Legal shift could transform tribal online gaming. But what about in Oklahoma?

A recent move by the U.S. Supreme Court could reshape what’s possible for tribal gaming and mobile sports betting. Experts caution, however, that massive changes could be years away for Oklahoma, one of a dozen states where sports betting remains illegal.

For one thing, gaming negotiations between Gov. Kevin Stitt and most tribes have stalled since 2019. For another, the sheer number of federally recognized tribal nations in Oklahoma — 38 — means consensus over sports betting and other forms of online gaming will be hard to reach.

Still, the governor and tribal leaders have a new model to look to: Florida’s exclusive sports betting deal with the Seminole Tribe. Under that compact, the tribe can accept online wagers placed anywhere in the coastal state.

Opponents had argued the Florida agreement violated federal laws requiring tribal gaming to take place on tribal land. State and tribal officials contended the computer servers processing the bets would be on tribal land, even if the people placing those bets would not.

A federal circuit court ruled in favor of the agreement, and the Supreme Court decided in June not to hear an appeal.

The agreement could pave the way for other deals between states and tribes looking to reach customers off tribal lands.

“The court decision allows the tribes and the states to really look beyond the scope of what we have done in the past and to look at new and innovative ways to offer gaming,” said Matthew Morgan, chair of the Oklahoma Indian Gaming Association. The trade group represents most of the 35 tribes that offer gaming in the state.

Little progress on expanding gaming in Oklahoma

Tribal gaming is a multi-billion-dollar industry in Oklahoma, and mobile betting could generate millions more for the tribes and the state.

But Morgan and others acknowledged talks to expand gaming aren’t currently happening between tribal leaders and the governor’s office, and it’s unknown when they might get underway. Efforts by state lawmakers to legalize sports betting have failed to gain traction, including earlier this year.

Sen. Bill Coleman, a Ponca City Republican who has led the push in the Senate, said leadership changes in both legislative chambers could add even more hurdles next year. “I probably will file another bill,” he said about his efforts to legalize sports betting. “I don’t know where it will go.”

More: Governor announces a plan for sports betting in Oklahoma, but many hurdles lie ahead

While Stitt has expressed support for sports betting online and in person, tribal officials have dismissed his proposal as a nonstarter because tribal nations would pit them against outside competitors, Morgan said.

He said a commercial sports betting market would breach the terms of the current state-tribal gaming compact, which provides tribes almost total exclusivity over the industry. In exchange, tribes pay the state a portion of revenues generated by games covered in the compact. The fees generate about $16 million every month, which mostly goes to schools.

Tribes use gaming proceeds to fund their own government programs, as well as development and infrastructure projects.

Why introducing mobile sports betting is more complicated than it seems

Every tribe’s economic needs and realities vary — from the Chickasaw Nation, which operates the massive WinStar World Casino and Resort near the Oklahoma-Texas line, to the United Keetoowah Band, which has struggled for years to establish any gaming operation at all in northeast Oklahoma.

Because every tribe faces such different circumstances, figuring out how to offer mobile sports betting in a way that works for everyone will be difficult, said William Norman, an Oklahoma City attorney who practices tribal law.

“I think there is a path forward if the tribes have the will among themselves to get there,” he said. “I think it will take a lot more communication.”

One of the biggest factors tribal officials must consider is the fact that sports betting operates on extremely thin profit margins, so the business may not pencil out for everyone, said Michael McBride, a tribal law attorney based in Tulsa.

The Florida compact, between the state and a single tribe, is very different from what might make sense in Oklahoma, where dozens of tribes operate gaming facilities, he said. While the Florida deal could influence negotiations to bring sports betting and other forms of online gaming to Oklahoma, it’s unlikely to resemble whatever final agreement takes shape in the state, McBride said.

“With so many tribes and the margins being so thin, it may be hard to reach a negotiated Class III compact,” he said, referring to the umbrella term federal regulators use to classify sports betting and other forms of Las Vegas-style gaming.

One gaming app currently operates in Oklahoma

Gaming based on a bingo-style system is referred to as Class II. Federal law allows tribes to offer that form of gaming completely independent from states. Several Oklahoma tribes have said they are developing Class II mobile apps, and three have received preliminary approval from federal regulators to do so.

The Chickasaw Nation rolled out a mobile Class II gaming app in December that works at WinStar near Thackerville.

Morgan said he expects the app development to continue, particularly as negotiations over sports betting and other forms of online gaming stall.

McBride said the Chickasaw Nation or another tribe may also look to expand the reach of their Class II games off of casino properties and across their reservations, which were reaffirmed by a landmark 2020 Supreme Court decision.

“Post McGirt, the Chickasaw Reservation got pretty huge, so that opens up a lot of possibilities in terms of where that gaming could occur,” he said.

Morgan said he isn’t sure when broader gaming talks will move forward between tribal leaders and the governor’s office. Over the past year, Stitt has feuded with tribes over police jurisdiction, license plates and tax agreements.

“There are other subjects when it comes to tribal-state relations that are sucking up the oxygen in the room, so gaming is not really top of mind,” Morgan said.

Molly Young covers Indigenous affairs. Reach her at mollyyoung@gannett.com or 405-347-3534.

This article originally appeared on Oklahoman: Legal shift could transform tribal online gaming. But what about in Oklahoma?