FAQ: Oklahoma's Tribal Compacts
Updated on January 17, 2020 at 3:13 p.m.
KOSU's Engagement Team has been reading and answering questions submitted to our recent survey on the tribal gaming compacts dispute. Below are answers to basic questions about tribal gaming compacts. This post will be updated as we get answers.
What is the difference between a contract and a compact?
"A contract is a binding agreement between two or more parties, whether those parties be ordinary people, businesses, nonprofits, etc.," Michael T. Gibson, Professor of Law at Oklahoma City University said. "A compact is a contract that is between two or more states, or a contract between a state and a tribal nation. So a compact is a type of contract; a contract can be, but is not necessarily a compact."
Tribal-state compacts establish the rules to govern Class III gaming activities, which are approved by the U.S. Secretary of Interior and a notice is published in Federal Register before they go into effect.
What is the history behind Oklahoma's tribal compacts?
Oklahoma's State-Tribal Gaming Act was created in 2004 after voter approval of State Question 712. It allows federally-recognized tribes to operate Class III gaming operations including slot machines, roulette and craps.
How many of Oklahoma's 38 federally-recognized tribes have gaming compacts with the state?
The Oklahoma Indian Gaming Association (OIGA) and the Gaming Compliance Unit within the Office of Management & Enterprise Services (OMES) both say there are 35 federally-recognized tribes that have compacts with the state. Here is the list of tribes who do have compacts.
"Someone needs to explain the whole concept of exclusivity and how compacts actually work." —Clay P. of Loyal, Okla.
A compact is a type of contract between the state and the different tribes. The concept of exclusivity in Oklahoma's case means the state offered tribes exclusive rights to operate compacted gaming in exchange for monthly exclusivity fees. Compacts are required between the state and tribes for Class III gaming.
How many tribal compact gaming operations exist in Oklahoma?
There are around 130 tribal gaming operations in the state.
What is the difference between Class I, Class II and Class III gaming?
Class I gaming refers to traditional and social games that tribes have played for a millennia.
Class II gaming refers to bingo and bingo-related games and certain card games.
Class III gaming refers to casino-style gaming which includes slot machines, craps and roulette.
"How much money is coming to the state in total from tribal gaming?" —Robin C. of Stillwater, Okla.
Since 2005, tribal governments have paid more than $1.5 billion in exclusivity fees to the State of Oklahoma.
How much money was paid in exclusivity fees to the state in 2017, 2018 and 2019, respectively?
How many jobs does tribal government gaming operations support in Oklahoma?
OIGA says current figures are that tribal governmental gaming provides around 75,885 jobs, primarily to citizens in rural Oklahoma—that number translates into nearly $4.3 billion in wages.
"Are there federal regulations that come into these agreements since the tribes are involved?" —Randy P. of Stillwater, Okla.
Yes. In 1988, the Indian Gaming Regulatory Act (IGRA) was enacted to provide statutory basis for regulating gaming on Indian lands. The act established three classes of gaming (Class I, Class II and Class III) and outlined regulation responsibilities for the tribes, states and the federal government.
IGRA also created the National Indian Gaming Commission within the U.S. Department of Interior. The Commission regulates Class II and Class III gaming.
How does horse racing and betting tie into the compacts?
Under Oklahoma state law, horse racing and the compacts are joined. Horse racing has a seperate federal law called the Interstate Horse Racing Act.
"In 2004, when the state presented State Question 712 to the [voters], the format it looked at was to not only help education recieve more funding. There was also a big push to help save the horse racing industry in the state," Matt Morgan, chairman of OIGA, said.
State Question 712 allowed Remington Park in Oklahoma City and Will Rogers Downs in Claremore to offer limited "covered games" at their facilities.
How do tribes use the money generated from gaming?
Revenues from tribal government gaming must be used in five specific areas, as stipulated by the Indian Gaming Regulatory Act. (25 U.S.C. 2710 [Sec. 11].
Net revenues from any tribal gaming are not to be used for purposes other than:
- To fund tribal government operations or programs;
- To provide for the general welfare of the Indian tribe and its members;
- To promote tribal economic development;
- To donate to charitable organizations;
- To help fund operations of local government agencies.
How does the state spend its portion of exclusivity fees?
State Question 712 outlined how the state's exclusivity fees were to be used: "towards the treatment of compulsive gambling disorders, to the Education Reform Revolving Fund and for college scholarships."
The Office of Management and Enterprise Services (OMES) says the allocation of exclusivity fees to state funds since 2005 are the following:
- Department of Mental Health and Substance Abuse Services: around $3.6 million
- General Revenue Fund: around $185 million
- Education Reform Revolving Fund: around $1.3 billion
Total: $1.5 billion in exclusivity fees since 2005.
In 2007, the State Legislature amended the 12% recipient from Oklahoma Higher Learning Access Program (OHLAP), also known as Oklahoma's Promise, to the General Revenue Fund through Senate Bill 820. The change became effective for fiscal year 2008.
The legislation directed that OHLAP funds would come directly from the General Revenue Fund. This was requested by the Oklahoma State Regents for Higher Education and approved by the Board of Equalization.
OMES Spokesperson Jake Lowrey confirmed allocation of exclusivity fees begins with around $250,000 towards the Department of Mental Health and Substance Abuse Services.
The remainder is then split by 12% to the OHLAP/General Revenue Fund and 88% towards the Education Reform Revolving Fund.
What part of the compacts are being debated?
Oklahoma Governor Kevin Stitt has often pointed to Part 15(b) of Oklahoma's State-Tribal Gaming Act as his point for renegotiations. Stitt says the language states the compacts expired on January 1, 2020, but the OIGA and tribal leaders have said the law clearly states the compacts auto-renew.
Part 15 (B) on page 52 says the following:
"This Compact shall have a term which will expire on January 1, 2020, and at that time, if organization licensees or others are authorized to conduct electronic gaming in any form other than pari-mutuel wagering on live horse racing pursuant to any governmental action of the state or court order following the effective date of this Compact, the Compact shall automatically renew for successive additional fifteen-year terms; provided that, within one hundred eighty (180) days of the expiration of this Compact or any renewal thereof, either the tribe of the state, acting through its Governor, may request to negotiate the terms of subsections A and E of Part 11 of this Compact."
"How much more money is the state asking for?" —Clint G. of Tulsa, Okla.
Gov. Stitt wants to increase the percentage of gaming exclusivity fees. Tribes pay about 4 to 6 percent on slot machines and up to 10 percent on table games in exclusivity fees to the state of Oklahoma. Stitt has said "most" tribal compacts around the nation pay gaming exclusivity fees of 20 to 25 percent. In a GAO analysis of tribal state compacts in 2015, there were 107 compacts that paid zero percent in revenue-sharing out of 276 compacts. There were also 100 compacts that paid 10 to 14.9 percent, and 22 compacts total that paid anywhere from 15 to 25 percent in revenue sharing.
Where can I find and read the law?
You can find Senate Bill 1252 here.
You can find the Model Tribal Gaming Compact here.
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