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Tribes weigh in on debate over gaming fees

 The Journal Record | July 10, 2019

OKLAHOMA CITY – The governor of the Chickasaw Nation said Wednesday that Oklahoma Gov. Kevin Stitt’s plan to pursue a renegotiation of a long-standing compact dealing with tribal gaming operations in the state should be considered carefully.

“(Gov. Stitt’s) position, as stated in his editorial and letter, came as a surprise to us. A position of this significance warrants respectful and purposeful conversations, particularly given the complexity of the compact and the law,” Gov. Bill Anoatubby said in a statement. “We are evaluating the governor’s letter and will consider our options.”

Anoatubby added that the Chickasaw Nation’s partnership with the state has paid great dividends to both the state and tribe.

“This constructive relationship has benefited the economy and the citizens of Oklahoma. It is our hope to preserve this positive partnership so we can continue to work together for the betterment of our state,” Anoatubby said.

In a similar statement, Kimberly Teehee, a senior officer of the Cherokee Nation, said state leaders should take special note of the powerful cultural and economic influences tribes have on Oklahoma.

“We look forward to sharing more with state leaders how Oklahoma’s economy is enriched by the nearly 40 tribes that call Oklahoma home,” she said.

A letter from Stitt that appeared earlier this week in the Tulsa World newspaper stated his desire to revisit the issue of fees paid to the state as percentages of revenues earned by tribal gaming operations.

“Fifteen years ago, the citizens of Oklahoma approved State Question 712, and the Oklahoma Legislature passed laws permitting the state to enter into gaming ‘compacts’ with the federally recognized Indian tribes located in Oklahoma,”  Stitt wrote. “Within a few years, Oklahoma led the nation in the number of tribal gaming casinos and was near the top in terms of gaming revenue. … Today, tribal gaming is the eighth-largest industry in Oklahoma. We are now the third-largest gaming market in the country, behind only Nevada and California, generating an estimated $4.5 billion in annual revenue for the tribes. … Moreover, in large part due to the success of the gaming partnership between the state and the tribes, the tribes have become the third-largest employer in the state, providing jobs to more than 54,000 Oklahomans.”

Stitt said agreements between the state and tribes giving the tribes “exclusivity” to the gaming industry may be renegotiated prior to the start of 2020. If the agreement isn’t renegotiated, conditions would remain the same.

“The easiest thing to do is simply renew the existing compacts ‘as is,’ rather than do the hard work of closely reviewing and negotiating new compacts that reflect the state of affairs today,” Stitt wrote. “I believe, however, that voters elected me to look at everything in state government with a fresh eye and, where necessary, make the difficult decisions that are in the best interest of all 4 million Oklahomans. In this case, that means sitting down with our tribal partners to discuss how to bring these 15-year-old compacts to an agreement that reflects market conditions for the gaming industry seen around the nation today.”

According to Stitt’s letter, tribes currently pay the state an “exclusivity fee” starting at 4% and topping at 6% of gaming revenues received.

“Today, Oklahoma’s fees are the lowest in the nation,” the letter says. “Most state-tribal compacts around the country provide for exclusivity fees to the state of 20% to 25%. In fact, in November 2018, voters in our neighboring state of Arkansas approved four new casinos in the state, two of which will be bid on by tribes from Oklahoma, according to media reports. In Arkansas, the fee will start at 13% and max out at 20%.”

Teehee, who is vice president of government relations for Cherokee Nation Businesses, said the gaming compact has worked very well, yielding benefits for the state and tribes for 15 years.

“Comparing commercial tax rates in other states to exclusivity fees paid by Oklahoma tribes is an apples-to-oranges comparison,” Teehee said in a statement. “Tribes differ from commercial casino operators in many ways. Commercial casino operators do not pave roads in their states, build homes for people in their communities, provide college scholarships to needy students or keep hospitals open in rural, underserved communities.

“Commercial operators are often headquartered in faraway places like Las Vegas,” Teehee said. “Tribal gaming operators are headquartered locally, where the Cherokee Nation’s 11,500 employees live, send our kids to school, and care about the long-term health of our state. Unlike commercial operators, we are a corporate headquarters that will never leave Oklahoma.

“The Cherokee Nation-state of Oklahoma gaming compact outlines that we pay exclusivity fees that range from 4% to 10% of revenues on Class III games. However, our broader impact on the state’s economy and all Oklahomans is felt through our investments in health care, education, housing, infrastructure and core services that the state of Oklahoma is often unable to provide,” Teehee concluded.

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