Gaming firm sues Oklahoma Tribe over casino control

OKLAHOMA CITY — A Las Vegas gaming management company has sued the Tonkawa Tribe of Oklahoma, alleging tribal officials violated management agreements with the company when they took over control of two tribal casinos in north-central Oklahoma and barred the firm’s employees from them.

Gaughan Gaming, which has managed the Tonkawa Indian Casino in Tonkawa and the tribe’s City Lights Casino in Newkirk near the Kansas border since 2007, filed the lawsuit in Kay County District Court claiming the tribe broke the management contracts when it forcibly evicted Gaughan and its employees from the casinos and took over their control.

Gaughan Gaming is a business enterprise operated by John Gaughan, son of South Point owner Michael Gaughan. The company is seeking $30 million.

“Gaughan Gaming helped the tribe make an audited $52 million,” John Gaughan said. “I had some concerns where this money was going and we started asking some hard, serious questions because of the tribe’s history with money. Those questions made the tribal government very uncomfortable.”

The lawsuit, which was filed Tuesday, requests an injunction to stop the tribe’s gaming commission from summarily suspending Gaughan’s gaming license and to return control of the tribe’s casinos to Gaughan. A hearing on a request for a temporary restraining order is set for Friday before Kay County Associate District Judge Philip Ross.

An attorney for the tribe, Gary Pitchlynn of Norman, said a dispute involving alleged breach of contract by Gaughan resulted in suspension of its tribe-issued gaming license for the Tonkawa casinos. The license was suspended on Sept. 28 — the same day the tribe ordered company employees out of the casinos.

“There is a continuing arbitration going on,” Pitchlynn said.

Company attorney Jimmy Goodman said its gaming license with the tribe was suspended without the legally required hearing. Goodman declined to comment on whether tribal politics played a role in suspension of the license and removal of Gaughan’s employees from the casinos.

“We want the tribe to be forced to live by its agreement and leave us in there until this is resolved,” Goodman said. Gaughan’s contracts with the tribe expire in July at the Tonkawa Indian Casino and in September 2012 at Native Lights.

The lawsuit says Gaughan has helped finance the tribe’s gaming activities and that since the Native Lights Casino opened in 2006, the casinos have generated more than $52 million in net revenue for the tribe. Gaughan’s management agreement states that it will receive 30 percent of the casinos’ net profits as compensation for its services.

“Prior to the tribe’s forced eviction of Gaughan Gaming, Gaughan Gaming handled every aspect of the casinos’ operations, including without limitation advertising, marketing, employee-customer relations and gameplay,” the petition states. “Each of these elements of the casinos’ operations ties directly to the casinos’ profitability and ultimately the net profits.”

Review-Journal writer Howard Stutz contributed to this report.