Gov. Kevin Stitt submitted his answer last week to the federal complaint filed by three Native American tribes in Oklahoma.
The dispute in Oklahoma enters around the tribal gaming compacts drafted by the state in 2004 and subsequently signed by many of its tribes. The compacts address which games tribes can conduct and what share of revenue the state will receive in exchange for substantial exclusivity over casino gaming.
The dispute primarily concerns whether or not tribal gaming compacts automatically renew at the end of a 15-year term. Here’s the provision in question:
“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 or the state, acting through its Governor, may request to renegotiate the terms of subsections A and E of Part 11 of this Compact.”
The state argues that the compacts expired, and the tribes need to return to the table if they wish to continue operating. According to Stitt, they are currently conducting gambling illegally without a valid compact in place.
The tribes adamantly disagree with the governor’s position, arguing that electronic gaming offered at the state’s race tracks triggered the automatic renewal. They filed their lawsuit on Dec. 31, 2019, the day before the first 15-year term was set to end.
In his response, the governor acknowledges that Indian Gaming Regulatory Act governs the matter and the Western District of Oklahoma is the proper venue for litigation. Beyond those concessions and a few other minor matters, though, the state largely denies the allegations contained in the complaint.
While many of the denials would be expected — or at least typical — a few do stand out:
Lisa Billy, the former secretary, resigned about 10 days before the lawsuit.
In her resignation letter, Billy stated among other things that the governor’s position regarding gaming compacts creates “an unnecessary conflict that poses a real risk of lasting damage to the state-tribal relationship and [the] economy.”
In addition to admissions and denials, the state asserts several affirmative defenses. It argues that the tribes:
The governor argues that the state has made repeated efforts to renegotiate with the tribes, including offering a temporary extension of the current compacts. The tribes, however, contend that a sit-down renegotiation was not a productive use of time by virtue of the compacts automatically renewing.
The state additionally argues that the tribes have come to the court with unclean hands, a matter that may deter a judge’s ability to afford equitable relief like an injunction.
The state’s answer came with a number of counterclaims raised against the tribes. The governor, most notably, is asking the federal court to declare that the tribes are conducting Class III gaming activities illegally.
In noting that the state believes the gaming compacts have ended, however, the governor clarifies that the Off-Track Pari-Mutuel Wagering Compacts remain in place.
The state also threw in an “in the alternative” argument should the court be disinclined to go along with the first two arguments. In that case, the state asks the court to order the tribes to return to the table to negotiate a new agreement within 180 days of the compact’s termination.
This lawsuit continues to heat up, and each side has entrenched their positions to the point that it is unclear if there is hope for an agreement outside of court.
The compact dispute has become front-page news in Oklahoma, with tribes running numerous television commercials demonstrating the impact they have on the state. Even former governor Brad Henry has come out in support of the compact’s automatic renewal. It was the Henry administration that drafted the model gaming compacts in 2004.
Since then, the state of Oklahoma has received more than $1.5 billion in revenue-sharing payments from the tribes, including $148 million in 2019. Given its population of just under four million residents, that money is significant.
While there is still hope that the two sides can find a solution, the way in which things have continued to escalate makes the possibility of a judicial resolution more likely. Such a process would almost certainly mean that sports betting and online poker are years away for the Sooner State.