Thursday, November 21, 2019

OCPA Report: Casino compacts should be renegotiated

New report shows Oklahoma’s casino compacts should be renegotiated

OKLAHOMA CITY—A new report by the Oklahoma Council of Public Affairs (OCPA) highlights the need for Oklahoma to renegotiate its gaming compacts.

“It’s clear from the data, Oklahoma casino operators are getting an incredibly special deal,” said Jonathan Small, OCPA president. “I encourage
 everyone to read this report. After doing so, there should be no doubt about it; Oklahoma’s gaming compacts must be renegotiated.”

The report compares the Oklahoma gaming industry to other states’—specifically looking at exclusivity fees and tax rates.

“Oklahoma’s gaming industry is the third-largest in the nation bringing in $4.4 billion last year. However, the state only collected $153
 million in fees, one of the lowest totals in the country,” said Curtis Shelton, OCPA Policy Research Fellow. “With the gaming industry now the eighth largest industry in the state, it’s clear that these tribal compacts have an enormous impact on all Oklahomans. This study provides a foundation of facts for this important issue.”

As the report points out, the exclusivity fees paid by tribal casino operators in Oklahoma are not only much lower than the tax rates paid by commercial casinos in most other states but are also lower than the fees paid by comparable tribal casinos in other states.

The financial impact created by Oklahoma’s low fees can be seen when comparing how much the state collects on slot machines at casinos versus slot machines at race tracks. The state receives an average $24,000 for each racing machine, but just $2,833 per Class III slot machine in tribal casinos.

Oklahoma casinos also have more Class II machines, which are subject to no state fees, than comparable casinos in other states. While Oklahoma is the third-largest gaming market in the United States behind only Nevada and California, there are 28,640 untaxed Class II machines in Oklahoma casinos compared to just 2,342 in California. Of all untaxed class II games in states where class III compacts have been signed, 80 percent of those machines are in Oklahoma.

“One fact stands out above all others: Oklahoma has more slot machines than all but a handful of states—yet collects less revenue than most,” Shelton said.

About the Oklahoma Council of Public Affairs
The Oklahoma Council of Public Affairs (OCPA) is a public policy research organization focused primarily on state-level issues. OCPA conducts
 research and analysis of public issues in Oklahoma from a perspective of limited government, individual liberty, and a free-market economy.

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