Analysis: Oklahoma Sports Betting Bill Backed By Questionable Numbers

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Oklahoma sports betting

In a state with only 4 million people like Oklahoma, $240 million sounds like a lot of new revenue from sports betting.

This is what one Oklahoma lawmaker says OK sports betting could do for Oklahoma. Representative Ken Luttrell, a Republican state representative from Ponca City, has circulated legislation that would provide a path for the Sooner State‘s tribes to offer sports betting at their brick-and-mortar facilities.

There is, of course, one problem: there is almost no way on Earth that Oklahoma sports betting will bring $240 million in revenue to the state and the tribes, at least not if we are considering revenue to be gross gaming revenue and/or state tax revenue.

Luttrell cites a 2017 study by the Oxford Economics Group prepared for the American Gaming Association. The document was prepared when the Professional and Amateur Sports Protection Act (PASPA) still existed, and we did not have a great grasp on how sports betting would expand.

While the document might yet prove accurate, at the moment, it appears to have been overly bullish in several respects.

What is in the Oklahoma sports betting bill?

The bill, which will not be discussed until the Oklahoma legislature reconvenes on February 7, sets out that if at least four of the state’s tribes enter into model tribal-state compacts, which are subsequently approved by the Secretary of the Interior, then the tribes may offer sports betting at their brick-and-mortar facilities. The bill would also allow for the state’s racetracks to expand their gaming terminals.

Should the legislation pass and Tribes choose to accept the model-compact offering sports betting as an additional covered game, the Tribes will pay the state 10% of the monthly “net win.” In exchange, the Tribes will receive exclusivity.

The money would primarily be directed to some of Oklahoma’s educational funding pools.

Current status in Oklahoma

Currently, Oklahoma’s Tribes pay the state between 4 and 10% under their current deals.

While the compacts were amended several years ago to allow the Tribes to offer ball and dice games (craps and roulette), the Tribes recently clashed with Governor Kevin Stitt over whether the compacts renew perpetually.

The Tribes ultimately prevailed in court.

Not Oklahoma’s first try

As the majority of the State’s Tribes were pitted against the Governor in a dispute over the renewal of compacts. However, several tribes attempted to opt-in to new compacts offered by the Governor, which would have allowed sports betting.

These compacts were ultimately thrown out, as the compacting process was done without the legislature’s input.

We have also seen a few previous attempts to pass legislation that would allow for Oklahoma sports betting. Hwever, all such previous efforts have failed to come to fruition.

Trying to find a comparison

The Oxford Economics Group report that was the reported basis for the $240 million figure is probably not a great benchmark. This is especially true when we look at the revenue from even the most successful states and see they have failed to reach revenue in several cases after being operational for two or more years.

Given that Oklahoma is unlikely to have mobile wagering (at least not as part of the bill proposed by Luttrell), the numbers look even meeker. While not a perfect comparison, Mississippi operates a scheme that would likely be similar to Oklahoma which has seen a little more than $165 million in revenue despite being one of the first states to launch.

While only about three-quarters the size of Oklahoma and having many fewer properties makes the comparison imperfect, it might be the best analogy. It is worth noting that the State of Mississippi’s share of that $165 million has been just under $20 million.

Oklahoma’s unique gaming environment

Oklahoma has been a tribal gaming success story. Gaming has become a fixture of Oklahoma alongside the oil and gas industry.

To keep up with its neighbors to the east in Arkansas and maintain an attraction for those crossing the Texas border, it makes sense that Oklahoma would eventually legalize sports betting. Sports betting is a product that Oklahoma residents clearly desire.

Indeed, one of the largest illegal sports betting rings in history ran some of its operations out of Oklahoma City. But realistic expectations must be set about what kind of benefits OK sports betting will bring.

What to make of this legislation?

It is tough to make too much of the legislation at this point. After all, the legislative session has not even begun.

However, it should be exciting for Oklahomans that there will be a bill in the legislature that could bring sports betting to the state, even if it means they will still have to drive to a casino to place a bet.

There are a lot of questions that remain, including who supports this bill. It remains uncertain at the moment whether the state’s tribes are on board or whether Stitt would support this legislation. Finding common ground between the Tribes and the Governor has been difficult in recent months, and it is not clear if this legislation could be a step to mending fences.