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David Stanley Ford

State may lose big in game goof
State may lose big in game goof

By Tony Thornton    Comments Comment on this article6
Published: December 5, 2007

If an Oklahoma County judge is correct, the state of Oklahoma may have been shortchanged millions of dollars since state/tribal gaming compacts took effect in 2005.

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It's unclear whether the state can recoup any of that.

District Judge Noma Gurich ruled last week that two popular models of gambling machines were wrongly classified as Class II devices, from which the state derives no income under the state/tribal compacts.

The games, called MegaNanza and Reel Time Bingo, fit the federal definition of Class III gambling, Gurich ruled.

Her order came in a lawsuit between two Class II machine vendors. Diamond Games, which has relatively few machines in Oklahoma, sued Multimedia Games, a larger maker of Class II games.

Gurich said her order isn't binding on tribal governments. "Nor is the court trying to regulate Indian gaming,” she wrote.

Nevertheless, the ruling is at the heart of a longstanding fight between American Indian tribes, their casino vendors and federal gambling regulators. A similar fight has unfolded in Oklahoma because revenue from the gaming compacts has never matched projections touted when voters approved expanded gambling in 2004.

A subtle difference
The National Indian Gaming Commission has tried for several years to pass rules that would clarify the distinction between Class II games, or those based on bingo, and Class III games, which are more akin to Las Vegas-style slot machines.

Vendors and tribes in Oklahoma and elsewhere have spent millions of dollars lobbying against the regulators' planned changes.

Roughly half of the 45,000 machines in Oklahoma casinos are considered Class II. The state receives no money from tribal casinos for those games.

The other half are Class III games. The state generally receives 6 percent of the amount left in each Class III machine after winnings are paid.

Industry experts say gambling machines, on average, make about $175 per day.

Multimedia historically has been the dominant Class II vendor in Oklahoma, although its market share has dropped considerably since the compacts took effect in early 2005.

It could not be determined Tuesday how many games involved in the lawsuit are in Oklahoma. Those details are part of a protective order issued in the lawsuit, attorneys said.

What's state's reaction?
The protective order prevents an estimate of how much money the state may have been shortchanged under the gaming compacts.

Those compacts are monitored by the Office of State Finance, whose director said Tuesday the ruling appears to have no bearing on the state.

"The district court ruling does not provide OSF with any authority to take compliance action,” state Finance Director Tony Hutchison said. "We would need additional information and perhaps a ruling from the federal government to take any compliance action regarding this issue.”

Jim Breslo, president of Diamond Games, was surprised by Hutchison's response.

"I would be surprised if the state ... would not at least look into the issue if this ruling is affirmed on appeal. Certainly millions of dollars are at stake,” Breslo said.

Multimedia's largest customer is the Chickasaw Nation. The head of that tribe's casino operations, Brian Campbell, said he learned of Gurich's ruling Monday and has asked his attorneys for an interpretation.

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David Stanley Ford





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The problem here is a District Court with all due respect to the Judge probably has no experience in this field. The experts have dilberated for years as to what constitutes Class II or Class III compacted games, so I would not put alot of weight in this decision. The Tribes in Oklahoma have been running Class II games for many years, the Gaming Regulators have been regulating the same for years and I would put alot more confidence in their abilities than that of a judge basing the decision on prejudiced briefs filed by litigating attorneys and I am sure some amount of research.
Please remember the Tribes are conducting their gaming enterprises as recognized by IGRA, and the enterprises are highly regulated, audited and reviewed; what the State is up to I dont know except the monies paid by the Tribes is significant by anyones standard, maybe except a few in this article.
Gary, Glenpool - Dec 7, 2007 at 10:07 am
Report as inappropriate or
Ignore Gary
Why is this a surprise to anyone? Ever since Gov. Henry started pushing for the lottery via his little toady Scott Meacham, I've suspected Meacham was an idiot. Remember the original $300M estimated revenue that the lottery was going to bring every year for education? I'm all lotteries & gaming, but I knew $300M a year was completely unrealistic. Plus the majority doesn't even go to the K-12 schools.

I voted my conscience last Nov. and voted against that moron Meacham, and I don't understand why the rest of the state didn't follow suit. I love Oklahoma; I was born & raised here, but sometimes I fear for my home state when I see what stupid choices its people make at the ballot boxes.
Philip, Oklahoma City - Dec 5, 2007 at 1:45 pm
Another blight on our great state!!!
HELEN, NOBLE - Dec 5, 2007 at 1:10 pm
The problem is the State (i.e. Scott Meachem) negotiatied a compact with zero enforcement or oversight. I called the Attorney General, the Office of State Finance, State Treasurer, and the Tax Commission asking who had authority over the machines on Tribal land and the each denied they had any! This was a botched deal like Henry and his friend Mr. Meachem's other gambling deal---the lottery and the $300 million they promised in yearly revenue.
Steven, Guthrie - Dec 5, 2007 at 10:42 am
Hey, David! Great to see your remark, and it is right on target!
Deann, Crescent - Dec 5, 2007 at 9:10 am
WOW! Who would ever have thought that gambling organizers might cheat at the gambling game?
David, Crescent - Dec 5, 2007 at 9:04 am

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