Judge rules in favor of tribes on gaming compacts
Oklahoma Gov. Kevin Stitt said in a July 28 statement that he was “deeply disappointed” by a federal judge’s finding that the state’s gaming compacts with the tribes did not expire at the end of 2019. WIKIMEDIA COMMONS
OKLAHOMA CITY – After months of sparring, the impasse between tribal governments and Oklahoma Gov. Kevin Stitt has received the decision of a federal judge that the state’s compact gaming agreements with the tribes automatically renewed on Jan. 1.
The ruling on July 28 by U.S. District Judge Timothy DeGiusti granted summary judgment in favor of the Cherokee Nation and eight other tribal governments that asked DeGiusti to interpret whether the compacts were in force or expired at the end of 2019 as Stitt contended.
DeGiusti’s interpretation favored the tribes, but the Stitt’s office may choose to continue legal arguments. The tribes and Stitt have until Aug. 7 to bring up further issues or concerns. A spokesman for the governor did not say whether an appeal would be sought.
“The Cherokee Nation is pleased with (this) ruling which affirms what our tribal nations have known from the beginning, that our gaming compacts with the state of Oklahoma renewed on Jan. 1 for another 15 years,” said Principal Chief Chuck Hoskin Jr. “Tribal gaming in this state will continue to be strong, not only for tribes, but for all of Oklahoma, contributing vital education dollars into our public schools and bolstering health care, roads and communities. Everything in our compact now remains the same, and we hope we can move forward and build a relationship built on respect with Gov. Stitt in the future.”
Matthew Morgan, Oklahoma Indian Gaming Association chairman, issued a statement with much the same tone as Hoskin’s.
“We appreciate that the court moved quickly to confirm what tribal leaders have always known – the plain language of our intergovernmental agreements mean what they mean, and here, those words mean our gaming compacts automatically renewed Jan. 1, 2020,” Morgan said. “We look forward to our tribal governments’ continued work under these gaming compacts and our continued contributions to the economic stability and health of our tribal nations and Oklahoma.”
Stitt’s office reportedly spent more than $1.5 million to defend against the tribes’ lawsuit, filed at the end of 2019.
Under the compact, the tribes pay the state 4% to 10% of revenue to exclusively offer Class III gaming, which includes slot machines, craps and roulette. The state collected $150 million from the fees in 2019, but Stitt has argued that tribes in Oklahoma pay too little for gaming in comparison to agreements in other states.
Stitt has also said he wants to negotiate a specific compact for each tribe. Currently, compact agreements are the same for all Oklahoma tribes. A few tribal leaders indicated on July 28 they were still open to revision, though terms suggested by Stitt during the previous months would require more than minor tweaks to the existing compacts.
“The new gaming compacts demonstrate the State could offer unique, thoughtful opportunities for each tribe,” Stitt said in a statement released after the ruling. “In turn, the State could achieve fair-market rates, as high as 13%, for Class III gaming operations, and we could establish clear auditing and transparency measures to protect the integrity of the compact and ensure the trust of all Oklahoma citizens. Our new gaming compacts show when the State and Tribes are at the table together, we can achieve better public policy and healthier relationships. We could create gaming compacts that level the playing field for all Oklahoma job creators and spur hundreds of millions of dollars more in revenue for our public schools.”
In his statement, Stitt suggested adverse consequences might follow, saying the ruling “confirms my fears, and the fears of many fellow Oklahomans” that the state is locked into “a poorly negotiated deal” and that “we must bear the cost of this mistake.”
In its arguments, the tribe noted a clause in the compacts that calls for automatic renewal of a second 15-year term once the state allowed Class IIII electronic gaming at race tracks.
The Cherokee Nation’s Will Rogers Downs, and the Chickasaw Nation’s Remington Park have offered Class III gaming for 15 years, and the respective licenses were renewed by the Oklahoma Horse Racing Commission in October. The tribes said this was precedent supporting their contention that the compacts automatically renewed – along with the language in the compacts themselves.
Stitt’s legal team said renewing the track licenses was “governmental action” that should have involved “legislative action,” but DeGiusti said that argument did nothing to undermine the straightforward language of the compacts.
“The federal court determined that the 2004 Gaming Compact auto-renewed for 15 years because of an action taken by an agency’s unelected board to reissue licenses for gaming at horse racing tracks,” Stitt said. “This decision, coupled with the recent U.S. Supreme Court ruling on McGirt, means Oklahomans have important questions to face regarding our future. Among other things, we will need to explore the challenges of who will pay taxes and who won’t, of how we will guarantee a competitive marketplace, and of how the State will fund core public services into the next generation. In short, we face a question of constitutional proportions about what it means to be the state of Oklahoma and how we regulate and oversee all business in our state.”