Oklahoma’s Tribal Gaming tax and direct payments as well as the economic output contributing to the state economy are often listed as the second largest in the United States, but when examined in financial context on a state by state basis they are actually the largest in the nation. Billions of dollars of direct and indirect economic value and the third largest industry employing Oklahomans have only been possible because of the Tribal Gaming Compacts that have been in place. With so much value and economic strength, along with an encouraging financial outlook for amazing future growth, there is certainly reason for Oklahoma’s Native Nations to be concerned by Governor Stitt’s most recent announcement.
In a column published in the Tulsa World on Sunday July 7, 2019 (Governor Kevin Stitt: New Gaming Compacts…), Oklahoma Governor Kevin Stitt announces the Oklahoma Tribal Gaming Compacts will not continue in their current form. The Oklahoma Tribal Gaming Compact have an expiration of January 1st, 2020, unless allowed to continue as is. In Tribal Gaming Compacts, it is the Governor of Oklahoma who makes the decision to continue or to terminate the compact as it is a government to government agreement between sovereign states. Governor Stitt makes his case for a renegotiation in his column and states “The agreements between the state and the tribes giving them exclusivity to the gaming industry are, however, terminating as of Jan. 1, 2020, and it is imperative that we come to terms on new compacts prior to the end of the year.”
While Oklahoma’s Governor takes note that the current Tribal Gaming Compact is 15 years old, his contrast of the percentage of revenue paid to the state is provided only in percentages as compared to other states and their Tribal Gaming Compacts. In this fashion, Governor Stitt is able to sweep away the true value that Oklahoma’s Native Nations have provided the State of Oklahoma. Governor Stitt makes a point to mention Arkansas as an example, who recently voted in four new casinos and whose exclusivity fees will start at 13% and max out at 20%. While on the surface such a comparison to Oklahoma exclusivity fees (4% and max at 6% – table games are paid at a set 10%) may seem very different it is what Governor Stitt is not saying that is the most important. Oklahoma Tribal Gaming revenue is the largest per capita in the entire United States because of the current level of fees.
While it is true that California has larger direct and tax tribal gaming payments made to the state, when such a contribution is examined in context of overall population, it is the State of Oklahoma who receives greater direct payments on a per capita basis. In September of 2017, the American Gaming Association commissioned a study of the economic benefits of tribal gaming. In the study, a state by state comparison was made using 2014 data. The State of California had the largest direct payments made by Tribal Nations, with $3.01 billion paid. The second largest state was the State of Oklahoma whose Tribal Governments paid $2.18 billion. On a per capita basis, Tribal Gaming payments to the state represented a contribution of $77.98 per person in California compared to Oklahoma’s contribution of $562.15 per person. Oklahoma Tribal Gaming’s tax and direct payment benefit to the State of Oklahoma was more than seven times greater than California’s.
Oklahoma’s top position in the country in Tribal Gaming economic contribution is even more drastic when the output, or the money that gets put back into the State, is properly viewed in perspective of the state’s Gross Domestic Product (GDP), the measurement of an economy. Using the American Gaming Association data set mentioned above and looking at the top five states in order of Tribal Gaming Tax and Direct payments, there is: California ($3.01 billion), Oklahoma ($2.18 billion), Washington ($1.19 billion), Florida ($1.09 billion), and Connecticut ( $0.83 billion). When the output and benefit of each of these state’s economies is taken into consideration, the Tribal Gaming contribution within Oklahoma is nearly 5% of Oklahoma’s GDP. California is by far the lowest with their Tribal Gaming contribution being less than 1% (a mere 0.64% of the California GDP) and the other states not much more (Florida – 0.68%, Washington – 1.2%, Connecticut – 1.61%).
While Governor Stitt takes time to recognize the importance of Tribal Gaming to Oklahoma’s economy, his comparison to Arkansas makes it seem like Oklahoma is somehow far behind other states when it comes to receiving revenue directly or indirectly, and as is noted above this most certainly is not the case. It is worth noting that a state such as Arkansas isn’t even on the list when it comes to such comparisons. Other states regionally such as Texas, Louisiana, Kansas, and even New Mexico are but small fractions compared to the revenue generation and direct payments of Oklahoma’s Tribal Gaming. This should be an important consideration for the State of Oklahoma and the Governor when reviewing how an industry that provides more than $8.72 billion dollars back into the state’s economy and provides Oklahomans with 65,000 jobs might be impacted by potentially significant changes.
When Oklahoma’s Tribal Gaming Compacts already produce a greater economic benefit to the State of Oklahoma than any Tribal Gaming Compacts do for any other state in the country, allowing such success to simply expire seems like it could be extremely short sighted.
If you are concerned with Oklahoma Governor Kevin Stitt’s proposal, you can let him know of your concern HERE.
Native America Action will continue to watch the developments of this situation closely.