Tribes hail bingo rules' demise
Casinos: Proposed regulations would have changed how state profits from different machines
Oklahoma tribes hail bingo rules' demise

By Tony Thornton Comments 0
Published: September 26, 2008

Oklahoma tribal casino officials on Thursday cheered a federal agency's withdrawal of proposed regulations that some said would have crippled the state's $2.4 billion-a-year industry.

Multimedia

More Info

BACKGROUND

Oklahoma impact

In 2004, Oklahoma voters approved a modified version of Las Vegas-style gambling. In return, tribes pay the state a share of the revenue.

Tribes gradually have replaced their bingo-based machines with Class III machines since then. One recent report says Oklahoma's 52,000 machines are almost evenly split between Class II and Class III.

Class II machines' future

A study prepared for the National Indian Gaming Commission suggests that despite further reductions, Oklahoma's tribal casinos will always have a Class II presence.

Prediction of Class II machines by year:

•2008: 18,200

•2009: 10,300

•2010: 7,500

•2011: 7,500

"This was a serious threat to the economy, not just for Indian country, but for Oklahoma as a whole,” said David Qualls, chairman of the Oklahoma Indian Gaming Association.

Wednesday afternoon, the National Indian Gaming Commission formally withdrew a plan to redefine Class II gambling machines, which by law must be based on bingo.

The regulatory agency said technological advances over the last decade had erased the line between Class II machines and Class III slot machines like those found in Las Vegas.

The distinction is critical, because Class III games require compacts between states and tribes. In Oklahoma, tribes pay the state 4 to 6 percent of their revenue from Class III machines. No such payments are required for Class II machines.

The state received $71.6 million in compact fees from tribes in 2007 and is on pace for $87.2 million this year. That money goes to public education.

Casinos feared changes

Although Oklahoma's tribes have migrated toward the compacted games, Qualls said many gamblers still prefer to play the Class II machines.

Many casino officials feared the new definitions would have been so restrictive as to outlaw virtually every Class II machine currently in play. That would have left tribes with slot machines as their only option, which Qualls said would have alienated some loyal customers.

"You can't fry up corn and tell 'em it's hominy,” Qualls said.

The National Indian Gaming Commission's announcement wasn't a surprise.

In June, commission Chairman Phil Hogen said at an Oklahoma City conference that he was shelving the plan.

David Stewart, chief executive officer for Cherokee Nation Enterprises, praised the federal agency's decision.

Class II games make up about 40 percent of the Cherokees' machines.

"The regulations, as they were proposed, would have had a significant negative economic impact on Indian country,” Stewart said.

What's the effect?

The financial impact would have been far greater in the four states that allow only Class II gambling: Alabama, Alaska, Nebraska and Texas. However, those four states combine for only 3,800 machines.

Brian Campbell, head of the Chickasaw Nation's commerce division, said market conditions are driving Oklahoma tribes further toward compacted machines. He's glad that regulators won't interfere with that.

"Dramatic change would have been very harmful,” said Campbell, adding that Class II makes up about half of his tribe's machines.