state, ranging from gas station annexes to resort-style hotel casinos, many of them in border communities, since voters approved a gambling expansion in 2004. The Winstar World Casino in a rural part of the state's Red River border with Texas includes massive hotel towers, more than a dozen restaurants and a 400,000-square-foot casino floor billed as the largest in the world. Tour buses filled with gamblers from neighboring Texas routinely shuttle into the casino's parking lot, which is packed with cars sporting Texas plates.

The exclusivity fees alone generated nearly $139 million for the state last year on roughly $2.3 billion in revenue from games covered under the compacts, which are scheduled to renew for another 15-year term in January.

But tribal leaders say those fees are just part of the overall contribution that tribes make to the state and don't include millions of dollars tribes are investing in health care, education and infrastructure that benefits all Oklahomans.

"What I don't understand, in any of his op-ed, there's no recognition of the true value of the tribes," said John Berrey, chairman of the Quapaw Nation, which operates two casinos in northeast Oklahoma. "(Native American tribes) are one of the largest employers in the state. We provide benefits for our employees. We're probably the most philanthropic group in the state."

Many tribal leaders also expressed disappointment that they first learned of Stitt's position from the editorial instead of direct contact from the governor.

"Coming out through an op-ed that was most tribes' first notice was very surprising," Matt Morgan, chairman of the Oklahoma Indian Gaming Association and a citizen of the Chickasaw Nation, said Wednesday.

Morgan said there also is a fundamental disagreement between the tribes and the governor about what would trigger the 15-year renewal. The governor's position is that the compacts must be renegotiated before they can be renewed, while the tribes contend if both sides can't come to an agreement, the compacts renew automatically.

"For the governor and his staff to take that stance and posture from the beginning, I think that was very surprising to a lot of tribal leaders," Morgan said.

Without a compact in place, Oklahoma tribes would be unable to offer many games at casinos, including advanced slot-machine-style electronic games or card games like poker and blackjack. Casinos could still feature bingo-style electronic games, which remain popular in Oklahoma and don't require the tribes to pay any fees to the state.

Stitt is out of the state this week, but spokeswoman Donelle Harder said Stitt and other candidates for governor made clear on the campaign trail they intended to renegotiate the compacts.

"The governor's position has been consistent since the campaign," Harder said, citing comments Stitt made last summer. "At the time, Stitt praised the tribes for their significant contribution to our state, and said he'd pursue a sound and equitable compact that is in the best interest of all stakeholders."

Harder added that a letter from Stitt's office to each of the 35 Oklahoma-based tribes who have compacts with the state was sent on Friday, four days before the editorial published.

In it, Stitt wrote that Oklahoma's tribal exclusivity fees are the lowest in the nation and that compacts in other states are closer to the 20% to 25% range, but that doesn't appear to be the case.

In Arizona , fees range from 1% to 8%, while in New Mexico fees range from 2% to 10%. In neighboring Arkansas, voters approved a casino measure in 2018 that calls for fees from 13% to 20%, but that state's deal allows for commercial operators, not just tribal governments, to apply for a casino license.

"Comparing commercial tax rates in other states to exclusivity fees paid by Oklahoma tribes is an apples-to-oranges comparison," Kimberly Teehee, vice president of government relations for Cherokee Nation Businesses, said in a statement. "Commercial casino operators do not pave roads in their states, build homes for people in their communities, provide college scholarships to needy students or keep hospitals open in rural, underserved communities."

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By SEAN MURPHY Associated Press

 

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