In a surprising turn, sports betting legislation in Oklahoma has failed this year despite a strong showing in the Oklahoma House of Representatives.
House Bill 1027, which would have allowed retail and online sports betting through tribes with existing gaming compacts, failed to advance through the Senate Finance Committee before an April 13 legislative deadline.
According to Rep. Ken Luttrell, author of HB 1027, one of the reasons the bill failed was the lack of conversation between tribal leaders and Gov. Kevin Stitt. Such inconsistent communication is nothing new for the governor and the tribal leaders.
After a failed 2020 attempt to negotiate new gaming compacts between Stitt and two tribes – the Comanche and the Otoe-Missouria – there has been a breakdown in trust between the parties. That breakdown still hangs heavy over sports betting legislation three years later.
So, what does this mean for Texas sports betting where legislators want to accomplish the same goals as Oklahoma?
Oklahoma House Bill 1027 details
HB 1027, in the form of a committee substitute, passed the Oklahoma House and offered the following summary:
“The committee substitute for HB 1027 legalizes sports betting and provides a model tribal gaming compact supplement for tribes to use if they want to offer sports betting.”
Simply stated, HB 1027 would have allowed tribes in Oklahoma to offer both in-person and online sports betting through their tribal gaming venues.
Before they could begin taking sports bets, these tribes would have had to adjust their gaming compacts with the state to incorporate sports betting. That would alter the fees paid by the tribes to accept sports bets through their online sportsbooks.
If HB 1027 passed, this is what Oklahoma sports betting fees the state would have collected:
- 4% of the first $5 million of the monthly net win to the state
- 5% of the next $5 million of adjusted gross revenue to the state
- 6% of the total adjusted gross revenue from sports betting each year to the state
The state would distribute all of that money generated from gambling to two different funds based on specific percentages. Of all that money, 12% would have gone to the General Revenue Fund, and the 88% left over would go directly toward the Oklahoma Education Reform Revolving Fund.
While the scaled tax rate proposed this year held more appeal to the tribes than last year’s 10% flat rate, that was still not enough to get the tribes fully on board.
House Bill 1027 fails to pass through Senate Committee
The first reading of HB 1027 was on Feb. 6, and on March 24, it passed the House by a vote of 66-26. That is no short process. Getting through the House required:
- A subcommittee hearing with the Appropriations and Budget Select Agencies Subcommittee
- Amendment by the Appropriations and Budget Select Agencies Subcommittee
- Recommendation to a larger full committee meeting
- A favorable report from the House Appropriations and Budget Committee
- A third House floor reading concluding with a vote of 66-26 in support of the bill
That vote pushed HB 1027 into the upper chamber.
In the Senate, the bill had its first reading on March 22. The Senate then passed it to the Rules Committee before moving forward to the Finance Committee. Unfortunately, despite its momentum, the Senate Finance Committee did not report on the bill before an April 13 deadline, killing the bill.
Oklahoma’s failure to push forward legislation that would legalize sports betting happened, in Luttrell’s estimation, because of a lack of familiarity between the tribes and the governor. That issue could resolve over the next year, but sports betting is done when it comes to this legislative session.
What does this mean for Texas sports betting legislation?
For legislators who believe expanding and legalizing gambling in their states will benefit their constituents, the outcome in Oklahoma is incredibly frustrating.
This is not a good sign in Texas, where there are similar hopes of passing gambling legislation.
While the reasons for Oklahoma HB 1027 falling short differ from the obstacles that sports betting faces in Texas, the tribal influence on gaming legislation cannot be understated. With only three total tribes, and only one – the Kickapoo Tribe – under the Indian Gaming Regulatory Act allowing them to offer Class II gaming, tribal considerations still hold significant weight in legislative decisions.
Texas’ tribes did not support Texas sports betting bills as initially issued, and without amendments granting significant tribal considerations, these three tribes could also stop legal sports betting bills in their tracks.
In Texas, House Bill 1942 – which would allow online-only sports betting – is still being considered in the House. Its two counterparts in the Texas Senate – Senate Joint Resolution 29 and Senate Bill 715 – are both idle in committee without much chance for advancement.
In the 2023 race between Texas and Oklahoma to legalize sports betting, Oklahoma has dropped, and Texas is watching the finish line fade in the distance.