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Capitol Insider: OIGA's Matthew Morgan On Tribal Gaming Negotiations

Jul 26, 2019

Gov. Kevin Stitt announced his intention to renegotiate Oklahoma's gaming compacts, the agreements governing Indian gaming in the state, through an op-ed earlier this month. Matthew Morgan, who leads the Oklahoma Indian Gaming Association, discusses how tribes have reacted to the governor's approach and what they need from him to play ball. 

  FULL TRANSCRIPT:

Pryor: This is Capitol Insider, your weekly look inside Oklahoma politics and policy. I'm Dick Pryor with eCapitol News Director Shawn Ashley. The Oklahoma Indian Gaming Association's annual conference and trade show just ended in Tulsa. Our guest is the chairman of OIGA, Matthew Morgan. Welcome. 

Morgan: Thank you. Appreciate the invitation. 

Ashley: Chairman Morgan, what is the purpose of the OIGA and who are its members? 

Morgan: We are the trade group that supports Indian gaming in Oklahoma. So we're there to advocate on behalf of our members, and then our members are made up of gaming tribes in the state of Oklahoma. Right now. Currently there are 31 tribes out of the 39 that game, and we have 25 of those 31 that are current members of the OIGA. 

Pryor: Tribal gaming compacts with the state expire January 1, 2020. Governor Kevin Stitt wants tribes to renegotiate, presumably so the state of Oklahoma can make more money. First, what is a compact? 

Morgan: That is the way that sovereigns interact with each other within the United States is through compacts. So in 2004 the state of Oklahoma citizens were presented with State Question 712, and they took a vote on whether to offer limited Class III gaming to tribes in return for a specific revenue fee payments. So under that agreement ,which has been in place now for the past 14 years, we provide  limited Class III games, and the state, for their part, what they have offered is substantial exclusivity to the gaming market.. Not pure exclusivity-- we're not a monopoly--but substantial. 

Pryor :Where does the money go? If the state of Oklahoma receives anywhere between 4 and 10 percent, where does the other money go? 

Morgan: So that goes back to the tribal governments. And tribal governments are limited in the way that it spends its money, but, generally speaking, it all goes towards tribal governmental purposes. 

Ashley: Under what conditions would renegotiation of the compacts be appropriate? 

Morgan: Well, you know, like any contract parties are always able to sit down and talk about terms the contract. The specific reference in the compact gave a window of a 180 days prior to the to the expiration. So we're within that window. So it's entirely appropriate and always expected that parties would have this conversation at this point in time. 

Ashley: Are there conversations taking place right now? 

Morgan: I would say there are limited conversations happening. I think tribal leaders were caught off guard about how Governor Stitt announced that he intended to renegotiate. I think they were also caught off guard on his view that the compacts terminated on January 1 should the parties not be able to come to an additional agreement. He has I think been misinformed. 

Pryor: Word of his sentiment came out in an op-ed piece. 

Morgan: An op-ed piece...You know, that piece to my understanding dropped at midnight on Sunday. That was during the Fourth of July weekend. The letters to tribes didn't start showing up until Monday afternoon or Tuesday. So the first mention that tribal leaders got of his intention was through that op-ed. 

Pryor: Is there an incentive for tribes to renegotiate? 

Morgan: Well, I think tribes want to be good partners. You know, we have many partners out there, and the state is one partner, and it's been a great relationship. But federal law says that, you know, under gaming compacts the state has to offer something of value to the tribe in return for receiving those revenue share payments. That's our question to Gov. Stitt at this point. What are you offering to us, specifically, that we would believe represents some value? 

Ashley: What would your members say would be of value to them? 

Morgan: You know, at this point we haven't really went down that far because we don't understand exactly what Gov. Stitt Is asking for. If you would like to talk about games being offered or the fee payment arrangement, what are you offering? We feel like his broad repudiation of the termination clause of the compact...It's not the right first step. And we're looking, I think, for him to to maybe step back for a second and re-evaluate what how he's done that and then to talk to tribes on a government to government basis. 

Ashley: The governor apparently wants tribes to pay a higher exclusivity fee for Class III games more in line with what some other states are paying. Where do the tribes stand on that?

Morgan: This is a little bit more complex. It's hard to just look at Oklahoma versus any other state to be quite honest with you. You have to drill down a little bit into what the parties discussed at that time. So you have to look at market share, competitors, what is the average entertainment dollar that your patrons may spend. When he starts comparing Oklahoma to Connecticut, I mean, that's an apples and oranges comparison. In 2015 the GAO, a federal government agency, looked at tribal gaming, and they looked at compacts across the country. And they did find thirteen compacts that did have a twnety to twenty five percent rate as the maximum, but they also found 104 compacts that had zero dollars in terms of revenue sharing payments. And so, if you look at where Oklahoma is in that 4 to 6 percent market, I think you'd find it's pretty equitable and in line with with national norms. 

Ashley: Outside of the brouhaha with the governor currently, where would you say Indian gaming is headed in Oklahoma in the years to come?

Morgan: Technology is always changing, and Indian gaming has always been an innovator in technology. You know, we've seen a lot of innovations take a foothold in Indian gaming before you actually see it in the commercial markets. And I think over the years you saw Indian gaming get more sophisticated in the state. You see, not only gaming facilities, you see hotels, concert venues, golf courses, RV parks. You know, Oklahoma is a leader in Indian gaming across the country. We are currently the number two tribal governmental gaming jurisdiction right behind California and number three, if you include in commercial jurisdictions, we're behind California Nevada. So, you know, that's one of the things that we do like to point out to Gov. Stitt. He's always talking about a "top ten state." In tribal gaming and gaming in general we are a top three state. 

Pryor: Matthew Morgan, Chair of the Oklahoma Indian Gaming Association, thanks for joining us. 

Morgan: Appreciate it. Thanks so much for having me. 

 

Pryor We will be visiting with Gov. Kevin Stitt on the next Capitol Insider. If you have questions e-mail us at news@kgou.org or contact us on Twitter at @kgounews. Until next time, with Shawn Ashley, I'm Dick Pryor.