OKLAHOMA CITY — After being ravaged by COVID-19, the state’s Native American-run gaming industry is on track to have one of its most profitable years in history.
State records show a key source of revenue for state coffers — exclusivity fees — have grown as the state’s economy continues to rebound from the pandemic.
Casino exclusivity fees were up nearly 6.5% from January through August 2021 compared with the same pre-pandemic period in 2019, according to an analysis of data provided by the Office of State Management and Enterprise Services. The fees were up nearly 35.4% compared to 2020, when COVID-19 forced tribal operators to shutter more than 120 licensed casinos around the state.
At the state’s two commercial race tracks and casinos — Remington Park and Cherokee Casino Will Rogers Downs — revenue is up about 1.4% from January through August compared with the same period in 2019, according to an analysis of data. Fees were up nearly 93% compared to 2020.
Over the past decade, lawmakers have become reliant on casino gaming fees, which fund common education and other services for Oklahomans.
Voter-approved compacts have long granted Oklahoma’s tribes the sole right to operate casinos in exchange for paying the state exclusivity fees ranging from 4% to 10% on a certain subset of games known as Class III.
In calendar year 2019, those exclusivity fees generated about $152.8 million, the state records show. From January through August 2021, the exclusivity fees have already generated $107.5 million. Commercial race tracks generated about $28.4 million in budget 2019, and $24 million in budget year 2021, state records show.
“It makes sense that they took a hit in 2020, but that they’re back in ’21,” said House Minority Leader Emily Virgin, D-Norman. “That really could only be good news for everyone involved. The exclusivity fee is an important stream of revenue for the state, and is important for education. And so that’s good news for everyone who cares about funding for public education. But these (casinos) are also big economic drivers, and to have them recover in this way is really important overall for the state of Oklahoma.”
Under the compacts, the Department of Mental Health and Substance Abuse Services receives $250,000 for gambling education and treatment. The bulk of the remainder — 88% — flows to public schools. The state’s general revenue fund receives the rest — 12%.
“I think it’s good for the state,” said state Sen. Roger Thompson, R-Okemah, the Senate budget chair. “It shows that people are getting out. It also shows that people have some expendable income, which is very good.”
Matthew Morgan, chair of the Oklahoma Indian Gaming Association, said when casinos began to reopen in a limited capacity last year, they did so with new health and safety measures put in place by regulatory bodies working in conjunction with their tribal leadership.
He said revenues have continued to increase since then at levels not seen previously.
“I think that our customers are feeling safe with what we put in place and that shows, (it) is reflected in our numbers,” Morgan said.
He also said the industry has seen increased traffic from out-of-state visitors.
“I think there’s no doubt that we probably got a boost from our surrounding states as well, people looking for entertainment options that they felt they could do,” Morgan said. He said anecdotally, casino operators are reporting seeing more out-of-state visitors than pre-pandemic.
He said as COVID-19 rates decreased, gaming facilities have also increased the entertainment options they had available. Some tribes have completed casino expansions in recent months or opened new hotels.
“I’d still caution you don’t really see 100% back open across the board the way that you did before we closed, but as those started to open, I think we’ve gotten better at our health and safety precautions, making sure people are spread out, making sure that the facilities are clean,” he said.
State Rep. Kyle Hilbert, R-Bristow, said the success of casinos mirrors how well Oklahoma’s economy is doing as a whole.
“People are rebounding from the coronavirus and have more disposable income, and so they’re spending more money all over the place, and certainly casinos are a part of that,” he said.
Janelle Stecklein covers the Oklahoma Statehouse for CNHI's newspapers and websites. Reach her at email@example.com.