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Chickasaw Nation tells state it can't audit tribe's gaming finances but can look at prior audits and records

Chickasaw Nation tells state it can't audit tribe's gaming finances but can look at prior audits and records

Oklahoma Tribal Finance Consortium (copy)

Chickasaw Nation Gov. Bill Anoatubby (left) speaks with the Absentee Shawnee Tribe of Oklahoma’s treasurer, Phillip Ellis, and secretary, John Johnson, at an Oklahoma Tribal Finance Consortium meeting in July.

DOUG HOKE/The Oklahoman file

OKLAHOMA CITY — The Chickasaw Nation has told the state of Oklahoma that the state cannot audit its gaming operations but can look at prior external audits and records.

The letter, sent Thursday, was in response to a Dec. 18 letter the state sent to all of the tribes with casinos in the state.

In the Dec. 18 letter to the Chickasaw Nation, the state said it was preparing to “conduct an investigation of revenue of the Chickasaw Nation’s Class III gaming activity. The objective of the investigation is to determine if the state has received all fees owed from the conduct of covered games” pursuant to the compact.

The action comes in the midst of an impasse between Gov. Kevin Stitt and the state’s gaming tribes.

Stitt believes that the compacts expire this Wednesday. He says Class III gaming in the state will be illegal after that time without a new agreement. In hoping to negotiate new compacts, he is seeking higher fees from the tribes, which now pay the state between 4% and 10% to operate Class III gaming, which includes slot machines, roulette and craps.

Last fiscal year, those exclusivity fees generated nearly $150 million for the state.

The tribes say the compacts automatically renew and that they will continue operating Class III games on Wednesday.

In its notification of its intent to audit, the state cited a portion of the compact for that authority. But D. Scott Colbert, Chickasaw Nation gaming commissioner, said that section of the compact does not authorize the state to perform financial audits.

It does give the state the authority to monitor the conduct of covered games to ensure that they are operated in compliance with the compact, he said.

The tribe uses a third-party accountant to do a financial audit each year, Colbert noted.

He wrote that the state is entitled to see the audit and can meet with the auditors to discuss work papers or other matters within certain limitations.

Saying the audit had already been provided to the state, he included it again with his letter.

Colbert said he would be glad to meet with state officials on Thursday in Ada, where the Chickasaw Nation has its headquarters.

Matthew Morgan, an administrator with the Chickasaw Nation who served two terms as the tribe’s gaming commissioner and also serves as chairman of the Oklahoma Indian Gaming Association, affirmed that the state has the right to monitor but not to audit.

“If they want to look at financial numbers, the way to do that is looking at the external financial audit required to be sent to them,” Morgan said.

He said Colbert’s letter attempts to educate the state about past practices.

“Commissioner Colbert wanted to make sure that everybody understood their swim lanes on how the process works,” Morgan said.

Donelle Harder, a Stitt spokeswoman, said the state is responsible for monitoring the conduct of covered games, including reviewing the audit and underlying documents.

“The state looks forward to initiating the process at the January 2 meeting,” she said.


Barbara Hoberock 405-528-2465

Twitter: @bhoberock

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