Governor selects out-of-state law firm to represent Oklahoma in tribal gaming dispute
Gov. Kevin Stitt has selected Seattle-based law firm Perkins Coie to represent the state in its ongoing dispute with Oklahoma Indian tribes over tribal gaming compacts.
Perkins Coie will help the state in its efforts to negotiate a revised gaming compact with Oklahoma tribes. It also will respond to a federal lawsuit filed by the state's three largest gaming tribes, the governor's office said.
The tribes are asking for a judicial ruling that the tribes' 15-year gaming compacts automatically renewed on Jan. 1.
Stitt contends the compacts expired on New Year's Day and must be renegotiated.
Meanwhile, gambling at the 130 or so tribal casinos in the state continues as the dispute moves to court.
Stitt wants the tribes to pay higher exclusivity rates on the Class III, Las Vegas-style casino games than the rates they have been paying. The tribes are paying graduated rates of 4-6% on Class III slot machines and 10% of the monthly net win from table games. The state received more than $148 million in exclusivity fees from tribes last fiscal year.
“With Perkins Coie, the State of Oklahoma is well positioned to work towards a compact that protects core public services and advances the future of our great state, its 4 million residents, and gaming tribes," Stitt said. "Perkins Coie will also respond to and address the Chickasaw, Cherokee, and Choctaw Nations’ federal lawsuit filed on New Year’s Eve. The legal experts at Perkins Coie have successfully represented other states in Indian law controversies, to include the State of New Mexico’s compact dispute in 2015.”
House Minority Leader Emily Virgin, D-Norman, criticized Stitt's decision to hire the international firm.
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"It’s safe to say this is not going to be cheap," Virgin said. "I don’t see anywhere in the Governor’s release stating how he plans to pay for this."
The three attorneys Perkins Coie has assigned to the case will be paid rates ranging from $430 to $750 an hour, according to a copy of the legal services agreement obtained by The Oklahoman. A legal assistant will be paid $390 an hour.
Total fees are capped $300,000.
"We intentionally selected a contract based on an hourly rate for assistance to compact negotiations," a spokeswoman for the governor said. "The more quickly we can resolve the dispute about compact expiration, the less cost there will be to the state."
Funds to pay the legal fees will come from the Gaming Compliance Unit in the Office of Management and Enterprise Services, the governor's office said.
Oklahoma Attorney General Mike Hunter initially represented the state in compact negotiations, but withdrew from the process Dec. 17 to allow the governor's office to directly pursue negotiations with the tribes.
In announcing his decision to retain the Perkins Coie law firm, the the governor cited the firm's extensive litigation experience, including its work in helping New Mexico win a gaming compact dispute with the Pojoaque Pueblo tribe in New Mexico.
While that litigation was in progress, the firm helped New Mexico negotiate a new gaming compact with five other tribes in 2015, the governor's office said. Several other New Mexico tribes are now also participating in that compact.
New Mexico's gaming compacts are similar to Oklahoma's compacts in that they call for tribes to make graduated revenue sharing payments to the state. In New Mexico, tribes that participate in the 2015 compact currently pay 2 percent of their adjusted net win on the first $6 million, then 8.75 percent up to $20 million; 8.75 percent from $20 million to $40 million; 9.5 percent from $40 million to $80 million; and 10 percent above $80 million.
Those rates appear to be a little higher than the rates paid in Oklahoma. Comparing rates can be misleading, however, because states define terms like "adjusted net win" in different ways and there are differences in fees that states often charge for things like regulatory expenses.
Stephen Greetham, senior counsel for the Chickasaw Nation, said the New Mexico compacts appear to authorize more forms of Class III gaming than the Oklahoma compacts. Issues like that are important and impact negotiations, he said.
In a related development, staff members of Oklahoma's Gaming Compliance Unit met with representatives of the Chickasaw Nation Thursday to discuss a letter that the state sent out announcing its intention to audit the tribe's Class III gaming activity starting Jan. 2.
"Staff and the Gaming Compliance Unit used the scheduled meeting as an opportunity to explain and have a discussion with the Chickasaw Nation about the State's process for reviewing Class III gaming revenue, and how this process has worked successfully with other Oklahoma tribes," said Donelle Harder, spokeswoman for Gov. Stitt. "Conversations are ongoing with the Chickasaw Nation at this time."
Greetham agreed the meeting was cordial.
"The Chickasaw Nation has never had any qualms — we're going to comply with every term of our compact," Greetham said. "The timing of what the state's doing is interesting, given that they're doing this after the governor takes the position that the compacts have expired. So, I thought we had a full and frank exchange on that. These are folks just trying to do their jobs. We respect that. I would characterize it as an amicable intergovernmental conversation."
Prior to the meeting, Chickasaw Nation Gaming Commissioner D. Scott Colbert wrote a letter to the director of the state's gaming compliance unit that stated the compact agreement "does not authorize state financial audits."
Colbert stated the Chickasaw Nation hires a third-party certified public accountant to prepare a detailed independent financial audit each year. The state receives a copy of that audit each year and "may, upon request, meet with the auditors to discuss the work papers, the audit or any matters in connection therewith," subject to certain limitations, he said in the letter.