While many might not pay much attention to Oklahoma politics, there is a long-lingering battle being fought between the State’s Republican legislature and Governor Kevin Stitt that holds the key to sports betting legalization prospects.
At the center of the battle is a now multi-year feud over various tribal compacts. While the most recent battle centers on tobacco and vehicle registration compacts, there is still a federal court battle being waged over gaming compacts entered into several years ago between the governor and a pair of Oklahoma-based tribes.
The Compacts would have legalized sports betting in Oklahoma, as well as expanded the number of properties in the state for a small number of tribes. The problem was that the legislature was never part of the process, something that the Oklahoma Supreme Court said was necessary for the Compacts to be valid.
New decisions could shape Oklahoma sports betting
The latest development in the fight largely seeing the legislature and the tribes aligned against the governor came to a head recently when the House and Senate, in a special legislative session, overrode the governor’s vetos of tobacco and motor vehicle tax compacts, extending the agreements for another year. For his part, Stitt voiced his displeasure and said the override was an “illegitimate process.”
While the tobacco and motor vehicle tax compacts obviously do not address legal sports betting, if the governor and the state’s tribes were able to come to an agreement (which would likely be far more valuable than any sports betting deal could be), it could signal a new leaf that would allow for the potential renegotiation of compacts, which could open the door for sports betting.
A lot of things need to fall just right for this to happen, but the rift between Stitt and what is likely the state’s biggest constituent group increases the pressure on the governor to perhaps try a new approach.
What’s this about tobacco and car taxes?
The latest kerfuffle has to do with Stitt expressing displeasure with definitional matters within the Compacts, along with the revenue split on motor vehicle registrations. The motor vehicle compacts between the state and numerous federally recognized tribes located within the state allow for reciprocity: a person registering a vehicle with a tribal government would have valid registration within the state of Oklahoma. The motor vehicle registration compacts generated $24 million in 2022, with a little more than $6 million shared between participating tribes.
The tobacco compacts, on the other hand, see the state of Oklahoma and tribal nations split tax revenue on tobacco sales to non-tribal citizens on tribal land. The tobacco compacts sent the state more than $57 million in 2022.
The governor vetoed the renewal of the agreements in June and sent a letter to 14 tribes seeking a renegotiation of the agreements. While the tobacco compact remained the same as to the revenue share portions, a 50/50 split, the governor wanted new language around the territory covered by the agreement.
The dispute over territorial definitions seems to be an extension of the Governor’s displeasure with the 2020 Supreme Court decision in McGirt v. Oklahoma, which found that much of Oklahoma (43 %) is tribal land for purposes of criminal law application.
A deepening split?
The split between the legislature and Stitt has been brewing for some time. The most recent evidence of the rift is a July 25 letter from the State’s Attorney General, Gentner Drummond, to the Governor. The letter informs him that, at the request of the President Pro Tempore of the Senate and the Speaker of the House, the Attorney General has entered an appearance in the litigation over the 2020 compacts that included Oklahoma sports betting, against the validity of the compacts.
The letter states to the Governor:
You knew that you lacked authority under Oklahoma law when you submitted these invalid compacts to the Secretary of the Interior in an attempt to sidestep the separation of powers enshrined in the Oklahoma Constitution.
It goes on to criticize the governor’s ongoing use of “high-priced” outside counsel to defend the compacts.
What does this mean for Oklahoma sports betting?
The federal litigation over the 2020 compacts wanes on. In the meantime, the growing number of issues dividing the governor and the legislature appears to need to come to a head at some point.
The tribes are at the center of the dispute, but if the veto overrides are an indication, the tribes seem to have broad support in the Oklahoma legislature. There remain a few possible scenarios moving forward.
The first is that the governor serves out the remaining three years of his term (Oklahoma only allows a governor to serve for eight years), and maintains a frosty relationship with the tribes and the legislature.
Alternatively, there could be a compromise reached. If a compromise is reached, there is the possibility that it would be broad enough in scope to incorporate various economic compacts between the state and the tribes.
If there is an effort to reconcile the relationship, OK sports betting could potentially be an item brought to the table, seen as desirable by both sides. Time will ultimately tell what comes from this, but it would seem like at least a possibility that some common ground could be found to bring all three parties together.