Patrick B. McGuigan
OKLAHOMA CITY – Absent state approval for off-reservation gaming and a couple of exceptions which don’t apply to Oklahoma, the Indian Gaming Regulatory Act (IGRA) prohibited gaming on post-1988 acquired Indian trust land unless it was on a reservation (tribal jurisdiction) – or in Oklahoma, where no reservation existed, a former reservation which again required tribal jurisdiction because both categories were to be treated the same.
Over the next two decades, four to five dozen Oklahoma casinos were put into trust for non-gaming purposes with no federal review. Now the validity of those deeds/casino eligibility are at issue in the Tenth U.S. Circuit Court of Appeals case of Comanche Nation v Zinke.
Against this backdrop the Step Up tax plan, with dice and roulette expansion included, had a provision in it, to act as a vehicle to allow for a compact amendment to approve these four to five dozen suspect post-1988 casino sites pursuant to 25 USC 2719 as state approved. While the Step Up plan’s first steps were not approved in a state House vote on February 12, proposals to enact a “land fix” in return for a small boost in state government revenues should be avoided.
If passed at the state Capitol, and once published in the Federal Register, it would be federally approved and would eliminate the State of Oklahoma’s leverage to negotiate a better deal when the compact expires in 2020, because the current compact has a provision which automatically extends the current terms in the absence of a new compact.
Without the ability to threaten the closure of these suspect casinos, the state of Oklahoma will have no real leverage in the negotiations, costing the state perhaps $500 million a year in unrealized revenues.
In sum, 12 percent in exclusivity fees of an estimated $4 billion in annual revenues.
Some States like Connecticut get 25 percent for exclusivity fees.