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Oklahoma City, OK (Tulsa World) — Gaming fees tribes pay the state were poised to rise above last year’s levels, but COVID-19 took a bite out of those projections.
Last year, the state saw nearly $150 million in revenue from exclusivity fees tribes pay Oklahoma for operating Class III gaming. It was the largest amount since 2006. But this year it appears collections will be on par with 2014.
The state expects to collect $122.9 million, slightly more than the $122.6 million collected in 2014, according to figures provided by the Oklahoma Indian Gaming Association and the state.
“Exclusivity fees are definitely going to take a hit,” said Matthew Morgan, Oklahoma Indian Gaming Association chairman. “For the first eight months of (fiscal year) 2020, it was up over $3.5 million over 2019. We were looking like we were going to increase the dollars sent into the state for education.
“Then COVID hit, and between March 15 and March 22 every gaming facility in Oklahoma shut down.
“So for the exclusivity payment in March, we only had 15 days; in April, no one was open, so zero amount of revenue was coming in for the tribes and zero for the exclusivity payments.”
The tribes pay the state rates ranging from 4% to 10% to operate Class III gaming, which includes many slot machines.
Gaming facilities began reopening in May, generating only $2.77 million in exclusivity fees for the month.
The fees picked up in June, generating slightly more than $11.7 million.
“As the tribes do better in gaming, the state does better, as well,” Morgan said. “Unfortunately, COVID has taken a hard hit not only on our business but on businesses in general.”
Morgan said the vast majority of tribes continued to pay employees even though gaming facilities were closed.
“A lot had to go into savings to make sure employees continued to receive their paychecks,” Morgan said.
Kyle Dean, director of the Center for Native American and Urban Studies at Oklahoma City University’s Meinders School of Business, has studied the impact the tribes have on the state’s economy.
Dean said the purpose of the Indian Gaming Regulatory Act is to allow tribes to generate revenue to fund tribal services and programs for the betterment of tribal citizens.
A lot of tribal gaming operations are in rural parts of the state, he noted.
“So I would expect these are really starting to hurt rural communities more so than urban communities,” he said.
Dean said casinos are in the same boat as other industries.
He said patrons will return only when they feel safe. Some casinos have put capacity restrictions in place to help deter the spread of the virus, he noted.
Until COVID-19 is under control, he expects lower revenues to continue, Dean said.
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