Federal Judge Rules Against Oklahoma Gov. Stitt In Tribal Gaming Dispute

Jul 28, 2020

A U.S. District Court judge ruled against Oklahoma Governor Kevin Stitt on Tuesday in the dispute over tribal gaming compacts.

The decision from Judge Timothy De Guisti states that gaming compacts between the Tribes and the State of Oklahoma automatically renewed on January 1, 2020 for another 15 years.

The court was asked to decide on one question:

"The Tribes’ and the State’s competing claims for declaratory relief require the Court to decide which side correctly reads and applies Part 15(B) under these facts. Did the Compacts expire January 1, 2020, or automatically renew for another 15-year term?"

The court decided they renewed.

Stephen Greetham, senior counsel for the Chickasaw Nation, said the court read the reading in the plain terms that the Tribe has over the last year.

"The Tribes have been saying since this dispute arose last July, that Governor Stitt was mistaken in his reading," said Greetham. "This restores the certainty and stability that we've previously been operating from, which is good news for everyone involved."

However, Stitt is disappointed in the ruling and says the state faces several important questions in the future.

"It confirms my fears, and the fears of many fellow Oklahomans, that the State entered into a poorly negotiated deal and now we must bear the cost of this mistake," Stitt said. "This decision, coupled with the recent U.S. Supreme Court ruling on McGirt, means Oklahomans have important questions to face regarding our future. Among other things, we will need to explore the challenges of who will pay taxes and who won’t, of how we will guarantee a competitive marketplace, and of how the State will fund core public services into the next generation. In short, we face a question of constitutional proportions about what it means to be the state of Oklahoma and how we regulate and oversee all business in our state."

It's unclear if Stitt will appeal the decision. But, for now, Tribes are celebrating the court ruling.

"It was an awesome thing to hear this good news," Muscogee (Creek) Nation Principal Chief David Hill said. "It automatically renewed, and we're going to stand by that."

Citizen Potawatomi Nation Tribal Chairman John "Rocky" Barrett said he was grateful for the ruling.

"The Citizen Potawatomi Nation has become the economic driver of our region, due in large part to our gaming operations. This legal victory for our Nation and the people of Oklahoma means we can continue to provide the jobs and services so valuable to Oklahomans and our Tribal citizens," Barrett said. "A great deal of time and money have been wasted on this needless litigation with the State. Our hope is for a new relationship with Governor Stitt in which mutual respect and the honoring of agreements becomes the norm."

A CONTENTIOUS BATTLE

This could signal an end to a battle that has lasted nearly a year. In July 2019, Stitt announced in a press conference that he intended to seek a higher percentage of revenue in the gaming compact renewal process. He pointed to other states, saying Tribes there paid as much as 20 percent for the exclusive right to operate casino gaming. Under the 2004 compact, Oklahoma Tribes paid between 4 and 10 percent.

"The agreements between the state and the tribes giving them exclusivity to the gaming industry are, however, terminating as of Jan. 1, 2020, and it is imperative that we come to terms on new compacts prior to the end of the year," Stitt said in a Tulsa World editorial in July 2019.

Twenty-nine Tribes quickly responded in a joint letter to the Governor saying the compacts automatically renewed at the end of 2019, but he could request a renegotiation. The Chiefs requested Stitt send his proposal directly to them instead of making a media announcement.

The back and forth in the media continued for months.

At the end of 2019, several Tribes announced they were suing Stitt, saying the 15-year negotiated gaming compacts in 2004 remain in effect. The Governor said no and claimed he asked for negotiations for a higher exclusivity rate, the fee that Tribes pay to the state to operate casino games.

At the end of December, 50 tribal representatives gathered at the River Spirit Casino in Tulsa to present a unified message to the Governor: gaming compacts were set to renew the minute the clock struck midnight on December 31, 2019. Stitt said the tribes would be operating the casinos illegally if they opened their doors to the public on January 1, 2020.

Stitt offered the Tribes an eight month extension with time to negotiate new compacts. The Cherokee, the Chickasaw, the Choctaw, The Citizen Potawatomi Nation, The Muscogee (Creek) Nation, the Quapaw Nation, the Delaware Nation, the Seminole Nation and the Wichita and Affiliated Tribes did not agree to an extension, saying that it wasn't necessary because an extension wouldn’t be needed if the compact automatically renewed.

FOUR TRIBES SIDE WITH THE GOVERNOR

Earlier this year, Stitt announced he was entering into new compact agreements with the Otoe-Missouria Tribe and the Comanche Nation. He later signed similar agreements with the Kialegee Tribal Town and the Keetoowah Band of the Cherokees. Under the new agreements, these tribes could operate event wagering and house banked table games like dice and sports betting. The agreement also includes a new revenue sharing structure between the tribes and the state. The U.S. Department of Interior essentially gave no ruling after the mandated 45 day period and thus the gaming compacts went into effect.

However, on July 21, Oklahoma's Supreme Court ruled the agreements between the state and the Otoe-Missouria Tribe and the Comanche Nation were invalid. The case concerning the Kialegee Tribal Town and Keetoowah Band of the Cherokees is still pending.

The Oklahoma Supreme Court ruling was in response to a motion House Speaker Charles McCall and President Pro Tempore Greg Treat filed at the end of May, saying the agreement Stitt struck with these Tribes poses a risk to state’s rights and that the Governor did not have the authority to unilaterally grant new games, such as sports betting.

In response to these new compacts, the Oklahoma Indian Gaming Association revoked the membership of these Tribes.

HISTORY OF TRIBAL GAMING IN OKLAHOMA

Fifteen years ago, Tribal gaming in Oklahoma didn't exist outside of games based on bingo. Today, it's a billion dollar industry giving Tribes economic muscle and the ability to invest in other businesses, provide more services and create jobs for citizens and non-citizens alike.

Tribes are now one of the top employers in the state, and exclusivity fees from gaming provide funding for Oklahoma's education system. However, it is unclear how that revenue will be affected because of shutdowns related to COVID-19.