Oklahoma governor raises the stakes in fight with tribes
Oklahoma Governor Kevin Stitt asked a federal judge late Wednesday to declare tribal casinos Class III electronic games illegal. The request by the governor includes ordering tribal casinos across the state of Oklahoma to stop offering the majority of electronic and table games.
The filing by Stitt was an escalation of the conflict and a direct response to a lawsuit filed by tribes in the state, namely the Chickasaw, Cherokee, and Choctaw Nations.
Gov. Stitt wrote an editorial that says he wants “a new compact to more equitably allocate fees among the more than 30 tribes that offer gaming” … as well as “a requirement that vendors do not exceed national market rates.”
The governor has also announced he “intends to opt-out of a contract with an out-of-state law firm he planned to hire to represent him and will instead hire two Oklahoma City-based firms to handle the case.”
Senior counsel for the Chickasaw Nation, Stephen Greetham, said in a statement he is eager to move forward after the actions of the governor.
“We are reviewing the pleading his lawyers filed on his behalf and look forward to learning what legal basis he will claim to justify the uncertainty he has endeavored to create,” said Greetham.
In a tweet just after midnight on Wednesday, Cherokee Nation Chief Chuck Hoskin, Jr. wrote, “Gov. Stitt’s bewildering and isolated position on gaming compact renewal continues. Asking the court to effectively cripple a vibrant industry hurts all 4 million Oklahomans and squanders our chance to be a top 10 state. #UnitedForOklahoma”
In the court filing, the governor asked for a trust fund to be set up for the state to receive its share of the revenue from the tribe’s operation of the games while the matter is being litigated. The tribes say if the state accepts the funds from gaming, it’s tantamount to a recognition that the gaming compacts renew.
It’s hard to quantify tribal significance in Oklahoma – a state whose name derives from the Choctaw language. Oklahoma and its history have an unparalleled connection to tribal nations. Oklahoma is now home to 38 tribal headquarters, established on land that precedes statehood and more than 500,000 individuals that identify as Native American.
The election of Stitt opened up a new fissure between the state and tribal nations.
In 2004, voters approved state question 712, which set in motion Class III gaming for tribes. Class III gaming includes card games, craps, roulette, and slot machines. Today, Oklahoma’s tribal nations pay more than $140 million per year to the State in gaming “exclusivity fees” – a rate of 4 to 10 percent.
Last July, Stitt dismayed tribal leaders when he called for a renegotiation of the “exclusivity fee” in the Model Tribal Gaming Compact, arguing it would expire on January 1, 2020.
Stitt contends the exclusivity fees paid to the state “are the lowest in the nation,” and floated a proposed exclusivity fee as high as 25 percent. Stitt’s assessment of national rates appears, at best, to be misleading. A 2015 report prepared for Congress by the U.S. Government Accountability Office shows out of the 276 tribal-state compacts, 107 require no revenue-sharing payments and only 13 require a maximum payment of 25 percent.
Tribal leaders believe Stitt’s understanding of Part 15B of the compact – the section regarding auto renewal – is misguided, maintaining the compact’s language asserts it automatically renews provided a clause is met.
The clause being if the Oklahoma Horse Racing Commission issued licenses to horse tracks to allow electronic gaming – a move the commission made in October 2019.
This, too, is the position supported by the author of the Senate bill that created the compact, former state Sen. Cal Hobson.
As a result of Stitt’s actions, on January 1, 2020, the dispute led the Chickasaw, Choctaw, and Cherokee Nations to file a federal lawsuit against the Governor in the U.S. District Court for the Western District of Oklahoma.
The Muscogee (Creek) Nation is in a position to join the lawsuit as well.
The Tribes are united
“Regardless of what Governor Stitt’s plan and intent might have been, his approach to the Tribes has motivated deeper and stronger inter-Tribal cooperation here in Oklahoma, and all things considered, that’s a pretty cool bright-side byproduct of his starting this ill-advised fight,” said Greetham.
The court’s decision will have a lasting imprint on Oklahoma.
Tribes don’t have shareholders. Gaming profits are invested into governmental services. Gaming operations exist to serve the well-being of current and future citizens. This model is distinctive in that sustainability and self-determination are in the forethought of tribal business decisions. Tribal members – an all Oklahomans – benefit together, from this aim.
A statement from the Cherokee Nation Principal Chief Chuck Hoskin, Jr. highlights this point, “Oklahoma is Cherokee Nation’s home and we’re here to stay. That’s why it’s so important to us to invest in jobs, infrastructure, education, and health care.”
By law tribes can only use gaming revenue to fund tribal government operations or programs; provide for the general welfare of the tribe and its members; promote tribal economic development; donate to charitable organizations; and help fund operations of local government agencies.
What may not be clear is just how much tribes do for Oklahoma, especially rural areas.
A recent study by Oklahoma City University economist and director for the Center for Native American and Urban Studies, Kyle Dean estimates that in 2017, tribal activities accounted for $12.9 billion and nearly 100 thousand jobs for the state.
Including exclusivity fees, tribal contributions totaled more than $198 million to education, $26 million to government, $5 million to history and culture, $3 million to health and wellness, and $12 million to a number of other sectors.
In tandem with the federal Indian Health Service, tribal nations provide health care for tribal citizens. Low-income citizens on Medicaid that receive treatment at tribal clinics, saved taxpayers $88 million in FY2018 since the state is not required to match the costs as required at non-tribal facilities.
Funds used to purchase a fire truck for Big Cabin, Oklahoma, nutritional meals for elders, disabled spouses of elders, donations to local school districts, secondary schools, and universities, health and wellness programs, and cultural programs.
In addition to the educational assistance from exclusivity fees, tribes contributed $80.5 million in 2017 to education in Oklahoma, funding that benefits Native and non-Native residents.
Tribes have contributed more than $200 million to transportation since 1980, funds that would have come from the Oklahoma Department of Transportation and taxpayers. This relationship aides the state’s ability to bring in further revenue from federal grants, in the form of the Tribal Transportation Program. This program covered 75 percent of Oklahoma and brought in $42.5 million on transportation projects.
Tribes spend a significant amount of funding both rural road and bridge repairs and the busiest interstates in the country. The Chickasaw Nation funded $13.5 million in repairs to I-35, while the Citizen Potawatomi Nation gave $8 million to improvements to I-40.
In 2017, Oklahoma tribes were the 9th largest industry in the state and the 11th largest employer. The total economic impact to Oklahoma is $12.9 billion and provides over 96,000 jobs, with a payroll of over $4.6 billion to their workers. And these numbers continue to increase.
As of now, it is unclear how this issue will shape state and tribal relations moving forward. The Director of Public Relations, Kristina Humenesky stated, “Separate from the litigation, regular operation of the tribe requires ongoing communication between different parts of Choctaw Nation of Oklahoma and various state agencies. The Choctaw Nation of Oklahoma continues to work to build and strengthen relationships between CNO and various state agencies and entities.”
Indian Country Today reached out to the governor’s communication director twice for comment. She did not respond by the time of the article posting.
The Associated Press contributed to this report.
Ben Pryor, Choctaw Nation of Oklahoma, researches American politics and political behavior. Email: firstname.lastname@example.org