Tribes could lose big with rule changes

Oklahoma's casino-owning tribes would lose millions of dollars annually — along with an important bargaining chip — if proposed federal restrictions take effect, a new study indicates.

However, the state's education system stands to reap a windfall from the proposal.

The rules will be debated during a congressional field hearing in Oklahoma, perhaps later this month.

In essence, the National Indian Gaming Commission wants to create a greater distinction between Class II games based on bingo and Class III, or Las Vegas-style slot machines.

Technology has blurred the difference between the types.

The distinction is important because states can only collect a portion of tribes' profits from Class III games.

Indian gaming experts have said the vast majority of existing Class II machines would become illegal in 2013 if the new regulations, as proposed, take effect.

Tribes have almost universally denounced the plan as an unfair imposition on their sovereignty.

Two Oklahoma congressmen seem to agree, according to their recent letters to the commission.

"I remain deeply concerned that there has not been sufficient consideration of the economic impacts of these proposed regulations,” U.S. Rep. Dan Boren, D-Muskogee, wrote in a Dec. 20 letter.

Boren said Indian gaming has an economic impact "of hundreds of millions, if not billions of dollars” in Oklahoma.

He urged the commission to shelve its plan "until such time as you have adequately consulted with all affected tribes.”

Boren joined U.S. Rep. Tom Cole, R-Moore, in a second letter asking that the comment period be extended until June.

However, a letter signed by 10 other congressmen urges "prompt adoption” of the proposed rules.

Both Boren and Cole are on the House Natural Resources Committee, which oversees Indian gaming.

That committee will discuss the matter during a hearing tentatively scheduled in Miami, OK. Boren requested the hearing, his spokesman, Cole Perryman, said.

Oklahoma tribes own more than half of the 160 Class II gaming locations in the U.S., economist Alan Meister reported in a study prepared for the Indian gaming commission.

The 30,044 Class II machines in Oklahoma at the end of 2006 represented 59 percent of all such machines in the country.

In 2004, Oklahoma voters approved compacts allowing tribes to offer modified Class III slot machines. In return, tribes must pay the state 4 percent to 6 percent of the revenue.

That money goes to fund teacher pay raises and other education programs. Tribes paid the state $54.5 million from Class III machine revenue in 2007, according to the Office of State Finance.

Most state tribal casinos have incorporated Class III games, and a few have moved solely to compacted machines. However, Class II machines still comprise a large majority of the games available in Oklahoma, Meister reported.

Meister said the proposed Class II restrictions would force tribes to use only compacted machines by 2013.

If that happens, Oklahoma tribes would have to pay the state an estimated $122.3 million a year in revenue-sharing costs, Meister reported.

That's in addition to what tribes pay for running card games. Oklahoma tribes paid the state nearly $13.6 million last year in card game fees.