OKLAHOMA CITY — Oklahoma Attorney General Mike Hunter has been asked for a legal opinion about whether the state can put tribal gaming exclusivity fees in escrow pending the outcome of a federal lawsuit.
Senate Appropriations Chairman Roger Thompson, R-Okemah, asked for the opinion.
Thompson asked whether Gov. Kevin Stitt has the authority to escrow the funds remitted from the tribes and not deposit them in the 1017 Fund, which goes to education.
Thompson said he believes the money can’t be put in escrow and must go to fund education.
The Governor’s Office did not immediately respond Thursday to a request for comment.
Several tribes have sued Stitt, asking a federal court to declare that their state gaming compacts automatically renewed on Jan. 1.
The governor has said the compacts expired and he believes Class III gaming in Oklahoma is now illegal. He is seeking higher exclusivity fees from tribes.
Tribes pay the state between 4% and 10% for the exclusive right to operate Class III gaming, which includes slot machines, craps and roulette.
Last year, exclusivity fees brought in nearly $150 million for the state.
In a Jan. 30 letter to the Comanche Nation Gaming Commission, the state said that it had created two special funds to hold tribal administrative assessments and exclusivity fees until it receives further direction.
The funds received and deposited by the state “will be characterized as being held in escrow and/or a credit to any constructive trust implemented by the federal court,” according to the letter from Brandy Manek, Office of Management and Enterprise Services director of budget, policy and gaming compliance.
In December, Hunter withdrew from tribal gaming compact talks. The action came after tribes declined the state’s request for arbitration.
Tribes later declined Stitt’s offer of an extension to the compacts.
A federal judge has assigned a mediator to the case.
If the state continues to spend the funds from exclusivity fees, it could be viewed as an admission that the compacts automatically renewed.
Alex Gerszewski, a spokesman for Hunter, said Stitt and Hunter had not discussed the legality of putting the funds in escrow.
“We are reviewing it and will respond as we would with any request from a member of the Legislature,” Gerszewski said.
The exclusivity fees go to the Education Reform Fund, or 1017 Fund, the state’s General Revenue Fund and to the Department of Mental Health and Substance Abuse Services.
The Oklahoma Department of Mental Health and Substance Abuse Services receives $250,000 annually.
Of the remaining dollars, the 1017 Fund gets 88% and 12% goes to the state’s General Revenue Fund.
In fiscal year 2018, the 1017 Fund received $121.7 million from exclusivity fees, up from $117.6 million in fiscal year 2017.
Gallery: What you need to know about tribal gaming in Oklahoma.
What is the dispute?
What is a compact?
How much does the state receive from tribal gaming compacts?
How much did the state receive in 2019?
What types of games are covered by the compact?
Can the compacts be expanded for other types of gaming?
How many tribes are involved in the gaming compacts?
How many tribal compact gaming operations exist?
How do tribes use the money generated from gaming?
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