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Governor Kevin Stitt has released his proposal to make sports betting a reality next year in Oklahoma, but the move has caught tribal leaders by surprise.
“The Oklahoma Indian Gaming Association (OIGA) was not consulted prior to Gov. Stitt releasing his sport betting plan,” Matthew L. Morgan, chairman of the association, said Friday (November 3).
“The members of the OIGA have been preparing to receive an offer from the state on sports betting for the past couple of years, and while we appreciate Governor Stitt finally joining the sports-betting conversation, to date he has not engaged in meaningful and respectful government-to-government discussion with tribes.”
Stitt’s plan would legalize retail sports betting at tribal casinos, a decision he described as “protecting their investments in brick-and-mortar facilities.”
According to the Republican governor's plan announced late Thursday (November 2), mobile sports wagering would be licensed by the state with operators to be taxed at a rate of 20 percent of revenue. Stitt also said he supports tribes updating their compacts to offer retail sports betting in exchange for a 15 percent revenue-sharing rate on sports wagering.
An initial licensing fee for online sportsbook operators of $500,000 will be required, in addition to a $100,000 annual fee.
“Thirty-five states have already legalized sports betting, and it’ll be a great revenue stream for the state,” Stitt said in a statement. “Tribes will be able to add it onto their existing infrastructure, and Oklahomans can access it right from their phone.”
Along with California and Minnesota, Oklahoma remains one of the key tribal gaming markets that has yet to legalize sports betting.
However, frosty relations between tribes and the governor, including animosity over separate compacts negotiated and signed by four tribes, is expected to make passage of any measure difficult in next year’s session.
Tribes also are concerned that the governor’s mobile sports-betting proposal likely runs afoul of the current state-tribal gaming compact, which grants tribal nations exclusive rights over Class III casino-style gaming in exchange for paying Oklahoma revenue-sharing fees.
“I hesitate to even comment on the mobile scheme until we get some details, as I am uncertain based on the one-page sheet I have seen exactly how the model would play out,” said John Holden, an associate professor with the Spears School of Business at Oklahoma State University.
“Ultimately, until the legislature and the tribes in the state announce that they support the plan I would expect the status quo to remain,” Holden said in an email. “Could they announce support? Perhaps. But I do not think it has happened yet.”
Under Stitt's plan, each tribe will have to decide if they want to offer sports wagering and sign an amendment to the compact, which would also have to be approved by the U.S. Department of the Interior.
Tribes currently pay the state 4 percent to 10 percent of net gaming revenues from slot machines and table games in exclusivity fees. Their compact with the state automatically renewed for an additional 15-year term on January 1, 2020 and will run until 2035.
Oklahoma is the second largest tribal gaming market in the United States behind California, with 130 casinos operated by 33 tribes. The industry reported $3.2bn in revenue in 2022, paying $192m in revenue-sharing payments to the state.
“We remain hopeful that [Governor Stitt] is committed to moving forward in a productive manner in accord with established law and process, which would include working with the Oklahoma Legislature to offer a compact supplement to tribes within the State-Tribal Gaming Act construct that protects the tribes’ ‘substantial gaming exclusivity,’” Morgan said.
“To approach it otherwise is simply to invite failure,” he added.
Morgan stressed that since the state-tribal gaming compact was approved in 2004 and renewed in 2020, tribes have taken on 100 percent of costs and associated risks, paid all the state’s monitoring expenses and exceeded all revenue projections.
“Likewise, Oklahoma continues to benefit under our model compact at a rate that far exceeds any other state with an Indian Gaming Regulatory Act compact with tribal nations,” Morgan said.
“We look forward to seeing the more than $2bn that gaming tribes have already contributed directly to the state continue to grow and positively impact the state’s education funding.”
