Oklahoma's Model Compact: How Exclusivity Fees and Renewal Work

Oklahoma's tribal gaming economy rests on a single document: the State-Tribal Gaming Act and the model compact that it created. The Oklahoma model compact exclusivity fee, a percentage of revenue that tribes pay for the right to be the only operators of covered casino games, now delivers well over $200 million a year to the state, and its renewal terms have shaped nearly every major dispute between the tribes and the governor's office in the past decade.

The Oklahoma Indian Gaming Association has recently cited more than $221 million in exclusivity fees for the 2025 budget year, a figure covered in our report on OIGA's argument on prediction markets. To read that number correctly, it helps to know how the underlying framework was built and why it has lasted.

What the model compact provides

The State-Tribal Gaming Act, adopted by Oklahoma voters in 2004, established a model compact that individual tribes could sign without negotiating terms from scratch. Its central bargain is exclusivity. The state authorizes tribes to operate electronic gaming and certain table games, and tribes agree not to see those games offered by non-tribal operators, apart from pari-mutuel wagering on horse racing, in return for monthly payments to the state.

Published accounts of the fee structure describe a graduated schedule in which tribes pay roughly 4 to 6 percent of revenue from electronic games and up to 10 percent of revenue from table games. The exact percentage a tribe pays steps up as revenue grows. The money is not paid into the general fund wholesale; the Act directs most of it toward education, and in the years through 2020 about $1.3 billion of the roughly $1.5 billion received since 2005 went to the Education Reform Revolving Fund, with smaller amounts directed to the General Revenue Fund and to mental health and substance abuse services.

Annual payments climbed steadily over the first fifteen years. Oklahoma's figures show about $133.9 million in 2017, $138.6 million in 2018 and $148.2 million in 2019. By the OIGA's account, the 2025 budget year topped $221 million, a reflection of the expansion of tribal floors and of the Oklahoma market's role in drawing customers from neighboring Texas, a dynamic analyzed in the piece on cross-border demand and the Oklahoma ceiling.

The renewal clause that became a legal fight

The compact's term is where most legal attention has focused. Part 15(B) states that the compact expires on January 1, 2020, but provides for automatic renewal in successive fifteen-year terms if the state authorizes electronic gaming by anyone other than tribes and the racetracks' pari-mutuel operations. Either the tribe or the state, acting through the governor, may request renegotiation of specified sections within 180 days before expiration or renewal.

As the January 2020 date approached, Governor Kevin Stitt took the position that the compacts would expire and that the state should renegotiate on higher terms. He argued that most compacts nationally pay far more than Oklahoma tribes do, citing figures in the range of 20 to 25 percent. The tribes and OIGA responded that the text clearly provided for automatic renewal and that the state had in fact authorized the relevant forms of electronic gaming. A federal judge ultimately sided with the tribes in 2020, holding that the compacts had renewed on January 1 for a further fifteen-year term, which carries them to the end of 2034.

The governor also signed separate compacts with the Comanche Nation and the Otoe-Missouria Tribe in April 2020. The Interior Department took no action within the 45-day review window, which under IGRA meant the compacts could take effect to the extent consistent with the statute. Oklahoma tribes and the state attorney general objected that a governor could not unilaterally bind the state to terms that included activities not legal under state law. The episode is a reminder of the interplay between state constitutional authority and federal review described in the Legal Guide and in our explainer on reading a Federal Register compact notice.

Whether the Oklahoma rate is high or low depends on the comparison. A 2015 GAO review of 276 compacts found 107 with no revenue sharing at all, 100 paying between 10 and 14.9 percent, and 22 paying between 15 and 25 percent.

Why the rate comparison is more complicated than it looks

Critics of Oklahoma's rates often point to the headline percentages in other states. But the comparison depends on what each state grants and what revenue base the rate applies to. California's Revenue Sharing Trust Fund and individual compact payments, for example, operate on different logic, as the RSTF explainer describes. Oklahoma's model gave tribes a large, protected market with no cap on the number of machines, a feature that has allowed some of the country's biggest tribal gaming enterprises to grow, as in the profiles of the Choctaw Nation and the Cherokee Nation.

Exclusivity is also the compact's vulnerability. The payments are justified by the exclusive right to offer covered games, so any development that weakens exclusivity, such as sports betting legislation, unlicensed online products or federal preemption claims, can change the economics for both sides. The ongoing debate over a November 2026 ballot question on sports betting, covered in our analysis of Oklahoma sports betting and tribal exclusivity, turns on exactly this point.

For readers following the Oklahoma state hub, the model compact is best understood as a long-term contract with a fixed renewal calendar. The current term runs through 2034, and the 180-day renegotiation window before the next renewal will be the next formal opportunity for either side to reopen the fee structure. Until then, the state's receipts will track tribal floor performance, and the political argument over rates will continue to be conducted in budget hearings and in court.