New State Compacts Not Authorized by Oklahoma Tribal Gaming Act

The subject of tribal compacts have been widely discussed in Oklahoma during the past few months, as the tribes continue arguing with the state governor that their agreements have been automatically renewed by the end of 2019, while the governor is digging his heels, looking for a bigger slice of tribal gaming revenue and even offering new compacts with provisions in them that are outside of his legal power.

Tribal Gaming Act Violated

Recently, the Otoe-Missouria Tribe and the Comanche Nation have agreed new compacts with the state that allow them to offer at their casinos Class III gaming, including sports betting. According to Attorney General of Oklahoma Mike Hunter, however, while St. Gov. Kevin Stitt has the power to negotiate gaming compacts, these include only certain type of games.

“The agreements signed today between the governor, the Otoe-Missouria Tribe and the Comanche Nation are not authorized by the state Tribal Gaming Act, Title 3A, Section 261 et. sec. The governor has the authority to negotiate compacts with the tribes on behalf of the state. However, only gaming activities authorized by the act may be the subject of a tribal gaming compact. Sports betting is not a prescribed ‘covered game’ under the act.”

Mike Hunter, Oklahoma Attorney General

Tribes Still Fight In Court

The newly signed controversial compacts come while most of the tribes are still debating the language of their agreements in court, as they do not agree with Gov. Stitt’s claim their compacts expired last year. The Cherokee, Chickasaw and Choctaw nations filed a lawsuit in December, and now the tribes and the governor have been given by a federal judge until May 31 to reach a compromise.

New Tax Rates

The new deals require both tribes to pay new exclusivity fees, to assure the state will not allow commercial casinos in. The tax rate for Class III gaming has been hiked to 4.5%, and the rate ramps up to 6% once revenue reaches $300 million. In the old compacts, the first $10 million were taxed by 4%, the second $10 million by 5% and the tax went up to 6% from then on.

New Gaming Facilities

Tribes will be allowed to open up to three new gaming facilities, in Love, Cleveland and Grady counties for the Comanche Nation, and in Logan, Noble and Payne counties for the Otoe-Missouria Tribe.

The position of Oklahoma Attorney General coincides with the stance taken by the Oklahoma Indian Gaming Association /OIGA/, arguing that the new compacts are based on a claim of unilateral state authority, an erroneous claim by itself.

The gaming association of the tribes insists that it is within the remit of state legislature to authorize new gaming facilities, revamp the state lottery and legalize sports betting, not solely for the governor to decide. OIGA even sent a letter to the governor last year, claiming state compacts will automatically renew from January 1, 2020.