Commentary: Governor Stitt, the Oklahoma Tribes and the Outside Vendors
Published: December 24th, 2019
When it comes to Compact negotiations between the state of Oklahoma and the various tribes involved in gaming enterprises, this essay could focus on the seemingly dramatic events of the last two weeks before Christmas.
First: After months of encouraging words and hopeful gestures to reach out to the leaders of the 32 Native American tribes involved in gaming, Gov. Kevin Stitt offered an 8-month extension of existing gaming compacts, even though those 15-year-old accords are heavily tilted in favor of the handful of big tribes whose casinos reside at plum locations, who pay a fraction of the rate paid in other states where tribes have exclusivity rights to operate gaming operations. His gesture of friendship was rejected.
Second: An analyst could write about the decision of the state attorney general to withdraw as negotiator for the State’s interests, without giving reporters or anyone else other than the State’s chief executive the reasons for his cold feet. No surprise in his silence, in that his office refused to provide meaningful information about contractors who would benefit, through hidden fees, during the state’s opioid litigation. The truth is there was little reason to think the A.G. was anything other than an ally of the Big Tribes, all along.
Third: A pundit might write about some of the Big Tribes seeking gaming opportunities in a neighboring state, where they would actually pay a much higher rate than in Oklahoma. And, to be clear, where they helped pay for advertising that promised voters lower taxes if they would approve a plan to put levies on new gaming operators (namely those same tribes). But save that for another day.
Fourth, a commentator might stroll through the implications of the governor’s idea to let private gaming operators come in to give the Big Tribes some real competition. But save even that for another day.
Let’s focus instead on the dirty little secret, which is less and less secret every week.
All things being equal – assuming it was wise to leave everything more-or-less as is between the state and the tribes — the only cash resource lying around available for redirection is for the Big Tribes to pay their out-of-state vendors less usurious rates. In such a scenario, “saved” money could be redirected the into the hands of the state of Oklahoma — or perhaps some could finance compensation to smaller tribes whose opportunities have been taken away by the equivalent of insider trading between the Big Tribes and allies at the U.S. Department of the Interior.
For decades, the Feds have approved dubious grants of trust status to the major players at plum locations, keeping the smaller tribes in the dark until the deals were done.
Of all the Big Tribes, Chickasaw operations have been and remain the most open to criticism and in need of broader scrutiny. This may, or may not, account for the erratic behavior of the top Chickasaw leadership in recent months. Time will tell.
Enough speculation.
The governor has not blinked. He seems unlikely to blink. The tall, lanky and proud Cherokee who is governor of all Oklahomans is sticking with his principles. On January 2, he will direct state auditors to find out about certain things.
Perhaps they will be able to document that half of the revenue flowing through those machines goes through Class 2 machines that, well, aren’t Class 2 at all.
Perhaps they will document, and soon, the full extent of the much-higher-than-industry average “vendor” rates the major state gambling operators in Oklahoma tribes pay to out-of-state businesses who know how to treat their friends.
Answers to the first “perhaps” above (given that as much money went through Class 2 games where the state gets nothing and tribes pay usurious rates) could result in over a billion dollars being owed from those nefarious Class 2 vendors’ games who are actually supplying Class 3 games.
Answers for the second “perhaps” question could result in upwards of a billion a year being available from those usurious rates to make up for the funds the Governor wants while holding the Tribes harmless.
The late Everett Dirksen, long an icon in the U.S. Senate, often reflected (always drawing smiles as he fought in vain to restrain federal expenditures): “A billion here, and a billion there, and pretty soon you’re talking real money.”
Indeed, the cumulative impact of the last 15 years of maneuvering could be worth, as Carl Sagan might put it, “billions and billions.”
All the recent theatrics from supporters of the Big Tribes, even the millions of dollars in paid advertising, seem to have raised the stakes.
Gov. Stitt deserves support as he seeks a win/win situation for both the State and the Tribes.
NOTE: This essay is expanded and updated from McGuigan’s commentary in the January 2020 print edition of The City Sentinel newspaper, of which McGuigan is the publisher. He is also founder of CapitolBeatOK, an independent online news service.