OKLAHOMA CITY — A federal judge handed Oklahoma’s governor a stinging defeat Tuesday, ruling that the state’s gaming compacts with Native American tribes do in fact automatically renew.

Chief U.S. District Judge Timothy DeGiusti found that the state’s gaming compacts automatically renewed for additional 15-year term starting Jan. 1 by “by operation of the unambiguous terms” of the agreement.

“We appreciate that the court moved quickly to confirm what tribal leaders have always known — the plain language of our intergovernmental agreements mean what they mean, and here, those words mean our gaming compacts automatically renewed Jan. 1, 2020,” said Matthew Morgan, chair of the Oklahoma Indian Gaming Association.

Gov. Kevin Stitt said he was “deeply disappointed” by the federal court’s ruling.

“It confirms my fears, and the fears of many fellow Oklahomans, that the state entered into a poorly negotiated deal, and now we must bear the cost of this mistake,” Stitt said. “The federal court determined that the 2004 Gaming Compact auto-renewed for 15 years because of an action taken by an agency’s unelected board to reissue licenses for gaming at horse racing tracks. This decision, coupled with the recent U.S. Supreme Court ruling on McGirt, means Oklahomans have important questions to face regarding our future.”

Stitt said as he traveled the state during his first six months in office, he learned that only a few tribes were receiving most of the benefit from the compacts, and the one-size-fits-all approach “was clearly broken.”

“As your governor, I was driven by a conviction that we could look to the future and generate new, sustainable opportunities for the next generation of Oklahomans,” he said.

Several tribes including the Chickasaw Nation had sued Stitt last year. They asked a federal judge help end an ongoing impasse over gaming compacts and bring an “end to the uncertainty” that they said the Republican leader had attempted to cast over tribal gaming operations ahead of Jan. 1.

The Chickasaw Nation operates WinStar World Casino and Resort near Thackerville, Oklahoma, just north of Gainesville. With about 600,000 square feet of gaming area, WinStar ranks among the largest casinos in the world, according to several roundups listing large casinos by square footage.

Stitt contended the compacts with 35 tribal governments automatically expired Jan. 1.

The compacts allow tribes to offer a subset of gaming known as Class III games in exchange for paying the state exclusivity fees ranging from 4 to 10%. The fees have generated more than $1.5 billion over the last 15 years.

Stitt wanted to renew the compacts for another 15 years, but suggested tribal leaders pay more for exclusivity rights. He also wanted resolution language added to specify what will happen the next time the compacts are up for renewal.

Tribal leaders have said they’re open to renegotiating, but not until Stitt acknowledges the compacts automatically renew.

The Tulsa World reported that the state has already spent more than $1.5 million in legal fees in the fight over the future of tribal gaming.

Stephen Greetham, senior counsel for the Chickasaw Nation, said Tuesday was a “good day for the tribes and Oklahoma.”

“Good partners keep their word,” he said. “The Chickasaw Nation will always do so, and we will always expect our intergovernmental partners to do so, as well. We all benefit when we do.”

Stitt said Tuesday’s federal court ruling, coupled with the recent U.S. Supreme Court decision classifying large swathes of eastern Oklahoma as Indian reservation, means Oklahomans will have to explore several challenges. Unresolved issues include who will pay taxes and who won’t, how Oklahoma will guarantee a competitive marketplace and how the state will fund core public services into the next generation.

“In short, we face a question of constitutional proportions about what it means to be the state of Oklahoma, and how we regulate and oversee all business in our state,” he said.

Stecklein covers the Oklahoma Statehouse for CNHI's newspapers and websites. Reach her at jstecklein@cnhi.com.

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