Oklahoma sports betting is now legal – depending on who you ask.
Oklahoma Gov. Kevin Stitt announced separate deals with the Otoe-Missouria and Comanche Nation in April which, among other opportunities, would allow the two tribes to take in-person sports bets at some of their facilities. Those agreements were later allowed to pass into law by the federal government but when – or even if – Oklahoma sports betting begins remains to be seen.
Several larger Oklahoma tribes, key state lawmakers and Attorney General Mike Hunter all question the legality of the deals, which they allege goes against the previous agreement between every state gaming tribe and the government. Critically, Stitt argues the previous compact has expired while the other parties argue it auto-renews until when (or if) a new deal is struck.
As the two sides argue over the compact, the future of Oklahoma sports betting – and the Sooner State’s gaming industry as a whole – are at stake.
To explain, Kevin Slicker, the managing partner at Tulsa-based GP Gaming Consultants, spoke with Betting USA about the state of Oklahoma gaming, the stances of the industry’s stakeholders and what may come next in one of the nation’s largest casino markets.
Whats Happening with Oklahoma Gaming?
At the center of the fight is Stitt, the first-term governor who took office in 2019, and more than 30 tribes that have operated gaming facilities on sovereign lands for more than 15 years. A 2004 agreement between tribes and government allowed the tribes exclusive rights to certain gaming options in exchange for government taxes on net gaming revenues.
The governor argues the compact expired and is now seeking deals with individual tribes (and higher taxes rates returned to the government). The bulk of the tribes argue the previous compact auto-renewed and is still in effect.
What is the Background for the Parties Involved in the Oklahoma Gaming Compact Negotiations?
“Stitt doesn’t really have a political background. He took office and came in and said, ‘we’re going to look at every program, reevaluate every source of revenue.’ When he came to the gaming piece, he said at a press conference he was going to look at a new compact. That’s where feelings were hurt.”
“When he said it in a public statement, it upset some people and the tribes felt disrespected. The governor’s position was that the existing 6% tax of the net (gaming proceeds), which can effectively be as little as 1% or 2% of the net, was too low while other tribes in other states in the area are paying a lot more than that. His view was to create a new compact as a way to generate more tax money for the state. The tribes, essentially, said no.”
“They tribes came back later and said they would negotiate if the governor agreed that the compact auto-renews. Stitt came back and said it doesn’t auto-renew. He didn’t want to give up his leveraging power, because If he accepted that the existing compact auto-renewed, and then if the tribes didn’t like the new compact, they could stick with the existing one.”
What are the views of the tribes?
“Basically, the largest tribes are against the individual compacts. They don’t feel that Gov. Stitt has the authority to negotiate them.”
“Different tribes have different priorities. The bigger tribes have billions of dollars. Some of the larger tribes could not take a bet for 20 years and they would be fine. But the smaller tribes can’t afford to prolong this uncertainty. They’re looking for new money for their tribes and their organizations.”
“The two tribes in the compact don’t have as much as some of the larger tribes, and a few of the ‘casinos’ are truck stop gas station out in the middle of nowhere. They’re trying to go expand their gaming options.”
What’s Comes Next?
This has left the two sides at a major impasse for months. The new compacts have only complicated things further as both parties remain far apart on even some of the basic details of the compact.
What are the immediate next steps?
“They were supposed to be in a mediation session that was going to be decided by the 31st of May, but that has since been delayed. With this, the tribes want a ruling on whether or not Stitt has the authority to rule on the compact.”
“That’s going to be a big decision. If he does, it changes the game. If he doesn’t, he loses all leverage and the compact renews.”
What Are Some Other Solutions?
“What they should do is give the government something along the lines of an extra 2% of revenues. In exchange, the tribes get everything they want from a new compact. Everybody saves face. It makes everyone more money. But it’s just not going to work like that.”
“I think the one thing the governor wanted was an agency or some sort of oversight, which the tribes have never had to do. They’ve always been self-regulated. The last thing the tribes want is oversight into their casinos.”
“The tribes could offer 2%, get sports betting, keep out oversight and also receive whatever other types of gaming they want, all the Class III games, and continue forward. But it probably won’t work out that way.”
What if a Tribe Opens a Sportsbook Now?
“I think it’ll come down to the ruling on whether or not the compact is actually valid or not. If it’s ruled that it is, my thought is that the tribes will be able to do whatever they want. I think the other tribes will follow suit. But if it’s not valid, and it’s ruled the governor doesn’t have the authority to negotiate the compact, they’re right back to square one.”
What’s the Bottom Line?
“They need to do something. It can either get resolved quickly, or it will keep going on 10 years from now.”