The gambling industry in Oklahoma is now facing great uncertainty as the gaming compacts between the state and the native Indian tribes are set to expire on January 1. Governor Kevin Stitt has not been able to negotiate an extension of the current deal with tribal casino operators and as a result casino games may be deemed illegal tomorrow.
Tribal leaders and state authorities have found themselves in a stalemate for several months over the language of the gaming compact, which was signed 15 years ago. The two parties have not been able to come to an understanding with regards to the automatic renewal of the deal. The compact clearly says that without negotiating new provisions, it will automatically renew for the same period of 15 years and at the same fee rate. However, it also says that either side can ask for renegotiating the deal six months before its expiration date.
The two sides in the conflict are interpreting the same paragraph differently, experts say. All 35 tribal nations with gaming compacts agree that even though the state can request negotiations, the compacts automatically renew on January 1. Gov. Stitt, on the other hand, claims that the agreements will not renew since he asked for renegotiations in July. Moreover, according to his office, casino-style gaming will become illegal starting this Wednesday.
The ongoing debate is not likely to end soon, which means that casinos and gambling vendors all across the state may be forced to shut down operations. Business owners are not expecting an easy solution considering the opposing views of the two sides. The Governor will probably take the matter to federal court, which means that stalemate will transform into an even longer and more bitter legal battle.
Governor Seeks to Secure More Revenue for the State
The negotiations between the state and tribal leaders started in a “positive and constructive” way, according to Oklahoma’s Attorney General Mike Hunter, who initially led the talks. Following complete lack of results, in December Gov. Stitt announced he was taking over the negotiations. Seeking to secure more revenue for the state, he offered an extension to the compact that included certain amendments.
Most notably, the extension included increased fees, known as “exclusivity fees”. Currently, tribes are required to pay between 4% and 10% of the casinos’ net revenue for the exclusive right to offer casino-style games in Oklahoma. Last year, tribal operators have paid $139 million in fees to the state based on total revenues from games at the amount of $2.3 billion. According to data from the American Gaming Association (AGA), the state is home to 141 casinos. They provide around 75,000 jobs (both directly and indirectly) and contribute nearly $10 billion in economic benefits.
In fact, Oklahoma is the second most gambling state in the country, new AGA statistics reveal. In terms of the average amount each resident gambles per year, it comes only after Nevada. Gamblers in Nevada, where Las Vegas is located, gamble $3,928 every year, compared to casino patrons in Oklahoma who spend $1,141 on gambling. Rounding up the top five are Mississippi ($717), Louisiana ($674), and Rhode Island ($620).
