Oklahoma: Tribal leaders point to purchase of NBA’s Dallas Mavericks by Las Vegas Sands’s owners as a threat

November 29, 2023 10:04 PM
Photo: Shutterstock
  • Buck Wargo, CDC Gaming Reports
November 29, 2023 10:04 PM

Tribal gaming leaders in Oklahoma and nationwide Wednesday called for Gov. Kevin Stitt to back tribal-led sports betting as the state faces lower oil prices and potential future competition from Texas.

Their calls took place during a weekly webcast “The New Normal” hosted by Victor Rocha, conference chairman of the Indian Gaming Association, and Jason Giles, executive director of the Indian Gaming Association. They interviewed Matthew Morgan, chairman of the Oklahoma Indian Gaming Association.

The webinar addressed the situation with Miriam Adelson, widow of casino magnate Sheldon Adelson, whose family controls the Las Vegas Sands Corp.; Adelson has agreed to purchase the majority interest in the Dallas Mavericks NBA team for a reported $3.5 billion. LVS announced Tuesday that Adelson was selling $2 billion in shares to purchase a sports team.

LVS has spent millions lobbying Texas to legalize gambling in the state, to no avail so far. Current Mavericks owner Mark Cuban, who would retain control of the team, wants to build a new arena surrounded by an entertainment district that includes a casino.

Stitt, a member of the Cherokee Nation, recently proposed a plan to introduce sports betting in Oklahoma, but experts and stakeholders have raised significant doubts about its feasibility and legality, Rocha said. This controversial plan has sparked a flurry of debate and speculation.

Morgan said Stitt hadn’t shared the plan with tribes and legislators when he announced it. Oklahoma would tax retail sports betting at tribal casinos at a 15% rate, while the state would issue mobile licenses taxed at 20%, with a $500,000 fee for a license, without spelling out who would be eligible to receive them.

“It caught everybody by surprise, but once everybody read through it collectively, everybody was very dismissive very quickly,” Morgan said. “It’s DOA.”

Giles said the proposed tax rates don’t make any sense, as if they were “pulled out of thin air.” The Oklahoma gambling industry is strong and the revenue numbers keep getting better, as national sports betting companies such as DraftKings have improved their income.

“It’s an insatiable market and why this kind of stuff is alarming,” Giles said. “It’s alarming in California (where non-tribal entities are trying to get a piece of sports betting in the future) and alarming in other places that don’t have sports betting yet, because there’s money to be made, even though the margins are small.”

Giles said Oklahoma is dependent on natural resources and that high gas prices have helped the state over the last couple of years, but the price of oil price is trending downward and if it falls to $50 a barrel, the state starts to hurt for more revenue.

“It’s time to be forward-thinking for once, not depend on the boom-and-bust cycle of high oil and energy prices, work out a deal, and start diversifying the economy,” Giles said.

Giles also cited pressure from surrounding states that offer sports betting, such as Kansas and Arkansas, and the potential for other states in the future, such as Missouri and Texas.

Morgan said they regional competition pressures first arose in 2014, which Oklahoma combated by offering roulette and craps. Players were leaving the state to play those games.

“We’re starting to see that more in the sports-betting arena. Kansas, Arkansas, New Mexico have it,” Morgan said. “Texas had a (sports betting) bill that went further than ever before and we get a one-year reprieve with Texas, where the legislature meets every other year. You continue to see investments that people make in Texas, thinking something will move. The Las Vegas Sands ownership group is going to buy out Mark Cuban for the Mavericks. That tells me people think there’s opportunity there.

“Oklahoma still has a chance to be a first mover with Texas,” Morgan said. “Some 37 to 38 states now have sports betting and we first sat down with the state in 2016 (before the Supreme Court overturned a federal ban on sports betting in 2018). We’re not going to do anything that blows up the compact and we’re not going to do anything against our economic interest. We’re the ones that take on all the risk and make all the money here. It has to work in our benefit as well and we need to be at the table.”

Morgan said it’s a good time for Gov. Stitt to review the relationship and added that tribes remain hopeful in terms of moving the state forward. He said the governor continues to focus on how to offer sports betting, but that issue was settled in 2004 when Oklahoma citizens agreed to operate a model compact.

“Our membership would like to focus on what makes economic sense on both sides of the table and can we move forward,” Morgan said. “In 2004 when the state offered our compact, the expectation was that $71 million a year in fees would be shared with the state. We’ve surpassed that a year and a half into our gaming compact. This last year we broke the $200-million mark and have given more than $2.2 billion to the state in exclusivity fees and that doesn’t include the other types of partnerships and philanthropic activities tribes are engaged in. I don’t think you would see much of the success in rural Oklahoma without tribes. A lot of that is attributable to our gaming-industry employment, but growth that happens around those facilities.”

Meanwhile, Oklahoma gaming is strong, with tribes investing in their casino properties, Morgan said. The Osage Nation opened two new properties in the last two months and properties across the state are being remodeled. “Our industry is confident we’ll continue to see an upward trend.”

Giles said he doesn’t understand the pessimism about the U.S. economy, with people complaining about inflation, then spending money. The Thanksgiving holiday was one of the highest travel weekends in history.

“The price of goods will not come down until people stop spending money,” Giles said. “It’s that simple. Times are good right now and this is the time you want to look at offering new games and venues if the governor was serious about respecting tribal sovereignty and respecting the compacts. These projections are really good going into next year.”