OK Supreme Court: Two of Stitt’s new compacts invalid

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The Oklahoma Supreme Court has ruled in favor of legislative leaders who sued Gov. Kevin Stitt and argued that he lacked authority to unilaterally approve his new gaming compacts with the Comanche Nation and the Otoe-Missouria Tribe. The decision hinges specifically on Stitt’s inclusion of provisions about house-banked card games and event wagering, which have not been specifically authorized in state law.

The two tribal nations, however, said they intend to continue operating under the other provisions of the compacts, which were deemed approved by the U.S. Department of Interior in June.

The 8-1 ruling’s majority opinion was authored by Justice James Winchester and comes after House Speaker Charles McCall (R-Atoka) and Senate President Pro Tempore Greg Treat (R-OKC) had argued to the Supreme Court that legislative approval of the additional Class III games was needed before the compacts could be signed. The court sided with the lawmakers.

“The tribal gaming compacts Gov. Stitt entered into with the Comanche Nation and Otoe-Missouria Tribes are invalid under Oklahoma law,” Winchester wrote in the majority opinion, which was posted online around noon Tuesday. “The state of Oklahoma is not and cannot be legally bound by those compacts until such time as the Legislature enacts laws to allow the specific Class III gaming at issue, and in turn, allowing the governor to negotiate additional revenue.”

At the top of the page in red, a disclaimer noted: “This opinion has not been released for publication. Until released, it is subject to revision or withdrawal.” Functionally, that means the opinion could change slightly and should not be cited as precedent in other cases until it is finalized.

The court’s decision emphasized that elements of the attempted Comanche and Otoe-Missouria compacts ran contrary to existing language of the State-Tribal Gaming Act:

The State-Tribal Gaming Act is “game-specific” and allows for specified forms of Class III gaming. The State-Tribal Gaming Act expressly bars house-banked card games, house-banked table games involving dice or roulette wheels, and event wagering. See 3A O.S. Supp. 2018, § 262(H). The Legislature has yet to amend the State-Tribal Gaming Act to include house-banked card and table games and event wagering as covered games. As a result, the tribal gaming compacts at issue authorize types of Class III gaming expressly prohibited by the State-Tribal Gaming Act. In turn, any revenue to the State, the Comanche Nation Tribe or the Otoe-Missouria Tribe that would result from the tribal gaming compacts is prohibited. The Court must, therefore, conclude Governor Stitt exceeded his authority in entering into the tribal gaming compacts with the Comanche Nation and Otoe-Missouria Tribes that included Class III gaming prohibited by the State-Tribal Gaming Act. Even if the Governor had sought and obtained the Joint Committee’s approval of these compacts as set forth in 74 O.S. Supp. 2012, § 1221, they would nevertheless be invalid. Just as the Governor is constrained by the statutory limitations on Class III gaming, so too is the Joint Committee.

Non-house-banked card games are currently authorized under state law, and discussions about event wagering — also known as sportsbook — have been ongoing.

Justice James Edmondson and Justice Tom Colbert recused in the case. Justice John Kane dissented on a procedural argument that the Comanche Nation and Otoe-Missouria Tribe should have been parties to the case.

OIGA, McCall, Treat praise court decision

The court’s opinion Tuesday is a political blow to Stitt, who signed the agreements with the Comanche Nation and the Otoe-Missouria Tribe in mid-April. But it’s also a defeat for the two tribes, which had broken from the state’s largest gaming tribes in pursuit of lucrative deals that included the potential for new casino locations and sports betting licenses.

In response to those tribes siding with Stitt in the compact dispute, the Oklahoma Indian Gaming Association suspended the membership of the Comanche Nation and the Otoe-Missouria Tribe. After Tuesday’s ruling, OIGA Chairman Matthew Morgan thanked the court for its decision.

“We appreciate the speed with which the Oklahoma Supreme Court acted on the pro tem and speaker’s petition in this important matter,” Morgan said in a statement. “Today’s decision confirms what the tribes have been saying since Gov. Stitt first launched his go-it-alone drive to rewrite our compacts. We believe firmly that the state-tribal relationship works best when we each act within the roles we have under the law.”

McCall and Treat also released statements.

“This ruling confirms what we have maintained all along: There are parameters defined by statute that must be followed in the negotiation of and entering into tribal gaming compacts,” said Treat, who has emphasized the value of the separation of powers in conversations with Stitt previously. “This has always been about preserving the separation of powers among the legislative, judicial and executive branches of government. When one branch of government acts outside of its authority, the other branches must take steps to restore the balance of power. This is a victory for the rule of law and preserves the foundational principle of checks and balances upon which our government is based.”

McCall concurred with Treat.

“We appreciate the court’s quick decision and look forward to all parties proceeding in a mutually beneficial manner for Oklahoma and all sovereign tribal nations,” McCall said in his statement. “From the start, this was about separation of powers, and the Supreme Court affirmed as much with a decisive ruling. Oklahoma and its tribal nations can move forward from this together as partners, as we have done for decades with great success.”

Attorney General Mike Hunter also released a statement.

“The Supreme Court affirmed what my office has opined, and the pro tem of the Senate and the speaker of the House of Representatives have argued all along, the governor lacks the authority to enter into and bind the state to compacts with Indian tribes that authorize gaming activity prohibited by state law,” Hunter said. “We applaud today’s ruling and appreciate the court for carefully looking at this and coming to an apt conclusion. We hope this settles and advances the resolution of gaming compact negotiations.”

Severability: Otoe-Missouria, Comanche say compacts still stand

Otoe-Missouria Chairman John Shotton countered with his own statement late Tuesday arguing that the Oklahoma Supreme Court lacks “jurisdiction to invalidate our compact” because his tribe did not intend to offer the expanded types of Class III gaming referenced by the court until they were authorized by the Legislature.

He also pointed to the compact’s severability clause.

“The Oklahoma Supreme Court doesn’t have jurisdiction to invalidate our compact when state and federal law dictates that our compact is legal. We have said all along we do not plan to offer house-banked card and table games and event wagering until they are authorized by state law,” Shotton said. “Indeed, this condition was part of the compact, and it was unfortunately overlooked by the court. We will continue to operate under the remaining terms of our compact pursuant to the severability clause of the compact, and we will refrain from operating any game that is not authorized under state law.”

Comanche Nation Chairman William Nelson Sr. also said his tribe would continue operating under the compact.

“Our compact is legal under federal law and is a matter of our tribal sovereignty. We intend to continue operating under the terms of the compact outside of offering games not currently authorized by state law,” Nelson said in a statement. “Our compact is legal and we are prepared to legally invoke the compact’s severability clause if necessary.”

Two other new compacts lack controversial language

On July 1, Stitt signed two other new gaming compacts with the United Keetoowah Band of Cherokee Indians and the Kialegee Tribal Town, two smaller tribes that have previously failed in their efforts to launch Class III casinos owing to opposition from larger tribes.

The UKB and Kialegee Tribal Town compacts do not include language related to house-banked card games or event wagering, so it is not immediately clear whether those compacts will be challenged as well in court. (The UKB and Kialegee Tribal Town compacts do include a most-favored nation clause that could have been exercised to authorize the additional Class III games if the Comanche and Otoe-Missouria compacts had taken effect.)

(Update: This story was updated at 3:10 p.m. Tuesday, July 21, to include comment from Hunter. It was updated again at 4:05 p.m. to include comment from Shotton. It was updated a final time at 5:30 p.m. to include comment from Nelson.)

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