Tribes sue Gov. Kevin Stitt over renewal of gaming compacts
Oklahoma's three largest gaming tribes have filed a lawsuit against Gov. Kevin Stitt, asking a federal judge to rule that the tribes' gaming compacts automatically renew Wednesday.
The Cherokee, Chickasaw and Choctaw Nations filed the lawsuit Tuesday in Oklahoma City federal court, naming Stitt in his official capacity as governor. The case has been assigned to Timothy D. DeGiusti, an experienced federal judge.
“We have a solemn duty to protect the sovereign rights of our Tribal Nations as well as the interests of our citizens," Chickasaw Nation Governor Bill Anoatubby said in a prepared statement. "While we prefer negotiation to litigation, the federal court is now the only reasonable alternative to bring legal certainty to this issue.”
Stitt said he had hoped for a different response from the tribes.
“I am disappointed that a number of Oklahoma tribes, led by the Chickasaw, Cherokee, and Choctaw Nations, did not accept the State’s offer on Oct. 28 for a three-person arbitration panel to resolve our dispute outside of court," Stitt said in a prepared statement. "This was a capstone action to their numerous refusals to meet with State and begin negotiations on the Model Gaming Compact to ensure a win-win for all parties by the end of this year. I was elected to represent all 4 million Oklahomans, and I will continue to be laser focused on an outcome that achieves a fair deal and is in the best interest of the state and its citizens.”
The tribes want the judge to rule that their 15-year gaming compacts automatically renew on Wednesday.
That is contrary to the governor's position that the compacts expire Wednesday and that gaming operations will be illegal unless the compacts are extended or renegotiated.
Tribes have announced they plan to continue operating their casinos Wednesday and beyond. Donelle Harder, a spokeswoman for Stitt, said the governor has no plans to attempt to force the casinos to shut down while negotiations and court actions proceed, she said.
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In a related development, the governor's office announced that two tribes, the Kialegee Tribal Town and United Keetoowah Band of Cherokee Indians, have accepted an offer from Stitt and signed agreements to extend model gaming compacts with the state for eight months while negotiations continue.
Neither of those tribes currently have casinos operating in the state, Harder confirmed. However, the 10th Circuit Court of Appeals ruled in September that the United Keetoowah Band could put a 75-acre tract in Tahlequah in federal trust, which could be a step toward establishing a casino.
The Kialegee Tribal Town is listed on a state agency sight as having first signed a gaming compact with the state in July 2011. The Office of Management and Enterprise Services' website does not list the United Keetoowah Band as having an existing compact with the state, but the compact extension that the Keetoowah Band signed indicates the original agreement was signed on Dec. 27 — the same day the tribe signed its compact extension. There was some question Tuesday as to whether the Dec. 27 compact had completed all the necessary steps to become valid.
“I appreciate the honesty and boldness of the Kialegee Tribal Town and the United Keetoowah Band of Cherokee Indians who recognize the Jan. 1, 2020 expiration in the Model Gaming Compact and have signed on to the eight-month extension generously offered by the State," Stitt said. "These extensions will enable the parties to negotiate a compact that better accounts for the differing needs of tribes throughout the state and the State’s interests in preserving the substantial exclusivity without a cloud of legal uncertainty.”
The governor wants the state's tribes to renegotiate gaming compacts and pay the state higher exclusivity rates than the 4-6 percent graduated rates that they have been paying on the Las Vegas-style Class III slot machines that they operate. Tribes also pay rates of up to 10 percent on certain table games.
The state has received about $1.5 billion in exclusivity fees from tribes since 2006, including about $148 million in fiscal year 2019, alone. The three tribes that filed the lawsuit were responsible for nearly two-thirds of the exclusivity fees paid to the state in fiscal year 2018, the most recent year for which a tribal breakdown of fees was readily available.
“The governor’s stance on the gaming compact has created uncertainty and has been seen as a threat to our employees and our business partners," said Choctaw Nation Chief Gary Batton. "We see this legal action as the most viable option to restore the clarity and stability the tribes and Oklahoma both deserve by obtaining a resolution that our compact does automatically renew."
The lawsuit focuses on a specific part of tribal gaming compacts that states: "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."
The tribes noted their view that the compacts automatically renew is backed by a legal opinion from Seth Waxman, former solicitor general of the United States, who examined the compacts at the tribes' request and concluded "under that provision's plain language, the compacts will renew automatically when they expire on Jan. 1."
The tribes are represented in the lawsuit by Robert Henry, a former Oklahoma attorney general and former judge on the 10th Circuit Court of Appeals.
Henry sent a letter to current Oklahoma Attorney General Mike Hunter on Tuesday thanking him for his earlier efforts to negotiate a resolution to the ongoing dispute, but criticizing Stitt's stance on the automatic renewal issue.
"Gov. Stitt's continued rejection of − and even ridicule for − the Compacts' plain terms and his recent allegations against them and threats to their operations have left them with no reasonable option other than to file this lawsuit," Henry said in his letter.