The Oklahoma-based Cheyenne Arapaho Tribes have sued the US Department of the Interior because the department did not approve of its plans to open its online gaming business to international customers.
The tribe wants “declaratory and injunctive relief” according to the lawsuit filed against Kevin Washburn, the assistant secretary of Indian affairs, and Sally Jewell, its secretary, because the Department of the Interior did not approve the agreement between government of Oklahoma and the Cheyenne Arapaho Tribes.
The Cheyenne Arapaho Tribes are the operators of The Lucky Star Casino in two places — Clinton and Concho. It launched online gambling, including poker, for fun at pokertribes.com in 2012 and signed an agreement with the government of Oklahoma in 2013 to permit it to offer its online gaming services to offshore customers too.
The US Department of the Interior did not approve the agreement because the state demanded 20 percent of the tribe’s gambling revenue, but was not giving any “meaningful concessions” to it.
The department’s disapproval was not based on the issue of online gaming legality. In September 2013, the compact signed between the state and the tribes was amended to include a revenue sharing agreement, according to which the tribe would share 4 percent of the first $10 million annual revenue it generated from state-approved electronic games. If the tribe generated over $10 million, it would have to pay 5 percent on the next $10 million and 6 percent on any excess amount. Besides, the tribe would have to pay the state a monthly fee of 10 percent of its net win from “non-house-banked” games such as poker.
The Department of the Interior did not approve the compact even after the amendment, stating that
the state of Oklahoma cannot control, nor can it offer, exclusive access to a market of patrons located exclusively outside the United States and its territories.
It also pointed out that the concession offered by Oklahoma was just “illusory” and could be considered as taxing tribal gambling revenue in an illegal manner.
In its lawsuit filed against the department, the tribe has presented a study, according to which it will gross annual revenues of around $132 million by the year 2018 if it can get a 2 percent share of the international market.
Besides owing The Lucky Star Casino in Clinton and Concho, the tribes own The Feather Warrior Casino in Canton and Watonga. It is believed to own businesses worth $32 million.
