As Legal Battle Over Gaming Compacts Heats Up, U.S. Department of The Interior Sidesteps Conflict

Jun 12, 2020

By default, the U.S. Department of the Interior, the federal agency that governs agreements between states and tribes, has approved the gaming compacts Oklahoma Governor Kevin Stitt entered into in April with the Comanche Nation and the Otoe-Missouria Tribe.

The deadline for the Department of the Interior to approve the gaming compacts was June 7. The Department took no action, which means the agreements automatically take effect once they're published in the Federal Register. 

"What decision?," Stephen Greetham said. "Those chose to do nothing."

Greetham is Senior Counsel for the Chickasaw Nation. He said under the Indian Gaming Regulatory Act, the agency has four options when it comes to these types of agreements: they can approve; disapprove; take no action and approve the agreement by default or send the agreement back and ask both parties to keep working on it. 

In this case, Greetham said, the Department took no action, allowing the agreements to be approved by default.

After 45 days, the compacts can take effect, but they must comply with rules under the Indian Gaming and Regulatory Act. 

"At the end of the day, they're [Department of Interior] allowing the compacts to go into effect only so long as they don't violate federal law, [which] leaves the risk of illegality on Governor Stitt's shoulders and on the shoulders of the Comanche and Otoe-Missouria Tribe," Greetham said.

He says there have been documented federal law defects in these agreements and thinks a federal court may have to step in. 

"It's a waste of resources," Greetham said.

Once they are published, the two tribes can begin operating under the terms agreed upon in April. That includes event wagering and house banked table games like dice. The agreement also includes a new revenue sharing structure between the tribes and the state. 

In a statement released to the press, Rob Rosette, the attorney for the Comanche Nation and the Otoe-Missouria Tribe said that in his opinion, the legality of these new compacts was never in question.

“This decision will have national ramifications as it reinforces tribal sovereignty and moves Oklahoma away from a one-size-fits-all gaming compact," said Rosette, referring to the approval by the Department of Interior.

Those statements were also echoed by Stitt, who, in a separate statement praised tribal leadership.

“I appreciate and respect the thoughtful leadership of Chairman Shotton and Chairman Nelson who worked hard to secure fair terms for their citizens, and whose contributions throughout the negotiations ensured a more level playing field and modernized gaming market in Oklahoma," Stitt said. "With these new gaming compacts, Oklahoma is ushering in a new era of prosperity, opportunity, and partnership for the state and the Tribes."

Matt Morgan, Chairman of the Oklahoma Indian Gaming Association, doesn't agree. He thinks these new compacts create instability between the state and the Tribes and insists that Stitt lacks the authority to enter into any gaming agreements prohibited by law. He thinks questions will continue to surround the legality of these compacts.

"It sets a bad precedent for how gaming compacts should be considered," Morgan explained. "Alternatively, you've already seen the Oklahoma State House and the Oklahoma State Senate question Governor Stitt's authority to enter into these types of agreements. There's already litigation on that front." 

At the end of 2019, several Tribes announced they were suing Stitt, saying the 15-year gaming compacts automatically renewed on January 1, 2020. The Governor wanted them to pay a higher exclusivity rate, a fee that Tribes pay to the state to operate. After the compacts were signed in April, the Oklahoma Indian Gaming Association suspended Otoe-Missouria and Comanche Nation's membership and they were released from the lawsuit. 

Fast forward to Thursday, June 4, Oklahoma legislative leaders filed a motion with the State Supreme Court in response to a recent federal court motion by Stitt. 

House Speaker Charles McCall and President Pro Tempore Greg Treat's motion says that a May 28 federal filing by Stitt concerning gaming compacts poses a risk to state's rights. Stitt asked a federal judge to rule on the Oklahoma Attorney General's decision, which said that the governor doesn't have the authority to enter into tribal gaming compacts.

 

In a statement, Treat said, "Federal judges decide matters of federal law, not matters of state." 

 

Greetham says the filing reiterates what tribes have been saying all along, which is that Stitt doesn't understand his role in state government when it comes to tribal state relations.

 

"We've always been open to good faith negotiations with the state of Oklahoma but we've also insisted that those talks have to be grounded in what the law requires. Stitt has consistently rejected that approach," Greetham said.

 

The filing by legislative leaders states that the Governor’s authority to negotiate and bind the state to his agreements is a state law question and asks the State Supreme Court to take up the matter.

Morgan also thinks the Department of Interior opting not to take action on these compacts isn't surprising. 

"There's too many times in history that the federal government has failed to live up to their legal obligations," Morgan said. "And in this matter, they decided to sidestep the issue and just wait for the clock to run out." 

He thinks they should've provided some guidance as trustees of tribes. 

The Otoe-Missouria and the Comanche Nation will immediately begin paying 4.5 percent rates on covered games they offer. This is a lower rate than previously paid. Sports betting, which is also in the compact isn't legal in Oklahoma, and Morgan says that will have to be worked out. 

The new gaming facilities that Stitt may or may not have had the authority to grant will pay higher rates.  

However, Stitt does not have the authority to approve land into trust applications. That is squarely within the authority of the Federal Government. Until the new facilities are approved by the federal government and/or wagering on sporting activities is de-criminalized by the State of Oklahoma, the State is going to receive less money from those two tribes.

The point of renegotiating the gaming compacts was to get a better deal for the state, but with that lower exclusivity fee, that's not a reality, according to Morgan. 

"Those lower exclusivity payments will be good for the Otoe-Missouria and the Comanche Nation but it will not be helpful to the state education department," Morgan said.

The default ruling by the Department of Interior on the compacts with the Otoe-Missouria and the Comanche Nation have no effect on the litigation between Stitt and the other tribes concerning the renewal of the previous gaming compacts they had with the state.