Oklahoma Sports Betting Depends on Thaw in Tribal-State Relations, Says Legal Expert

Oklahomans may be looking east to Florida for clues on what could happen with tribal-led sports betting in their state after a Seminole Tribe of Florida win before the DC Circuit Court of Appeals in June. But one legal expert says Oklahoma Gov. Kevin Stitt is really the one to watch.

Stitt’s strained relationship with Oklahoma tribes remains a major factor in any future Sooner State sports betting launch, Oklahoma State University Spears School of Business associate professor and attorney John T. Holden told Gaming Today in an exclusive interview last week.

The OSU professor — whose research is focused on gaming policy — said he sees two options for legal sports betting in Oklahoma, at least before 2027: Wait for Stitt to possibly renegotiate tribal-state gaming compacts that include sports betting in his current second (and final) term, or wait until the governor is term-limited out of office in 2026.

Holden called the gaming compact scenario “optimistic.”

“I would not be betting a lot of money on Oklahoma getting something done in the next session,” he told Gaming Today. Holden said sports betting negotiations could potentially be “swept in” as separate tribal-state compact negotiations get underway over the next year, but he has his doubts.

“Alternative, the governor’s term will be up in 2026,” said Holden. “Perhaps a new governor will have a different relationship with the tribes.”

Related: Florida Sports Betting Ruling Could Have Broad Impact for Tribal Gaming in US

Tension Remains Between Stitt and Tribes

Tribes appear hesitant to work with Stitt, who reworked gambling compacts with some of the state’s gaming tribes and not others in 2020, only to have the compacts invalidated by the Oklahoma Supreme Court.

Troubles continued this year when Stitt vetoed several bills that were supported by tribes.

Oklahoma Gov. Kevin Stitt's icy relationship with the tribes has impacted movement toward legalizing sports betting.
Oklahoma Gov. Kevin Stitt (AP Photo/Sue Ogrocki)

Oklahoma state lawmakers – reportedly frustrated with the governor – planned to meet in special session last week to override Stitt’s vetoes to tribal-state compacts related to tobacco sales and motor vehicles, allowing those compacts to stay in effect for one more year.

Like separate gambling compacts, tobacco and vehicle compacts provide revenue to the tribes and the state. Revenue from tobacco compacts alone – which split taxes on tribal tobacco sales to non-tribal citizens 50/50 between tribes and the state – totals around $50 million annually, according to Holden.

Lawmakers want Stitt to negotiate new tobacco and vehicle compacts with tribes over the next year, but obstacles remain. The biggest one may be the landmark 2020 US Supreme Court (McGirt v. Oklahoma) decision on tribal sovereignty. That decision found that more than 40 percent of Oklahoma is tribal land, including about half of Tulsa.

Relations between the governor and many tribes have been cool since the decision was handed down.

“The governor has been very upset that he has not been able to get some narrowing of this decision,” Holden told Gaming Today. “If there’s some common ground found between the three parties (tribes, governor, and state lawmakers) where they’re able to sort of resolve the tobacco and vehicle compacts and in that, the gaming compacts get swept in as well, and sports betting becomes a subject of negotiation there, I think that is the optimistic scenario.”

Oklahoma Sports Betting Legislation Still Pending

Another issue is the Oklahoma State Legislature. To avoid a repeat of what happened with the Oklahoma Supreme Court in 2020, state lawmakers need to add sports betting to Oklahoma’s State-Tribal Gaming Act before new gaming compacts are signed. Holden said a final federal ruling in favor of the Florida Seminole tribe won’t preclude the need for state legislative action in Oklahoma.

State lawmakers in Oklahoma City came close this year to allowing mobile and in-person sports betting via approved tribal-state gaming compacts when they considered HB 1027. Sponsored by Rep. Ken Luttrell, R-Ponca City, the bill would have allowed gaming tribes to offer sports betting on their lands (with mobile potentially limited to reservations under current federal law) by signing a supplement to their existing compact. The supplement would have to be approved, like a compact, by the US Department of the Interior.

Tribes offering sports betting under an approved supplement per HB 1027 would have paid four percent of their first $5 million in monthly net win from sports betting to the state per calendar year. Fees on the next $5 million would total five percent of adjusted gross revenue from sports betting per calendar year. Subsequent fees would total six percent of all adjusted gross revenue from sports betting per calendar year.

Instead, the bill passed the House 66-26 in March only to stall in the Senate.

It is possible that similar legislation will be resurrected next year. Luttrell remains hopeful, according to a May 10 story in Tulsa World – although the lawmaker realizes much depends on Stitt.

“I think he realizes the advantages to cooperating with the tribes and working together on projects that move the state of Oklahoma forward,” Luttrell was quoted as saying.

The Florida Connection and What’s Best for Oklahoma Tribes

It remains to be seen if a final decision in the Florida Seminole case, now pending, would really change the landscape for Oklahoma and other states.

What’s good for Florida might not be good for Oklahoma – specifically regarding mobile sports betting, Holden told Gaming Today.

“The Florida situation is so unique with only the Seminole tribe – it is the only player in the market, while in Oklahoma there are 30 plus gaming tribes. That’s kind of where things break down with mobile,” he said. “If I’m advising a tribe, and they can’t secure a deal with DraftKings or FanDuel, I gotta tell them, ‘You don’t want mobile because you aren’t going to have any meaningful share of the marketplace.’”

That’s tough news in an industry where mobile makes most of the revenue. But Holden says retail has its advantages in Oklahoma.

“Even though many states with dollar signs in their eyes have viewed mobile sports betting as the best approach, Oklahoma might be an anomaly in that respect as the interests of the state and the tribes within the state may be better served by an in-person mode,” he wrote in a 2022 Oklahoma Bar Journal article. “With gaming properties across the state and 35 compacted tribes potentially competing in a mobile environment, it may mean the biggest tribes win out either through their own name recognition or through partnering with national brands.

“In many ways, sports betting in Oklahoma could look like a fancy new amenity for many properties, a new way of bringing customers through the doors.”

About the Author
Rebecca Hanchett

Rebecca Hanchett

Legislative Writer
Based in Kentucky's Bluegrass region, Rebecca Hanchett is a political writer who covers legislative developments at Gaming Today. She worked as a public affairs specialist for 23 years at the Kentucky State Capitol. A University of Kentucky grad, Hanchett has been known to watch UK. basketball from time to time.

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