May 28, 2020 Tribal, Legal

From the top: A tough time for tribes

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Tim Poole looks into the difficulties facing Oklahoma tribes during the coronavirus pandemic.

Though the impact of the COVID-19 outbreak has been devastating worldwide, in gaming, few nations have been as affected as the US. While legalized online sports betting has begun to proliferate nationwide, with very young online casino markets also breaking through, the coronavirus has decimated sports betting from the source, but has especially brought the US’ primary segment to a shuddering halt: its land-based casino and hospitality sector. States in the process and some which are very near to legalizing sports wagering also now face a major slowdown due to the practicalities of self-isolation and social distancing.

But while the likes of MGM Resorts International, Caesars Entertainment, Boyd Gaming and other commercial entities make headlines across the US, spare a thought for tribal casinos. Not only are tribes losing out on huge sources of revenue with casinos shut down nationwide, leading the industry to request $18bn in federal aid, the sector has now been deprived of the highlight event on the tribal gaming calendar: NIGA. The annual epicentre of exhibiting, networking and industry discussions for tribal organizations, this year’s NIGA trade show in San Diego in March was postponed due to the coronavirus pandemic.

More specifically, however, Gaming America would like to zone in Oklahoma, where it’s fair to say current plights for tribes are exacerbated by Governor Kevin Stitt’s approach toward tribal gaming. On top of the current pandemic and subsequent loss of revenue, Oklahoma tribes have been at loggerheads with the Governor for some time now; Stitt has most recently been accused of ramping up efforts to create division among tribes even during the COVID-19 outbreak. Tensions in Oklahoma are rooted in the renewal of the state’s gaming compact, which Stitt believes no longer accurately reflects how much gross gaming revenue tribes generate in the Sooner State.

In April, Stitt reached a tentative agreement with Otoe-Missouria Tribe chairman John Shotton and Comanche Nation chairman William Nelson, to "establish clarity and certainty" and expand gaming opportunities like sports wagering for the two tribes as part of a modernized gaming compact. But legal disputes between the tribes and Stitt are ongoing, and in early May, Oklahoma attorney general Mike Hunter questioned the new compact’s legitimacy, saying Stitt lacks the authority to allow sports betting, which is prohibited by Oklahoma state law.

Yet Oklahoma Indian Gaming Association executive director Sheila Morago told Gaming America the ball is still in the Governor’s court, and he wants exclusivity fees to be raised significantly. Morago, however, said tribes will not agree to such demands.

"I call it a little push and a little push back,” she said. “Right now, the tribes are caught a little off guard with Governor Stitt’s position. We’re united in terms of our belief the compact is renewed for another 15 years if we can’t come to an agreement. Even if we did want to negotiate, there are only two sections of the compact that are negotiable. The reading of the compact is very clear: if it’s not broken, don’t fix it."

Despite this stance being made clear throughout, Stitt has remained undeterred in his attempts to continue the dispute.

Once the coronavirus pandemic had already forced the closure of all casinos in late March, a legal letter on behalf of the Governor was sent to tribes. During these “uncertain times,” they were urged to “stand together” with the state and sign the proposed new gaming compact with a 5% flat fee on all class III games, and allowing tribes to implement legal sports wagering with a 2% fee of the total amount wagered. It also included an oversight fee schedule each tribe would be required to pay, ranging from $25,000 to $250,000 depending on the annual revenue derived from covered games. This letter, according to the Oklahoma Indian Gaming Association, was not sent to tribes currently involved in the lawsuit against Stitt.

Oklahoma Indian Gaming Association Chairman Matthew Morgan said in response: "We aredisappointed in the action taken by Governor Stitt through one of his attorneys to take advantage of tribes as they focus on protecting their tribal citizens and non-tribal citizens during this pandemic. This letter is yet another unsuccessful attempt to divide the tribes. The letter confirms the real intent of Governor Stitt is to destroy the tribal interest outlined in the existing compacts. The tribal leaders who received the letter reject the proposal as disrespectful and disingenuous."

Morgan continued: "Perhaps more than anything, we are dismayed Governor Stitt would exploit the current pandemic for these purposes. Consistent with the advice of public health professionals, the tribal governments have suspended gaming operations to help blunt the spread of COVID-19. Nothing is more important to the tribes than working together to fight this deadly virus. Public health is
our main focus at this time."

As is by now tradition, though, the Governor’s office would not be subdued. The tug of war continued, despite Morgan’s strong claims. Defending the state’s offer, Baylee Lakey, the Governor’s communications director, said: “Since day one, the Governor has been committed to negotiating

to achieve a win-win for the future of tribal gaming in our state. The State has been aggressively communicating with every tribe in Oklahoma to advance a common-sense solution on Model Gaming Compacts [which] are unquestionably legal and deliver unprecedented guarantees of clarity, stability and transparency for all Sovereign parties, and for the benefit of all four million Oklahomans.”

It seems the disagreement shows no signs of abating, at a time when legal wrangles should be the least of both the state and the tribes’ worries. Indeed, the situation in Oklahoma offers us a window into the difficulties tribal operations face on a regular basis. While wider uncertainty pervades every walk of life, no one in the US should take tribal gaming and the resilience it is showing for granted, especially during such a tough time for tribes in particular. For a sector that contributes so much of US gaming’s gross revenue on an annual basis, its reward is often paid in unjustified hostility, ­­instead of the credit it deserves.

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