Oklahoma Tribes Warn Governor's Sports-Betting Plan May Threaten Compact

December 1, 2023
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After Kevin Stitt, a citizen of the Cherokee Nation, was elected governor of Oklahoma in 2019, tribal leaders were optimistic they could have a working relationship with his administration but now into his second term they continue to be surprised by his adversarial approach to tribal affairs.
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After Kevin Stitt, a citizen of the Cherokee Nation, was elected governor of Oklahoma in 2019, tribal leaders were optimistic they could have a working relationship with his administration but now into his second term they continue to be surprised by his adversarial approach to tribal affairs.

Matthew Morgan, chairman of the Oklahoma Indian Gaming Association (OIGA), said tribes were taken by surprise by Stitt’s proposed sports-betting legislation introduced in early November that “he really hadn’t shared with anyone before he released it through social media.”

Stitt’s plan would legalize retail sports betting at tribal casinos, a decision he described as “protecting their investments in brick-and-mortar facilities.”

However, according to the Republican governor’s plan announced on November 2, mobile sports wagering would be licensed by the state with operators to be taxed at a rate of 20 percent of revenue.

Stitt also said he supports tribes updating their compacts to offer retail sports betting in exchange for a 15 percent revenue-sharing rate on sports wagering. An initial licensing fee for online sportsbook operators of $500,000 will be required, in addition to a $100,000 annual fee.

“He proposed, it was not in his press release, that the Oklahoma Lottery would be the primary regulatory of online activity,” Morgan said. “And when I say no one knew, none of the tribes were informed of this. None of the legislature knew this was coming, and in fact, with some of the conversations I had, no one at the lottery commission knew this was coming.”

“It kind of caught everyone by surprise. But once everyone read through it, collectively everyone was very dismissive, very quickly,” he added.

As for the governor’s plan opening the door to commercial gaming in Oklahoma, Morgan confirmed he has had conversations with “a lot of platform providers, some of their lobbyists and lawyers” and they stressed they also were not consulted and are not in favor of this proposal.

Morgan assured attendees of an hour-long webinar Wednesday (November 29) hosted by the Indian Gaming Association that the governor’s sports-betting proposal is “DOA.”

Jason Giles, executive director of the National Indian Gaming Association, said Oklahoma is a successful gaming market, “that’s why this kind of stuff is alarming.”

According to National Indian Gaming Commission data, Oklahoma is divided into two regions with Oklahoma City, including Texas, posting $3.1bn in gross gaming revenue (GGR) in fiscal year 2022 from 72 operations, while Tulsa, which includes Kansas, reported GGR of $3.5bn from 74 operations.

California, which includes northern Nevada and is known as the Sacramento region, posted $11.8bn in GGR in fiscal 2022 from 87 tribal casinos.

“The market continues to remain strong in Oklahoma,” Morgan said. “We continue to show an upward trend in what we are doing.”

Giles questioned Stitt’s seriousness about respecting tribal sovereignty and the 2004 Model Tribal Gaming Compact.

“We’ve had five years of this governor. We’ve had quite a few issues between tribal, state relations,” Morgan said.

“We have not found Governor Stitt working to engage tribal governments here in Oklahoma in a way that is productive. You see that on several fronts.”

Negotiating new tobacco tax compacts is on the Oklahoma legislature’s agenda in 2024. Lawmakers extended, over Stitt’s veto, the tobacco and vehicle registration compacts that would have expired in 2023 to the end of next year.

“On this particular subject, sports betting, he continues to be focused on who gets to offer it,” Morgan said.

“I think our industry knows that was settled 19 years ago in 2004 when the citizens of Oklahoma agreed to a model compact on who could participate in gaming.”

Morgan warned that government officials know that only tribes can participate in gaming and any violation of that would “blow up the compact.” He added that tribes are not in a hurry to get sports betting approved.

“Are there additional forms of gaming that we could offer, and if so, what makes good economic sense on both sides of the table and can we move forward?” he said.

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