AG opinion: Gaming revenue cannot be placed in escrow

AG opinion: Gaming revenue cannot be placed in escrow

By Ken Childers

ONL Editor

In a legal opinion issued on Monday, Oklahoma Attorney General Mike Hunter said Gov. Kevin Stitt cannot deposit funds received from tribal gaming into an escrow account while awaiting the outcome of federal litigation over gaming compacts between the state and tribes.

In December, several of the state’s largest tribes sued the governor in federal court, and a judge has ordered mediation. In response to the lawsuit, Stitt suggested placing gaming revenue in a trust until the lawsuit is settled.

Hunter said in the opinion that revenue from gaming must be allocated per state law, which stipulates that 12 percent be deposited into the state’s general fund and the rest into a public education fund.

“We are not aware of any authority by which the State can deposit these monies in any fund other than those already mentioned,” Hunter wrote in the opinion, which was issued at the request of Senator Roger Thompson, who chairs the Senate Appropriations Committee.

“As Appropriations Chair, I am tasked with writing a budget,” Thompson said. “If the governor were allowed to escrow these funds, it would mean about an $11 million a month hit to the 1017 Fund, so it would be an $11 million deficit to the schools each month. The first payment was due in on March the 10th, so I’m glad the Attorney General issued the opinion today.”

Stitt and several tribes that operate casinos in Oklahoma have been deadlocked over whether or not gaming compacts are still in effect. The governor maintains that the compacts expired effective Jan. 1, 2020 – rendering tribal gaming illegal in Oklahoma – while the tribes say they automatically renewed at the first of the year. The casinos have not ceased gaming operations and have continued to remit exclusivity fees to the state each month.

Tribes pay the state anywhere between four percent and 10 percent to operate Class III gaming in Oklahoma casinos, which includes slot machines, roulette and craps. Last year those fees totaled about $150 million, the bulk of which goes toward education.

“This does not wade into the legal argument between the governor and the tribes of who’s right and who’s wrong,” Thompson said. “It just says we’re going to use this money for the intended purpose, and that’s to fund education.”