October 13, 2011

New and Improved: NIGC’s Inclusive Approach Wins Approval

Filed under: Business,Gaming,News Alerts — Tags: , , — Gale Courey Toensing @ 3:58 pm

It’s been years since the National Indian Gaming Commission (NIGC) received a hearty round of applause from an audience of tribal leaders and gaming experts, but that’s what happened at the recent Global Gaming Expo, not once, but twice at the end of the commissioners’ presentation.

A few years ago, meetings with the NIGC were tense and contentious affairs, as former Chairman Phil Hogen, a Bush-era appointee, pushed a “bright line” between Class II bingo machines and Class III slot machines that that he insisted was needed to protect Class II technology from federal intervention. But instead of creating a bright line, tribal leaders and gaming experts said, his proposals would have virtually reclassifying bingo machines as slot machines, threatening the commercial viability of Class II gaming.

Things at the commission changed radically when commission Chairwoman Tracie Stevens, Vice Chairwoman Stephanie Cochran, and Commissioner Dan Little were appointed beginning in January 2010. A full year into their staggered three-year terms on the primary federal agency that regulates Indian gaming, Stevens, Cochran, and Little talked about their achievements over the past year and what they hope to accomplish in the year-and-a-half left of  their time together on the commission. They were warmly received by a G2E audience that filled the conference room.

Stevens opened by praising the NIGC staff members who also attended the gaming expo.  “They are behind the scenes all the time and while you sit and listen to us about all the great things the agency is doing the folks here and many others out in our regions and back in D.C. should have some kudos,” she said.

When the commissioners attended the gaming expo last year they laid out “a very aggressive agenda” for the next 12 months, Stevens said. “There were four things we were going to take a look at: consultation and relationship building, training and technical assistance, regulatory review, and agency operation review. We talked about how we were going to approach out time in office. We were going to be clear. We were going to be transparent. We were going to tell you what we were going to do and we were going to do it and you were going to be included and we were going to do periodic updates so there were no surprises and the tribes were included all along the way.”

Well aware of the distrust between the NIGC and tribes left by the former chairman, Stevens said the commissioners agreed that they wanted to leave NIGC better than they had found it. “Something we heard from tribes when we first came into office is, ‘We pay fees. What do you all do and how can we be included?’ There were fences that needed to be mended about how the NIGC needed to change, how tribes needed to be at the table before we started making changes to policies.”

So the commission’s first priority was to improve consultation. “And, yes, we had a consultation on consultations and heard from the tribes what’s working and what’s not working,” Stevens said. According to the NIGC website, commissioners held almost 20 formal consultations in 2011 and several other public meetings. And mostly they traveled to the tribes for these meetings. The commission has also improved its relationship with other federal agencies such as the Justice Department, the IRS and particularly the Interior Department, all of which play a role in regulating Indian gaming, Stevens said.

Cochran has been tasked with reviewing and evaluating training and technical assistance to the tribes. “It is absolutely an essential component of our mission. In my opinion it is probably one of the greatest marks we can leave in the relationship with tribes and how we look at our regulatory practices on a day to day basis,” Cochran said. In the past year, the commission has completed an initial assessment of its programs and refined some the regional training events. It has worked on improving its course catalogue to make sure it meets tribal needs and has fostered relationships with some regional gaming associations and other federal agencies to tap into their expertise in gaming regulations. The overall goal is to provide tribes with the training and technical assistance that will help them to be in compliance, Cochran said. “And we continually ask ourselves whether or not we’re meeting the needs of tribes; that’s always the core question,” she said.

The commission last year also began the process of reviewing the regulations and began by asking tribes which regulations should be reviewed and how to review them. “We didn’t want to look at all the regs immediately, if we didn’t have to,” Stevens said. So the commissioners held a number of consultations and received 79 written submission from tribes on their priorities, Stevens said. Commissioners discovered in the consultation process that tribes wanted a Tribal Advisory Committee (TAC) to review  Minimum Internal Controls (MICs)and Technical  Standards regulations and so the commission put out a call to tribes for nominations. “The nominees have to be authorized by their tribal governmental body and cannot be lobbyists. Those are the criteria we put out. We want a balance of regions. Class II, Class III operations, regulators and people with specific expertise in various part of the operations,” Stevens said. The commission received 55 nominations from tribal governments and announced its selection of TAC members on its website on Oct. 6.

Asked about the general quality of NIGC and state regulations, Stevens said she found that 24 of the 28 states with have Class III gaming and 96 percent of the tribes meet the standards laid out by the commission or the states, or they have “equal or better” tribal ordinances for MICs that protect both tribal assets and players. Although all the tribes have to meet MICs either in compacts or by ordinances there are various systems in place that are working, Stevens said. “We’re going to come up with a hybrid approach because the last thing NIGC wants to do is upset any of the apple carts that are working for the tribes in Indian country,” she said.

Stevens anticipates the TAC’s work will continue through next March and new regulations will be completed by the end of next year. “We’re moving at a pretty good pace that includes tribes—the most important thing for us is that tribes are included because making regulations from a desk in D.C. doesn’t always turn out well for people on the ground out in Indian country,” she said.

The commission is also in the process of performing a top to bottom review of its own internal workings, a task overseen by Little. “We want to be a smarter, more transparent and better equipped agency that can be responsive and adapt to the needs of the industry,” Little said.

The review includes surveys, interviews and focus groups as well as well as a review of technological needs and budgetary processes.

So, the goals for next year are to formalize the revises consultation policy which is already in practice, improve training, complete most of the regulatory review, and have a more efficient and streamlined agency, Stevens summarized. “We’ll be back next year to give you a progress report,” she said.

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October 27, 2011

NIGA’s Ernie Stevens Jr.: ‘We Accept the Challenge’

LAS VEGAS — National Indian Gaming Association (NIGA) Chairman Ernie Stevens Jr. sat down with Indian Country Today Media Network during the Global Gaming Expo in Las Vegas in early October to talk about tribal governmental gaming in the troubled economy and what’s ahead. Prior to the interview, Stevens told a crowd at the NIGA booth that last year, Indian gaming interests made up 45 percent of the massive international gaming expo, which draws more than 25,000 people each year. “We are on the front line in Indian country. We are now the experts. We are the ones getting it done and everything we do, we do for our communities, for our family and our culture and our traditions.” He talked with pride about his 101-year-old grandmother, a citizen of the Oneida Indian Tribe of Wisconsin. “My grandmother, who never asked for anything, who retired as a school teacher at the age of 93, who was educated and stood up against the boarding school system and survived it, and who still tells us what to do, lives in her apartment with government support to help her. And she waits for that bus that takes her down to Wal-Mart so she can get her hair done every week. She’s a proud, proud victor and Indian tribal gaming is taking care of that elder every day.”

ICTMN: The National Indian Gaming Commission’s statistics for 2010 show Indian gaming revenues remained stable at $26.5 billion last year despite the bad economy. What does that say about Indian gaming?

Ernie Stevens: From my heart, it boils down to what we’ve been talking about all along, which is we’re responsible to our communities so we accept this challenge as a much bigger issue and approach it much more diligently and proactively. Business people don’t really look at things from the point of view of government responsibility or from a seven generations mentality. So while we’re trying to analyze our way through this economic downturn and survive, we know we’re dealing with our future and that’s why it’s so important. Historically, we’ve always had to figure out how to survive on little or nothing, how to make ends meet, so cutting budgets, analyzing our industry needs – those are things we’ve done in trying to move our governments forward. We can’t be reckless. Those are key things that are helping us survive.

ICTMN: What about the non gaming tribes?

ES: Some folks in Indian country are having a very hard time and that offsets the statistics of the tribes that are doing well. Our key frustration and concern is for those who are struggling and how can we help them out of that? I think the people who thought this economy was going to be a little dip and then get better made a mistake. I’m not an economist – I have a degree in criminal justice – but my study of this tells me we have to grin and bear it and work our way through it.

ICTMN: There are predictions of worse to come and a double dip recession on the horizon. Should casino nations prepare for that, and if so, how?

ES: I think we’ll learn to deal with it on a longer term. We understand that it’s not about whether our numbers going up and down; it’s not that simple. Every setback we suffer, our community suffers so we have to understand what the challenges are. It’s an experience that we have to share and analyze together whether it’s the American Indian Business Network or panels such as the ones presented here.

ICTMN: What is going on in terms of the tribes that are not doing so well, and are there legislative hurdles that Indian gaming has to overcome?

ES: We’re having them network among each other and creating an environment where they’re talking to each other about their challenges and what they’re doing to work their way out of this thing. I don’t really want to wrap the issue around legislation. I think it’s about economic development. I know a lot of people think Internet gaming is going to solve our financial crisis not just in Indian gaming but elsewhere, but I think anyone looking for a quick fix is making a big mistake. I think maintenance, planning and working together is what we have to do. We have to look at other forms of business, other economic opportunities and other ways of doing business. That’s what we’re trying to promote with the American Indian Business Network.

ICTMN: Do you think Indian gaming has plateau’d?

ES: Has it reached saturation? No, I don’t think so. Walk down the strip – there’s are tons of people here, you can’t even drive a car through, it’s nuts!

ICTMN: But this is Las Vegas. . .

ES: But in our world, if you like bingo or slot machines or just hanging out in the cigar bar or watching the big screen or splurging on a stay overnight in a hotel and doing some site seeing – that’s kind of where Indian country’s niche is. When you come to Indian country it’s more of a family environment, it’s a slower pace but it’s just as much fun. So maybe people spend less, but they’re still showing up. Indian gaming is still at the top of the list in terms of funding tribal governments.

ICTMN: But you agree that tribes should diversity?

ES: Yes, but I’m not a proponent of diversity because the end is near or the market is saturated or we have to solve the gaming ‘crisis.’ I don’t believe that. Those are doom and gloom scenarios. Indian tribes have gamed since long before there was a United States and we’ll continue to game and as long as I’m around we’ll do more gaming. My philosophy is we’re building a future. Every day we have more members and more challenges and we still have a lot of tribes that don’t have casinos or markets or opportunities, so tribes with resources can help create businesses and other industries to help those tribes without casinos or whose casinos are just about maintaining jobs for their members. But it’s important for us to have other options when we have this kind of economy so we can continue to provide for the basic needs of our tribal communities.

ICTMN: NIGA’s resolution of principles regarding Indian gaming is very cautious.

ES: There are elements in the existing bills that are not fair to the basic principle of tribal sovereignty. We stand firm: If they write a bill that doesn’t include what tribal leaders have asked for, we’re going to fight them tooth and nail. We believe we have the right to be at the forefront. We’ve educated the tribes about this and anyone who thinks the tribes don’t know or are not prepared is wrong. There has to be an even playing field. We’ve already had to make significant adjustments when the Indian Gaming Regulatory Act was written and to try to dilute that at this point is totally unfair.

ICTMN: Is NIGA still opposed to opening IGRA for amendments?

ES: Staunchly opposed. It’s absolutely imperative — and I’ve advocated this to all the tribal leaders—to be ready and engaged in understanding and educating each other about this Internet gaming industry. I guarantee you, the leadership in Indian country understands the potential. We take it seriously and we’re ready to deal with it.

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November 23, 2011

A Seat at the Internet Gaming Table

Indian gaming experts say there’s no need to amend the Indian Gaming Regulatory Act in order to give the National Indian Gaming Commission a regulatory role in any Internet gaming enterprises established by tribal governments.

The 1988 Indian Gaming Regulatory Act (IGRA) established the commission as the regulator of Indian gaming along with tribal governments. Since then there have been various threats to reopen IGRA for amendments – threats that tribal leaders have vigorously opposed for fear that opening the gaming statute would provide an opportunity for anti-gaming legislators to introduce amendments to limit Indian tribal governments’ ability to conduct gaming. But with the prospect of Internet gaming on the horizon, tribal leaders are pushing for a regulatory role for the commission and some leaders and legislators have questioned whether it would be necessary to open amend IGRA in order to authorize the commission as the oversight agency.

Spokesmen for the commission and for the National Indian Gaming Association (NIGA) say authorizing the commission to provide oversight to Indian gaming in cyberspace could be written into Internet gaming legislation. “I believe that responsibility is there with the commission. I don’t see why we would have to open up IGRA in order to do that.” NIGA Chairman Ernie Stevens Jr. says. “What we’re saying is that the commission has the experience and knowledge about Indian gaming and they’re the only ones who really have that kind of experience, and we think that would be more appropriate than having an outside agency oversee it.”

The issue of opening IGRA was raised in front of the Senate Committee on Indian Affairs at an “Oversight Hearing on the Future of Internet Gaming: What’s at Stake for Tribes?” November 17 when Sen. Al Franken (D-Minn.) questioned Larry Roberts, a citizen of the Oneida Nation of Wisconsin and general consul for the National Indian Gaming Commission. “If Internet gaming were made fully legal tomorrow and your commission would have a role in regulating tribal Internet gaming, do you think the IGRA would have to be rewritten in any way in order for the commission to take on that role?” Franken asked.

Roberts said it was a hard question to answer “in the abstract, because there’s no bill out there that provides roles and responsibilities for us so it’s hard to lay out whether it would actually have to be part of IGRA or not. It really depends on how Congress defines our role.”

Franken probed further. “But, I mean, if Congress were to say, ‘Okay, the Indian side of this is going to be regulated by IGRA,’ it would have to be in the legislation, obviously, right?” Franken said, referring to the legislation to legalize Internet gaming.

“Yes,” Roberts said, “and as with any legislation we would implement our statutory duties as Congress directs us to.”

Protecting IGRA from amendments is among a set of principles tribal leaders developed over the past two years, facilitated by NIGA. The principles establish ground rules for an Internet gaming bill that would meet tribal government interests and provide an even playing field between tribal and commercial gaming. They were developed in response to current Internet gaming proposals that Indian country leaders say give unfair advantages to commercial gaming in states such as Nevada and Arizona. The principles provide for protection for tribal sovereignty; give tribes the right to operate, regulate, tax and license Internet gaming; allow tribes to reach customers off the reservation; exclude tribes from taxes; protect existing tribal-state compacts, and provide economic benefits for Indian country.

The push to legalize Internet gaming is coming from the commercial side of the industry, primarily from the Poker Players Alliance, the American Gaming Association, and the gaming states of Nevada and New Jersey. Sen. Harry Reid (D-Nevada) tried to attach Internet gaming language to an Omnibus bill late last year, and Congressmen Joe Barton (R-Texas) and Congressman Jim McDermott (D-Wa.) have proposed H.R. 2366 and H.R. 2230, respectively. The existing proposals name the Department of Commerce and the Department of the Treasury as regulators of commercial Internet gaming.

Jason Giles, NIGA’s executive director and former general consul, argues that legislation to legalize Internet gaming could simply name the commission as the regulator of Indian Internet gaming. “You don’t need to go back into the legislation that created the Commerce and Treasury departments and amend those in order to give them a new role or responsibility,” he says.

While some tribes are eager for Internet gaming to get off the ground and others oppose all Internet gaming, tribal leaders agree—and insist—that they should have a major role in shaping any legislative proposals. Akaka strongly supports the tribal leaders’ involvement in the process. He noted that Indian gaming comprises approximately 43 percent of the entire $61 billion-plus gaming industry in the U.S. “That is why it is critical that the committee explore this issue to find out what it would mean for tribes and their traditional Indian gaming facilities,” Akaka says. “We must make sure that the unique circumstances surrounding tribal sovereignty are maintained in any legislation and we must also enable tribes to fully participate so tribes are on equal footing with their counterparts in the commercial gaming industry should any legislation be considered.”

Several legislators also support the nation’s efforts to be at the table and to protect tribal sovereignty. Sen. Daniel K. Inouye (D-Hawaii) wrote to Reid in October urging that tribes be treated fairly in any legislation the Senate majority leader might consider. “Tribes are sovereign governments and should be treated as such,” Inouye wrote. “They should have the authority to regulate, tax and operate gaming. . .  When Congress enacted IGRA in 1988, we intended to authorize Indian tribes engaged in gaming to use new technologies as they developed. Accordingly, Internet gaming has become a new market and tribes should have equal access to this market.”

John Hoeven (D- N.D.) wrote to Reid on November 14 in support of Inouye’s letter. He also argued for fair treatment of the tribes. “Historically, our country has recognized the importance of allowing tribal leaders to regulate this industry in a way that will meet the goals of promoting tribal economic development, tribal self-sufficiency, and a strong tribal government as outlined in IGRA. Congress should continue to respect tribal nations and their economies by treating them fairly during any Internet gaming discussions,” Hoeven wrote.

In October, Congressman Tom Cole (D-Okla.) wrote to the co-chairs of the Joint Select Committee on Deficit Reduction—the “Super Committee” that ended it’s work November 21 without reaching consensus on deficit reductions—urging the committee not to include Internet gaming provisions in the deficit reduction package. “While I do not support Internet gaming, if an Internet gaming regime is established, anything short of a comprehensive system developed through the regular committee process threatens the constitutionally recognized sovereignty of Indian tribes,” Cole wrote.

The current bills are clearly inadequate, Stevens says. “As they rolled this out they did it without respect for several aspects that are standard for tribal governments. We have to be treated as tribal governments. They have to understand and respect that we have a responsibility to our communities as we move forward because we’re not individuals, we’re not private investors. Our tribal governments’ economic development needs are in order to service our communities.”

Akaka has promised to analyze all potential impacts of Internet gaming on tribal nations. “I know there are many other tribes and affected stakeholders that we need to hear from as well. That’s why I intend to convene additional meetings about this issue so my colleagues and I can make sure we’re hearing from all interested parties representing tribal issues in this important matter,” he says. No further hearings have been scheduled.

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March 28, 2012

Seneca Nation Unveils Re-Designed $130 Million Buffalo Creek Casino

New Casino Will Be Part of Revitalized City Waterfront

The Seneca Nation of Indians has announced plans to move ahead with a re-designed $130 million casino in Buffalo’s waterfront district after a three-year pause on the project because of the economic recession.

The new Seneca Buffalo Creek Casino will be built on 9.5 acres of the Nation’s sovereign territory, replacing an existing temporary building that has offered slots-only gaming since 2007.  The new gaming facility is scheduled for completion in the summer of 2013 and is expected to provide approximately 600 construction-period jobs. Once completed, the new casino will provide 500 direct jobs, including inside jobs and others related to the operation, with a multiplier effect that will create another 500 jobs over time, Seneca officials said. The new casino will be a vital presence in the city’s old industrial waterfront area, which is in the process of revitalization.

Officials from the Seneca Nation and the Seneca Gaming Corp. talked about the project at a press conference March 27 at the temporary casino’s parking lot where the new casino plans were unveiled. “This new casino will be a national design leader for casinos in urban settings,” Seneca Nation President Robert Odawi Porter said in a prepared statement. “Our investment in this facility is our stake in our partnership with Buffalo’s Inner Harbor, the rejuvenation of the Perry Choice Neighborhood, and growth in the Old First Ward and along the Buffalo River. We are all in this together and we will succeed through collaboration.”

Porter explained that the Nation has gone to great lengths to communicate with all the stakeholders. “We sat down with and listened to people representing the locations and institutions that surround us today. We talked to waterfront officials, HSBC representatives, leaders from South Buffalo and the Old First Ward, executives from the Bisons, the Buffalo News, the Buffalo Niagara Partnership and Buffalo Niagara Enterprise. We heard from the Oishei Foundation, the Buffalo Municipal Housing Authority, Erie County and of course the City of Buffalo,” Porter said. “It means that when this casino opens next summer it will blend and merge with what surrounds it.”

Earlier this year, Seneca Gaming Corp. announced that it had hired the Memphis-based Hnedak Bobo Group, an award-winning architecture and design firm, to create plans for the newly envisioned gaming facility. Construction on the old casino stopped in 2008 when the economy began to fail. Opened in 2007, the current temporary Seneca Buffalo Creek Casino underwent two expansion projects, in 2008 and 2010. The casino has 457 slot machines and attracts more than 750,000 visitors a year, making it one of downtown Buffalo’s most popular destinations. Workers have already started dismantling its steel frame, which will be recycled and used to build the new casino. The dismantling process is expected to take about six weeks and yield around 340 tons of steel to be re-used. Construction of the new casino is expected to start in the summer.

SenecaSitePlanCrop e1332957247762 Seneca Nation Unveils Re Designed $130 Million Buffalo Creek Casino

Seneca site plan (Courtesy of the Seneca Nation of Indians)

Karen Karsten, chairman of the Seneca Gaming Corp. board of directors, said the Nation is focused on the future. “Dismantling the existing steel structure not only clears the site so our new vision can take shape, it opens the door to a modern concept designed to generate a prudent business model for downtown Buffalo,” Karsten said. “As we move forward, we are excited by the investments being made, by ourselves and by many others, to create an exciting destination atmosphere in the Inner Harbor and Buffalo River areas.”

The Nation will help move the revitalization forward. In February the Seneca Buffalo Creek Development Advisory Board announced it had developed a $1 million grant program for projects designed to boost infrastructure, landscaping, lighting and signage in areas around the downtown Buffalo casino. Grant applications for those improvements are due March 31 and awards are expected to be announced in late April.

Earlier this month one of two lawsuits involving the Seneca Nation’s Buffalo Creek Casino was eliminated. U.S. District Court Judge William M. Skretny dismissed an action filed against the federal government by Daniel Warren, who claimed, among other things, that the Indian Gaming Regulatory Act was unconstitutional and the Nation’s gaming compact with the state was invalid. The judge said the court lacked jurisdiction to entertain the claims and that the Nation and Seneca Gaming Corp. have sovereign immunity from this sort of lawsuit.

A lawsuit filed by anti-Indian gaming group Citizens Against Casino Gambling against the National Indian Gaming Commission is pending in federal court.

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March 31, 2012

Internet Gaming, Taxation And Regulatory Review Top NIGA 2012 Agenda

Internet gaming will be a hot topic at the Indian Gaming 2012 Tradeshow & Convention, the annual meeting of the National Indian Gaming Association (NIGA). Taking place at the San Diego Convention Center from April 1 to 4, the gathering is filled with golf tournaments, training, workshops, membership meetings, breakout sessions, networking and business opportunities, award ceremonies and a massive gaming trade show. The evenings will offer receptions, banquets, music and entertainment. In recent years, the convention has attracted more than 4,000 attendees.

We spoke to NIGA Chairman Ernie Stevens Jr. for a preview:

What are the top three issues to be discussed at this year’s NIGA and where does Internet gaming fit in the list of priorities?

The top three issues are Internet gaming, IRS taxation of cultural benefits, and the NIGC’s regulatory review process.

I would hesitate to say that any are more important than the others. But certainly Internet gaming is being talked about more and for good reason. We are resolute that Internet legislation must protect the rights of tribal sovereignty and preserve the integrity of IGRA. That brings us to another hot topic, which is taxation within those rights. Tribes are experiencing intrusion on their cultural affairs by IRS tax agents. The IRS is auditing the educational benefits and tribal cultural activities provided by tribal governments to individual tribal citizens. We are working with NCAI and our regional tribal organizations, such as the Great Plains Indian Gaming Association, to address the IRS’s intrusion. Additionally, we are working with our friends in Congress, such as Congressman Tom Cole (R-Oklahoma) and Senator Daniel Kahikina Akaka (D-Hawaii), to move legislation that would mandate the IRS respect tribal cultural affairs as official governmental activities.

On Thursday, the NIGC will hold an all-day consultation at the convention center. This will be its last consultation before issuing a new round of regulations for tribal review. This consultation will be of equal importance to tribal leaders who cannot always make it to D.C. to meet with the NIGC. We are happy to accommodate the NIGC, as well as Congress, so that our tribal leaders have one more avenue of access to key decision-makers.

Are there new events this year?

We are excited about the congressional interest shown in our trade show. On Wednesday, we will hold a congressional and tribal leaders listening session on Internet gaming. We have several congressmen confirmed, and the meeting will be led by Congresswoman Mary Bono-Mack (R-California). Holding a congressional listening session is a first at NIGA and we realize the importance that the Internet gaming issue has on industry. Not every tribal leader can come to Washington, D.C. and testify before committees. So we wanted to bring the congressional folks to our trade show, where there will be ample opportunity for tribal leaders to voice their opinions to them.

How many people do you expect?

Right now we have over 3,500 registered, including attendees and vendors. On average, though, we host over 5,000 guests each year, and with the economy improving, we might just exceed that average.

Who should attend and why?

We are hosting over 120 seminars. If you are a tribal gaming commissioner or regulator, this conference is the only gaming conference geared toward your profession and concerns. Our membership meetings on Monday and Tuesday are designed to provide tribal leaders and tribal government officials with the latest updates from Washington D.C. and how federal policy is impacting your tribal community. Not only do we have industry-specific seminars, but we have an exciting trade show and I’m proud to announce that we’ve completely filled our 90,000-square-foot floor room with over 400 exhibitors. You have to see the latest technology that is available for the gaming industry and meet some great established and emerging Native-owned businesses. So really, if you are a tribal leader, tribal gaming official, or Indian gaming professional, this trade show is a can’t-miss event for you.

What else should we know?

Our headline entertainment this year is Dwight Yoakam. He has agreed to interrupt his movie schedule to perform, so we are all really excited to hear him play at the Wendell Chino Banquet on Tuesday night. In addition, we will have a great day of golf on Sunday at two of our member tribes’ top-rated golf courses. The Sycuan and Barona Band of Indians will host this year’s golf tournaments. At the end of the day Sunday, our chairman’s welcome reception will be at the U.S.S. Midway in San Diego Harbor from 6:30 to midnight. We are excited about this venue, and even though American Idol beat us to the punch a little by holding their show on the Midway after the Super Bowl, we think it will be an awesome experience. This event is sponsored entirely by Rocket Gaming Systems. We will have two bands performing that night on the Midway, plus an honoring ceremony for Native veterans. Shuttles will be running all night from the hotels. So please, don’t miss this opportunity to spend some free time on such icon of American history.

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April 1, 2012

Keep Your NEPA Out of My Gaming Management Contract

One area of vital importance to many Indian tribes is the relationship of the Indian Gaming Regulatory Act (“IGRA”) to the National Environmental Policy Act (“NEPA”). The National Indian Gaming Commission (“NIGC”) requires Indian tribes entering into management contracts for gaming to comply with NEPA requirements when construction is involved. This position puts Indian gaming enterprises at a severe disadvantage to other businesses, which do not have to spend millions of dollars on NEPA compliance for the same project, nor undertake months or years of delay resulting from the NEPA process before beginning construction. The delay has the effect of outdating market analyses, dramatically increasing project costs, involving the general public in the sovereign decisions of tribal governments, and deterring potential investors.

The NIGC should be excused from compliance with NEPA because there is no way that tribes can complete full NEPA environmental reviews within the time period set out by Congress for the approval or disapproval of management contracts. Courts have found time conflicts excuse NEPA compliance. See Flint Ridge Development Co. v. Scenic Rivers Ass’n of Okla., 426 U.S. 776, 788-89 (1976). Continuing to require NEPA compliance for gaming management contracts is a waste of tribal, management contractor, and federal resources.

The completion of an Environmental Impact Statement (“EIS”) takes a considerable amount of time – from the Draft Environmental Impact Statement, review and revision in response to feedback, possibly publication of another draft, publication of a Final Environmental Impact Statement and publication of a Record of Decision. The average time for completion of an EIS is 3.4 years based on a 2008 study by Piet and Carole deWitt of 2,095 EISs prepared by 53 different federal agencies. This is very similar to a 3.6 year timeframe found by a 2000 Federal Highway Administration evaluation on environmental streamlining. On the two occasions when an EIS was required by the NIGC, for the Nottawaseppi Huron Band of Potawatomi Indians, it took approximately two years and three months to prepare a Record of Decision. The second occasion, for the Graton Rancheria, the NEPA process took approximately three and a half years from publication of the Draft EIS until issuance of the Record of Decision. Moreover, these time periods also are not adequate for the NIGC to consult with Indian tribes pursuant to the Commission’s government-to-government consultation policy.

The NIGC must approve or disapprove a gaming management contract within one hundred and eighty (180) days, with a possible ninety (90) day extension, or a tribe may sue to compel action under 25 U.S.C. § 2711(d). There is simply no way that a Tribe can complete an EIS within this period. As a result, the one hundred and eighty (180) day period allowed for approval or disapproval of management contracts in 25 U.S.C. § 2711(d) is far too short for the agency to comply with NEPA. The time limitations in the IGRA warrant the conclusion that there is a statutory conflict with NEPA.

Indian tribes have had the authority to build and operate gaming facilities on their lands prior to the enactment of IGRA. Under IGRA, an Indian tribe has the right to build and operate a gaming facility on its lands after adoption of a gaming ordinance approved by the NIGC Chairman — no federal review of the construction design, location, or site is required unless an opinion is needed that the selected site qualifies as Indian lands. See 25 U.S.C. § 2719.

Furthermore, NEPA was enacted to assist Federal agencies to ensure that significant environmental impacts are fully considered in the Federal decision-making process. Thus, under NEPA, an EIS should be created only when a federal agency, such as the NIGC, will be undertaking an activity that rises to the level of a major federal action which significantly affects the quality of the human environment. Department of Transportation v. Public Citizen, 541 U.S. 752, 763 (2004).

For Indian gaming management contracts, federal interest in the contract is slim, other than for enforcement of its gaming terms. When a management contract does involve construction activity, the NIGC has no ability to control or regulate the size, design, or construction of the project. Thus, no major federal action in involved in the Indian gaming management contract process, and therefore, NEPA compliance should not be required.

To further explain why no federal action is involved, the factors considered by courts to determine whether a project is a major federal action when a non-federal party is involved include: (1) whether the project is federal or non-federal; (2) whether the project receives significant federal funding; and (3) when the project is undertaken by a non-federal actor, whether the federal agency must undertake “affirmative conduct” before the non-federal actor may act. Mineral Policy Center v. Norton, 292 F. Supp. 2d 30, 55 (D.D.C. 2003).

An Indian gaming management contract is not a federally initiated, operated, or owned project.

The tribe has the sole proprietary interest and responsibility for the conduct of any gaming activity pursuant to 25 U.S.C. § 2710(b)(2)(A), and may begin construction of a gaming operation or offer gaming activities as soon as its gaming ordinance has been approved. The management contract is between two non-federal entities: an Indian tribe and a private company. The Indian gaming operation receives no federal funding; instead the tribe pays fees to the government to cover regulatory and oversight costs.

Even though a management contractor cannot begin work without federal approval, there has been reluctance to require NEPA compliance on actions “that are marginally federal” especially when no federal funding is involved. State of Alaska v. Andrus, 591 F.2d 537, 541 (9th Cir.1979). Moreover, NIGC approval of any construction or building terms in the management contract are outside the scope of the factors Congress requires the Commission to review. “[If] the agency does not have sufficient discretion to affect the outcome of [an] action, and its role is merely ministerial, the information that NEPA provides can have no affect on the agency’s actions, and therefore NEPA is inapplicable.” Citizens Against Rails-to-Trails v. Surface Transp. Bd., 267 F.3d 1144, 1151 (D.C.Cir. 2001). The NIGC is not in control of the project, nor may it exert significant influence on any construction or environmental mitigation terms of the gaming management contract. Sierra Club v. Hodel, 848 F.2d 1068, 1089 (10th Cir. 1988).

If the NIGC insists on that there is no statutory conflict and that major federal action is involved in management contract approvals, it can create a single programmatic EIS based on past experience that would support a categorical exclusion for tribal projects. Such an approach, called “tiering” is allowable by federal regulations at 42 C.F.R.§ 1500.20, and would save substantial time and money.

Considering these issues, NEPA should not apply to the IGRA based on statutory conflict and/or categorical exclusion. Furthermore, continuing to require NEPA compliance for gaming management contracts is a waste of tribal, management contractor, and federal resources.

Andrea Lord Goldstein is a Senior Associate with the law firm of Smith, Shelton, Ragona & Salazar, LLC, located in the Denver area, and a former Staff Attorney for the National Indian Gaming Commission.

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April 4, 2012

On Class II Gaming Regulations

The National Indian Gaming Commission (NIGC) recently published discussion drafts of a set of regulations for Class II. These are the first set of regulations for Class II put forth by Chairwoman Stevens and are the result of a strenuous consultation process and with the advice of a NIGC organized Technical Advisory Committee (TAC). All of this follows years of pain-staking hard work by the Tribal Gaming Working Group (TGWG). The good news is that this set of regulations did not come down off the mountain, as was the process in the recent past. This is not to say that some significant work is not needed to make this set of regulations workable for the industry and, most importantly, for the Tribal governments that are the primary regulators of Class II.

This set of regulations encompasses Technical Standards and Minimum Internal Controls (MICS). There is no doubt that Class II will be better off when these regulations are adopted and become the measuring rod for enforcement at both the NIGC and for Tribal regulators. This article is not intended to be a specific review of each provision; rather, it is meant to take a broader policy view.

The Technical Standards set the minimum requirements that manufacturers of Class II hardware and software must build into their products. This newest draft will modify existing regulations and will bring needed clarity and direction. A set of standards like these has long been a goal of the industry. It is my view that most of the provisions that ensure a viable and profitable Class II industry are contained in this draft. What is lacking is largely highly specific and requires that the NIGC give great weight to the comments that will come from the Tribal governments, Tribal regulators, the TGWG, and the industry.

The NIGC will benefit from the technical expertise that will be contained in many of the comments to be filed. I urge this NIGC to be open-minded to the considerable expertise offered. To do anything less may allow historical failings to overshadow an otherwise propitious record of regulatory reform, consultation, and collaboration.

MICS are the heart and soul of gaming regulation. Tribal government gaming has a proud and enviable record of regulation over the past 24 years since the passage of the Indian Gaming Regulatory Act (IGRA). Historically the role of the NIGC in fulfilling its oversight role has largely been successful, with some notable exceptions. The exceptions grew out of a fundamental misinterpretation of the language of the IGRA by the previous NIGC administration that lead to overreaching and a “policing” mentality. I point this out not to open wounds, rather to make it clear that there is no room to return to that failed view.

The work of the TAC and the consultations along with the comments that will be offered to the NIGC will shape a regulatory view that must define the fundamental role of the NIGC as defined by the IGRA – oversight. Tribes are the primary regulators of Class II gaming and must be fully accorded that role by the NIGC in all of its regulations, especially these Class II regulations.

The draft NIGC regulations are not consistent and appear to place the NIGC on equal footing with Tribal regulators. The IGRA, established law and the stated policies of this NIGC should support and strengthen Tribal sovereignty. Lest I be accused of overreacting, let me say I speculate that when all of the comments are in and when the NIGC has a chance to reflect, this concern will be remedied.

This set of NIGC regulations is a good start; we must make sure that the end product does not drift back to historically and legally unsupported conclusions. Groups like the TGWG along with the advisors to Tribal government gaming will continue their good work and focus on this issue as well as the details of the regulations.

I urge all Tribal governments and regulators to take the time to comment on this draft set of NIGC Class II regulations paying particular attention to the proper role of the NIGC.

Due date for comments is April 16, 2012. For more information, see the NIGC website at NIGC.gov.

Joe Valandra, Sicangu Lakota, is principal owner and president of VAdvisors, LLC, chairman and CEO of Tehan Woglake, Inc., and former chief of staff of the National Indian Gaming Commission.

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