Compact Dispute Solution: End the Casino Monopoly

Jan 20, 2020 | Blog | 0 comments

With Governor Stitt and Oklahoma’s tribes at loggerheads over the gaming compact, it seems like a good time to reconsider the tribes’ gambling monopoly altogether. While there is only one Las Vegas, Oklahoma is a casino state. And regardless of the dispute between the governor and the tribes or its outcome, Oklahoma will remain a casino state. The question we should ask ourselves is, why should the tribes be exclusively able to operate casinos?

As I understand the history, casino gambling exclusively allowed of tribes in other states arose out of a legitimate need for impoverished reservations to generate some cash flow. Reservations, in my opinion, are basically great big quasi-autonomous concentration camps. In Arizona, where I lived for nearly a decade, I found reservations to be sad, undeveloped, generally poverty-stricken places with a few poorly-exploited natural attractions that tourists could have attended in greater numbers if anybody had the incentive to promote them. It’s easy to understand why tribes in those circumstances would jump at the chance to generate a relatively easy cash flow from gambling attractions, limited to the geographic confines of the reservations, and why sympathetic lawmakers would agree to let it happen.

But Oklahoma does not have reservations. Consequently, tribal members have largely fully integrated into the prevailing culture and have benefitted by apparently becoming just as prosperous as any other group of people. Congress still recognizes Oklahoma’s reservation-less tribes, and this grants the tribes some privileges others of us do not enjoy. Given history, this might well be justified, but it is not apparent that there is now, or ever really was, a strong justification for the grant of a monopoly over an industry other than that it happened elsewhere. Casinos in this state are not restricted to specific territories, although the laws and regulations on permissible locations can be restrictive, confusing, and arbitrary.

Thus, casinos in Oklahoma are fairly ubiquitous, and they tend to be located close to the interstates and are common on our borders. That’s just good business. The largest casino is practically on the border between Texas and Oklahoma on I-35. As any frequent traveler on I-44 and I-35 knows, when headed north out of Texas on either of these two highways, it can be quite the adventure dodging all the vehicles with Texas plates slowing for the exits to the casinos. After mile marker 5 or 6, though, traffic becomes relatively clear.

That’s the main reason casino gambling will not be shut down in Oklahoma, no matter what happens with compact negotiations and legal disputes. Casinos bring too much money into the state, even with tribes being the primary beneficiaries of surrounding states’ inhabitants’ gambling habits.

So, if casino gambling is not going away and it’s already pretty much all over the place even with the difficult-to-understand restrictions on their locations, why should the tribal monopoly continue? A more competitive casino gambling industry is likely to bring even more money into the state. Competitive industries are generally larger and richer than monopolized ones. Sure, to some extent Oklahoma’s casinos compete with those in Las Vegas, Louisiana, New Jersey and other states, but the head-to-head competition that made Las Vegas great is relatively muted in Oklahoma by its limitation to tribes.

This is not just a practical issue. It is also a moral one. As Howard Hughes (played by Leonardo DiCaprio) pointed out to a U.S. Senator in the movie, The Aviator, granting monopolies is downright un-American. For those who have a problem with making the expansion of the gambling industry a moral imperative, keep in mind that while casino gambling is exploiting a vice, so is selling liquor in a bar, and so is selling state-sponsored lottery tickets out of a neighborhood convenience store. If people want to keep casinos out of their communities, there are legal means to do so, some of which are far more likely to prevail over, say, a Steve Wynn wanting to open a casino than over tribes wanting to do the same.

So the bottom line is this. Let’s end the tribal monopoly over casino gambling in Oklahoma and open the industry to anyone willing to compete.

Byron Schlomach is 1889 Institute Director and can be contacted at bschlomach@1889institute.org.