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Oklahoma Tribes Refuse Arbitration in Gaming Compact Renewal Dispute

  • Tribal gaming compacts in Oklahoma end on January 1, 2020
  • Tribes say they automatically renew, state maintains they expire
  • State officials want to renegotiate for a larger cut of tribes' gaming revenue
Dan Katz

Dan Katz graduated with a BS in Commerce from the University of Virginia and an MBA from Emory University. He clearly uses neither of those degrees now, having been writing about the gambling industry (specializing in poker) since 2005. Prior to that, he was an IT and management consultant. He is an avid gamer, primarily on PC, and enjoys collecting retro video games and consoles; finding room to set them all up is his current challenge. Dan lives in Atlanta, Georgia with his wife and two children. You can get in touch with Dan at [email protected].

Welcome to Oklahoma highway sign
Oklahoma tribes have declined the state’s offer of arbitration in their disagreement over what happens when their gaming compacts end on January 1, 2020. [Image: Shutterstock.com]

Tribes met with state officials in October

The Native American tribes that operate casinos in Oklahoma have declined an offer from the state to have a dispute surrounding the renewal of gaming compacts go to arbitration.

Around 200 leaders from the 31 tribes met with Attorney General Mike Hunter and members of Governor Kevin Stitt’s staff at the Grand Casino in Shawnee in late October. The parties were unable to come to a resolution.

Do compacts expire or auto-renew?

The issue at hand concerns what happens when tribal gaming compacts’ terms conclude at the end of this year. The state believes the compacts expire on January 1 2020. The tribes, on the other hand, believe they are automatically renewed.

Governor Stitt wants them to expire so the state can negotiate a greater cut of the tribes’ gaming revenue

Both sides want to continue the agreements, as casino gaming benefits both the tribes and the state financially. Governor Stitt wants them to expire so the state can negotiate a greater cut of the tribes’ gaming revenue.

State, tribes deadlocked

Attorney General Hunter offered to take the dispute to arbitration, but the tribes have refused. In arbitration, a third, neutral party hears the cases presented by both sides and decides on the outcome.

In a November 5 letter to Hunter obtained by Tulsa World, the tribes gave their reason for declining, saying:

The state’s argument against renewal is not supported by any facts or law and arbitration is not presently justified.”

Though Hunter’s office has not commented on the letter, Baylee Lakey, the Governor’s communications director, said, “The governor is disappointed the tribes declined the state’s proposal for arbitration in order to resolve our legal differences and that they did not present an alternative resolution towards progress.” Governor Stitt has not put forth a proposal either.

In their letter, the tribes added that if the state does propose a greater revenue share, it must justify it with “a meaningful state concession of proportionate value.”

State made $139m from tribal gaming in 2018

The Indian Gaming Regulatory Act of 1988 (IGRA) set forth the regulatory structure for tribal gambling in the United States. As part of IGRA, tribes are required to enter into compacts with the state where the tribe is located to offer Class III games (slots, craps, roulette, etc.).

The compacts each tribe has with the state of Oklahoma provides this Class III authorization plus geographic exclusivity. In exchange, the tribes share a portion of their gaming revenue with the state, with rates ranging from 4% to 10%.

For the 2018 fiscal year, tribes paid the state $139 million from their gaming revenue.

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