Boren, Cole torn between interests

By Tony Thornton

Published: February 24, 2008

What's a representative to do when his home state's financial interests conflict with those of an industry that contributed heavily to the congressman's campaigns?

That's the situation Dan Boren and Tom Cole face as federal regulators ponder new rules governing the lucrative Indian casino industry.

During a congressional field hearing on the issue in Oklahoma last week, Cole, R-Moore, called the proposal "not only destructive, but highly unjust.”

Boren, D-Muskogee, said before the hearing that he was open-minded. However, his questions to witnesses and comments during and after the hearing indicate he opposes the planned rules.

Their stances may put them at odds with state officials, who say the proposal would generate more money for Oklahoma's public education system.

Boren called the hearing of the Natural Resources Committee, held in Miami, OK. He and Cole, a Chickasaw Nation member, were the only House members to attend. Oklahoma's third member of that committee, Rep. Mary Fallin, R-Oklahoma City, sent a staffer.

The four-hour hearing involved the National Indian Gaming Commission's attempt to clarify the difference between Class II and Class III gambling.

Class III games are slot machines like those found in Las Vegas.

Class II involves games based on bingo. Or at least that's what the Indian Gaming Regulatory Act of 1988 intended.

Since then, critics say, technology has allowed tribes and gambling machine makers to bypass the law's intent by crafting games that more closely resemble slot machines than bingo.

In Oklahoma, tribes must pay the state 4 to 6 percent of their machine revenue from Class III games. The state is on track to make $62 million this year from those machines. That money is earmarked for education.

The Chickasaw, Cherokee and Choctaw tribes are by far the leaders in Oklahoma's gambling industry. All three pay the state, on average, more than $1 million a month in compact fees.

However, the state still has an estimated 25,000 Class II machines — far more than any other state.

The tribal gambling industry has spent untold millions of dollars since 2003 to kill federal regulators' effort at clarifying the difference between the two types.

Most experts say the proposed rules would force Oklahoma tribes to use compacted games exclusively, resulting in millions more per year for education.

Boren said he's not convinced that would happen.

For the 2008 cycle, Cole has received $38,600 and Boren $33,700 from the gambling industry (including tribes), ranking them sixth and eighth among all House members, according to opensecrets.org.

For 2006, Cole received $70,307 and Boren $42,375, ranking them 11th and 17th.

Fallin has received $14,750 from gambling interests for the 2008 campaign and $16,600 in 2006.

Cole said his opposition to the proposed Class II rules should be no surprise, since he's a Chickasaw Nation member and because Oklahoma has the nation's largest percentage of American Indians.

"The belief by some that there is a difference between the interests of the tribes and the schoolchildren of Oklahoma is, in my opinion, a false and misleading dichotomy,” Cole said after the hearing.

"To suggest that it is appropriate to cripple an industry that provides millions of dollars for education, health care, housing, senior citizen centers, wellness centers and a myriad other social services in order to increase money for the state is essentially robbing Peter to pay Paul. It makes no sense.”

He said the Class II changes would cause massive lost revenue, significant job losses and possible casino closures.

"Clearly the adoption of the regulations in question is bad for the tribes, the school children of our state and the economy of rural Oklahoma. I will do everything I can to see that they are not adopted or implemented as written,” Cole said.

Boren also said the proposed regulations would cripple tribes, which are his district's largest employer.

"After review of the testimony by the panelists, it is clear to me the NIGC (National Indian Gaming Commission) proposed these regulations without forethought for the economic impact on rural Oklahoma or in-depth consultation of the affected parties,” Boren said Friday.

"The state of Oklahoma, the tribes of Oklahoma and local communities have long been partners for the continued prosperity in our state,” he said.

Fallin said she generally opposes gambling in Oklahoma.

"However, I am curious about the motivation behind the proposed change which, by some estimates, could render nearly one half of Oklahoma's games obsolete. It appears we are trying to change the rules in the middle of the game,” Fallin said.

Oklahoma Gov. Brad Henry hasn't filed an official comment with federal regulators. His com-munications director, Paul Sund, said Henry hasn't reviewed the proposed regulations.

"However, he believes that greater clarity in the definition of and distinction between Class II and Class III games benefits everyone and reduces the potential for confusion and the possibility of protracted, expensive litigation.

"While the governor supports rules that will result in greater revenues for public education, he believes the regulators should listen carefully to the concerns of all interested parties,” Sund said.

State Treasurer Scott Meacham, the state's main negotiator of the tribal gaming compacts, also said he supports greater clarity between Class II and Class III games.

"Obviously if there are more games that would fall under our compact, then the state would receive more revenue for education,” Meacham said.

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