, Muskogee, OK

Oklahoma News

December 31, 2013

Oklahoma tribe sues over Internet gaming website

CONCHO — An Oklahoma-based tribe is betting on a federal lawsuit to get its Internet gambling website up and running.

The Cheyenne and Arapahoe Tribes and the state agreed in its gaming compact that the tribe could operate with international players. But the U.S. Department of the Interior put a stop to it last month, saying the state can’t offer exclusive access to a market outside the U.S. The site is currently inactive.

The Concho-based tribe filed a federal lawsuit in Oklahoma City last week seeking to stop the Department of Interior from interfering. The suit names Sally Jewell, secretary of the Interior, and Kevin Washburn, assistant secretary of Indian Affairs, as defendants. The Interior Department has not commented on the lawsuit, according to The Oklahoman newspaper.

The Cheyenne and Arapahoe Tribes is the only Native American tribe that has an agreement to operate a gambling website from tribal lands with international players, said Steve Mullins, general counsel for Gov. Mary Fallin.

A few states have legalized Internet gambling this year, but they are restricted to in-state players.

According to the court filing, tribal leaders estimate they could generate $132 million annually by 2018 if the website attracts 2 percent of the worldwide online gaming market.

“It’s pretty groundbreaking,” said Richard Grellner, an attorney representing the tribe. “In Oklahoma, we have the Native American culture we can sell to the world, and the state and the tribes can really benefit.”

Grellner said the Cheyenne and Arapaho Tribes spent $9.4 million to set up the website, and it has to comply with the state’s controls to make sure players are from outside the United States.

Under the tribal compact, it would pay the state 4 percent of the first $10 million in annual net revenue from electronic gaming, 5 percent of the next $10 million and 6 percent of any subsequent amount, plus a monthly 10 percent from non-house banked card games, or games in which the casino or host has no stake in the outcome.

The tribe originally agreed to share 20 percent of its revenue with the state, but Washburn, the assistant secretary of Indian Affairs, didn’t approve of the arrangement.

Court documents show that the state and tribe rewrote the agreement to reflect the current profit-sharing arrangement, but Washburn said it introduced an inappropriate basis for revenue sharing. He said the state couldn’t control or offer exclusive access to a market entirely outside the U.S.

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