Gaming Tribes’ Fees to State Continue to Rise

Gaming Tribes’ Fees to State Continue to Rise

ICTMN Staff
4/18/11

Tribes operating casinos in Oklahoma paid the state $118 million in fees last year, reported the Tulsa World.

The Chickasaw Nation lead the pack with $33 million to the state, contributing to the overall increase in fees paid to Oklahoma by gaming tribes. In 2006, the first full fiscal year for gaming compacts between tribes and Oklahoma, gaming tribes paid $14 million to the state. First year projections estimated gaming compact fees to bring in about $55 million. Tribes have exceeded that amount every year since 2008, the Tulsa World reported.

"It's important to realize that tribes are over-delivering on our deal with the state," said Chad Smith, principal chief of the Cherokee Nation, which operates eight casinos. "We've created thousands of jobs while the state is far exceeding revenue projections. The gaming compact has been a great deal for the state of Oklahoma, really very beneficial to both tribal and state governments."

Of the state's 34 gaming tribes, 33 have compacted for gaming with the state since 2005, reported the Tulsa World.

Only one gaming tribe, the United Keetoowah Band of Cherokees, does not compact with the state, which is attributed to its lengthy battle over its Tahlequah-based casino. Determination of its rights to continue operating remains pending with the National Indian Gaming Commission.

Tribes pay 4 to 6 percent of adjusted gross revenues from electronic games and 10 percent of the net winnings from nonhouse-banked card games to the state. The bulk of tribal casino fees paid to the state go toward the House Bill 1017 fund, which covers costs of the education reform measure limiting gaming class size. The rest is delegated to the state's general fund with a small cut funding programs for compulsive gamblers.

The highest grossing gaming tribe, the Chickasaw Nation, operates 15 casinos, including the state's largest casino: the 500,000-square-foot WinStar World Casino just north of the Texas border, reported Tulsa World. "Our gaming compact with the state of Oklahoma is the result of negotiations which ultimately provide benefits to everyone concerned," Chickasaw Nation Gov. Bill Anoatubby told the Tulsa World. "It has contributed to an increasingly positive and mutually beneficial relationship with the state of Oklahoma in recent years."

In a distant second, the Choctaw Tribe payed $22.7 million; the Cherokee Nation ranked third, paying $12.2 million.

The State of Oklahoma's steady rise in revenues, and thus payments to the state, may be attributed to the tribes' ability to grow their local market and attract customers from nearby states who have limited gaming options. Oklahoma tribes have also proven successful due to strategic placement of gaming facilities near population centers and states borders, adding Class III gaming, increasing the supply of gaming and adding high-quality non-gaming amenities, according to the Casino City Indian Gaming Industry Report by Alan Meister, an economist with Nathan Associates Inc.

All Oklahoma tribal casino compacts expire Jan. 1, 2020, yet they have automatic renewal clauses unless renegotiated, Derek Campbell, in charge of gaming compliance for the Office of State Finance, told the Tulsa World.

"I imagine two or three years out they will try to renegotiate," Campbell told the Tulsa World.

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