Oklahoma Casinos and Gambling

 

 

In Oklahoma, gambling laws traditionally were an issue of Indian tribal laws and gaming, which makes up about 90 percent of the state’s gaming and gambling. However, tribes faced continued restrictions as to the type of games they could conduct.

Oklahoma Tribal Gaming

Gaming and gambling on Oklahoma tribal lands dates back to the 1970’s. Most tribes only offered games of chance, such as pull tabs, bingo and similar games. The Sooner State prohibited Las Vegas-style gambling for several years, that is until the Federal Government stepped in on the matter. In 1987, Congress passed the Indian Gaming Regulatory Act, which divided tribal gaming and gambling into three distinct classes, Class I, Class II and Class III.

 

Online Casinos in Oklahoma

At the time, Oklahoma’s tribes were engaging in what was categorized as Class II gaming. To engage in Class III, Las Vegas-style gaming, the Indian Gaming Regulatory Act required that Indian tribes and their respective states enter into an agreement, or a compact. The compact must clearly describe the type of games each tribe would offer, the terms of regulatory supervision and revenue sharing agreements. The compact must then be sent to the federal government for approval, and once approved, the compact governs how the tribe and its respective state would interact in regards to tribal gambling.

It wouldn’t be until the early 1990’s that the first tribal-Oklahoma compacts would come to fruition, but they only allowed horse-race betting at tribal casinos, in addition to class II games of chance. Oklahoma legislators simply refused further negotiations with tribes for expanded tribal gaming from 1992 to the early 2000’s.

Oklahoma’s Indian tribes were forced to make the most of their circumstances. Several tribes worked to maximize their Class II gaming restriction by implementing video gaming devices and network bingo games at their casinos. These games exploited the advantages of the latest gaming technology, but per the tribal casinos, they still fell within the Indian Gaming Regulatory Act’s class II definition. The state of Oklahoma disagreed and several lawsuits ensued over the difference between Class II and Class III gaming, most of which the tribal casinos won. Tribes continued adding class II gaming technology to their casinos. It was the tribal casino Class II gaming expansion and a growing state deficit that finally pushed Oklahoma to negotiation table for Class III gaming with the state’s tribal casinos.

 

 


Class III Tribal Gaming Agreements

In the early 2000’s, tribes started negotiations with the state governor, which resulted in a compact proposal. The new proposal was placed on the state’s 2004 ballot as State Question 712. State Question 712 proposed gaming machines on three Oklahoma horse racetracks, two of them being owned by the Choctaw Nation and the Cherokee Nation. If the new law passed, the non-tribal horse track would be allowed to operate 650 gambling machines, but the two tribal-owned horse racetracks would only be allowed to operate 250 gambling machines.

Additionally, State Question 712 proposed a new compact to tribal nations that would permit several of past disputed games. The new compact also proposed state regulatory control over tribal casinos and included new revenue sharing provisions. The big catch of the new compact is that it only allowed for specific Class III games at Oklahoma tribal casinos, not Class III games exclusively. The new compact allowed for skill-based electronic games, bonanza-style electronic bingo games and instant-win electronic bingo games. The new compact would explicitly prohibit Class III, Las Vegas-style games, such as slots, dice games and card games.
Oklahomans overwhelmingly voted in favor of State Question 712 on November 2, 2004. However, many of the compact’s provisions favored the state, such as more gaming machines at non-Indian owned racetracks in comparison to Indian-owned racetracks and the compact’s 15-year period without any prospect for re-negotiation.

 

Oklahoma State Lottery

Also on the November 2, 2004 ballot was Oklahoma’s proposal for a state lottery. The lottery’s proceeds would be placed in an education fund for the state, including university scholarships, teacher pay and retirement, school technology equipment and early childhood education programs. Creating a state lottery would allow the state to enter the gaming and gambling arena and earn several of its residents gaming dollars lost to neighboring states, such as Kansas and Texas, every year. Oklahoman’s voted in favor of a state lottery.

The state’s legal definition of a lottery fell under the Class III classification of the Indian Gaming Regulatory Act. Oklahoma lawmakers had long put forth several arguments to prohibit the expansion of broad-based Class III gaming in tribal casinos. In fact, state lawmaker’s most drastic blocking measure asserted that should a court determine that Class III gaming be allowed to expand to tribal nations following the passage of the state lottery, the state would terminate the lottery and forego lottery revenue generation altogether.

Many tribal nations argued that the same citizens who voted in favor of a state lottery would likely protest if the lottery absolved upon ruling that broad Class III gaming expand to tribal nations, especially if the lottery provided substantial revenue for the state. Others argued that the same lawmakers, who took measures to block tribal nations from their rights to Class III gaming under the Indian Gaming Regulatory Act, cleared the path for Class II gaming throughout the state when they took simultaneous measures to expand Class III gaming in Oklahoma. The current tribal-Oklahoma compact does not expire until January 1, 2020, and it will renew itself automatically unless it is terminated or re-negotiated. Until then, tribal nations are left with their limited Class III gaming agreement.

The Indian Gaming Regulatory Act’s purpose was to give states an opportunity to share in the construction of gaming and gaming in tribal nations, not block that construction to state limitations, as is the case in Oklahoma. Nevertheless, tribal gaming has been a godsend for Oklahoma tribal nations and the state of Oklahoma. Oklahoma currently has over 100 tribal casinos generating nearly $3 billion in business. Since 2004, tribal casinos have paid over a quarter a million in revenue sharing to the state.