An Editorial: Fresh Thoughts on Why Kevin Stitt is (Still) right on the Compact
Published: September 3rd, 2019
Governor Kevin Stitt apparently remains determined to renegotiate gaming compacts in Oklahoma. Because that is the case, leaders of the large tribes – fashioned into a coalition that benefits only the haves, and in no instance the have-nots – announced recently they would rebuff Stitt’s renewed calls for a meeting to discuss this serious matter in a serious manner.
The powerful supporters of the status quo in Oklahoma tribal gaming are rejecting real talks about real issues because they like things the way they are. They have renewed pressure campaigns, working through paid surrogates (beneficiaries of Big Tribe largesse), to undermine the state’s chief executive. But it appears he will stay the course. This could be his finest hour, and this newspaper supports him.
Among the points that need to be made:
Under the status quo, presently too much money goes out of state that should stay in Oklahoma. To be clear, some $600-800 million is paid to out-of-state machine vendors and middle men distributors. That number would be $150-200 million if the same activities were taking place in Las Vegas.
In short, there is plenty of money churning here in Oklahoma to pay the state and little tribes more. But as things stand today and have for many years, the cash instead flows to nationally-connected vendors and their well-connected middle men. The money does not flow to Oklahomans.
Although state law prohibits slot machines, the state’s definition of a slot machine is not the same as Vegas. Therefore, what is considered a slot machine in Vegas … is not considered that here. The State could simply require the Vegas style standards for what is a gambling machine and deal with a large part of the problem. This can be done and not run afoul of the Oklahoma definition of slot machines (still considered the old-style wooden tumbler machines that ran here long ago).
In truth, sweetheart deals between the Big Tribe “players” – operating with virtual monopolistic powers after decades of dubious federal Trust decisions – and their middle men machine vendor pals benefit only … the Big Tribes and their well connected buddies – who have skimmed hundred of millions from the market through exclusive deals with Vegas machine manufacturers by attaching themselves to large tribes and thereby controlling the market.
To stop this, vendor contracts could require approval under the compact to make sure they are not usurious.
To be clear, three tribes (Chickasaw, Choctaw, Cherokee) control two-thirds of the $4.2 billion gaming market for Oklahoma. Adding in the other two Big Tribes, the numbers are: Five tribes controlling over eighty percent of the gaming market.
There are other pieces to this puzzle.
Here’s just one: When Oklahoma was formed roughly 10,000 natives were of the five tribes – and 10,000 were of the smaller tribes. That is how the market ought to be divided. That is how it is divided in other states. The smaller tribes could then sell their allotment of the market to the larger tribes and each reap tens of millions a year for tribal membership and positive programs: Even if they decide to remain out of the gaming market entirely. Real benefits for real Indians would bring the situation much closer to the vision of original agreements.
But the story does not end there. For the sake of everyone (even those who disagree with us) in the long run there needs to be clarity of what is and isn’t a Class II game. Today half the machines in the casinos pay nothing to the State because they are argued to be Class II but haven’t been determined to be Class II by a court or federal agency.
Now to be clear what is Class II is very important to the tribes because it was a right of their retained sovereignty which the federal gaming law did not regulate. But by not having what is Class II clarified, the grey market vendors have an advantage to charge the higher rates claiming Class II status when Las Vegas vendors can’t risk their licenses by putting out the same product. That money should and would be saved for the state and small tribes if there was clarity.
Sports book market is going to come into Oklahoma. It needs to be allocated along the same market lines, not in maintenance of the monopolistic status quo.
A rational limitation on locations is needed. One tribe – the Chickasaw – has 24 casinos that were placed into trust for Agricultural purposes but then converted to casinos. The State was never told any of these casinos were going to opened until two casinos were approved on the last day of the Obama Administration.
The entirety of this three-decade process constituted a massive fraud on the sovereignty of the state of Oklahoma and rights of the smaller tribes, and needs to be fixed by limiting the number of casinos a tribe can have to a few — but in any case not multiple dozens.
Because gambling is treated as legal in Oklahoma, and will continue to be so, more money to combat addiction (which is now is rampant) must be part of any compact.
Governor Kevin Stitt is the right man, at the right time, in the right place. He does not want to undermine tribal rights, he wants to be governor for all Oklahomans. There is no reason to believe he is unwilling to work with the Tribes – regardless of size or current economic clout.
As suggested at the start: May this be his finest hour.