Tribal gambling puts millions in state pot
by: S.E. RUCKMAN World Staff Writer
The Tulsa World
3/3/2008   
 
http://www.tulsaworld.com/news/article.aspx?articleID=20080303_1_A1_spanc00052


Oklahoma received $70.4 million in 2007 from Indian gambling compacts or "exclusivity fees," state records show.
 
The figure is more than triple the $21.5 million collected in 2006 and matches estimates made in 2004, when a state question was approved allowing the state to enter into compacts with gambling tribes.
 
In 2005, only about $8.2 million was collected.
 
The Chickasaw Nation led state Indian tribes in 2007 for revenue payments with $18 million, according to Office of State Finance records. The Choctaw Nation was second with $16.5 million, and the Cherokee Nation came in third with $11.5 million.
 
State Treasurer Scott Meacham said it is likely that up to a 50 percent increase in those payments could result if the National Indian Gaming Commission were to approve proposed regulations that would reclassify noncompacted Class II -- or bingo-based -- games into compacted Class III games, or slot machines.
 
The tribes have argued that the proposed rules are unfair and unnecessary. Meacham said approving those rules has a positive side to it.
 
"If payments go up, it means more tribes are converting to compact games," he said. "But that money doesn't go to the state as a whole, but straight to education."
 
Meanwhile, Brian Campbell, CEO of Chickasaw Enterprises, said his tribe making the most compact fee payments among state tribes is not a surprise.
 
"The Chickasaw Nation is always among the top three tribes that contribute the most to the state's education fund," he said. "We've proven that we are a significant contributor to Oklahoma's economic development."
 
Cherokee Principal Chief Chad Smith said the tribe's No. 3 position for compact payments is a direct result of finding its market and then competing in it.
 
"That's why we decided to expand in West Siloam (Springs)," he said. "We built a site there many years ago because of its proximity to Fort Smith and the northwest Arkansas market."
 
Derek Campbell, head of gaming compliance in the Office of State Finance, said officials see exclusivity fees as a barometer on how well a tribe's gambling enterprise is faring during the year.
 
"We don't know how many Class II machines (uncompacted games) a casino has," he said. "We see trends that we read from the year-end report."
 
Revenue payments increased from the beginning of the year to the end. That is what state finance officials saw in 2007, Campbell said.
 
Compact payments started with $4 million in January and rose to $6.6 million by October. The monthly figures represent the total amount tribes paid to the state in compact fees, officials said.
 
The state began keeping logs on compact payments in 2005 after State Question 712 was approved in November 2004, allowing gambling agreements between Oklahoma and Indian tribes.
 
The tribes' payments are derived from a percentage of the compact machines' (Class III) profit that the state and each tribe have negotiated in their gambling compact agreement and ranges from 6 percent to 10 percent. Currently, about 33 of 37 federally recognized tribes have compacted with the state.
 
Janie Dillard, Choctaw executive director of gaming, said her tribe pays 6 percent for compact games and 10 percent of table games revenue to the state. She estimates 80 percent of its total games are compacted games.
 
"Over the past couple of years, some of the largest companies in the industry have had their games approved for play in Oklahoma under the state compact," she said.
 
Among other local tribes, the Osage Nation and Muscogee (Creek) Nation ranked fifth and seventh, respectively, among state tribes in total 2007 payments. The Osages paid $3.2 million, and the Creeks paid $2 million.
 
State gambling tribes have about 25,000 (noncompacted) Class III machines of about 50,000 total gambling machines.
 
Oklahoma officials rely on tribal self-reporting and inventory amounts per casino the state already has to draw up their estimate of compacted games, Campbell said.
 
 
S.E. Ruckman 581-8462
se.ruckman@tulsaworld.com <mailTo:se.ruckman@tulsaworld.com>