U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

42–319 PDF 2008

S. HRG. 110–405 

THE NATIONAL INDIAN GAMING COMMISSION 

HEARING 

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

APRIL 17, 2008 

Printed for the use of the Committee on Indian Affairs 

( 

(II) 

COMMITTEE ON INDIAN AFFAIRS 

BYRON L. DORGAN, North Dakota, Chairman 

LISA MURKOWSKI, Alaska, Vice Chairman 

DANIEL K. INOUYE, Hawaii 

KENT CONRAD, North Dakota 

DANIEL K. AKAKA, Hawaii 

TIM JOHNSON, South Dakota 

MARIA CANTWELL, Washington 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

JOHN MCCAIN, Arizona 

TOM COBURN, M.D., Oklahoma 

JOHN BARRASSO, Wyoming 

PETE V. DOMENICI, New Mexico 

GORDON H. SMITH, Oregon 

RICHARD BURR, North Carolina 

ALLISON C. BINNEY, Majority Staff Director and Chief Counsel 

DAVID A. MULLON JR., Minority Staff Director and Chief Counsel 

(III) 

C O N T E N T S 

Page 

Hearing held on April 17, 2008 .............................................................................. 1 

Statement of Senator Dorgan ................................................................................. 53 

Statement of Senator Tester ................................................................................... 1 

WITNESSES

Carlyle, Delia, Chairwoman, Arizona Indian Gaming Association; Chairwoman, Ak-Chin Indian Community .................................................................. 12 

Prepared statement with attachment ............................................................. 13 

Hogen, Philip N., Chairman, National Indian Gaming Commission .................. 3 

Prepared statement .......................................................................................... 5 

Luger, J. Kurt, Executive Director, North Dakota and Great Plains Indian 

Gaming Association ............................................................................................. 32 

Prepared statement .......................................................................................... 34 

Matthews, J.R., Niga Executive Committee Member and Vice Chairman, 

Quapaw Tribe of Oklahoma; accompanied by Mark Van Norman, Executive 

Director, National Indian Gaming Association .................................................. 18 

Prepared statement .......................................................................................... 20 

Patterson, Brian, President, United South and Eastern Tribes, Inc. ................. 27 

Prepared statement .......................................................................................... 29 

Rand, Kathryn R.L., J.D., Professor, University of North Dakota School of 

Law; Co-Director, Institute for the Study of Tribal Gaming Law and Policy; 

accompanied by Steven Andrew Light, Ph.D., Professor, University of North 

Dakota College of Business and Public Administration; Co-Director, Institute for the Study of Tribal Gaming Law and Policy ........................................ 41 

Prepared statement with attachment ............................................................. 43 

APPENDIX

Boren, Hon. Dan, U.S. Representative from Oklahoma, prepared statement 

with attachment ................................................................................................... 67 

Supplementary Information Submitted by: 

Confederate Salish and Kootenai Tribes of the Flathead Nation ................. 200 

Hogen, Philip N. ............................................................................................... 203 

Miccosukee Tribe of Indians of Florida ........................................................... 75 

Poarch Band of Creek Indians ........................................................................ 168 

Seminole Tribe of Florida, Metlakatla Indian Community, Kickapoo Traditional Tribe of Texas, and the Wichita and Affiliated Tribes of Oklahoma ............................................................................................................... 144 

Seneca Nation of Indians ................................................................................. 192 

(1) 

THE NATIONAL INDIAN GAMING COMMISSION 

THURSDAY, APRIL 17, 2008 

U.S. SENATE, COMMITTEE ON INDIAN AFFAIRS, Washington, DC. 

The Committee met, pursuant to notice, at 10:30 a.m. in room 

562, Dirksen Senate Office Building, Hon. Jon Tester, presiding. 

OPENING STATEMENT OF HON. JON TESTER, 

U.S. SENATOR FROM MONTANA 

Senator TESTER. [Presiding.] I would like to call the Indian Affairs Committee meeting on the oversight of the National Indian 

Gaming Commission to order. We have a great panel to hear from 

today. The panelists can go ahead and take your respective seats 

now. I have a quick opening statement and then we will get to the 

testimony and the questions and answers shortly thereafter. 

I want to welcome everybody, especially the panelists, to the 

Committee meeting today. I want to thank you for being here to 

visit about the National Indian Gaming Commission’s consultation 

processes. As everybody in this room knows, Indian gaming is a 

dual-edged sword. On one side, the Indian gaming represents the 

most significant economic development system since the treaties 

were made. On the other side, gaming carries the possibility of 

fraud, corruption and abuse. 

To help ensure gaming contributes more positive than negative 

to Indian Country, Congress established the NIGC. According to 

the Indian Gaming Regulatory Act, the NIGC role is to shield 

tribes from organized crime, ensure that Indians are the primary 

beneficiaries of gaming, and ensure gaming is conducted fairly. 

It is undisputed that NIGC is a big job to do. More than 400 

gaming enterprises on 230 reservations in 30 States generated 

about $26 billion in 2006. To complicate matters, each tribe is an 

individual nation with unique goals and needs. The NIGC is a relatively young entity as far as Government agencies go, and it is 

reasonable to expect a few growing pains along the way. 

We are here today to ensure that the NIGC and Indian gaming 

overall are accomplishing its missions to improve Indian Country 

with meaningful, safe and fair economic development. I have several concerns about the process today and hope this hearing helps 

clarify the issues for everybody here. I want to be sure that the 

NIGC is spending more of its time to ensure Indian Country is successful with gaming, rather than merely building bureaucracy. 

2 

Along those lines, however, I am concerned that this very important job is in the hands of only three people, but right now it is 

in the hands of only two people because one of the positions has 

not been filled and both those people are Republicans. I want to be 

sure that the consultation it does is meaningful. The tribes have 

reported that although the NIGC announces its proposed rules and 

collects comments from the tribes, that the NIGC is merely going 

through more than just the motions. The comments have little influence on its decision-making process. Along these lines, I would 

like to get your thoughts about the Rahall bill that is currently before the House of Representatives regarding consultation, H.R. 

5608. 

I am also concerned about the recent controversy surrounding the proposed Class II regulations. With an estimated $1 billion to 

$2 billion loss at stake in an industry created to provide economic 

benefit to Indian Country, we need to be very, very careful about 

how we proceed. I am particularly concerned because tribes are 

fairly new to the gaming regulations and business enterprise, and 

only giving them one month to analyze the economic impact statement and no time to analyze the cost-benefit analysis is contrary 

to NIGC’s mission. 

That is why Senator Baucus, my comrade from Montana, and I 

wrote you a letter, Mr. Hogen. In that letter, we had asked you to 

extend that comment period until tribes had an opportunity to analyze the important aspects and comment appropriately. It is vital 

for you to understand the impact of this decision will have on Indian Country and avoid losses if at all possible. 

And finally, with all the criticisms we have heard about the 

NIGC, I also want to be sure that gaming operators understand 

that it is not fair to complain about the NIGC process just because 

they don’t happen to agree with the rule or regulation. The NIGC 

has a big and very complicated job to do with limited resources. It 

is important that we all work together. 

So in closing, I want to thank you all for being here today. I look 

forward to this discussion. We are here today to ensure that as we 

grow, we continue to adhere to the goals identified by Congress. 

Working together, we truly can improve Indian Country through 

economic development and gaming can be a contributor. 

I want to welcome the panelists here today. It is great to have 

you. I will introduce you and then we will go in the order of introduction. 

We have the Honorable Phil Hogen, Chairman of the National 

Indian Gaming Commission right here in Washington, D.C., formerly out of the great State of South Dakota. We have the Honorable Delia Carlyle, Chairwoman of the Arizona Indian Gaming Association, Chairwoman of the Ak-Chin Indian Community Council 

of Phoenix, Arizona. We have the Honorable J.R. Mathews, Board 

Member and Vice Chairman of the Quapaw Tribe of Oklahoma, 

Quapaw, Oklahoma. He is accompanied by Mark Van Norman, Executive Director of the National Indian Gaming Association, Washington, D.C. 

We have Brian Patterson, the President of the United South and 

Eastern Tribes of Nashville, Tennessee; and Kurt Luger, Executive 

Director of the Great Plains Indian Gaming Association, Bismarck, 

3 

North Dakota. And finally, last but certainly not least, we have 

Kathryn R.L. Rand, accompanied by Steven Light, Co-Directors, Institute for the Study of Tribal Gaming Law and Policy, University 

of North Dakota, Grand Forks, North Dakota. 

Welcome, all. 

We will start with you, Mr. Hogen. 

STATEMENT OF PHILIP N. HOGEN, CHAIRMAN, NATIONAL 

INDIAN GAMING COMMISSION 

Mr. HOGEN. Good morning, Senator. Thank you for inviting the 

National Indian Gaming Commission to testify. With me today 

here seated behind me is Norm DeRosier, who is the Vice Chair of 

the Commission, and as you observed, the other member of what 

ordinarily is a three-member commission. 

It is really important and timely that the Senate from time to 

time look at agencies like ours. Getting ready for these hearings is 

kind of like doing my income tax. I don’t look forward to its preparation, but once I get done with it, I am really better off because 

I can put things in better perspective and identify some areas 

where I probably could have done things a little better. 

With respect to Indian gaming, I want to say at the outset and 

remind everybody Indian gaming is not a Federal program. Indians 

invented Indian gaming. It has been working great. Our job is to 

be part of the solution, not part of the problem. 

The growth of Indian gaming revenues continues to increase. I 

think with the economy slowing up a little bit, the growth rate 

might slow down a little, but it is getting bigger and it is doing 

great things for meeting Indian needs. 

NIGC’s role, very generally, is to ensure ongoing integrity in this 

industry. We need to do that so the public will perceive that there 

is integrity and they will continue to come to tribal gaming facilities. We need to do that to make sure that the tribal assets, the 

tribal gaming revenues are protected and go to the right place. 

But most important, in looking at the regulation of Indian gaming, we need to bear in mind that the tribes do the heavy lifting. 

The tribes are there all day, every day, 24/7, 365 days a year. If 

they fall down on the job, then the thing is going to have trouble. 

Our job is to try and assist them in that regard. 

We do that primarily in three ways. We help to assure the suitability of the people they hire to run the place. That is, they license 

the tribal gaming employees and we help them going to the FBI 

to check the fingerprint base and so forth do that. We also help 

them assure that the play at the tribal gaming facility, the casino 

or the bingo hall, is fair, fair to the players, fair to the tribal gaming facility. 

And thirdly, we want to make sure that the dollars that come in 

the door and are eventually supposed to end up in the tribal bank 

account get there, so that the developers and the contractors don’t 

get an unfair share along the way or something doesn’t fall through 

the cracks. So internal controls and various mechanisms permit 

them to do that. 

With respect to our agency, we have our headquarters office here 

in Washington, D.C. We have five regional offices out in the Country, so to speak, and one region is served from our D.C. office. We 

4 

have currently 416 tribal gaming operations out in Indian Country 

operated by 230 tribes. We try to do our job with a staff of 104 staff 

members. 

We have several divisions that we are broken into. We have an 

audit division that, first of all, looks over the audits that are done 

by outside accountants for tribal operations, and then sent to the 

NIGC, and we go out and do audits with respect to the performance or the compliance with the tribe’s internal control standards, 

and in the case of Class II gaming, the NIGC internal control 

standards. 

We have a contracts division that reviews and recommends approval or disapproval of proposed management contracts the tribes 

enter into with outside developers and so forth. In connection with 

that, they do background investigations of those folks who tribes 

interface with. That contracts division also participates in the background investigation role the NIGC plays to support tribal gaming 

commissions as they license their employees. 

And of course, we have an enforcement division. We have investigators who look to make sure that the Indian Gaming Regulatory 

Act, the NIGC regulations, the tribe’s gaming ordinance, and the 

tribal-State compact are being complied with. To do this, we need 

some legal advice. We have an office of general counsel. I think we 

have 17 staff within that office. We often get sued for one reason 

or the other. They defend that litigation with the Department of 

Justice, and they advise the rest of the Commission. And then to 

do the job, of course, we have a division of Administration. 

One of the events that was significant in the life of the National 

Indian Gaming Commission was the ruling in what is called the 

CRIT case, Colorado River Indian Tribes case, that challenged 

NIGC’s application of minimum internal control standards to Class 

III or casino gaming. That part of the Indian gaming, the casino 

gaming, represents 90 percent of that $26 billion that is generated, 

but the court decided that we had gone too far as we attempted to 

apply those regulations. So we have necessarily modified what we 

do and how we do it in that connection. 

We still maintain minimum internal control standards, and we 

do that of course because they still apply to Class II gaming. And 

in a number of cases, those MICS have been adopted by tribalState compacts, so they need to stay current with technical advances and so forth. 

Recently, a number of tribes have amended their tribal gaming 

ordinances to adopt or incorporate the NIGC MICS with respect to 

Class III gaming and to recognize the NIGC’s role to monitor that 

to take enforcement action if there are violations. 

So while we have changed after the CRIT decision, it hasn’t been 

a drop in the interest in the minimum internal control standards. 

There are a number of tribes, knowing that the CRIT decision took 

that jurisdiction away from us, would like some help and have invited us to come in, look at their Class III mixed compliance, and 

we are doing that. 

Senator TESTER. Chairman Hogen, one thing that I didn’t state, 

and goes to all, we are going to try to limit you to five minutes. 

Your complete testimony will be a part of the record, so continue 

5 

on and if you can wrap it up in the next two or three minutes, it 

would be much appreciated. 

Mr. HOGEN. Okay. 

We are funded not with any taxpayers’ dollars. We are funded 

with fees that we assess on tribal gaming. We recently set the rate 

for that fee, and it will be .057 percent. We reduced the rate from 

what it had been in the prior year, and that will collect about $15.4 

million based on our projections. That is an increase from the previous year’s budget. 

In addition to the fees, we also collect money with respect to the 

service we provide on the fingerprints and the management contractors pay their own way with respect to the background investigations they do. 

I know that the Committee is very interested in the consultation 

that NIGC conducts. We have adopted a consultation policy. We attempt to adhere to that, and we are watching with great interest 

that bill that is in the House that relates to consultation. Consultation is a good idea, but I think in terms of current controversy, if 

you will, it is not, in my view, that we haven’t consulted. Rather, 

it is that we haven’t agreed with everything that the tribe has 

asked or suggested of us with respect to the Class II standards. I 

would be happy to respond to questions that might arise in that 

connection. 

So we do have many other areas addressed in our written testimony, and I would be happy to respond to any questions that you 

or the Committee might have with respect to anything we do. 

Thank you, Senator. 

[The prepared statement of Mr. Hogen follows:] 

PREPARED STATEMENT OF PHILIP N. HOGEN, CHAIRMAN, NATIONAL INDIAN GAMING

COMMISSION

Good morning Chairman Dorgan and members of the Committee. The National 

Indian Gaming Commission (NIGC) is delighted that the Committee has once again 

chosen to look at the NIGC and the role it plays under the Indian Gaming Regulatory Act (IGRA). As I have testified before, Indian gaming is the greatest engine 

for economic development that Indian country has developed. 

Indian gaming is not a federal program, and its genesis did not occur with the 

enactment of IGRA. Rather, tribes have been gaming since before the inception of 

the Act and in many respects, the structure established by IGRA has fostered the 

growth and development of that industry. IGRA created the NIGC and it is the nation’s only federal gaming regulatory entity. To put the regulation of tribal gaming 

in proper context, we need to appreciate that the vast majority of the regulation of 

tribal gaming is done by the tribes themselves, with their tribal gaming commissions and regulatory authorities. In many instances, where tribes conduct Class III 

or casino gaming, state regulators also participate in the process. NIGC has a discrete role to play in this process and is only one partner in a team of regulators. 

As I have often told this Committee, the growth of revenues generated by tribal 

gaming is large, and getting larger. For individual casinos, however, growth may 

slow and, in some cases, may even diminish. There has been and continues to be 

growth in the industry, which now generates nearly $26 billion of gross gaming revenues annually, and which represents the second largest component of gaming revenues generated by the gaming industry in the United States. 

NIGC’s role in the structure established by IGRA is to ensure ongoing integrity 

in the tribal gaming industry by assisting tribes to determine the suitability of those 

whom they approve or license to staff and operate their gaming operations and to 

ensure that the play at the casinos and bingo halls is fair, both to the customer 

players and to the facilities themselves. In addition, NIGC ensures that the revenues generated by the tribal gaming operations go to the tribal governments and 

are not wrongfully siphoned away or disproportionately paid to those who supply 

and assist tribes as they conduct those operations. 

6 

As the Committee knows, zero taxpayer’s dollars are provided to NIGC to fund 

its role, but rather the tribes pay their way through fees the Commission assesses 

on the tribes’ gross gaming revenues. The large and growing scope of Indian gaming 

of late has meant that NIGC, too, has grown and is growing to keep pace. The composition and staffing of NIGC is currently as follows: 

Overview of the Commission 

The NIGC is headed by three Commissioners. The Chairman is appointed by the 

President with the advice and consent of the Senate and the other two Commissioners are appointed by the Secretary of the Interior. One Commissioner position 

is currently vacant. 

Our current structure is comprised of our Washington D.C. Headquarters Offices, 

six regional offices (one of which is housed in our D.C. offices) and five satellite offices. The typical regional office is composed of a regional director, several field investigators, one or two auditors and administrative staff. 

Collectively our field personnel consist of six regional directors, field and background investigators, auditors, and administrative staff (with one vacancy). It 

should be noted that the auditors in the regional or satellite offices actually report 

to the Director of Audits in our D.C. offices. 

Our D.C. Headquarters houses the Directors of Enforcement, Training, Auditing, 

and Contracts. The Directors and our managers for Information Technology (IT), 

Freedom of Information Act requests, Finance and other administrative roles all report to a Chief of Staff. In addition there is the Office of General Counsel. The attached chart further breaks down the composition of our staffing. Of our 104 employees, 22 are Native American, 16 of whom are enrolled tribal members. 

A brief description of the function and achievement of the several divisions of the 

Commission follows: 

Enforcement Division 

NIGC’s Enforcement Division, through its field investigators, reviews the conduct 

of gaming at 416 tribal gaming operations run by 230 tribes. 

As a result of NIGC field investigators’ work and with the help of NIGC’s Office 

of General Counsel, in 2007 NIGC issued seven Notices of Violation and entered 

into an additional 4 Settlement Agreements in lieu of notices of violation. Although 

informal compliance is the primary method for assuring compliance, approximately 

160 Notices of Violation have been issued over the years. 

Training 

Along with Congress’s grant of flexibility in the amount of fees collected to fund 

our activities came a mandate to provide technical assistance to tribal gaming operations. NIGC has always seen training as an important part of its mission but has 

taken special care to offer training since enactment of Pub. L. No. 109–221 on May 

12, 2006. For example, in calendar year 2007, NIGC’s Division of Enforcement provided over 700 hours of formal training to tribal regulators. This figure excludes all 

the hours of informal training that took place during the 715 site visits that were 

conducted during 2007 or that took place at national and regional gaming conferences. Training topics include: tribal background investigations and licensing; environment, public health and safety programs; tribal gaming commission duties; and 

slot machine technology. 

NIGC recently hired a Director of Training, who will oversee the agency’s training 

efforts, integrating the work of our field investigators and field auditors in providing 

the training, both formal and informal, that is needed by tribal gaming facilities and 

regulators. 

Audit Division 

Since the U.S. Court of Appeals for the D.C. Circuit affirmed the holding in the 

Colorado River Indian Tribes (CRIT) decision, the Audit Division has foregone the 

conduct of Minimum Internal Control Standards (MICS) audits at most gaming operations conducting Class III gaming; however, at the time of the decision followup was being performed from several previous audits. At the request of some tribes, 

that work continued and reports of findings were provided to the tribal gaming regulatory authorities for their disposition. Furthermore, in addition to performing four 

compliance audits at Class II gaming operations, the Division has received two requests from Class III properties to conduct audits; one has been completed and the 

other is in progress. 

The Division has also conducted audits confirming that the uses of gaming revenue by three tribal governments were compliant with NIGC regulations. Complementing the audit work has been an increased demand for training assistance from 

gaming operations and tribal regulatory personnel. Since the beginning of the curVerDate Aug 31 2005 09:22 Jul 07, 2008 Jkt 042319 PO 00000 Frm 00010 Fmt 6633 Sfmt 6621 S:\DOCS\42319.TXT JACK PsN: JACKF
7 

rent fiscal year, audit staff have participated in or conducted training on 17 occasions. 

The Audit Division has also worked to install a computerized accounting system 

to improve various aspects of the agency’s financial management. The new system 

has allowed the automation of billings and receipts for the tribes that process fingerprints of tribal gaming operation key employees through the NIGC. The new system 

also allows us to better monitor the timely payment of NIGC quarterly fees and to 

more accurately track payment of fines and penalties that are deposited with the 

U.S. Treasury. The system will also help improve NIGC’s monthly financial management through preparation of monthly financial statements, comparing actual expenditures to budgeting revenues and expenses to facilitate financial planning for 

the future. 

Contracts Division 

The Contracts Division is responsible for reviewing all management contracts and 

amendments in order to make a recommendation to the Chairman, who must approve management contracts before they become effective. 

Tribal Background Investigations and Licensing 

The NIGC assisted in processing over 72,000 fingerprint cards for tribal gaming 

operations. All the fingerprint information is sent electronically to the Federal Bureau of Investigation, pursuant to a MOU with the Bureau with most of the results 

returned to the tribes within 24 hours. This is a marked improvement since the 

early days of NIGC when results were sent through the mail and not received for 

two to four months. 

Administration Division 

The NIGC Administration Division has responsibility for, among other things, responding to Freedom of Information Act (FOIA) requests. Our FOIA Office began 

FY 2007 with 10 pending requests, and received 101 new requests. By December 

31, 2007, the Office had processed and closed out 108 of those requests; the remaining three were closed out within the 20-day time limit. 

In addition to updating the Employee Manual with many new policies and procedures, the Division is also working to create an updated agency-wide data base. 

Office of General Counsel 

The Office of General Counsel (OGC), a staff of 17, provides legal advice and counsel to the Commission. 

Currently, OGC attorneys, along with the Department of Justice, are handling 13 

cases in Federal courts and monitoring 11 additional cases that impact the Commission. In 2006, 69 ordinances and amendments were submitted for review, and in 

2007, an additional 49 were submitted. In every instance, those reviews were completed within the 90-day statutory deadline. 

Twenty-eight contracts in 2006 and 22 contracts in 2007 were submitted to OGC 

for a review of management and sole proprietary interest. The OGC issues advisory 

opinions on these contracts as a service to tribes and contractors so that they may 

avoid possible violations of the IGRA. 

The OGC also assumed responsibility for tracking whether tribal gaming facilities 

are located on Indian lands. It established an Indian lands data base to capture all 

of the information required to determine if the lands are eligible for gaming. That 

data base is undergoing a complete revamping to make it more user friendly. The 

OGC is also developing a system of maps to reflect where the gaming operations 

are located. 

The OGC, along with NIGC’s program personnel, staffs the Commission’s work on 

regulations. It also provides legal advice on the distinction between class II and 

class III games. As a consequence, over a period of five years, the Office helped draft 

and revise the Commission’s several drafts of the regulations for classification, facsimile definition, technical standards, and class II minimum internal control standards. To do so, they staffed the meetings of two advisory committees, the meetings 

of a separate working group formed by the advisory committees, consultation hearings, and hundreds of individual consultations, and reviewed hundreds of written 

comments submitted by tribes, states and others. 

The OGC also drafted Facility License Standards which were published as final 

in the Federal Register in February of this year. The regulation requires tribes to 

notify the Commission 120 days before a tribe plans to license a new facility. The 

rule was finalized after nearly two years of consultation with tribal leaders and 217 

written comments on prior drafts and proposed standards. Since the Facility License 

Standards were published, the NIGC has received seven tribal notifications of intent 

to open a new gaming facility in 120 days. We have requested information from anVerDate Aug 31 2005 09:22 Jul 07, 2008 Jkt 042319 PO 00000 Frm 00011 Fmt 6633 Sfmt 6621 S:\DOCS\42319.TXT JACK PsN: JACKF
8 

other five tribes regarding their intent to open a facility within the 120-day timeframe. 

The Commission’s Evolving Mission 

Over time, of course, the methods by which the Commission fulfills its mission 

have evolved, and continue to evolve. Some of the areas of focus in this regard are 

as follows: 

Consultation 

In keeping with the obligation to consult, NIGC adopted its consultation policy in 

early 2004, a copy of which is attached and which we published in the Federal Register. This policy was itself a product of the Commission’s consultation with tribes 

as it was formulated. In the course of formulating this policy, NIGC also gathered 

and examined the consultation policies of other federal agencies, and discussed the 

utility of those policies with those agencies. 

In the course of consulting on regulations, we typically first draft the proposed 

regulations, based on the agency’s experience of what is needed for healthy regulation, and then we present these proposed regulations to the tribes. The proposals 

are often published on our website and, for example, in the case of the classification 

regulations, are presented to tribal advisory committees, so that tribal gaming regulators with the most experience in the field can advise NIGC of how the regulations 

would affect them. 

We continue to seek consultation in the most effective ways. While there are 562 

recognized tribes in the United States, only about 230 are engaged in Indian gaming, and so it is that group to whom the NIGC has most often turned for consultation. In the two years 2006 to 2007, NIGC has conducted 154 government-to-government consultations. 

In addition, I met with 41 tribes here in my office in D.C. at their request to discuss a myriad of issues. NIGC also attended 15 tribal advisory committee meetings, 

15 national and regional conferences, and 8 tribal leadership meetings to which we 

were invited. In addition, on September 16, 2006, we held a public hearing on the 

class II regulations. That hearing, at which 27 speakers made public comments, was 

attended by 129 participants. 

It is not possible, of course, for the Commission to visit every tribe on its reservation each time an issue or policy might affect tribes. Gaming tribes have formed regional gaming associations, such as the Great Plains Indian Gaming Association 

(GPIGA), the Oklahoma Indian Gaming Association (OIGA), the Washington Indian 

Gaming Association (WIGA), the California Nations Indian Gaming Association 

(CNIGA), the Midwest Alliance of Sovereign Tribes (MAST), and the New Mexico 

Indian Gaming Association (NMIGA), among others, as well as national and regional organizations such as National Indian Gaming Association (NIGA), National 

Congress of American Indians (NCAI) and United South and Eastern Tribes 

(USET). Those organizations meet annually or more often, and NIGC has taken 

those opportunities to invite tribal leadership to attend consultation meetings on a 

NIGC-to-individual-tribe basis. Consulting at gaming association meetings maximizes the use of the Commission’s time and minimizes the travel expenses that 

tribes, who ordinarily attend those meetings anyway, must expend for consultation. 

Many tribes accept these invitations, many do not. Some tribes send their tribal 

chair, president or governor, and members of their tribal council to these consultation sessions, while others only send representatives of their tribal gaming commissions, or in some instances staff members of the tribal gaming commission or of the 

tribal gaming operations. The consultation session is always most effective when 

tribal leadership, by way of tribal chair or council, is present. The letters of invitation identify issues that NIGC is currently focusing on, and about which the agency 

would like tribal input. The letters always include an invitation to discuss any other 

topics that might be of particular interest to an individual tribe. Some consultations, 

therefore, have been limited to a single issue, such as NIGC’s proposals to better 

distinguish gaming equipment permissible for uncompacted Class II gaming from 

that permitted for compacted Class III gaming. Others might focus on issues specific 

to the individual concerns of the tribes. 

We do not only make ourselves available for numerous consultations but we also 

listen seriously to what we hear at those consultations. The regulations NIGC 

adopts are published with thorough preambles, which attempt to summarize all of 

the issues raised in the government-to-government consultation sessions the Commission has held with tribes, as well as those raised by all other commenters providing written comment, during the comment period on the regulation. We write 

such detailed preambles so that commenters will know that we considered their 

comments and understand why those comments were or were not accepted. 

9 

We also take to heart what we hear at consultations while we formulate our regulations. For example, the proposed regulations on Minimum Internal Control Standards for Class II gaming were written completely in response to observations made 

by the Tribal Advisory Committee on the Class II regulations. Likewise, we have 

drastically revised our Class II classification regulations and technical standards 

based on tribal feedback. While it may not be patently clear to the Committee why 

reducing the number of daubs or ball releases in an electronic bingo game is important, I can assure you, it is a topic of hot debate among gaming tribes and the 

states. The fact that we have reduced the number of daubs from two (after the game 

starts) to one, makes a tremendous difference in the speed with which the game 

may be played. 

This is not to say that our responses to tribal feedback are met with applause 

in Indian Country. We believe that consultation should not necessarily mean agreement and that the parties consulting should not measure the good faith or effectiveness of the consultation by whether agreement is reached. We must also balance the 

desire for collaboration with the regulated community (Indian gaming tribes) with 

our statutory mission to provide robust and healthy regulation. 

Typically, there is little or no clamor for consultation if the action being considered is favorably received throughout the Indian gaming industry. NIGC’s recent reduction in the fees it imposes on gross gaming revenues to fund NIGC operations 

provides such an example. On the other hand, if the issue the agency is considering 

is viewed as problematic, often there are concerns expressed that consultation has 

been inadequate. 

A further challenge the NIGC has observed is that consultation is most often criticized by tribes when the eventual policy that the agency settles on is at odds with 

the position expressed by tribes during consultations. That is, the NIGC’s failure, 

from the tribal point of view, was not in the consultation per se but rather that the 

Commission did not agree with tribal points of view. It is often the case that the 

only consultation deemed adequate is that in which the Commission always fully 

comports with tribal points of view. NIGC often finds itself sympathetic to tribal 

points of view, but it is also bound by statutory constraints. For example, the 

IGRA’s characterization of certain games as Class III requires the sanction of tribalstate compacts. 

Government Performance and Results Act (GPRA) 

In mid-2006 IGRA was amended by Pub. L. No. 109–221 (Act of May 12, 2006) 

to require the NIGC to formally comply with the Government Performance and Results Act (GPRA). 

The formal GPRA process was new to NIGC, and we lacked knowledge and experience in our agency in preparing strategic and performance plans in accordance 

with GPRA procedures and requirements. Our staff, after reading GPRA and reviewing one or two existing plans from other agencies, drafted a plan for FY 2008. 

In light of feedback, including from tribal representatives who read the discussion 

draft on our website, the plan was essentially discarded and we started anew. 

The new draft was completed around the first of April 2008. We are now seeking 

review, guidance and assistance relative to our new plan. 

We hope to have a draft strategic plan suitable for submission to Tribes and Congress for comments by the end of June 2008. 

CRIT Decision 

In performing its oversight role, in the 1990s NIGC addressed concerns about the 

lack of internal controls in a number of tribal gaming facilities by adopting a comprehensive set of Minimum Internal Control Standards (MICS), which the NIGC applied to Class II and Class III gaming. While many tribes at that time already had 

excellent internal control systems, a number did not, and as a result of the application of those standards, the entire Indian gaming industry moved to a more professional level, some tribes adopting the NIGC MICS, some tribal-state compacts 

adopting those MICS, and many tribes combining the NIGC standards with their 

own, more rigorous standards. The annual audits IGRA requires tribes conduct and 

furnish to NIGC for review, thereafter included independent auditors’ analysis of 

tribal compliance with those standards. NIGC expanded its team of auditors and 

conducted tribal audits in connection with compliance with those standards. Those 

standards were applied to Class II and Class III gaming. At the time of their adoption, many tribes, while complying with the new regulations, voiced a concern that 

NIGC lacked the authority to so regulate Class III gaming—Class III gaming constituting more than 90% of the $26 billion of gross gaming revenues per year. Those 

concerns crystallized in a judicial challenge brought by the Colorado River Indian 

Tribes (CRIT) to the NIGC’s MICS’s application to Class III gaming. The United 

10 

States District Court and the United States Court of Appeals in the District of Columbia agreed with the tribes reasoning and in 2006 decreed that NIGC could no 

longer mandate tribal compliance in that area. Thus, the role and approach of NIGC 

in that area has since changed. A number of tribes have recently amended their 

tribal gaming ordinances to adopt and include the NIGC MICS, and to recognize 

NIGC’s enforcement authority over Class III. In those instances NIGC has reverted 

to the role that it earlier played. Elsewhere, NIGC confines its review of MICS compliance to Class II gaming except when a number of tribes have invited the NIGC 

to their facilities to do Class III MICS audits on a voluntary basis. 

Classification Standards 

Perhaps the highest profile initiative of the NIGC in recent years has been its effort to adopt a regulatory scheme to draw a brighter line to distinguish gaming 

equipment tribes may use for uncompacted Class II gaming (bingo, etc), from that 

which tribes employ for compacted Class III gaming (casino gaming). The IGRA recognized that the long standing Johnson Act prohibited ‘‘gambling devices’’ in Indian 

country, but made a specific exemption for the use of such equipment when it is 

utilized pursuant to the tribalstate compact. The Act also recited that tribes could 

use computers and electronic and technologic aids when they conducted their bingo 

and games similar to bingo, but further provided that slot machines of any kind and 

electronic facsimiles of games of chance fell into the compacted Class III category. 

After taking enforcement actions, closing tribal gaming facilities and imposing significant fines, in instances where the NIGC observed slot machines or electronic facsimiles of games of chance being employed in the absence of compacts, the Commission attempted to better address the issue by providing a number of advisory opinions with respect to equipment it deemed playable without a compact. That process 

proved complex and difficult, and with the rapid advances in technology, we discovered that no sooner were such advisory opinions written, than they became obsolete. 

Thus, a long effort, assisted by tribal advisory committees, was commenced to write 

regulations to clarify what equipment could be used without a compact, and how 

such equipment could be identified and certified. This effort included a long discussion and negotiations with the Department of Justice, which has responsibility for 

enforcement of the Johnson Act, and drafting and proposing rules which, after 

strong criticism by tribes and others during many consultation sessions, were withdrawn. 

As a result of a long arduous effort by the NIGC’s tribal advisory committees, 

working with a working group of representatives who build, design and regulate 

such equipment at the tribal level, a new package of proposals was published in the 

Federal Register in October, 2007. Much consultation with respect to those proposals was held thereafter, and the comment period was extended several times, 

most recently concluding on March 9, 2008. In connection with this effort the Commission commissioned an economic impact study which will be considered together 

with the comments on the proposals under consideration. This long-standing effort 

deserves to be fairly and finally concluded, and the Commission is cautiously optimistic that with the information received from tribes, states and the public, it can 

publish final rules with respect to at least some aspects of this concern in the near 

future. 

Unless or until clarity is brought to this area, challenges will remain for gaming 

tribes, as well as those of us who attempt to regulate them. Tribal gaming is by 

no means the only sector where concerns of this nature exist. In many states, there 

is a significant expansion of what is purported to be charitable gaming using automated bingo equipment. These states find themselves struggling with questions 

about whether such equipment complies with their charitable gaming laws or runs 

afoul of their gambling laws, and, generally, with the scope of permissible charitable 

gaming within their borders. In some instances, this has raised issues about violating the ‘‘exclusivity’’ that tribes understood they had bargained for in their Class 

III compacts in exchange for revenue sharing with the states. Tribes cannot expect 

to have an unfettered breadth of Class II gaming equipment in their sector, yet require states to view the issue very narrowly. Clarity in this area will serve many 

purposes. 

Change in the Face of Growth 

The NIGC, in the context of the federal family, is a relatively young and small 

agency. It was not long ago when NIGC’s staff consisted of only a handful of people, 

operating from a single office. As the industry grew from at most a $200 million 

industry when IGRA was enacted to a $26 billion industry, the agency’s budget 

grew from $1.2 million in 1991, to $13 million in 2006, to $20.5 million in 2008. 

11 

* The information referred to is printed in the Appendix. 

The days are not long past when there were only five ‘‘field investigators’’ operating 

out of their homes and the trunks of their cars, spread throughout Indian country. 

As this growth has occurred, it has become necessary to adopt more and more formal policies and procedures. The agency has always attempted to look at federal 

statutes, such as most of Title 5 U.S.C. governing government organization and employees, and through more specific procedures of the Department of the Interior 

under our interagency arrangement with the Department to provide administrative 

support. With the agency’s growth, it has become necessary to develop and adopt 

more agency-specific policies, and this is a work in progress. Recently the agency 

has adopted policies relating to reasonable accommodations under Equal Employment Opportunity Commission guidance, and undoubtedly as the agency continues 

to grow, further policies of this nature will be deemed appropriate. Common sense 

and good judgment has always been the approach the agency has attempted to take 

when dealing with its management. As the NIGC has now grown to have a staff 

of more than 100, formal policies and procedures become a greater necessity. While 

an informal approach kept the agency nimble in its early days, experience is showing that as it has grown, more bureaucracy, to ensure due processes and transparency, is appropriate and the agency continues to examine its practices to develop 

measures that are necessary. In this connection, the agency is using its own audit 

staff to conduct audits of a number of its programs, and greater consistency and 

clarity is resulting there from. 

That is an overview of how we are evolving in carrying out our mission. I will 

be happy to answer any questions the Committee have. Thank you. 

Staffing at the NIGC Headquarters 

1—Chief of Staff 

2—Commission assistants 

1—Director of Audits 

1—Director of Enforcement 

1—Director of Training 

1—Director, Region VI 

1—Director, Congressional and Media Relations 

1—Director of Contracts 

1—Financial Analyst 

1—NEPA Compliance Officer 

2—Tribal Background Investigation Staff 

1—Support Staff 

1—Director of Administration (vacant) 

11—Administration Personnel (1 vacant) 

1—IT Manager 

4—IT Staff (1 vacant) 

1—Acting General Counsel 

13—Attorneys (2 on detail) 

5—Legal staff 

——————————————————— 

D.C. Total 50 

Field Total 54 

——————————————————— 

Agency Total 104 

April, 2008 

Senator TESTER. Thank you, Chairman Hogen. I appreciate that. 

Along the lines of testimony, Congressman Boren has requested 

a statement for the record and it will be also included. * 

Senator TESTER. Delia, I look forward to your testimony. As with 

the previous one, if you can keep it to about five minutes and we 

will put your full testimony in the record. So go ahead. Thank you 

for being here. 

12 

STATEMENT OF DELIA CARLYLE, CHAIRWOMAN, ARIZONA 

INDIAN GAMING ASSOCIATION; CHAIRWOMAN, AK–CHIN 

INDIAN COMMUNITY 

Ms. CARLYLE. Thank you. Good morning, Chairman Dorgan, Vice 

Chairman Murkowski, Senator Tester and other distinguished 

members of this Committee and staff. My name is Delia Carlyle. 

I am currently the Chairman of the Ak-Chin Indian Community, 

which is just south of Phoenix, not in Phoenix, but south of Phoenix. I am also the Chair of the Arizona Indian Gaming Association, 

which represents 19 tribes with gaming compacts in Arizona. 

My comments today are on behalf of both my tribe and AIGA, 

and are based on my written comments which I respectfully request be entered into the record. 

First, let me discuss what I think many of you may have heard 

about Indian gaming in Arizona. First and foremost, tribal gaming 

activity in Arizona is rigorously regulated by both the tribes and 

the State in Arizona. In Arizona, the tribes and the State have developed a collaborative partnership for effective regulation of Indian gaming. 

Now, that is not to say we agree on everything. Like many good 

relationships, we often agree to disagree, but remain reasonable, 

respectful and attentive. To reiterate what the Arizona Department 

of Gaming Director Paul Bullis had previously stated to this Committee, and I quote, ‘‘Although the compact is the cornerstone of 

our partnership, what makes the partnership work is communication, discussion, engagement, and a process for resolving issues.’’ In 

fact, in May of 2007, Casino Enterprise Management Magazine 

wrote that Arizona’s regulatory program exemplifies the very best 

in regulation. 

I want to touch upon a few issues with the NIGC’s current practices and regulations. In general, the NIGC is overreaching with its 

recent regulations and appears to be engaging in empire-building 

as there is no significant reason for them to be involving themselves in areas already regulated by other Federal, tribal and State 

agencies. 

The publishing of the NIGC’s facility licensing standards is a 

prime example of how NIGC has disregarded meaningful tribal 

consultation and collaboration, and adopts its own rules. Based 

upon our experience in Arizona, tribal consultation and collaboration means actually listening to and considering tribal perspectives, 

not just sitting across from tribal representatives in a one-hour 

meeting and responding with a thank you for your comments. 

Here is an example of what we think the NIGC considers consultation. At our January, 2008 annual Southwest Indian Gaming 

Trade Show, the Arizona tribal leaders extended an invitation to 

the NIGC to meet with them and talk about a number of issues, 

one of which was how tribes and the NIGC could better communicate. The first item brought up by tribal leaders was the NIGC’s 

facility licensing regulations. 

To our surprise, the answer from NIGC was that the regulations 

were already at the Federal Register waiting to be published and 

additional comments were not necessary. When asked if there were 

changes from the last draft, the answer was yes. When asked if 

13 

NIGC could let the tribal leaders know what those changes were, 

the answer from NIGC was no. 

If you look further into this issue, you will see that the December 

12th, 2007 NIGC consultation letter to Arizona tribal leaders included the status of proposed facility licensing regulations as a bullet point discussion item. Doesn’t it seem odd that NIGC listed for 

discussion with tribal leaders the proposed facility licensing standards, when the NIGC already had its version of the standards at 

the Federal Register waiting to be published? 

With the new regulations, the NIGC is trying to expand from a 

gaming activity regulator to a sanitation, emergency preparedness, 

electrical, plumbing, food and water, construction and maintenance, hazardous materials, and environmental regulator. 

Mr. Chairman and other distinguished members of this Committee, tribes already have EPA, OSHA, IHS and other Federal, 

State and tribal regulators who review environmental health and 

safety conditions. There are more than enough Federal layers piled 

on our industry. 

Moreover, we are highly dubious of gaming regulators turned all 

of the above regulators at the swoop of a Federal Register publication. We do not need yet another Federal agency expanding beyond 

its statutory mission as directed by Congress to become another 

unwieldy, ever-growing bureaucracy. 

Finally, on October 1st, 2007, the NIGC submitted its draft Government Performance Results Act report, GPRA. Subsequently, as 

I have been informed, the NIGC has decided on its own to revise 

its own GPRA report. The NIGC should not be allowed to stall this 

long. We question the logic of implementing significant changes to 

the current regulations when tribes do not know how we fit within 

NIGC’s strategic five-year plan. 

In addition, tribes are also waiting for the plan on technical 

training, which is another part of the GPRA report. 

Again, on behalf of the Ak-Chin Indian Community and the Arizona Indian Gaming Association, I would like to thank the Chairman, Vice Chair and other members of this Committee for holding 

this important meeting. 

Thank you. 

[The prepared statement of Ms. Carlyle follows:] 

PREPARED STATEMENT OF DELIA CARLYLE, CHAIRWOMAN, ARIZONA INDIAN GAMING

ASSOCIATION; CHAIRWOMAN, AK-CHIN INDIAN COMMUNITY

Introduction 

Good Morning, Chairman Dorgan, Vice-Chair Murkowski, other distinguished 

members of this Committee and Staff. 

My name is Delia Carlyle and I am the Chairman of the Ak-Chin Indian Community. I am also Chair of the Arizona Indian Gaming Association (AIGA) which represents 19 tribes in Arizona. My comments today are on behalf of both my Tribe 

and AIGA. 

The Ak-Chin Indian Community Reservation was established in May 1912 and 

comprised over 47,000 acres. A few months later, more than half of the Reservation 

was taken by the federal government and reduced to its present day size of almost 

22,000 acres. The Community is located approximately 35 miles south of Phoenix, 

Arizona, near the Gila River Indian Reservation. We are a small tribe with about 

800 enrolled members. 

Ak-Chin is an O’odham word which means ‘‘people of the wash.’’ The term refers 

to a type of desert farming that depends on the area’s washes where our ancestral 

people planted beans, corn and squash, which were irrigated from the wash runoff 

14 

1SCIA March 8, 2006 Testimony of Mr. Paul Bullis. 

2 Arizona Department of Gaming. 

from storms. While we are still farmers today, we also engage in another form of 

economic development known as Tribal Governmental Gaming which helps support 

the needs and dreams of our tribe and tribal members. 

On behalf of the Ak-Chin Indian Community I would like to thank the Chairman, 

Vice-Chair, and the other members of this Committee for holding this hearing on 

oversight of the National Indian Gaming Commission (NIGC). 

Collaborative Regulation: Arizona Indian Tribes and the Arizona 

Department of Gaming 

First, let me discuss what I think many of you may have heard about Arizona 

Indian gaming. In Arizona, the tribes and State have developed a collaborative partnership for effective regulation of Indian gaming. After years, if not decades, of the 

State not accepting that tribes are in fact sovereign governments, Arizona, under 

the leadership of Governor Napolitano, now understands that tribes are indeed sovereign governments that predate Arizona. Moreover, under the leadership of Executive Director Paul Bullis at the Arizona Department of Gaming, the relationship between tribes and the State has become a successful partnership. That is not to say 

we agree on everything. Like many good relationships, we often agree to disagree 

but remain reasonable, respectful and attentive. 

In Arizona, the Tribal-State Gaming Compacts delineate the roles and responsibilities of the tribes and State. To reiterate what Director Bullis has previously stated 

to this Committee, ‘‘[a]lthough the Compact is the cornerstone of our partnership, 

what makes the partnership work is communication, discussion, engagement, and 

a process for resolving issues.’’ 1

Pursuant to our Compacts, tribal gaming in Arizona funds the vast majority of 

the Arizona Department of Gaming’s budget and regulatory activities. The Department’s Fiscal Year 2008 budget is approximately $15.6 million, and for FY 2009 

about $16.3 million. To highlight some examples, the tribally-funded Arizona Department of Gaming: 2

• Has 111 employees (comprised of numerous peace officers, auditors, CPAs and 

CFEs); 

• Performed approximately 12,000 slot machine inspection and certifications; 

• Conducted over 300 vendor background reviews and certifications with 100 

being new vendor certifications and 200 renewals; and 

• Conducted approximately 10,000 employee background reviews and certifications with almost 2,500 new applications and over 7,500 renewals. 

Please keep in mind that tribal regulatory agencies also inspect and certify slot 

machines; review and certify employee and vendor backgrounds; and have multimillion dollar budgets and staff to ensure fair and safe gaming on our tribal lands. 

In May 2007, ‘‘Casino Enterprise Management’’ magazine wrote that Arizona’s regulatory program exemplifies ‘‘the very best in regulation,’’ The magazine staff spent 

several days with the Arizona Department of Gaming and observed their gaming 

compliance technicians inspecting slot machines at our casinos. The article said: 

‘‘The state regulators and the tribal regulators work together for the best interest 

of gaming and to assure compliant and effective enforcement. The Department’s 

management and staff have worked hard to build a comprehensive and efficient system of checks and balances that not only work well for them, but... are also welcomed by the tribes.’’ Consequently, tribal gaming activity in Arizona is rigorously 

regulated by both the tribes and the State. 

Problems with NIGC Regulation—Facility Licensing Standards 

I want to touch upon several issues we have with NIGC current regulatory regime. In general, the NIGC is overreaching with its recent regulations, and appears 

to be engaged in empire building as there is no significant reason for them to be 

involving themselves in areas already regulated by other tribal, federal, and state 

agencies. 

The promulgation and publishing of the Facility Licensing Standards are prime 

examples of how the NIGC has disregarded meaningful tribal consultation and collaboration, and unilaterally adopts its own rules. The NIGC’s own March 31, 2004 

Tribal Consultation Policy requires that: 

To the extent practicable and permitted by law, the NIGC will engage in regular, timely, and meaningful government-to-government consultation and collaboration with Federally-recognized Indian tribes, when formulating and imVerDate Aug 31 2005 09:22 Jul 07, 2008 Jkt 042319 PO 00000 Frm 00018 Fmt 6633 Sfmt 6621 S:\DOCS\42319.TXT JACK PsN: JACKF
15 

plementing NIGC administrative regulations... which may substantially affect or impact the operation or regulation of gaming on Indian lands by tribes 

under the provisions of IGRA. 

Accordingly, collaboration means more than the NIGC incorporating grammatical 

comments into their regulations. Based upon our experience with tribal and State 

regulation in Arizona, consultation and collaboration means actually listening to 

and considering tribal perspectives not just sitting across from tribal representatives 

in a one hour meeting and responding with only a curt ‘‘thanks for your comments.’’ 

This regulation by fiat must be replaced by meaningful consultation and collaboration with tribes, instead of the all too familiar ‘‘we [NIGC] considered that comment 

but . . . .’’ 

Here is an example of what NIGC considers consultation. As stated in Chairman 

Hogan’s testimony on H.R. 5608, ‘‘Gaming tribes have formed regional gaming associations, such as . . . . Those organizations meet annually or more often, and NIGC 

has taken those opportunities to invite tribal leaders to attend consultation meetings on a NIGC-to-individual-tribe basis. Consulting at gaming association meetings 

maximizes the use of the Commission’s time and minimizes the travel expenses that 

tribes, who ordinarily attend those meeting anyway, must expend for consultation.’’ 

While this looks great on the surface, the experience we had at our Annual Southwest Trade Show was very different. Although Arizona tribes received letters to 

meet with NIGC (see attached example letter), tribal leaders also extended an invitation to the NIGC to meet with them at a breakfast since some of the tribal leaders 

could not meet with the NIGC at their scheduled time (where the NIGC met with 

tribal staff). The first comment to the Commissioners was that they would like to 

talk about the ‘‘Facility Licensing Draft Regulations.’’ To our surprise, the answer 

from the NIGC was that the regulations were already at the Federal Register waiting to be published and additional comments were unnecessary. When asked if there 

were changes from the last draft—the answer was yes. When asked if they could 

let the leaders know what changes were made—the answer was no. 

If you look further into this issue you will see that the NIGC consultation letters 

to tribal leaders inviting them to a consultation meeting were dated December 12, 

2007. One of the bullet point discussion items was the ‘‘[s]tatus of proposed facility 

licensing regulations.’’ Our tribal leaders’ breakfast meeting was on January 15, 

2008. The new regulations were published on February 1, 2008. It seems disingenuous that the NIGC listed for discussion with tribal leaders the proposed gaming 

facility licensing standards, when the NIGC already had its version of the standards 

at the Federal Register waiting to be published two weeks later. 

A significant problem at the NIGC is that they have stopped listening to tribes. 

As I have previously stated, in Arizona, both the tribes and the Arizona Department 

of Gaming work together to fulfill the goals of the Compact by listening to each 

other to develop a mutual understanding, even if we don’t always agree. The problem with the NIGC is that they are hearing tribes—but not listening! While this 

NIGC administration has done a good job of meeting with tribes as compared to 

their predecessors, they are putting quantity of meetings over quality of listening 

to tribes. For example, most tribes in Arizona met with the NIGC in March 2007 

and January 2008 regarding the Facility Licensing Standards. Again, the quality of 

consultation is far more important than the quantity of tribal consultations. 

In December of 2007, the AIGA submitted written comments to the NIGC which 

detailed AIGA’s objections to their Facility Licensing Standards. In summary, the 

19 Indian tribes of AIGA find it offensive that the NIGC’s Standards conflict with 

the intent of IGRA, which recognizes tribal authority to regulate the construction, 

maintenance, and operation of a tribal gaming facility within tribal jurisdiction. In 

addition, the regulations provide a very broad grant of authority and discretion to 

only the Chairman, as opposed to the Commission, for approving gaming facility licenses. IGRA itself provides that a tribe must issue a facility license for Class II 

or III gaming. Finally, the tribe must provide in its tribal gaming ordinance that 

it will comply with appropriate construction, maintenance, and operation of these 

facilities. 

Furthermore, our State-Tribal Compacts already require tribes to comply with 

minimum operational standards to protect environment, health and safety. Once 

again, the NIGC’s rules conflict with our Compact and, thus, are a waste of resources when tribal operations in Arizona already comply with such standards. 

The overbreadth of regulation is especially true for the new Gaming Facility Licensing Standards. The Indian Gaming Regulatory Act (IGRA) is supposed to provide a balanced framework for tribal, state, and federal regulators. Unfortunately, 

the NIGC has upset that delicate balance with its new Gaming Facility Licensing 

Standards. With the new regulations, the NIGC is trying to expand from a gaming 

16 

activity regulator to a sanitation, emergency preparedness, electrical, plumbing, food 

and water, construction and maintenance, hazardous materials, and environmental 

regulator. Mr. Chairman and other distinguished members of the Committee, we already have the EPA, OSHA, IHS, and other federal, state and tribal regulators who 

review environmental, and health and safety conditions. There are more than 

enough federal layers piled on our industry. Moreover, we are highly dubious of 

gaming regulators turned all-of-the-above regulators at the swoop of a federal register publication. We do not need yet another federal agency expanding beyond its 

statutory mission as directed by Congress to become another unwieldy, burgeoning 

bureaucracy. 

Finally, another major concern of many tribal regulators is whether the NIGC is 

prepared to understand and apply new technology as it rolls out today and in the 

future. We are concerned that the NIGC’s process for Class II gaming could once 

again delay available technology and future gaming activities for tribal gaming. 

Revised GPRA 

On October 1, 2007, the NIGC submitted its Draft Government Performance Results Act Report (GPRA). The GPRA Report was due pursuant to the Congressional 

mandate as part of S. 1295, the National Indian Gaming Commission Accountability 

Act of 2005. Subsequently, as I have been informed, the NIGC has decided on its 

own to revise its own draft, a draft that was approved by the Chairman of NIGC 

and submitted for comment to the Office of Budget and Management. The NIGC’s 

decision to revise its GPRA Report stalls its mandated requirement to submit to 

Congress: (1) a strategic five-year plan, annual performance plans, and performance 

reports, and (2) as part of its compliance with GPRA, a plan that addresses technical assistance to tribal gaming operations. If in fact the NIGC is not going to comply with the mandate, then it should be held responsible. The NIGC should not be 

allowed to stall this long, and Congress should not enable the delay. Without the 

GPRA Report, tribes have no idea how the current regulations fit into the NIGC’s 

five-year plan and when, or if, the technical assistance that many tribes need are 

adequate or even being developed. Furthermore, we question the logic of embarking 

on such large regulatory changes without first knowing how they fit into a strategic 

plan and without that plan going out for consultation with the very people who have 

to implement it. 

Conclusion 

Again, on behalf of the Ak-Chin Indian Community I would like to thank the 

Chairman, Vice-Chair, and the other members of this Committee for holding this 

very important hearing. Thank you. 

17 

Attachment 


417d1.eps
18 

Senator TESTER. Thank you, Ms. Carlyle. 

Mr. Mathews? 

STATEMENT OF J.R. MATTHEWS, NIGA EXECUTIVE 

COMMITTEE MEMBER AND VICE CHAIRMAN, QUAPAW TRIBE 

OF OKLAHOMA; ACCOMPANIED BY MARK VAN NORMAN, 

EXECUTIVE DIRECTOR, NATIONAL INDIAN GAMING 

ASSOCIATION 

Mr. MATHEWS. Thank you, Mr. Chairman. 

Senator Tester and other members of the Committee, my name 

is J.R. Mathews. I am the Vice Chairman of the Quapaw Tribe of 

Oklahoma. As a Board Member, I am speaking on behalf of the National Indian Gaming Association. Thank you for this opportunity. 

The Indian Gaming Regulatory Act is a remarkable success. Nationwide, there are over 230 tribes in 28 States which are engaged 

in gaming, and these tribes are using revenues to build or rebuild 

their communities. 

Last year, Indian gaming, as you know, generated more than $26 

billion in gross revenues for those tribal governments. That means 


417d2.eps
19 

that we created more than 700,000 jobs nationwide and generated 

almost $12 billion in Federal, State and local revenues. 

Tribal governments are dedicated to building and maintaining 

strong regulatory systems because of our sovereign authority, governmental operations and resources are at stake. Under IGRA, 

tribal governments are the primary day-to-day regulators of Indian 

gaming. We have dedicated tremendous resources to the regulation 

of Indian gaming. Tribes spent over $345 million last year on tribal, State and local regulations. We have more than 3,300 expert 

regulators and staff. 

Among our concerns today is the government-to-government consultation and a need for a statutory directive to the NIGC to consult with Indian tribes. Executive Order 13175 establishes the 

framework for Federal agencies to work with Indian tribes and 

elected tribal leaders. 

When Federal action will substantially and directly affect tribal 

governments, the essential principles and the guiding agency actions should be an all-out respect for tribal sovereignty and selfgovernment, the maximum administrative discretion for tribal governments, and preserving the prerogatives of tribal lawmaking 

whenever possible. 

This is a firm belief among tribal leaders that while the NIGC 

is willing to meet with tribal leaders, the NIGC does not accommodate tribal government concerns. Instead, the NIGC has a pre-determined decision that has already been made, and they tell us 

they are open to change, but they don’t listen to us. 

Tribal leaders believe that Federal agencies should try to reasonably accommodate a tribal government concern, not just to sit 

across the table from us and then go on about business as usual. 

The tribal Federal government-to-government relationship needs to 

be better than this, especially when the agency has ‘‘Indian’’ in its 

name. The NIGC should do the utmost to accommodate our views 

through consultation. We should not get a flippant response to the 

quote that was stated, consultation does not mean agreement. 

The United States should operate on a basis of mutual consent 

with Indian tribes, just as it does with U.S. territories. A statutory 

directive to the NIGC on government-to-government consultation is 

both appropriate and necessary. We encourage this Committee to 

introduce legislation along the lines of House Resolution 5608 

which seeks to codify the Executive Order 13175. Also Executive 

Order 12866 requires that agencies examine whether or not these 

alternatives to direct regulations consider the cost and benefits of 

the regulations, consult with State, local and tribal governments, 

and minimize the burdens on them. 

In addition, regulations should be drafted in a manner that is 

simple and easy to understand. The NIGC has failed to comply 

with these standards. 

NIGC’s own economic impact analysis found that the Class II 

proposals would cost Indian tribes between $1.2 billion and $2.8 

billion annually. The NIGC does not conduct cost/benefit analysis 

of its regulatory proposals. That violated Executive Order 12866. 

Clearly, the NIGC is failing to comply with the general rules for 

Federal regulatory proposals. 

20 

The NIGC should adopt and comply with the Regulatory Flexibility Act. Because the NIGC failed to conduct its economic impact 

analysis until the close of the comment period, and it did not consider lower-cost alternatives as required by the Regulatory Flexibility Act, once again the NIGC should open its regulation and consider the cost and benefits of alternatives. 

The NIGC should comply with the Federal Advisory Committee 

Act. The NIGC has been regularly constituting and disbanding 

tribal advisory committees. This gives the impression that when an 

existing TAC objected to the arbitrary NIGC policies, the NIGC 

abolished them and sought a new TAC that would be amenable to 

the NIGC views. 

The NIGC should comply with Congress’s directive to provide 

training. Despite a clear directive to the NIGC in the NIGC Accountability Act, they have not provided meaningful training and 

technical assistance. Congress should act to ensure that the National Indian Gaming Commission is working with tribal governments to build up tribal government institutions, rather than a 

Washington-centered approach and relying primarily on rulemaking to resolve perceived problems. 

Thank you for this opportunity to speak. 

[The prepared statement of Mr. Mathews follows:] 

PREPARED STATEMENT OF J.R. MATHEWS, NIGA EXECUTIVE COMMITTEE MEMBER; 

VICE-CHAIRMAN, QUAPAW TRIBE OF OKLAHOMA

Good Morning, Mr. Chairman and Members of the Committee. Thank you for inviting me to testify today. 

My name is J.R. Mathews. I am the Vice Chairman of the Quapaw Tribe of Oklahoma and I serve on the Executive Committee of the National Indian Gaming Association. 

I am speaking today on behalf of the National Indian Gaming Association and its 

184 Member Tribes. NIGA is a tribal government association dedicated to supporting Indian gaming and defending Indian sovereignty. I am accompanied by 

Mark Van Norman, NIGA’s Executive Director. Mark is a member of the Cheyenne 

River Sioux Tribe of South Dakota. 

Indian Gaming: The Native American Success Story 

The Indian Gaming Regulatory Act is a remarkable success. Nationwide there are 

231 tribes in 28 states which are engaged in gaming. Tribes are using revenues to 

build or rebuild their communities, while putting tribal members to work and providing basic and essential tribal government services. Tribes are also generating significant taxes to Federal, state and local governments through Indian gaming and 

making significant charitable contributions to their communities and other Indian 

tribes. Last year, Indian gaming generated $26.5 billion in gross revenues (before 

capital costs, salaries, expenses and depreciation, etc.) for tribal governments. That 

means tribal governments created more than 700,000 jobs through Indian gaming 

nationwide and generated almost $12 billion in Federal, state and local revenue. 

Here are some examples of the tribal community infrastructure and the essential 

government services that Indian gaming revenues provide: 

• The Mescalero Apache Tribe of New Mexico built a new high school; 

• The Choctaw Nation of Oklahoma built a new hospital; 

• Gila River established a new police and emergency medical unit; 

• The Pechanga Band established a new fire department; 

• The Mohegan Tribe is building a water system for the Tribe and seven of its 

surrounding communities; 

• The Rosebud Sioux Tribe established child care and provides new school clothes 

for impoverished students; 

• The Fort Berthold Tribes established a new Headstart center; 

21 

1 At the outset of the poll, 59 percent of American voters support Indian gaming. After learning about the uses of Indian gaming revenue for essential tribal government purposes and economic development, 69 percent of voters support Indian gaming. 

• The Tohono O’odham Nation is funding the Tohono O’odham Community College and used $30 million to fund a student scholarship program; and 

• Several tribal governments provided major funding for the new Smithsonian 

Museum of the American Indian. 

These positive developments are happening across Indian country. 

The development of Indian lands is a benefit to surrounding communities. For example, Gila River EMTs serve as first responders to accidents in their stretch of I– 

10. The Pechanga Band’s Fire Department responded to the California wildfires, 

working hard to save homes and lives in neighboring communities. 

Indian gaming benefits neighboring Indian tribes as well. The Shakopee 

Mdewakanton Sioux Tribe, for example, has generously assisted many Indian tribes 

in Minnesota, the Dakotas, and Nebraska, including refinancing the Oglala Sioux 

Tribe’s debt, providing a grant to help build a new nursing home for the Cheyenne 

River Sioux Tribe and an economic development grant for the Santee Sioux Tribe. 

The public recognizes that Indian gaming is a success. A national poll of 1,000 

voters conducted on March 14, 2008 for NIGA by the independent polling firm 

Fairbank, Maslin, Maullin & Associates found that American voters generally agree 

that Indian gaming has been a success: 

• 81 percent agree that Indian tribes benefit from having casinos; 

• 82 percent agree that Indian gaming provides revenues that tribes can use to 

provide essential services to their members; 

• 79 percent agree that Indian gaming provides jobs for Indians; 

• 65 percent agree that Indian gaming benefits state and local communities; and 

• 68 percent agree that Indian gaming allows Indian tribes to break the cycle of 

poverty and welfare and become self-reliant. 

Approximately, twenty-four million visitors annually travel to Indian country to 

visit Indian gaming facilities and on average, make 7 visits per year. Thus, many 

voters have now experienced Indian gaming personally and their first hand experience is reflected in the polling data.1

The Existing Regulatory Framework for Indian Gaming 

Tribal governments are dedicated to building and maintaining strong regulatory 

systems because tribal sovereign authority, government operations and resources 

are at stake. Under IGRA, tribal governments are the primary day-to-day regulators 

of Indian gaming and regulate Indian gaming through tribal gaming commissions. 

Tribal gaming regulators work with the NIGC to regulate Class II gaming, and 

through the Tribal-State Compact process, tribal gaming regulators work with state 

regulators to safeguard Class III gaming. 

Tribal governments have dedicated tremendous resources to the regulation of Indian gaming: Tribes spent over $345 million last year nationwide on tribal, state, 

and Federal regulation: 

• $260 million to fund tribal government gaming regulatory agencies; 

• $71 million to reimburse states for state regulatory work under the Tribal-State 

Compact process; and 

• $14.5 million for the NIGC’s budget. 

At the tribal, state, and Federal level, more than 3,350 expert regulators and staff 

protect Indian gaming: 

• Tribal governments employ former FBI agents, BIA, tribal and state police, 

New Jersey, Nevada, and other state regulators, military officers, accountants, 

auditors, attorneys and bank surveillance officers; 

• Tribal governments employ more than 2,800 gaming regulators and staff; 

• State regulatory agencies assist tribal governments with regulation, including 

California and North Dakota Attorney Generals, the Arizona Department of 

Gaming and the New York Racing and Wagering Commission; 

• State governments employ more than 500 state gaming regulators, staff and 

law enforcement officers to help tribes regulate Indian gaming; 

• The National Indian Gaming Commission is led by Philip Hogen, former U.S. 

Attorney and past Associate Solicitor for Indian Affairs; and Commissioner 

22 

2 Alturas Rancheria, for example, provides in its tribal gaming ordinance: ‘‘Tribal Gaming 

Commission regulations necessary to carry out the orderly performance of its duties and powers 

shall include... the following: The Minimum Internal Control Standards (MICS) as issued by 

the NIGC.’’ This type of incorporation by reference is unaffected by the Federal Court decision 

in Colorado River Indian Tribes. In California, tribal governments spent approximately $104 

million to fund regulation of Indian gaming in 2006. Of the $100 million, Tribal governments 

spent $80 million to fund tribal regulation of Indian gaming, $20 million for state regulation, 

and $4 million for Federal regulation. The State of California dedicates more than 100 regulators and staff to Indian gaming regulation while tribal governments maintain 800 tribal regulators and staff. 

Norm DesRosier is a former tribal gaming regulator and state law enforcement 

officer. 

• At the Federal level, the NIGC employs more than 100 regulators and staff. 

Tribal governments also employ state-of-the-art surveillance and security equipment. For example, the Mashantucket Pequot Tribal Nation uses the most technologically advanced facial recognition, high resolution digital cameras and picture enhancing technology. The Pequot’s digital storage for the system has more capacity 

than the IRS or the Library of Congress computer storage system. In fact, the Nation helped Rhode Island state police after the tragic nightclub fire by enhancing 

a videotape of the occurrence, so state police could study the events in great detail. 

At the state level, more than 200 tribal governments have entered into 250 TribalState Compacts with 23 States. Typically, Tribal-State Compacts include rules on 

internal controls and regulation. For example, California 1999 Compacts require 

tribal governments to maintain accounting, machine and technical standards that 

meet or exceed industry standards. In California, tribal governments have incorporated MICS into their tribal gaming regulatory ordinances.2 The Fairbanks 

Maslin poll found that 76 percent of American voters support the Tribal-State Compact system. 

Indian gaming is also protected by the oversight of the FBI and the U.S. Attorneys. The FBI and the U.S. Justice Department have authority to prosecute anyone 

who would cheat, embezzle, or defraud an Indian gaming facility–this applies to 

management, employees, and patrons. 18 U.S.C. 1163. Tribal governments work 

with the Department of Treasury Financial Crimes Enforcement Network to prevent 

money laundering, the IRS to ensure Federal tax compliance, and the Secret Service 

to prevent counterfeiting. Tribal governments have stringent regulatory systems in 

place that compare favorably with Federal and state regulatory systems. Seventyfour percent of American voters agree that IGRA provides enough or more than 

enough regulation, according to the Fairbank, Maslin poll. Only 15 percent of American voters believe that there should be more regulation. 

Government-to-Government Consultation: Need for a Statutory Directive 

Since 1960, when then Senator John F. Kennedy pledged to ‘‘[e]mphasize genuinely cooperative relations between Federal officials and Indians,’’ each succeeding 

Administration has pledged to promote tribal self-government. President Kennedy 

followed through on his pledge by ending the Termination Policy and establishing 

Federal programs to revitalize Indian country. President Johnson helped tribal governments build capacity to provide essential services to tribal citizens. 

Building on the work of the Kennedy-Johnson Administrations, President Nixon 

promoted the Indian Self-Determination Act to empower tribal governments to provide the government services that the Bureau of Indian Affairs and the Indian 

Health Service previously provided. Nixon heralded the new Indian Self-Determination Policy in a special message to Congress, which explained: 

It is long past time that the Indian polices of the Federal government began 

to recognize and build upon the capacities and insights of the Indian people. 

Both as a matter of justice and as a matter of enlightened social policy, we must 

begin to act on the basis of what the Indians themselves have long been telling 

us. The time has come to break decisively with the past and to create the conditions for a new era in which the Indian future is determined by Indian acts and 

Indian decisions. 

President Nixon, Special Message on Indian Affairs, July 8, 1970. 

Presidents Ford, Carter, Reagan and Bush used the Indian Self-Determination 

Policy as the baseline for American Indian policy. In their Administrations, Congress built upon Self-Determination Policy through the Indian Health Care Improvement Act, the American Indian Religious Freedom Act, the Tribal College Act, the 

Indian Self-Governance Act, and the Indian Gaming Regulatory Act, among others. 

23 

On January 24, 1983, President Reagan issued a Statement on American Indian 

Policy, explaining: 

When European colonial powers began to explore and colonize this land, they 

entered into treaties with the sovereign Indian nations. Our new nation continued to make treaties and to deal with Indian tribes on a government-to-government basis. Throughout our history, despite periods of conflict and shifting national priorities, the government-to-government relationship between the United 

States and Indian tribes has endured. The Constitution, treaties, laws and court 

decisions have consistently recognized a unique political relationship between 

Indian tribes and the United States which this administration pledges to 

uphold . . . . 

The administration intends to... remove[e] the obstacles to self-government 

and . . . creat[e] a more favorable environment for the development of healthy 

reservation economies . . . . Development will be charted by the tribes, not the 

Federal Government . . . . Our policy is to reaffirm dealing with Indian tribes 

on a government-to-government basis and to pursue the policy of self-government for Indian tribes without threatening termination . . . . 

President Clinton’s Executive Memorandum and Executive Orders on Consultation and Coordination with Tribal Governments took President Reagan’s announcement the next steps forward. 

Executive Order 13175 on Consultation and Coordination with Tribal Governments, EO 13175, establishes the framework for Federal agencies to work with Indian tribes and elected tribal leaders. President Clinton issued it in 2000 and President Bush affirmed it in 2004. When Federal action will substantially and directly 

affect tribal self-government or tribal rights, the essential principles that guide 

agency action are: 

• Respect for tribal sovereignty and self-government, treaty rights, lands and natural resources, and the Federal trust responsibility; 

• Maximum administrative discretion for tribal governments; and 

• Preserve the prerogatives of tribal law-making whenever possible. 

The Executive Order recommends that consensual decision-making, such as negotiated rulemaking be used when possible. 

Five years ago, the National Indian Gaming Association and our Member Tribes 

asked the Senate Committee on Indian Affairs to enact a statutory directive to the 

NIGC to consult with tribal governments on a government-to-government basis. The 

NIGC, for its part, said, ‘‘No, there is no need for a statutory directive because we 

will develop our own policy.’’ 

There is a firm belief among tribal leaders that, while the NIGC is willing to meet 

with tribal leaders, the NIGC does not accommodate tribal government concerns. Instead NIGC has a pre-determined decision made, they tell us that they are open 

to change, but they do not accommodate tribal leader concerns. Chairman Hogen 

says, ‘‘Consultation does not mean agreement.’’ Well, we believe that is the wrong 

attitude. Tribal leaders believe that, to the maximum extent possible, Federal agencies should try to reasonably accommodate tribal government concerns—not just sit 

across the table for a little while and then go about with business as usual. One 

tribal representative explained to us that: 

As long as they feel they that tribal governments do not need to be consulted 

in the rulemaking process until after the final rules are crafted by NIGC and 

published, then they are perpetuating a failed process. Tribes not only have the 

same responsibilities and goals to protect the integrity of Indian gaming, they 

have the primary responsibility, and they have created the governmental institutions in the tribal gaming commissions and have hired and trained staff in 

the areas of compliance, surveillance, security, co-jurisdictional law enforcement, etc. 

Some tribal government leaders are reluctant to meet with the NIGC because 

they believe that informational meetings are wrongly being reported as Federal-tribal government-to-government consultation. A Northwest tribal representative has 

informed us that: 

In my dealings with the NW tribes thru ATNI and WIGA, even as recently as 

yesterday, what I hear is that tribes are reluctant to sign up for the consultations offered at the trade show next week, or ANY consultation opportunity for 

that matter. 

24 

3 A. Josephy, The Patriot Chiefs (1961) at 178. 4Louisiana Purchase Treaty (Treaty between U.S.A. and the French Republic), Article VI 

(1803). (Spain is referenced because France acquired Louisiana territory from Spain). 

Many of the NW tribes’ consultation meetings with NIGC over the past 2–3 

years were mischaracterized by the NIGC in their October 2007 letters to Congressman Rahall and Senator Dorgan regarding the proposed Class II package, 

stating that the listed tribes were consulted regarding the proposed regulations. 

Most, if not all, tribes discussed (when the NIGC wasn’t monopolizing the conversation) their own individual tribe’s issues at those meetings. One 

tribe... gave a tour of their surveillance department to the NIGC only to 

have their tribe show up on the list of tribes having been consulted with on the 

proposed regulations. What?!? 

. . . Also, the laundry list provided in the notice of consultation is huge. There 

are 7 bullets in the notice but if you read each one, it’s really 13 topics plus 

your own tribe’s issues. All done in 45 minutes should you have the full amount 

of time once NIGC is done with their spiel. 

In sum, the tribes up here feel that they are damned if they do and damned 

if they don’t. If they sign up, chances of misrepresentation of their meeting to 

benefit the NIGC’s position is likely to occur. If they don’t, then their absence 

will be misrepresented as not haven taken the opportunity to consult when offered (as done with my tribe.) And finally, most believe that even if they could 

manage to have their meetings represented accurately, whatever they say about 

the proposed regulations will not be considered. That is, what difference will it 

make? They aren’t listening anyway. Why bother? This is a good indicator that 

something is wrong with the NIGC’s consultation process. 

The Federal-tribal government-to-government relationship needs to work better 

than this, especially when the agency has ‘‘Indian’’ in its name! 

The United States’ government-to-government relationship with Indian tribes is 

as venerable as the American Republic. In 1796, President George Washington told 

the Cherokee Nation that: 

The wise men of the United States meet together once a year to consider what 

will be for the good of all of their people . . . . I have thought that a meeting 

of your wise men once or twice a year would be alike useful to you . . . . The 

beloved agent of the United States would meet with them . . . . If it should 

be agreeable to you that your wise men should hold such meetings, you will 

speak your mind to my beloved man . . . . to be communicated to the President of the United States . . . . 

President George Washington Letter to the Cherokee Nation, August 29, 1796. 

President Thomas Jefferson said, ‘‘The sacredness of [Native American] rights is 

felt by all thinking persons in America as well as Europe.’’ 3 Jefferson’s view is embodied in the Louisiana Purchase Treaty, where the United States agreed to honor 

prior European treaties, until such time as it entered its own treaties with the Indian nations, based upon mutual consent: 

The United States promise to execute such treaties and articles as may have 

been agreed between Spain and the tribes and nations of Indians until by mutual consent of the United States and the said tribes or nations other Suitable 

articles shall have been agreed upon. 4

In total, the United States entered into more than 370 Indian treaties, and these 

treaties guaranteed tribal lands and tribal self-government. Those guarantees continue to protect tribal self-government and tribal lands today. 

Given this background, the NIGC should do its utmost to accommodate tribal government views through consultation. We should not get a flippant response that 

consultation does not mean agreement. The United States should operate on a basis 

of mutual consent with Indian tribes, whenever possible—just as it does with 

United States territories. A statutory directive to NIGC on government-to-government consultation is both appropriate and necessary. We encourage the Committee 

to introduce legislation along the lines of H.R. 5608, which seeks to codify Executive 

Order 13175. 

NIGC Should Follow Basic Rules for Drafting Regulations: Executive Order 

12866 

Executive Order 12866, as modified by the Bush Administration to exempt the 

Vice President, provides the framework for Federal agency rule-making. The Executive Order provides: 

25 

5Seneca-Cayuga Tribe of Oklahoma v. National Indian Gaming Commission, 327 F.3d 1019 

(10th Cir. 2003) (10th Circuit relied on NIGC 2002 Class II regulations); United States v. Santee 

Sioux Tribe, 324 F.3d 607, 615-617 (8th Cir. 2003) (Relying on the NIGC 2002 Class II regulations, the Court found that ‘‘NIGC’s conclusion that Lucky Tab II is a permissible class II gaming device seems to be a reasonable interpretation of the IGRA’’). 

The American people deserve a regulatory system that works for them, not 

against them . . . . [R]egulatory approaches that respect the role of State, 

local, and tribal governments; and regulations that are effective, consistent, sensible, and understandable . . . . 

This Executive Order requires that agencies identify the problem the regulation 

is intended to address, examine whether there are alternatives to direct regulation, 

determine the costs and benefits of the regulation, consult with state, local and tribal governments and seek to minimize the burdens on those governments. In addition, regulations should be drafted in a manner that is simple and easy to understand. 

NIGC has failed to comply with these standards. First of all, tribal governments 

have asked: What is the need for these regulations? NIGC has responded that it 

seeks clarity in terms of the definition of Class II technologic aids, yet its proposed 

definition is inherently ambiguous and does little or nothing to promote clarity. Indeed, Indian tribes have pointed out that its proposed definition of ‘‘electro-mechanical facsimile’’ may very well be contrary to IGRA’s statutory language and contrary 

to five Federal Court of Appeals cases on this subject. See U.S. v. 162 Megamania 

Gambling Devices, 231 F. 3d 713 (10th Cir. 2000); U.S. v. 103 Electronic Gambling 

Devices, 223 F. 3d 1091, 1093 (9th Cir. 2000); Seneca-Cayuga Tribe of Oklahoma v. 

National Indian Gaming Commission, 327 F.3d 1019 (10th Cir. 2003); United States 

v. Santee Sioux Tribe, 324 F.3d 607, 615–617 (8th Cir. 2003); Diamond Games v. 

Reno, 230 F.3d 713 (D.C. Cir. 2000). Thus, the primary NIGC rationale for the regulation is baseless and leaves the regulation without foundation or merit. 

The Oklahoma Indian Gaming Association makes the point a different way–where 

there is clear statutory guidance, why is the agency adding new legal requirements 

of its own making? OIGA states: 

Assuming for arguments sake, that classification regulations were needed, another question that has been asked and not answered is why hasn’t the NIGC 

used the statute and the Federal court cases, both those won and lost, as guidelines for drafting regulations? Instead, the NIGC has chosen to draft extremely 

cumbersome language, which arbitrarily adds more than one legal element beyond the elements that IGRA uses to define the game of ‘‘bingo.’’ Given the 

strict construction given to IGRA in other cases like the Colorado River Indian 

Tribes decision, and with three Federal Appeals Courts ruling that the statutory 

language of IGRA establishes the legal elements for bingo, the NIGC has no 

valid reason to go down a legally perilous path. 

As Gerry Danforth, Chairman of the Oneida Tribe of Wisconsin testified before 

the House Natural Resources Committee last week, if NIGC took the time to really 

consult with tribal governments on a government-to-government basis, it would find 

workable, acceptable and durable solutions to regulatory issues that do not lead to 

litigation. So, the time invested in consultation and coordination with Indian tribes 

is well worth it. 

NIGC’s own economic impact analysis (conducted by an independent economist) 

found that its Class II regulatory proposal would cost Indian tribes between $1.2 

billion and $2.8 billion annually. While the four proposed Class II regulations were 

published on October 24, 2007, the economic impact study was not published until 

February 1, 2008 and the comment period on the regulations closed on March 9, 

2008. NIGC did not conduct a cost-benefit analysis of its regulatory proposals. That 

violated Executive Order 12866. A cost-benefit analysis should have considered the 

cost of alternative regulatory approaches, such as using existing statutory definitions or existing regulatory definitions. The existing regulatory Class II technologic 

aid definition would carry no additional cost because it has been in force since June, 

2002, the industry has already accommodated the regulation, and the Federal 

Courts have approved the regulation. 5

Clearly, the NIGC is failing to comply with the general rules for Federal regulatory proposals. Indeed, on the Class II regulations, the NIGC failed the very basic 

task of drafting the regulations in a simple manner: After months of work by the 

Class II gaming manufacturers group convened by NIGC, NIGC took a fairly reasonable rewrite of its Class II minimum internal control standards regulation and 

re-inserted its old Class II MICS rule by reference. That is not plain English—the 

26 

incorporation by reference makes it almost impossible to understand the new regulatory proposal, or to point out potential conflicts between the old and new rule. 

This proposal needs to go back to the ‘‘drawing board’’ for a ‘‘plain English’’ lesson. 

NIGC Should Comply with the Regulatory Flexibility Act 

The Regulatory Flexibility Act requires Federal agencies to consider the economic 

impact of Federal regulations on small governments, communities, and entities. The 

RFA requires agencies to consider lower cost alternatives to expensive regulations. 

Experts explain the RFA as follows: 

The Regulatory Flexibility Act created several new sections in the APA. The legislative history states that the intention of the Act is ‘‘to encourage individuals, 

small businesses, small organizations, and small government bodies that would 

otherwise be unnecessarily adversely affected by Federal regulations . . . . It 

is primarily aimed at forcing agencies to consider the problems of small businesses and local governments and to investigate least cost alternatives in regulation. 

C.A. Wright & C.H. Koch, ‘‘Judicial Review of Administrative Action,’’ 32 Fed. 

Prac. & Proc. Judicial Review, Section 8187 (2008). 

Yet, because the NIGC failed to conduct its economic impact analysis until the 

close of the comment period and it did not consider lower cost alternatives as required by the Regulatory Flexibility Act. Thus, with the comment period closed tribal governments are left to contemplate an economic impact of $1.2 billion to $2.8 

billion in lost income, a loss of perhaps 35,000 jobs, and an additional compliance 

burden of $347 million. Once again, the NIGC should re-open its regulation and consider lower cost alternatives to its proposed regulations. 

NIGC Should Comply With Congress’s Directive to Provide Training 

In 2006, Congress gave the NIGC new authority to work with tribal governments 

to provide technical assistance and training to tribal regulators. Public Law No. 

109–221 (2006). Specifically, the NIGC Accountability Act is intended to do three 

things: 

• Provide increased funding for NIGC by empowering NIGC to assess a fee up 

to the level of $0.80 per $1,000 of gross Indian gaming revenue; 

• Require NIGC to follow the Government Performance and Results Act; and 

• Require NIGC to include a training and technical assistance plan in its GPRA 

compliance plan. 

NIGC is currently undertaking a paperwork shuffle of its GPRA compliance plan, 

but Indian tribes were not consulted in its development, there have been no national 

or regional meetings scheduled to consult with tribes on the GPRA plan, and no 

training or technical assistance programs have been undertaken pursuant to the 

plan. NIGC has increased its fees and is spending more money under the fee provisions. 

NIGC Should Comply with the Federal Advisory Committee Act 

Congress established a general rule to limit the use of Federal Advisory Committees by regulatory agencies because they are not democratic. Yet, it provided an exception for Federal agency consultation with state, local and tribal governments. 

That exception only applies to tribal governments when Federal agencies meet with 

authorized tribal government representatives. Under FACA, GSA provides oversight 

of Federal Advisory Committees. 

The NIGC, however, has been regularly constituting and disbanding Tribal Advisory Committees for work regarding the development of the NIGC’s regulatory proposals. It has several problems with this approach: 

• No Tribal Advisory Committee (TAC) plan or proposal was presented to GSA 

to ensure that NIGC is actually complying with FACA; 

• TAC Members were not initially requested to be authorized representatives of 

their tribal governments and some were not, putting them outside the FACA 

exception for consultation with tribal governments; 

• While the NIGC established the TAC to assist in the development of its Class 

II regulations, this committee was limited to seven members expected to represent all of Indian country; and 

• Although the TAC unanimously objected to unreasonable restrictions on Class 

II games, none of its significant objections were accepted by the NIGC. 

27 

Just last month, the NIGC disbanded its existing TAC and Minimum Internal 

Control Standards Tribal Advisory Committee (MICS TAC) and then asked for the 

formation of a new Tribal Advisory Committee, to be limited to tribal regulators 

with five or more years experience. This gives the impression that when the existing 

TACS objected to arbitrary NIGC policies, the NIGC abolished them and sought a 

new TAC that would be amenable to NIGC views. As a tribal representative explained to us: 

NIGC’s latest initiative to dissolve existing tribal advisory committees and to 

appoint new committees whose member’s qualifications have been predetermined by NIGC is done without tribal consultation. The NIGC should be consult 

with the tribes concerning the purposes and functions of the committees, and 

the qualifications of committee members. 

Tribes do have staff with the legal, technical and operational experience and 

skills to develop an effective regulatory environment, and they are willing and 

able to consult with NIGC to contribute their expertise to the process. It is clear 

from Chairman Hogen’s letter of February 29, 2008, that NIGC intends to exclude many experienced and competent candidates, who have legal or operational experience, rather than ‘‘auditing’’ or ‘‘accounting’’ experience. 

Indeed, the NIGC’s new tribal regulatory experience requirement excludes elected 

tribal leaders while FACA expressly authorizes Federal consultation with elected 

tribal leaders as the primary exception to the general prohibition on ‘‘expert’’ advisory committees! 

Miscellaneous Concerns 

We have additional concerns with the NIGC. For example, NIGC does not have 

an audited financial statement available for review. The NIGC is just now implementing an accounting package that will give it the ability to produce financial 

statements. For the past 5 years, the NIGC has collected more fees than needed for 

its operating budget over the past 5 years. At the end of last year, the amount was 

greater than $10 million. While IGRA requires ‘‘excess’’ fees to be returned to the 

Tribes, these funds have been retained by NIGC from year to year. 

Conclusion 

Congress should act to ensure that the National Indian Gaming Commission is 

working with tribal governments to build up tribal government institutions rather 

than using a Washington-centered approach and relying primarily on rulemaking to 

solve perceived problems. We encourage the Senate Committee to consider legislation like H.R. 5608 to mandate an accountable government-to-government consultation process for the NIGC. In addition, the NIGC should begin to provide training 

and technical assistance to tribal governments and tribal gaming regulators as Congress mandated in 2006. NIGC has been collecting increased fees, but has yet to 

engage tribes under its new requirement to provide training and technical assistance. Perhaps if it did, NIGC would find a useful role, besides continually revising 

existing NIGC regulations. 

Senator TESTER. Thank you, Mr. Mathews. 

Mr. Patterson? 

STATEMENT OF BRIAN PATTERSON, PRESIDENT, UNITED 

SOUTH AND EASTERN TRIBES 

Mr. PATTERSON. Good morning, Senator Tester and distinguished 

members of the Committee on Indian Affairs. My name is Brian 

Patterson. I am the President of the United South and Eastern 

Tribes. I am also a member of the Oneida Indian Nation where I 

serve as Bear Clan Representative to the nation’s council. Thank 

you for the opportunity to testify before the Committee on our experiences with the National Indian Gaming Commission. 

USET represents 25 federally recognized tribes from Maine to 

Texas to Florida. While for the most part the relationship of our 

member tribes with the NIGC works well and is positive, there is 

one very important area in which USET feels that NIGC has failed 

to meet its responsibility to Indian Country, and our tribes are afVerDate Aug 31 2005 09:22 Jul 07, 2008 Jkt 042319 PO 00000 Frm 00031 Fmt 6633 Sfmt 6601 S:\DOCS\42319.TXT JACK PsN: JACKF
28 

fected by this failure far more than other areas of the Country. The 

NIGC and USET share the same common goal of ensuring that Indian gaming operates in a manner which benefits and protects tribal interests. I will highlight several areas in which we have been 

able to establish positive relationships. 

One, our member tribes have been able to work collaboratively 

with the NIGC to identify areas in which the tribes could improve 

the regulation before they become problematic. Two, despite a Federal decision limiting the NIGC’s jurisdiction on Class III gaming 

operations, several of our member tribes have continued to work 

with the NIGC to ensure that their operations meet minimal internal control standards. 

Three, a number of our member tribes are located in States 

which allow Class III gaming as a matter of State law, but the 

States refuse to negotiate with tribes for Class III gaming compacts. The NIGC has been helpful in providing these tribes with 

technical assistance in the operation of Class II gaming and offering support and assistance with developing the regulatory framework necessary for secretarial procedures to move forward. 

Four, the NIGC has also provided on-site training to a number 

of our member tribes which provides them with invaluable technical assistance they need to develop and improve their regulatory 

systems. 

As I have mentioned above, there is one very important situation 

in which we believe the NIGC has failed to meet and fulfill its responsibilities to those tribes who are only able to operate Class II 

gaming. For the member USET tribes who find themselves in this 

situation, the State’s regulatory scheme would in fact allow them 

to operate Class III gaming. However, for these tribes, their respective State has refused to negotiate a Class III compact with the 

tribe. 

These tribes are therefore left to operate Class II games, and 

apply to the Department of Interior for Class III gaming procedures, a process which has taken years to navigate. Thus, the regulation of Class II gaming is vital to USET member tribes, especially 

those located in Florida, Alabama, Louisiana, and Texas. Consequently, USET member tribes follow the NIGC’s regulatory efforts in the area of Class II gaming with great interest. 

Unfortunately, the NIGC’s new set of proposed regulations addressing Class II definitions would have a devastating impact on 

many gaming operations. The NIGC’s own economic impact study 

estimates that the draft Class II regulations will cost the tribal 

gaming industry over $1.2 billion a year. 

Much to our dismay, these regulations are dramatically different 

than previous drafts that have been worked on between NIGC and 

tribes. The USET tribes generally believe that NIGC has not listened to our comments, nor have they acknowledged the current 

state of the law. USET tribes are most concerned that the NIGC 

has set on a specific outcome with regard to adoption of these proposed regulations pertaining to Class II gaming, and that this has 

skewed the rulemaking process. I have attached copies of our member tribes’ comments regarding the proposed gaming classification 

regulations. 

29 

1Members of the United South and Eastern Tribes, Inc., include: Eastern Band of Cherokee, 

Mississippi Band of Choctaw, Miccosukee Tribe, Seminole Tribe of Florida, the Chitimacha Tribe 

of Louisiana, the Seneca Nation of Indians, the Coushatta Tribe of Louisiana, the St. Regis 

Band of Mohawk Indians, Penobscot Indian Nation, the Passamaquoddy Tribe Indian Township, 

the Passamaquoddy Pleasant Point, the Houlton Band of Maliseet Indians, the Tunica-Biloxi Indians of Louisiana, the Poarch Band of Creek Indians, the Narragansett Indian Tribe, the 

Mashantucket Pequot Tribe, the Wampanoag Tribe of Gay Head (Aquinnah), the AlabamaCoushatta Tribe of Texas, the Oneida Indian Nation, the Aroostook Band of Micmac Indians, 

the Catawba Indian Nation, the Jena Band of Choctaw Indians, the Mohegan Tribe of Connecticut, the Cayuga Nation, and the Mashpee Wampanoag Tribe. 2 25 U.S.C. § 2701(4) 

One additional area on which we would like to comment is that 

of governmental planning and performance. The application of the 

Government Performance Results Act to the NIGC is a positive 

step. We look forward to an ongoing consultation and dialogue with 

the Commission as the draft GPRA report is finalized. 

In conclusion, our member tribes feel the overall relationship between the tribes and NIGC is positive. We acknowledge Chairman 

Hogen’s support of Indian tribes over the many years and in his 

many different roles. But we also believe that NIGC has failed in 

one very significant respect with its unyielding move toward reworking Class II gaming regulation. 

A lot of hard work has already been done to develop consensus 

positions on many of the Class II issues. This provides a good place 

for us to re-engage with the Federal Government in establishing a 

meaningful dialogue to reach out to an acceptable outcome for Indian nations. 

Thank you, Senator Tester, for the opportunity to testify before 

you today. 

[The prepared statement of Mr. Patterson follows:] 

PREPARED STATEMENT OF BRIAN PATTERSON, PRESIDENT, UNITED SOUTH AND

EASTERN TRIBES, INC. 

Good morning Mr. Chairman and distinguished members of the Committee on Indian Affairs, my name is Brian Patterson, and I am the President of the United 

South and Eastern tribes, Inc. (USET). I am also an enrolled member of the Oneida 

Indian Nation, where I serve on the Nation’s Council as a Bear Clan Representative. Thank you for the opportunity to testify before the Committee on our experiences with the National Indian Gaming Commission (‘‘Commission’’ or ‘‘NIGC’’). 

United South and Eastern Tribes, Inc. is a non-profit, inter-tribal organization 

that collectively represents its member tribes at the regional and national levels. 

USET represents twenty-five federally recognized tribes. 1

Included among the members of USET are some of the largest gaming tribes in 

the United States. We also represent tribes with more modest gaming facilities, as 

well as tribes that currently do not engage in gaming. 

Congress enacted IGRA ‘‘to promote tribal economic development, tribal self-sufficiency, and strong tribal government.’’ 2 The Act, for the most part, has accomplished those goals. Indian gaming has been described as ‘‘the only federal Indian 

economic initiative that ever worked.’’ That is absolutely correct. Indian gaming has 

served as a critical economic tool to enable Indian nations to once again provide essential governmental services to their members, re-assert their sovereignty, and promote the goals of self-determination and self-sufficiency. 

Prior to the advent of Indian gaming, many Indian nations, while legally recognized as sovereign governments, were not able to provide basic, governmental services to their people. They had all of the legal attributes of sovereign nations, but 

many did not have the practical ability to be an effective government for their members. Consequently, despite a strong and proud tradition, Indian nations languished 

in a two hundred year cycle of poverty. 

Today, the resources of Indian gaming operations are used to provide essential 

governmental services to tribal members. Indian nations across the country are 

using gaming revenues to invest in dozens of tribal member programs, including 

home ownership initiatives, tuition assistance for everything from elementary 

30 

3 Jim Adams, Leaders guide museum with humble yet historic partnership, Indian Country 

Today (Lakota Times), Sept. 22, 2004, at 1. 

schools to post-doctorate work, health insurance for all tribal members, and access 

to top-notch health clinics. 

We cannot calculate the intangible benefits of the impact such economic development has created, including the impact on the most important matter for an Indian 

nation—its human resources. Suffice it to say that in many situations, Indian governments have seen their members move from unemployment rolls to being gainfully employed. 

Reclaiming a past heritage also has been a priority for all USET members, and 

gaming proceeds have enabled Indian nations to make tremendous gains in this 

area. In many respects, these individual efforts culminated collectively in the dedication of the National Museum of the American Indian in September 2004. I am 

proud to note that the three largest contributions to the building of this tremendous 

institution came from Indian nations that are Members of USET. 3 I want to thank 

the Committee for its leadership in making this museum a reality, and in particular, Senator Inouye for his vision and dedication to ensuring that the museum 

would meet the expectations of Indian people. 

While for the most part, the relationship of our member tribes with the NIGC 

works well and is positive, there is one very important area in which USET member 

Tribes feel the NIGC has failed to meet its responsibilities to Indian Country, and 

our tribes are disproportionately affected by this failure far more than other areas 

of the Country. I am here today to discuss both the negative and positive aspects 

of our members’ relationship with the NIGC. 

Working Toward a Common Goal 

The National Indian Gaming Commission and the United Southern and Eastern 

Tribes, Inc., share the common goal of ensuring that Indian gaming operated by the 

USET Tribes is operated fairly and in a manner which benefits and protects the 

Tribes’ interests. We believe that the Tribes and the NIGC have been able to establish a relationship that assists both parties in meeting their goals. 

There are several areas in which we have been able to establish positive relationships. 

1. Working together to identify problem areas. 

Our member tribes have been able to work collaboratively with the NIGC to identify areas in which the Tribes could improve their regulation before they become 

problematic. It can be helpful to engage the assistance of the NIGC, even though 

Tribes are quite effective at resolving the vast majority of these issues without such 

assistance. 

2. Voluntarily working with NIGC to conduct on-site reviews of their Class III gaming operations. 

Despite the holding in the Colorado River Indian Tribe (CRIT) v. National Indian 

Gaming Commission, several of our member tribes have continued to work with the 

NIGC to ensure that their operations meet minimum internal control standards. 

Many tribes, since the CRIT decision was issued, have voluntarily continued to follow the Minimum Internal Control Standards set in place by the NIGC prior to the 

decision. 

The NIGC has assisted more than one of our member Tribes with on-site visits 

to assess voluntary compliance with those MICS standards. 

3. Working with tribes who have applied for Secretarial Procedures. 

A number of our member Tribes are located in states which allow Class III gaming as a matter of State law, but the States refuse to negotiate with the tribes for 

Class III gaming compacts. These tribes are left to operate Class II gaming and seek 

Secretarial Procedures. 

The NIGC has been helpful in providing these tribes with technical assistance in 

the operation of Class II gaming, and offering support and assistance with developing the regulatory framework necessary for Secretarial Procedures to move forward. In at least one instance, the NIGC has offered to provide Class III regulatory 

services to the Tribe seeking procedures. 

4. Providing on-site training and review. 

The NIGC has also provided on-site training to a number of our member Tribes, 

which provides them with invaluable technical assistance they need to develop and 

improve their new or existing regulatory systems. They are also available and have 

provided on-site reviews to assess the adequacy of existing systems in place, and 

31 

4 In addition, the regulation of Class II gaming is important even to those tribes who operate 

pursuant to Class III compacts because in many instances the terms of the compact expire. 

There is no guarantee that a state with a new governor and legislature will negotiate in good 

faith over a new compact. 

provide advice on how to improve those systems, preventing problems before they 

can happen. 

When Relationships Break Down 

As I mentioned above, there is one very important situation in which we believe 

the NIGC has failed to meet its responsibilities to those Tribes who are only able 

to operate Class II gaming. 

For the member Tribes of USET who find themselves in this situation, their 

state’s regulatory scheme would in fact allow them to operate Class III gaming. 

However, for these Tribes, their respective state has refused to negotiate a Class 

III compact with the Tribe. These Tribes are therefore left to operate Class II 

games, and apply to the Department of Interior for Class III gaming procedures, a 

process which takes years to navigate. In the case of one of our member Tribes, this 

process of receiving Class III gaming took sixteen years (16) to resolve and is still 

not complete. 

Thus, the regulation of Class II gaming is vital to many of our member Tribes, 

especially those located in Florida, Alabama, Louisiana and Texas. Consequently, 

USET member tribes follow the NIGC’s regulatory efforts in the area of Class II 

gaming with great interest. 4

In the past several years, the NIGC has attempted to modify the regulatory structure surrounding Class II gaming in a number of ways, beginning in 2003 with the 

formation of a Tribal Advisory Committee charged with creating a ‘‘bright line’’ between Class II and Class III gaming. These efforts led to the NIGC’s publication 

of Game Classification Standards and amendments to its definition of 

electromechanical facsimile on May 26, 2006, as well as proposed Class II Technical 

Standards on August 11, 2006. Tribes overwhelmingly opposed these draft regulations, a position that was driven home during a hearing held on September 19, 

2006. Most Tribes stated that the new standards would impose an unwieldy and unworkable system of rules on Class II operators, and would cause severe economic 

harm to Indian tribes who operate Class II games. And tribes were not alone in 

their opposition of these regulations: gaming manufacturers also opposed the 

NIGC’s regulations. 

In the wake of this hearing, the NIGC held a follow-up meeting in December of 

2006 with what is now termed the ‘‘Tribal Gaming Working Group.’’ This Working 

Group consists of Tribal Leaders, technical and legal experts, and members of the 

NIGC’s Tribal Advisory Committee (TAC) on Class II gaming, which itself is made 

up of Tribal representatives and Class II technical experts. During this follow-up 

meeting, the draft regulations were discussed, and it was agreed that the Working 

Group would develop a more suitable set of Class II Technical Standards. Less than 

two months later, on January 25, 2007, this group provided a revised draft of the 

Class II Technical Standards to the NIGC for review and consideration. Now understanding that they were looking at Class II gaming incorrectly, and that they needed to look at Class II gaming more systematically, the NIGC withdrew all pending 

Class II regulations on February 15, 2007. 

The NIGC, in conjunction with the Tribal Gaming Working Group, then embarked 

on an extensive effort to revise the NIGC’s Minimum Internal Control Standards 

(MICS) so that they conformed to the Technical Standards, as revised. The Working 

Group also made additional conforming changes to the already revised Technical 

Standards to ensure that when taken as a whole, the overall package was consistent. 

The work product from this extensive effort was submitted to the NIGC on September 12, 2007. On October 24, 2007, the NIGC published four new sets of proposed regulations addressing the Facsimile Definition, Game Classification Standards, the MICS and the Class II Technical Standards. Much to our dismay, however, 

our member tribes who participated in this process were completely shocked to find 

that significant and material changes had been made by the NIGC to the collaborative September 2007 drafts. 

Overall, USET Tribes generally believe that the NIGC has not listened to their 

comments, nor have they acknowledged the current state of the law. Our member 

Tribes also are concerned with the appearance that the NIGC simply went through 

the motions of ‘‘consultation’’ by holding meetings with tribal leaders and representatives when in fact, they had no intention of attempting to reach a consensus or 

32 

even making meaningful concessions regarding the substance of the draft regulations. 

Perhaps most disturbing, our members Tribes are concerned that the NIGC has 

not heeded Tribal concerns regarding the devastating impacts that these proposals 

will have on the Tribal gaming industry. The NIGC’s own economic impact study 

estimates that the draft Class II regulations will cost the tribal gaming industry 

over $1.2 billion a year. 

At the end of the day, USET Tribes are concerned that the NIGC has been set 

on a specific outcome with regard to the adoption of the proposed regulations pertaining to Class II gaming, and that this orientation to a specific outcome has 

skewed the rulemaking process. They also feel that, despite their best efforts to deal 

with the NIGC fairly on these issues, they have not received the same treatment 

in return. 

I have attached copies of our member Tribes comments regarding the proposed 

gaming classification regulation for your information, because I feel the information 

contained in them is important and too detailed to be properly addressed by my 

brief testimony. 

Governmental Performance and Results Act 

One additional area in which we would like to comment is that of governmental 

planning and performance. Until very recently, the National Indian Gaming Commission was not required to take part in the standard strategic planning and performance assessment in which other agencies are required to participate. 

This changed very recently, with the adoption of Public Law 109–221, which subjected the NIGC to the requirements of the Government Performance and Results 

Act (GPRA) of 1993 (Public Law 103–62) and additionally required the NIGC to provide a plan for technical assistance to tribal gaming operations in accordance with 

GPRA. 

We believe that the application of GPRA to the NIGC is a positive step toward 

making the Commission more transparent and accountable to the public and particularly to Indian Country. We are also encouraged by the development of the draft 

GPRA plan proposed by the NIGC is a move in the right direction, and we look forward to an ongoing consultation and dialogue with the NIGC on their future plans 

before the report is finalized. 

Conclusion 

As you can see, the relationship between the diverse tribes who make up the 

United South and Eastern Tribes and the Commission is complicated. Overall, our 

member tribes feel that the relationship between tribes and the NIGC is positive. 

We acknowledge Chairman Hogen’s support of Indian tribes over many years and 

in many different roles. But we also believe that NIGC has failed in one very significant respect, with its unyielding move toward reworking Class II gaming regulation. 

The failure of the NIGC to properly consult with tribes regarding its Class II rulemaking efforts has left our member Tribes frustrated. However, if afforded the opportunity, we are committed to continuing to work with Congress and the NIGC on 

the Class II gaming issues. A lot of hard work already has been done to develop 

consensus positions on many of the Class II issues. This provides a good place for 

us to re-engage with the Federal Government in establishing meaningful dialogue 

to reach to an acceptable outcome for Indian nations. 

Thank you, Mr. Chairman, for the opportunity to testify today. 

Senator TESTER. Thank you, Mr. Patterson. 

Mr. Luger? 

STATEMENT OF J. KURT LUGER, EXECUTIVE DIRECTOR, 

NORTH DAKOTA AND GREAT PLAINS INDIAN GAMING 

ASSOCIATION 

Mr. LUGER. Thank you, Senator. My name is Kurt Luger. I am 

a member of the Cheyenne River Sioux Tribe in South Dakota. My 

office is in Bismarck, North Dakota and I represent 28 nations 

from Kansas, Nebraska, Iowa, North Dakota, South Dakota, and 

the great State of Montana. 

I am here today, and I will great right to the heart of our concerns with the NIGC. It is that they have adopted a top-down inside-the-beltway approach to the regulation of Indian gaming. 

33 

Rather than coming out to the field to assist tribal governments in 

ensuring that tribal regulatory systems are running appropriately. 

The NIGC constantly wants to write new Federal rules. We acknowledge that the NIGC is willing to sit down with tribal leaders 

and willing to attend tribal meetings. Unfortunately, tribal leaders 

often come away with the feeling that NIGC had a predetermined 

decision and that despite tribal concerns, the NIGC will not move 

off its own bureaucratic agenda to find its way to respect tribal sovereignty and self-government. 

We are told that consultation does not mean agreement, but consultation is supposed to be meaningful and it should require consideration of tribal points of view and accommodation of those perspectives to the greatest extent possible. For example, when the 

NIGC was developing its Class II regulatory proposals, it was very 

reluctant to consider tribal governmental points of view. Yet when 

the gaming manufacturers made a point, the NIGC would listen to 

them readily. 

The other thing that happens is when something appears to 

make travel concerns, the Chairman and Commissioners go back 

and talk to the NIGC lawyers and any sign of accommodation is 

later dropped. There is simply too much inside-the-beltway counseling and not enough field experience. 

I brought with me five recommendations that we believe would 

help the NIGC in fulfilling its mission to assist Indian tribes with 

gaming regulation. One, our first recommendation is to make Federal and tribal consultation meaningful, that NIGC should be directed by statute to follow Executive Order 13175, and we call upon 

the Senate Committee to consider a bill similar to H.R. 5608. 

Our next recommendations concern training and technical assistance. In 2006, the NIGC Accountability Act was signed into law. 

In that Act, Congress intended three things: to provide increased 

funding to the NIGC; require the NIGC to comply with the Government Performance and Results Act; and to require the NIGC to include training and technical assistance plans to the GPRA. 

NIGC is currently undertaking a paperwork shuffle of its GPRA 

compliance plan, but Indian tribes were not consulted in its development. There have been no national or regional meetings scheduled to consider with the tribes on the GPRA plan, and no training 

or technical assistance programs have been undertaken. NIGC, 

however, has increased its fees and is spending the money under 

the fee provisions. 

Two, we recommend that NIGC hire a training and technical assistance director with Indian gaming experience. We urge the Senate Committee to ensure that NIGC hires a training and technical 

assistance director to begin providing training and technical assistance programs to tribal governments and tribal gaming regulators. 

Three, we also recommend that NIGC provide training and technical assistance that meets or exceeds industry standards. This is 

critical. We need practical training and useful technical assistance 

that can really help tribal regulators to establish and maintain topnotch systems that meet or exceed industry standards. 

Mr. Chairman, our experience of you today called up what I myself and my association has put on more than 150 training sessions. I went back through my record. Their people have been at 

34 

less than 10 of them. They tell me one of two things: they are not 

available or they don’t have the expertise in that particular field 

to do it. So, I get them from Indian Country, from within ourselves. 

If lawyers who do not know the industry standards are assigned 

to the task of training and technical assistance, it is a waste of 

time. 

The NIGC should apply Indian preference in hiring. The District 

Court of the District of Columbia recently ruled that Indian preference in hiring applies to ‘‘positions in the Department of Interior 

whether within or without the Bureau of Indian Affairs that directly and primarily provides services to Indians.’’ NIGC is directly 

and primarily providing regulatory services to Indians within the 

meaning of Indian preference, yet NIGC has a poor track record of 

hiring Indians. Only three out of 17 supervisory personnel at the 

NIGC Washington headquarters are Indian. This must change. 

Lastly, we are also very concerned with NIGC’s use of Federal 

advisory committees. The NIGC claims exemption from FACA and 

constitutes and disbands tribal advisory committees at will. It is a 

recommendation that NIGC submit its claimed FACA exception to 

GSA for its review, and upon a favorable review by GSA, that the 

tribal advisory committees be formed only after consultation about 

their use and purpose with tribal governments. 

In conclusion, the NIGC must respect tribal governments as dayto-day regulators of Indian gaming and become more of a userfriendly agency. NIGC must stop its top-down inside-the-beltway 

approach. We have seen it before. It was called the BIA and the 

IHS, and we don’t need anymore of that. 

Thank you very, very much for your time and for being invited 

today. 

[The prepared statement of Mr. Luger follows:] 

PREPARED STATEMENT OF J. KURT LUGER, EXECUTIVE DIRECTOR, NORTH DAKOTA

AND GREAT PLAINS INDIAN GAMING ASSOCIATION

Good Morning, Chairman Dorgan and Members of the Committee. Thank you for 

inviting me to testify this morning. 

My name is Kurt Luger and I am a member of the Cheyenne River Sioux Tribe. 

I grew up on the Standing Rock Sioux reservation in North Dakota on my family 

ranch and my family operates a grocery store and small business in Fort Yates, 

North Dakota. 

I serve as the Executive Director of the North Dakota Indian Gaming Association, 

which includes the Spirit Lake Sioux Tribe, Standing Rock Sioux Tribe, SissetonWahpeton Sioux Tribe, the Three Affiliated Tribes of Fort Berthold, and the Turtle 

Mountain Chippewa Tribe. 

I also serve as the Executive Director of the Great Plains Indian Gaming Association, which covers North Dakota, South Dakota, Nebraska, Iowa, Kansas, Wyoming, 

and Montana. GPIGA was founded in 1997, and we have 28 Tribes as Members. 

This year we will hold our 16th Annual Gaming Conference & Trade Show together 

with the Minnesota Indian Gaming Association on May 18–21, 2008 at the Mystic 

Lake Casino & Hotel. Senator Dorgan, I respectfully extend to you an invitation to 

be our keynote speaker on Monday, May 19, 2008, so our tribal leaders can hear 

from you directly about the Committee’s policies and priorities. 

At GPIGA, our mission is to bring together the federally recognized Indian Nations in the Great Plains Region who are operating gaming enterprises in a spirit 

of cooperation to develop common strategies and positions concerning issues affecting all gaming tribes; to promote tribal economic development and its positive impacts within the Great Plains; to provide pertinent and contemporary information 

for the benefit of the GPIGA member nations; to draw upon the unique status of 

those Great Plains Indian Nations which have treaties between themselves and the 

35 

United States; and to provide our Member Tribes with information about national 

legislation and issues affecting tribal economic development. 

Naturally, we are concerned about the manner in which the NIGC approaches its 

mission to assist tribes in regulating Indian gaming. Rather than a cooperative environment where the NIGC and Indian tribes work together to ensure the highest 

standards of regulation, Tribes are left with the impression that the NIGC has chosen to write regulations without tribal input or concern for the affect those regulations will have on tribal sovereignty and the Indian gaming industry. Similarly, we 

are concerned by the lack of training and technical assistance on those regulations 

to Indian tribes and tribal regulators despite a mandate to do so in the NIGC Accountability Act of 2006. 

Background: Federal-Tribal Government-to-Government Relations 

Before the United States, Indian tribes were independent sovereigns with sustainable economies, strong agricultural traditions, vast natural resources and extensive 

trade networks. Early United States’ treaties sought to foster ‘‘a firm and lasting 

peace’’ with the North Dakota tribes, to build a trade network between the United 

States and North Dakota tribes, and to extend Federal protection to the tribes. See 

Treaty with the Mandan (1825); Treaty with the Arikara (1825); Treaty with the 

Hunkpapa Sioux (1825). Later, the United States sought cessions of land from 

North Dakota tribes through war, treaty, or statutory agreement, and these cessions 

left the tribes destitute. 

Through these treaties the United States acknowledged the status of Indian tribes 

as sovereigns and established the principle of government-to-government relations 

between the United States and Indian tribes. In fact, these principles are part of 

the very fabric of the Constitution, as set forth in the Indian Commerce and Treaty 

Clauses. The United States never withdrew its treaty pledges of peace, friendship, 

and protection for North Dakota’s Indian tribes, and accordingly, we seek to hold 

the United States to its Federal trust responsibility. Part of the Federal trust responsibility is a duty to protect tribal self-government, which means that to the 

greatest extent possible, the United States, its officers and agencies should work 

with Indian tribes on a basis of mutual respect and mutual consent. 

Indian Gaming in North Dakota 

The Indian Gaming Regulatory Act’s purpose is to build strong tribal governments, promote tribal economic development and foster tribal self-sufficiency. Indian 

gaming has been an important economic development activity for Indian tribes in 

North Dakota and the Great Plains region. 25 U.S.C. section 2701(4). 

After almost 20 years of experience under the Indian Gaming Regulatory Act, we 

can say definitively that Indian gaming is working in rural areas of America. Indian 

tribes that faced 50, 60, and even 70 percent unemployment are now generating jobs 

not only for their own tribal members, but for neighboring non-Indians as well. I 

live and work in North Dakota so I will use the North Dakota Tribes as a representative example. 

In North Dakota, Indian gaming has a significant economic impact. Our tribal 

government gaming operations provide employment, essential tribal government 

revenue that funds essential services and community infrastructure, and generates 

much needed revenue for communities statewide through the economic multiplier effect. Our Tribes have created 2,400 direct, full-time jobs with pension and health 

care benefits. The payroll from the gaming operations exceeds $55 million, and approximately $39 million of that payroll goes to tribal members who live in rural 

North Dakota. More than 70 percent of our gaming employees are Native Americans 

and 40 percent of our employees were formerly unemployed and survived on welfare. 

Our tribal government payroll contributes $156 million annually to the total economy of the state. Tribal government gaming operations purchased over $45 million 

in goods and services within North Dakota. Purchases were made in 93 communities 

throughout the State. Without these sales, the state would lose $100 million of economic activity in cities throughout the State. We have estimated our total economic 

impact in the State since 1997 to have exceeded $1.3 billion. 

Indian Tribes in North Dakota 

In North Dakota, 5 tribal governments operate Indian gaming facilities: the Three 

Affiliated Tribes of Fort Berthold—Mandan, Hidatsa, and Arikara; the Spirit Lake 

Sioux Tribe, the Turtle Mountain Chippewa Tribe, the Standing Rock Sioux Tribe 

and the Sisseton-Wahpeton Sioux Tribe. Both the Standing Rock Sioux Tribe’s reservation and the Sisseton-Wahpeton Sioux Tribe’s reservation straddle the border 

with South Dakota. 

36 

Three Affiliated Tribes. The Three Affiliated Tribes, Mandan, Hidatsa, and 

Arikara, operate as a unified tribal government. These Tribes have occupied the 

Missouri valley for hundreds and thousands of years, planted corn, squash, and 

beans on the fertile flood plains, and hunted buffalo and wild game. Living in 

stockaded villages, the Three Affiliated Tribes were devastated by smallpox 

epidemics in 1792, 1836, and 1837. 

The traditional lands of the Mandan, Hidatsa, and Arikara encompassed an area 

of 12 million acres from eastern North Dakota to Montana and as far south as Nebraska and Wyoming. Early on, the Three Affiliated Tribes established friendly relationships with the United States. They welcomed the Lewis and Clark expedition 

into their villages and assisted them on their journey. The Fort Laramie Treaty of 

1851, congressional acts and executive orders reduced the Tribes’ lands to 1,000,000 

acres in western North Dakota. 

In the 1950s, the Three Affiliated Tribes were asked to undertake a tremendous 

sacrifice by allowing the United States to dam the Missouri River and flood their 

reservation. The original tribal headquarters were flooded and families were moved 

away from the fertile Missouri River flood plain up on to the high prairie. When 

Lake Sakakawea was formed by the dam, the new lake divided the reservation into 

three parts. 

Due to the flooding, the Tribes suffered an enormous loss of natural resources, 

including the most fertile land on the reservation, their community was divided and 

the small village life that many had known along the Missouri River was gone. The 

tribal headquarters were relocated four miles away in New Town, North Dakota. 

Today, the tribal population is about 10,000 with about 5,000 living on the reservation. 

Spirit Lake Sioux Tribe. The Spirit Lake Sioux Tribe is composed of the SissetonWahpeton and Yankton bands of the Dakota or Sioux Nation. Originally residing 

in Minnesota and eastern North Dakota, the Spirit Lake Sioux Reservation was established by the Treaty of 1867 with the United States. The Treaty of 1867 provides 

that: ‘‘The... Sioux Indians, represented in council, will continue... friendly 

relations with the Government and people of the United States... .’’ The Treaty 

recognizes the Spirit Lake Sioux Reservation as the ‘‘permanent’’ reservation of the 

Tribe. 

The Tribe has worked to develop jobs through manufacturing, providing Kevlar 

helmets and military vests to the Pentagon through Sioux Manufacturing Corporation, yet with a reservation population of over 6,000 people, the Tribe has struggled 

with 59 percent unemployment as the Defense Department budget was cut in the 

1990s. The Spirit Lake Reservation encompasses 405 square miles north of the 

Sheyenne River in northeastern North Dakota. 

Turtle Mountain Chippewa Tribe. The Chippewa or Ojibwe people originally inhabited the Great Lakes Region and began to hunt and trade in North Dakota in 

the late 18th and early 19th Centuries. Historically, the Chippewa and the Dakota 

fought wars with each other, but they settled their differences through the Treaty 

of Sweet Corn in 1858. 

In 1882, Congress set aside a 32 mile tract in Northeastern North Dakota for the 

Turtle Mountain Band of Chippewa 11 miles from the Canadian border. With the 

passing of the great buffalo herds, the Chippewa turned to agriculture and ranching, and faced many difficulties due to encroachment by settlers. 

Today, almost 20,000 tribal members live on the 6 × 12 mile Turtle Mountain reservation. Belcourt, North Dakota, the tribal headquarters, has become the 5th largest city in the state. 

Standing Rock Sioux Tribe. The Standing Rock Sioux Tribe is composed of Sitting 

Bull’s Band, the Hunkpapa, and the Yanktonai, with some Black Foot Sioux on the 

South Dakota side. In the Fort Laramie Treaty of 1868, the United States pledged 

that: ‘‘The Government of the United States desires peace and its honor is hereby 

pledged to keep it.’’ The Treaty also provides that the Great Sioux Reservation was 

to serve as the ‘‘permanent home’’ of the Sioux Nation. 

Yet, in 1876, General Custer and the 7th Cavalry came out to Sioux country to 

force the Sioux tribes on to diminished reservations. In 1889, the Federal Government once again called on the Sioux Nation to cede millions more acres of reservation lands, and the Standing Rock Sioux Reservation was established by the Act of 

March 2, 1889. Sitting Bull had opposed the land cession and in 1890, he was murdered by United States officers—that is, the BIA police acting in concert with the 

U.S. Cavalry and under the direction of the Indian Agent. 

The Standing Rock Sioux Reservation is composed of 2.3 million acres of land 

lying across the North and South Dakota border in the central area of the State. 

Like the Three Affiliated Tribes, the Standing Rock Sioux Tribe was asked to make 

a substantial sacrifice for flood control and ceded almost 56,000 acres of the best 

37 

reservation land for Lake Sakakawea. Tribal members were removed from their traditional homes along the Missouri River flood plain and relocated well up above the 

river. Today, the population of resident tribal members is almost 10,000. 

Sisseton-Wahpeton Sioux Tribe. Located in Southeastern North Dakota and 

Northeastern South Dakota, the Sisseton-Wahpeton Sioux Tribe has a total enrollment of over 10,000 tribal members and a resident population of about 5,000 tribal 

members. The Tribe was originally located in Minnesota, but pressure from white 

settlers pushed the Tribe westward. The Treaty of 1858 with the United States established the Sisseton-Wahpeton Sioux Reservation, which today has approximately 

250,000 acres in North and South Dakota. 

The Tribal-State Compact Process in North Dakota 

Since the beginning of tribal gaming in North Dakota, its primary function has 

been to provide employment and economic development opportunities. Indian gaming has also provided vital funding for tribal government infrastructure, essential 

services including police and fire protection, education, and water and sewer services, and tribal programs, such as health care, elderly nutrition, and child care. 

There are five Indian gaming facilities in the state—Four Bears Casino & Lodge 

(Three Affiliated Tribes), Sky Dancer Casino & Lodge (Turtle Mountain), Spirit 

Lake Casino (Spirit Lake Sioux), Dakota Magic Casino (Sisseton-Wahpeton), and 

Prairie Knights Casino & Lodge (Standing Rock). 

In North Dakota, tribal governments have worked hard to maintain our sovereign 

authority and territorial integrity, so that we can provide a life for our people on 

our own homelands. The Indian Gaming Regulatory Act acknowledges the governmental status of Indian tribes and seeks to promote ‘‘tribal economic development, 

self-sufficiency, and strong tribal governments.’’ 

Historically, state law does not apply to Indian tribes or Indians on Indian lands 

in the absence of an express congressional delegation of authority. That means that 

under general principles of Indian sovereignty, Indian tribes are able to conduct 

gaming under tribal law, not state law. Yet, through the Indian Gaming Regulatory 

Act, Congress made a compromise between tribal interests and state interests and 

established the Tribal-State Compact process for the regulation of Class III gaming. 

The Senate Committee Report explains: 

It is a long and well-established principle of Federal Indian law as expressed 

in the United States Constitution... that unless authorized by act of Congress, the jurisdiction of State governments and the application of state laws 

do not extend to Indian lands . . . . [U]nless a tribe affirmatively elects to 

have State laws and State jurisdiction extend to tribal lands, the Congress will 

not unilaterally impose or allow State jurisdiction on Indian lands for the regulation of Indian gaming activities. The mechanism for facilitating the unusual 

relationship in which a tribe might affirmatively seek the... application of 

state laws . . . is a Tribal-State Compact. 

The Administration expressly rejected a primary Federal regulatory role: 

Recognizing that the extension of State jurisdiction on Indian lands has traditionally been inimical to Indian interests, some have suggested the creation of 

a Federal regulatory agency to regulate class II and class III gaming activities 

on Indian lands. Justice Department officials were opposed to this approach, arguing that the expertise to regulate gaming activities and to enforce laws related to gaming could be found in state agencies, and thus there was no need 

to duplicate those mechanisms on a Federal level. 

Senate Report No. 100–497 at 5–7 (1988). 

Accordingly, when tribal governments conduct Class III gaming, IGRA first requires three things: (1) a tribal gaming regulatory ordinance that meets minimum 

statutory standards, approved by the NIGC; (2) the Tribe is located in a state where 

Class III gaming is allowed for any purpose by any person, entity or organization; 

and (3) a Tribal-State Compact. The Tribal-State Compact provides the rules for 

Class III gaming: 

(i) the application of the criminal and civil laws of the Indian tribe or the State 

that are directly related to, and necessary for, the licensing and regulation of 

such activity; 

(ii) the allocation of criminal and civil jurisdiction between the State and the 

Indian tribe necessary for the enforcement of such laws and regulations; 

(iii) the assessment by the State of such activities in such amounts as are necessary to defray the costs of regulating such activity; 

38 

(iv) taxation by the Indian tribe of such activity in such amounts comparable 

to amounts assessed by the State for comparable activities; 

(v) remedies for breach of contract; 

(vi) standards for the operation of such activity and maintenance of the gaming 

facility, including licensing; and 

(vii) other subjects that are directly related to the operation of gaming activities. 

25 U.S.C. sec. 2710(d)(3). 

Tribal gaming regulatory ordinances support the Tribal-State Compact provisions. 

Tribal gaming ordinances must include: (1) the tribe has sole ownership of the gaming facility; (2) net revenues are used first and foremost for essential government 

purposes and tribal infrastructure; (3) annual audits are provided to NIGC (including independent review of contracts in excess of $25,000); (4) standards for construction and maintenance of the facility; and (5) a background check and licensing system for management and key employees. The tribal ordinance process is intended 

to provide a measure of respect for tribal law-making authority, so the NIGC can 

only disapprove of a tribal ordinance if it does not meet the statutory criteria. 

North Dakota Tribal-State Relations 

In North Dakota, both our Tribes and the States have taken the Tribal-State 

Compact very seriously. Our first Tribal-State Compacts were approved in 1992 and 

they were renewed in 1999. We follow a broad, inclusive process of negotiation 

where all 5 Tribes work together and we negotiate with the Executive Branch, including the Governor’s office and the Attorney General. The State Senate Majority 

and Minority Leaders and the State House Majority and Minority Leaders are invited to sit in on our compact negotiation meetings. The Tribes participate in six 

public hearings throughout the State to gather public input. Then our Tribal-State 

Compacts are approved through the normal legislative process, including committee 

hearings and approval by a vote of the State Legislature. 

All of the North Dakota tribes have worked to maintain positive government-togovernment relationships with the State of North Dakota. We meet every two years 

with the same group of state officials that negotiate Tribal-State Compacts to review 

tribal progress and any regulatory or implementation issues that may arise. 

Our Tribes expressly adopted Minimum Internal Control Standards through our 

Tribal-State Compacts—which incorporate the NIGC MICS by reference: 

Minimum Internal Control Standards 

‘‘Tribes shall abide with such Minimum Internal Control Standards as are 

adopted, published, and finalized by the National Indian Gaming Commission 

and as may be in current effect.’’ 

The State Attorney General is vested with authority to regulate gaming under 

state law, so Attorney General has expertise in this area: 

The State Attorney General regulates the State Lottery, horse-racing and charitable gaming, alcoholic beverages, and tobacco retailers, enforces consumer protection laws, and operates the Bureau of Criminal Investigations. The Attorney 

General’s Gaming Division regulates, enforces and administers charitable gaming in North Dakota. The division provides training, performs audits and investigations of gaming organizations; reviews gaming tax returns; issues administrative complaints; conducts criminal history record checks of gaming employees 

and Indian casino employees; and ensures compliance with tribal-state casino 

gaming compacts. 

The Attorney General’s office works with our tribal gaming commissions to address any significant issues that arise in Class III gaming conducted pursuant to 

our compacts. Our compacts provide: (1) GAAP and IGRA standards for accounting; 

(2) regulation, testing and reporting for electronic machines to the state; (3) regulation for table games; (4) background checks conducted by the State Attorney General’s office and licensing standards for our tribal gaming commissions; and (5) random inspections by the State Attorney General’s office and tribal gaming commissions. The Tribes in North Dakota have worked very hard to preserve a strong relationship with the State, and the State for, its part, has worked in good faith with 

the Tribes. 

In North Dakota, tribal governments employ more than 325 tribal regulators and 

staff. In 2006, tribal governments spent $7.4 million on tribal and state regulation 

of Indian gaming in North Dakota. That’s $1.48 million per tribal government and 

we run relatively modest operations. We just had our biennial meeting with state 

officials and no regulatory issues or deficiencies were identified by any party. The 

39 

1 In essence, the Federal Court ruling simply held that the NIGC may not draw up new Federal standards for the operation of Class III Indian gaming over and above Tribal-State Compacts. The Federal Court left in place the original understanding of IGRA. 

Attorney General has said that his office is comfortable that we have achieved our 

original intention to create a safe, secure and effective tribal-state regulatory system. 

Attorney General Stenjhem has complimented the tribal governments on our 

record of strong regulation and has cooperated with the tribal regulatory agencies 

to apprehend and prosecute those who attempt to cheat our casinos. The Attorney 

General has recognized that Indian gaming has created important jobs and generated vital revenue for tribal self-government. He made it clear that he is proud 

that the State has not asked for revenue sharing. State officials in North Dakota 

know that tribal governments have many unmet needs and it helps the whole state, 

when tribal governments have a way to create jobs and generate essential governmental revenue. 

The Role of the NIGC—Background Oversight/Training and Technical Assistance 

The National Indian Gaming Commission was established to assist Indian tribes 

with the regulation of Indian gaming. Under IGRA, tribal gaming regulators are the 

primary day-to-day regulators of Indian gaming and they regulate Indian gaming 

under tribal gaming ordinances, which are approved by the NIGC provided that 

they conform to minimum federal statutory standards. 

For Class II gaming, tribal regulators are supported by continuous monitoring of 

the NIGC. For Class III gaming, tribal regulators are supported by State regulators 

in accordance with Tribal-State compacts and the NIGC has a specialized role. Specifically, the NIGC: 

• NIGC reviews and approves tribal gaming regulatory laws; 

• NIGC reviews tribal background checks and gaming licenses; 

• NIGC receives independent annual audits of tribal gaming facilities; 

• As part of the annual audits, NIGC receives audits of gaming contractors over 

$25,000; and 

• NIGC approves management contracts. 

In addition to the Tribal-State Compact system, IGRA specifically provides that 

NIGC authority to work with tribal governments to ensure the enforcement of NIGC 

approved tribal ordinances under 25 U.S.C. sec. 2713: 

Subject to such regulations as may be prescribed by the Commission, the Chairman shall have authority to levy and collect appropriate civil fines, not to exceed $25,000 per violation, against the tribal operator of an Indian game or a 

management contractor engaged in gaming for any violation of any provision of 

this chapter, any regulation prescribed by the Commission pursuant to this 

chapter, or tribal regulations, ordinances, or resolutions approved under section 

2710 or 2712 of this title. 

Thus, the NIGC has authority to assist the tribes in ensuring proper enforcement 

of those tribal minimum internal control standards. This role continues and was not 

interrupted by the Federal Court decision in Colorado River Indian Tribes v. 

NIGC. 1

Top Down/Inside the Beltway Approach to Regulation 

Our concern with the NIGC is that they have adopted a top-down, inside the beltway approach to the regulation of Indian gaming. Rather, than coming out to the 

field to assist tribal governments in ensuring that tribal regulatory systems are running appropriately, the NIGC constantly wants to write new Federal rules. 

To strengthen the United States’ government-to-government relationships with 

Indian tribes, President Clinton issued Executive Order No. 13175 (2000), which directs Federal agencies to consult and coordinate with Indian tribes on Federal rulemaking and agency actions that have substantial direct impacts on tribal self-government, tribal lands and treaty rights. In considering Federal rulemaking that so 

impact tribal interests, the Executive Order provides that agencies shall adhere to 

the following criteria: 

• Respect for tribal self-government and sovereignty, treaty and other rights that 

arise from the Federal trust relationship; 

• Provide tribes with the maximum administrative discretion possible; and 

40 

• Encourage tribes to develop their own policies to achieve objectives, defer to 

tribal standards where possible, and otherwise preserve the prerogatives and 

authority of Indian tribes. 

The Executive Order also directs Federal agencies to consider the need for the 

regulation in light of tribal interests, take tribal concerns into account, and use consensual mechanisms for decision-making, including negotiated rulemaking, where 

appropriate. On September 23, 2004, President Bush issued an Executive Memorandum directing Federal agencies to adhere to Executive Order 13175. 

We acknowledge that the NIGC is willing to sit down with tribal leaders and is 

willing to attend tribal meetings. Unfortunately, tribal leaders often come away 

with the feeling that NIGC had a pre-determined decision and that despite tribal 

concerns, NIGC will not move off its own bureaucratic agenda to find a way to respect tribal sovereignty and self-government. We are sometimes told that consultation does not mean agreement but consultation is supposed to be meaningful and 

it should require consideration of tribal points of view and accommodation of those 

perspectives to the greatest extent possible. 

For example, when the NIGC was developing its Class II regulatory proposals it 

was very reluctant to consider tribal government points of view, yet when the gaming manufacturers made a point, the NIGC would listen to them. The other thing 

that happens is when we sometimes appear to make some headway in promoting 

tribal government concerns, the Chairman and Commissioners go back and talk to 

NIGC lawyers and any sign of accommodation is later dropped. There is simply too 

much inside the beltway counseling and not enough field experience. 

Recommendation: Make the Federal-Tribal Government-to-Government Relationship Meaningful! The NIGC should be directed by statute to follow Executive Order 

No. 13175 and we call upon the Senate Committee to consider a bill similar to H.R. 

5608. If possible, we would ask the Committee to pass that bill with an expanded 

scope to cover other Federal agencies. 

Training and Technical Assistance 

In 2006, Congress gave the NIGC new authority to work with tribal governments 

to provide technical assistance and training to tribal regulators. Public Law No. 

109–221 (2006). Specifically, the NIGC Accountability Act is intended to do three 

things: 

• Provide increased funding for NIGC by empowering NIGC to assess a fee up 

to the level of $0.80 per $1,000 of gross Indian gaming revenue; 

• Require NIGC to follow the Government Performance and Results Act; and 

• Require NIGC to include a training and technical assistance plan in its GPRA 

compliance plan. 

NIGC is currently undertaking a paperwork shuffle of its GPRA compliance plan, 

but Indian tribes were not consulted in its development, there have been no national 

or regional meetings scheduled to consult with tribes on the GPRA plan, and no 

training or technical assistance programs have been undertaken pursuant to the 

plan. NIGC has increased its fees and is spending more money under the fee provisions. 

Recommendation: NIGC Must Hire a Training/Technical Assistance Director with 

Indian Gaming Experience! We urge the Senate Committee to ensure that the NIGC 

hires a training and technical assistance director to begin providing training and 

technical assistance programs to tribal governments and tribal gaming regulators. 

We strongly believe that the NIGC training and technical assistance director should 

be someone who has actual Indian gaming field experience (meaning that they have 

worked for an Indian tribe). 

Recommendation: NIGC Must Provide Training/Technical Assistance that Meets 

or Exceeds Industry Standards! If Washington lawyers who have never worked in 

the field sit around a conference table at the agency headquarters and dream up 

training subjects, the NIGC is headed for failure in this area. We need practical 

training and useful technical assistance that can really help tribal regulators to establish and maintain top-notch systems that meet or exceed industry standards. If 

lawyers who do not know the industry standards are assigned to the task of training 

and technical assistance, it is a waste of time. 

The NIGC Should Apply Indian Preference in Hiring 

Recommendation: NIGC Must Use Indian Preference in Hiring! Under existing 

law, NIGC should provide for Indian preference in hiring. On March 31, 2008, the 

U.S. District Court for the District of Columbia ruled that Indian preference in hiring applies to all ‘‘positions in the Department of the Interior, whether within or 

41 

without the Bureau of Indian Affairs, that directly and primarily relate to providing 

services to Indians... .’’ Indian Educators Federation v. Dirk Kempthorne,llF.3dll(Civ. No. 04–01215) (March 31, 2008). IGRA expressly places the 

NIGC within the Department of the Interior and it is without question that NIGC 

is engaged in providing regulatory services for Indian gaming, which is a tribal government activity. Hence, NIGC is directly and primarily providing regulatory services to Indians within the meaning of Indian preference. Yet, NIGC has a poor track 

record of hiring Indians: only 3 out of 17 supervisory personnel at the NIGC Washington headquarters are Indian. This must change. 

Federal Advisory Committees 

In general, the Federal Advisory Committee Act (FACA) frowns on the use of Federal Advisory Committees because they are composed of unelected experts who may 

have an unknown impact on Federal policy while the public is excluded. There is 

an exception for consultation with state, local and tribal government representatives 

because such consultation is appropriate to promote federalism, comity, and respect 

for tribal self-government. Normally, when a Federal Advisory Committee is formed 

a plan must be filed with GSA. 

NIGC simply claims exemption from FACA and constitutes and disbands Tribal 

Advisory Committees at will. Recommendation: Tribal Advisory Committees Should 

be Formed Only After Consultation with Tribal Governments about their uses and 

purposes. They should be staffed with tribal government representatives freely nominated by sovereign tribal governments. Instead, NIGC calls for experts and puts 

qualifications on its Tribal Advisory Committees that fly in the face of FACA. For 

example, NIGC just disbanded a MICS Tribal Advisory Committee and Technical 

Standards Tribal Advisory Committee and shortly thereafter, announced the formation of a new Tribal Advisory Committee that would limit its membership to tribal 

regulators with 5 or more years of experience. That means that no elected tribal 

government leaders will be on the committee and no gaming operators will be on 

the committee. That seems to subvert the FACA exception that NIGC is relying 

upon by cherry-picking committee members who are amenable to the NIGC viewpoint. 

Recommendation: NIGC Should Submit Its Claimed FACA Exception to GSA for 

Review. NIGC should submit its Tribal Advisory Committee plans to GSA for approval as an exception to FACA to ensure that it is not end-running the statute. 

Conclusion: NIGC Must Respect Tribal Governments as Day-to-Day Regulators 

NIGC should embrace Congress’ direction to provide training and technical assistance to tribal governments and tribal gaming regulators. Moreover, NIGC should 

meaningfully consult with tribal governments concerning the need for new regulations. For example, where NIGC just issued regulations in 2002 on Class II 

Technologic Aids, NIGC should truly consider the importance of simply maintaining 

those regulations as an alternative to new regulations. Especially, where those 2002 

regulations were approved by the Federal Court of Appeals! 

In short, NIGC needs to become a more user friendly agency, and stop the top/ 

down inside the beltway regulatory directive approach to its mission. Tribal governments invest hundreds of millions of dollars for regulation and NIGC is not happy 

unless it is duplicating tribal government regulation. 

Senator TESTER. Thank you, Mr. Luger. 

Ms. Rand? 

STATEMENT OF KATHRYN R.L. RAND, J.D., PROFESSOR, 

UNIVERSITY OF NORTH DAKOTA SCHOOL OF LAW; CO– 

DIRECTOR, INSTITUTE FOR THE STUDY OF TRIBAL GAMING 

LAW AND POLICY; ACCOMPANIED BY STEVEN ANDREW 

LIGHT, PH.D., PROFESSOR, UNIVERSITY OF NORTH DAKOTA 

COLLEGE OF BUSINESS AND PUBLIC ADMINISTRATION; CO– 

DIRECTOR, INSTITUTE FOR THE STUDY OF TRIBAL GAMING 

LAW AND POLICY 

Ms. RAND. Thank you, Senator Dorgan and the Committee for inviting us to testify this morning. My name is Kathryn Rand. I am 

a professor at the University of North Dakota School of Law, and 

42 

with me is Dr. Steven Light, a professor at the University of North 

Dakota College of Business and Public Administration. 

We are the Co-Directors of the Institute for the Study of Tribal 

Gaming Law and Policy at the University of North Dakota. 

We are not here to criticize the NIGC. Our testimony will focus 

on three issues raised in our written statement: consultation with 

tribes; accountability; and agency capture. These issues, including 

our recommendations for each, are addressed in detail in our written statement. 

As the Committee knows, the NIGC has a government-to-government tribal consultation policy, and as you have heard, tribal leaders have criticized the NIGC’s consultation as pro forma and without substantive impact on decisions. These criticisms are illustrated by the protracted process of promulgating Class II brightline regulations. 

The NIGC’s accountability is complicated by its varied stakeholders and the fact that it addresses highly controversial and 

technically complex issues. Several questions related to the Commission’s accountability are raised in the context of the Class IIproposed regulations. 

For example, are the proposed regulations necessary, given the 

Commission’s 2002 amendments and the Federal court’s application of the same? And is the content of the proposed regulations 

consistent with congressional intent, especially given the potential 

economic impact on tribes? 

With agency capture, the question is how to balance appropriate 

government-to-government consultation and stakeholder accountability with the risk of capture. For example, both tribes and game 

manufacturers have a vested interest in a strong Class II market 

and have sought to influence the NIGC’s regulation of the same. 

We have a few preliminary recommendations in each of these 

areas. With regard to consultation, we recommend comparing other 

agency practices. For example, the IHS has a relatively detailed 

and specific consultation policy which requires the definition of consultation and specific triggers for the process of consultation. 

We also recommend clarifying the nature of government-to-government consultation, which should be uniquely geared toward 

tribes’ governmental status and their relationship with the Federal 

Government. 

And also with regard to consultation, we recommend considering 

consent-based policy-making in the form of negotiated rulemaking. 

True government-to-government consultation may afford tribes a 

role in decision-making. There is a need for clear criteria and 

mechanisms to trigger negotiated rulemaking. For example, the 

IHS policy ties negotiated rulemaking to specific issues. 

With regard to accountability, we recommend preserving the 

NIGC’s role in tribal institution-building. The NIGC has a dual role 

of facilitating and overseeing tribal regulation of gaming. Any accountability measures should take into account the NIGC’s facilitation of effective tribal regulation. 

Also with regard to accountability, we recommend accounting for 

the NIGC’s effective gambling regulation. The NIGC is also responsible for some direct regulation of gaming, and this regulation 

should be tailored to IGRA’s goals and to the specific needs of the 

43 

tribal gaming industry, including fostering tribal economic development. 

Finally, with regard to accountability, we recommend increasing 

transparency as much as possible. 

On the issue of capture, we recommend ensuring sufficient funding and personnel for the NIGC and, perhaps more importantly, 

weighing the capture risk against IGRA’s goals and the NIGC’s 

role in facilitating tribal institution-building. There is a need for 

the NIGC to be informed by tribal and industry expertise. We recommend guidelines for the formation of work groups and advisory 

committees, as well as their input. 

Thank you. Both Dr. Light and I stand ready to answer the Committee’s questions. 

[The prepared statement of Ms. Rand follows:] 

PREPARED STATEMENT OF KATHRYN R.L. RAND, J.D., PROFESSOR, UNIVERSITY OF

NORTH DAKOTA SCHOOL OF LAW; CO-DIRECTOR, INSTITUTE FOR THE STUDY OF

TRIBAL GAMING LAW AND POLICY; ACCOMPANIED BY STEVEN ANDREW LIGHT, 

PH.D., PROFESSOR, UNIVERSITY OF NORTH DAKOTA COLLEGE OF BUSINESS AND

PUBLIC ADMINISTRATION; CO-DIRECTOR, INSTITUTE FOR THE STUDY OF TRIBAL

GAMING LAW AND POLICY

Good morning. We thank Senator Dorgan and the Committee for this opportunity 

to appear before you today to discuss the role of the National Indian Gaming Commission (NIGC) in effective and appropriate regulation of Indian gaming. 

We co-direct the Institute for the Study of Tribal Gaming Law and Policy at the 

University of North Dakota, which provides legal and policy assistance related to 

tribal gaming enterprises to all interested governments and organizations, assists 

tribes with gaming enterprises in pursuing reservation economic development and 

building strong tribal governments, and contributes to the scholarly and practical 

research and literature in the area of tribal gaming. Our testimony today is informed by our research and scholarship in the area of Indian gaming over the past 

twelve years. 

In the last two decades, the tribal gaming industry has seen rapid expansion 

under the regulatory framework of the Indian Gaming Regulatory Act of 1988 

(IGRA). Some 400 tribal gaming establishments in as many as 30 states are operated by 230 tribes that have decided to pursue gaming to create jobs, facilitate economic development, and provide public services to their members. The Indian gaming industry generated $25 billion in 2006. As a peculiar intersection of federal Indian law and gambling law, Indian gaming is a particularly complicated and highly 

specialized topic, giving rise to numerous legal questions fraught with political and 

policy implications. A regulatory official must respond to a phenomenal array of 

such questions, from concepts related to abstract theoretical principles or 

preconstitutional history to those with highly technical answers grounded in the interpretation of current federal law and regulations. Given the growth of the industry 

and the myriad and recurring legal and political issues concerning Indian gaming, 

it perhaps should come as no surprise that many, including members of Congress, 

see Indian gaming as meriting vigorous federal oversight. 

The congressional goals reflected in IGRA and its legislative history contemplated 

both federal Indian law and policy and Congress’s expectations for the tribal gaming 

industry. Although federal Indian policy may not have significantly changed since 

1988, the Indian gaming industry certainly has. The predominant view, at least of 

non-tribal policymakers and the general public, is that the rapid growth of the industry has created significant problems that should be solved through more stringent regulation. Congress’s goal in providing sufficient regulation of tribal gaming 

to ensure legality and protect the financial interests of gaming tribes remains critically important. At the same time, we believe the success of the industry has created opportunities to achieve two additional goals of at least equal importance in 

the long term. Together, the three goals of sound regulation, tribal institution building, and improving tribal-state relations, each of which is based on Congress’s original intent in enacting IGRA, should serve as lodestars for Congress’s policymaking 

for Indian gaming. See Kathryn R.L. Rand & Steven Andrew Light, How Congress 

Can and Should ‘‘Fix’’ the Indian Gaming Regulatory Act: Recommendations for Law 

and Policy Reform, 13 VA. J. SOC. POL’Y & L. 396 (2006). 

44 

Today we have been asked to provide our opinions related to Congress’s legislative 

oversight of the NIGC, the independent federal regulatory agency charged with regulating Indian gaming. Indian gaming presents complexities unlike most other industries subject to federal regulation. We believe that the NIGC has been largely 

successful in its efforts to work with tribes in regulating a complex and changing 

industry. The members of this Committee undoubtedly are familiar with the NIGC’s 

authority and many of the issues swirling around its implementation and enforcement of IGRA and federal Indian law and policy. As the NIGC itself has acknowledged, there is a strong perception among tribes that the NIGC does not adequately 

consult with tribal leaders regarding proposed regulations, a criticism raised repeatedly during the NIGC’s protracted process of issuing proposed regulations related 

to Class II gaming. Recently, the NIGC requested assistance from the National Indian Gaming Association (NIGA) in developing and implementing procedures and 

practices for government-to-government consultation with tribes. 

We welcome this opportunity to contribute our views on how best to ensure appropriate congressional oversight and efficient and accountable governance through the 

NIGC’s meaningful consultation and cooperation with tribal governments. In this 

statement, we focus on three issues related to the NIGC’s role that we believe may 

be helpful to the Committee: communication and consultation policies and practices, 

accountability, and agency capture. 

I. Scope of NIGC Powers 

In IGRA, Congress specified several goals related to the overarching tenets of federal Indian policy. Congress intended IGRA to codify tribes’ right to conduct gaming 

on Indian lands as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments, while providing sufficient regulation to ensure legality and to protect the financial interest of gaming tribes. Congress also enacted IGRA to establish an independent federal regulatory authority in the form of 

the NIGC. 

IGRA situates the NIGC within the U.S. Department of the Interior. At least two 

of the NIGC’s three members must be enrolled members of a tribe. IGRA also requires the Commission to submit a report, with minority views, to Congress every 

two years. The NIGC’s mission is ‘‘to regulate gaming activities on Indian lands for 

the purpose of shielding Indian tribes from organized crime and other corrupting influences; to ensure that Indian tribes are the primary beneficiaries of gaming revenue; and to assure that gaming is conducted fairly and honestly by both operators 

and players.’’ IGRA assigns some powers to the NIGC Chair, and others to the full 

Commission. The powers of the Chair include authority to issue temporary closure 

orders, to levy and collect civil fines, to approve tribal ordinances and resolutions, 

and to approve management contracts. The Chair’s decisions in these areas may be 

appealed to the full Commission. The Commission also may delegate additional authority to the Chair. The Commission’s powers include authority to order permanent 

closure, to monitor and inspect Class II gaming, to conduct background investigations, to issue self-regulation certificates, and to issue subpoenas, order testimony, 

take depositions, and hold hearings. The NIGC also exercises broad authority to 

‘‘promulgate such regulations and guidelines as it deems appropriate to implement 

[IGRA’s] provisions.’’ 25 U.S.C. § 2706(b)(10). In addition to promulgating formal 

regulations, the NIGC also issues opinion letters and other informal interpretations 

of IGRA. 

In 2000, President Clinton issued Executive Order 13175, titled ‘‘Consultation and 

Coordination with Indian Tribal Governments.’’ The Executive Order sets forth 

three ‘‘fundamental principles’’ to guide regulations, legislative proposals or recommendations, and other policy statements or actions that have ‘‘substantial direct 

effects on one or more Indian tribes’’: 

• The unique nature of the tribal-federal relationship 

• Federal law’s recognition of tribal sovereignty 

• Federal Indian policy recognizing tribal self-government and supporting tribal 

sovereignty and self-determination 

The Executive Order further specifies ‘‘policymaking criteria,’’ directing federal 

agencies to: 

• Respect tribal self-government and sovereignty 

• Grant tribal governments the maximum administrative discretion possible 

• Encourage tribes to develop their own policies to achieve federal program objectives, defer to tribes to establish standards, and consult with tribes as to the 

need for federal standards 

45 

In a 2004 memorandum, President Bush directed federal agencies to adhere to the 

principles reflected in the Executive Order and to ‘‘work with tribal governments in 

a manner that cultivates mutual respect and fosters greater understanding.’’ Accordingly, the NIGC adopted a Government-to-Government Tribal Consultation Policy. 

In addition to incorporating the fundamental principles set out in the Executive 

Order, the NIGC policy references IGRA’s recognition of tribal sovereignty, its policy 

goals, and its regulatory framework, including the primary authority and responsibility of tribes over Indian gaming. The policy provides that: 

to the extent practicable and permitted by law, the NIGC will engage in regular, timely, and meaningful government-to-government consultation and collaboration with Federally recognized Indian tribes, when formulating and implementing NIGC administrative regulations, bulletins, or guidelines, or preparing legislative proposals or comments for Congress, which may substantially 

affect or impact the operation or regulation of gaming on Indian lands by tribes 

under the provisions of IGRA. 

The NIGC policy also sets forth ‘‘policymaking principles and guidelines,’’ including: 

• Reasonable consideration of variations among tribes, gaming operations, and 

tribal-state compacts 

• Qualified deference to tribal regulations and standards for Indian gaming 

• Provision of technical assistance to tribes in complying with federal law and in 

implementing their own policies and standards 

• Restraint from enacting policies that will impose substantial direct compliance 

or enforcement costs on tribes, if the policies are not required by IGRA or necessary to further IGRA’s goals 

• Granting tribes the maximum administrative and regulatory discretion possible 

in operating and regulating Indian gaming, and elimination of unnecessary and 

redundant federal regulation ‘‘in order to conserve limited tribal resources, preserve the prerogatives and sovereign authority of tribes over their own internal 

affairs, and promote strong tribal government and self-determination’’ 

The policy’s procedures and guidelines have as the primary focus consultation and 

collaboration with individual tribes. The consultation procedures promise ‘‘early notification’’ to tribes of proposed policies, ‘‘adequate opportunity’’ for discussion, and 

‘‘meaningful input regarding the legality, need, nature, form, content, scope and application of such proposed regulations, including opportunity to recommend other alternative solutions or approaches.’’ As part of the consultation process and before 

issuing a final decision, the NIGC will ‘‘answer tribal questions and carefully consider all tribal positions and recommendations.’’ The NIGC also will ‘‘consult with 

affected tribes to select and establish fairly representative intertribal work groups, 

task forces, or advisory committees’’ in developing administrative regulations or legislative proposals. Finally, the policy provides that ‘‘[t]he NIGC will, to the extent 

it deems practicable, appropriate, and permitted by law, explore and consider the 

use of consensual policy making mechanisms, including negotiated rulemaking.’’ 

One of the more pressing issues with which the NIGC has grappled is game classification. If a particular game falls within Class II, then it may be operated by a 

tribe without a tribal-state compact; if the game falls within Class III, however, 

legal operation requires a compact. IGRA’s definitions do not offer much in the way 

of technical guidance. Class II gaming is defined as ‘‘bingo (whether or not electronic, computer or other technologic aids are used in connection therewith),’’ as well 

as some card games. Class II gaming specifically excludes house-banked card games 

and ‘‘electronic or electromechanical facsimiles of any game of chance or slot machines of any kind.’’ Games excluded from Class II fall within Class III, a residual 

category that includes all other forms of gaming (excepting, of course, Class I’s traditional games). In addition to the statutory definitions, the NIGC promulgated regulations meant to clarify the distinctions between Class II and Class III gaming. 

The current regulations in large part mimic the statutory language, but also provide 

‘‘plain English’’ definitions and additional guidance. The NIGC also issues advisory 

opinions on whether a specific game is Class II or Class III. 

Whether a game falls within the catch-all of Class III or qualifies as a Class II 

game has significant impact. The legality of Class II games depends only on whether ‘‘such gaming’’ is permitted in the state and the tribe retains exclusive regulatory 

jurisdiction (with limited federal oversight) over the games. Class III games, on the 

other hand, are allowed only under the terms of a valid tribal-state compact. 

As reflected in IGRA’s legislative history, Congress included the Class II 

‘‘technologic aid’’ provision to ensure that tribes ‘‘have maximum flexibility to utilize 

46 

games such as bingo and lotto for tribal economic development.’’ Tribes’ Class II 

games should not be limited to ‘‘existing game sizes, levels of participation, or current technology,’’ but should ‘‘take advantage of modern methods’’ of conducting 

games. See S. Rep. 100–446, 100th Cong. 2d Sess., 1988 U.S.C.C.A.N. 3071. Although Congress’s intent in authorizing Class II technologic aids may have been 

clear, the line between a Class II technologic aid and a Class III electronic facsimile 

was not. IGRA did not define either term, and until it amended its regulations in 

2002, the NIGC offered little additional guidance. The 2002 amendments provided 

more detailed definitions, as well as illustrative examples of Class II technologic 

aids. The 2002 amendments were applied by the federal courts in United States v. 

Santee Sioux Tribe, 324 F.3d 607 (8th Cir. 2003), and Seneca-Cayuga Tribe of Oklahoma v. NIGC, 327 F.3d 1019 (10th Cir. 2003), to conclude that the machines at 

issue in each case fell within Class II. 

In both Santee Sioux Tribe and Seneca-Cayuga Tribe, the U.S. Department of Justice took a position contrary to that of the NIGC, contending that both games at 

issue were Class III electronic facsimiles or, alternatively, even if Class II 

technologic aids, the games violated the Johnson Act’s criminal prohibition against 

gambling devices in Indian country. Because the Johnson Act is a federal criminal 

statute separate from IGRA and enforced by the Justice Department, the NIGC’s 

interpretation of the Johnson Act is not entitled to the same deference as its interpretation of IGRA. Though agency officials were not uniform in their reading of the 

statutes, generally speaking the NIGC and the Justice Department disagreed over 

the Johnson Act’s applicability to Class II aids. In 2005, the Justice Department 

sought legislation that would include Class II gambling devices within the scope of 

the Johnson Act. The Justice Department’s proposal was met with tribal opposition, 

and failed to find a sponsor in Congress. 

In the meantime, though, the NIGC was in the protracted process of issuing new, 

highly technical regulations governing Class II electronic aids, sometimes called the 

‘‘bright line’’ rules. In 2004, the NIGC formed a Class II Game Classifications Standards Advisory Committee, charged with assisting the NIGC in developing definitive 

classification and technical standards for distinguishing Class II aids from Class III 

facsimiles. In May 2006, the NIGC published its first set of proposed regulations. 

During the public comment period, it collected comments from over 80 tribes, as 

well as state and local governments, game manufacturers, citizen groups, and others, and conducted multiple hearings. See http://www.nigc.gov/LawsRegulations/ 

ProposedAmendmentsandRegulations/ 

ClassIIGameClassificationStandardsWithdrawn/tabid/705/Default.aspx. 

The 2006 proposed ‘‘bright line’’ regulations were criticized by tribes on two 

grounds. First, in requiring slower play, the rules would undermine the Class II 

market. An economic impact study concerning the 2006 proposed regulations commissioned by the NIGC found the rules would have ‘‘a significant negative impact’’ 

on Class II gaming revenue, and therefore on the tribes that operate such games. 

The study concluded that the proposed changes would reduce gaming revenue by 

$142.7 million, with an accompanying loss of $9.6 million in non-gaming revenue 

and a $17.4 million reduction in tribal government revenue. Second, the regulations 

would trigger IGRA’s tribal-state compacting requirement. In drawing a bright line 

between Class II and Class III games, the proposed regulations would shift some 

Class II games into the Class III category. Tribes in states that allow Class III gaming would need to convince the state to negotiate a new compact, opening up the 

process to the whims and vagaries of state politics and the possibility of state-mandated revenue sharing. 

Interagency contestation with the Department of Justice and continued criticism 

from tribes and game manufacturers considerably slowed the NIGC’s promulgation 

of the new Class II regulations. Following the initial announcement of the 2006 proposed standards, a group of prominent manufacturers formed the Technical Standards Work Group (TSWG) to draft an alternative regulatory scheme to submit to 

the NIGC. Together with the Technical Standards Tribal Advisory Committee, a 

group of tribal operators and experts that had been advising the NIGC, the TSWG 

submitted alternative Technical Standards to the Commission in early 2007. In February 2007, the NIGC formally withdrew the 2006 proposed regulations. The NIGC 

published its new set of proposed regulations in October 2007, eventually extending 

the public comment period until March 9, 2008. On February 1, 2008, the NIGC released a second economic impact study, which estimated that under the 2007 proposed regulations tribes could lose up to $2.8 billion in revenues and face expenses 

of almost $350 million in redeveloping Class II machines. Both tribal and industry 

leaders have complimented Chairman Hogen’s efforts and acknowledged some improvements over the 2006 proposed regulations, but also have expressed frustration 

47 

and disappointment in both the process and the substance of the 2007 proposed regulations. 

II. Concerns Expressed About the NIGC: The Goldilocks Gamut 

Indian gaming is a product of the confluence of law and public policy that sanction and regulate the industry at the tribal, state, and federal levels. With so much 

at stake for so many stakeholders, it is no surprise that the resultant regulatory 

politics of tribal gaming is complex and controversial. The NIGC is charged with the 

complex task of monitoring and enforcing IGRA in relation to a host of ever-changing issues. The Commission interfaces with 230 sovereign tribal governments, as 

many as 30 sovereign state governments, and a powerful industry lobby that increasingly resembles that of the commercial gaming industry—in part because it includes identical players with a global reach, from game manufacturers to the commercial conglomerates that operate the majority of the casinos in Reno, Atlantic 

City, and on the Las Vegas Strip, and in part because of the growing clout of tribal 

advocacy associations like NIGA and its state and regional partners, such as the 

California Nations Indian Gaming Association (CNIGA). 

Despite its broad authority under IGRA and its generally successful efforts to regulate a complex industry, the NIGC variously has been accused of being underfunded, understaffed, and underempowered to regulate tribal gaming, overly solicitous of tribal, state, or industry interests, and overzealous and overreaching in exercising its statutory grant of authority. 

In the last 20 years, the NIGC has faced a number of ‘‘hot-button’’ issues across 

the U.S. with which the agency is involved through direct regulation or advisory 

opinions or in conjunction with decision making by other federal agencies. These 

highly controversial, sometimes rapidly developing, and often technically complex 

issues include: 

• Promulgation of rules defining Class II technologic aids and Class III electronic 

facsimiles, as detailed above 

• Gaming on newly acquired lands, including land-into-trust and ‘‘Indian land’’ 

determinations 

• Enforcement actions and closure of gaming operations 

• Tribal-state compacting and a ‘‘Seminole Tribe’’ fix to address perceived political 

imbalances between tribal and state governments 

• Management contracts and consulting agreements with non-tribal parties 

• Tribal use of gaming revenue, including transparency and accountability 

• Employment issues, including unionization of tribal casino employees 

• Tribal acknowledgment determinations 

• Differences of opinion across and within federal agencies 

• Calls to amend IGRA and other federal statutes to address the above issues and 

more 

A critical feature unifying the issues the NIGC faces is that they vary by tribe, 

by state, and even by gaming establishment, creating a tension between the need 

for uniform industry regulatory standards to effectuate IGRA’s overarching policy 

goals, and the highly localized and particularized nature of issues that might compel 

highly tailored and even tribe-specific regulation. Elsewhere we have written in detail about the very different issues faced by tribes across the U.S., and the governmental challenges they create. See, e.g., STEVEN ANDREW LIGHT & KATHRYN 

R.L. RAND, INDIAN GAMING AND TRIBAL SOVEREIGNTY: THE CASINO 

COMPROMISE (2005); Rand & Light, How Congress Can and Should ‘‘Fix’’ the Indian Gaming Regulatory Act. 

Depending on the issue and the interests involved, concerns expressed about the 

NIGC’s authority, resources (including funding and personnel), and decisions have 

run a Goldilocks gamut, ranging from ‘‘far too much’’ to ‘‘nowhere near enough.’’ 

Rarely is the agency seen as having or exercising ‘‘just the right amount’’ of regulatory authority—although admittedly few agencies are. 

We turn to three prominent critiques of NIGC authority that the above issues illustrate, and which may be of the greatest concern to this Committee as we sit before you in today’s oversight hearing: the NIGC’s communication and consultation 

policies and practices, its accountability to various stakeholders, including Congress 

and tribal governments, and the possibility of agency capture. 

A. Communication and consultation policies and practices 

Under the NIGC’s own government-to-government consultation policy, the NIGC 

routinely communicates with tribes through ‘‘Dear Tribal Leader’’ letters, attends 

48 

tribal gaming association and other trade conferences and meetings, and conducts 

consultation sessions with individual tribal leaders. It also has convened working 

groups and advisory committees to assist in policy formulation. 

Nevertheless, some tribal leaders and others have criticized the NIGC’s consultation process as being pro forma; that is, the letters are sent and the meetings and 

sessions for the most part occur, but the consultation efforts are too little, too late 

(for instance, key information is released just before relevant deadlines, or consultation comes only after regulations are fully drafted and formally proposed), or tribal 

input does not have a significant or substantive impact on the NIGC’s decision making. For example, the NIGC’s protracted efforts to promulgate Class II ‘‘bright line’’ 

regulations have been subject to extensive criticism regarding both the process and 

substance of the NIGC’s consultation with affected tribes. Recently, NIGA and a 

number of tribal leaders have criticized the fact that the NIGC closed the formal 

notice-and-comment period on the proposed regulations just over a month after releasing an economic impact study it commissioned that estimated the proposed regulations would cost tribes as much as $2.8 billion in lost revenues. 

Succinctly put, the question is whether the NIGC in fact conducts timely and 

meaningful communication and consultation with the parties it regulates, which include sovereign tribal governments. The answer, though, depends upon the nature 

of government-to-government consultation—an area where tribes and the federal 

government may not agree. 

B. Accountability 

Like all administrative agencies, the NIGC is subject to concerns about accountability, whether to its enabling legislation (and therefore to congressional intent), 

its own internal policies, or appropriate stakeholders. Previous congressional hearings, including a Senate Indian Affairs Committee oversight hearing at which we 

testified in April 2005, have aired concerns about the NIGC’s resources and capacity 

to adequately carry out its regulatory authority under IGRA. Despite its formal tribal consultation policy, the NIGC is one of three federal agencies singled out in a 

recent House bill (H.R. 5608, 110th Congress, 2d Session) meant to ensure an ‘‘accountable consultation process’’ between the agencies and tribal governments, including ‘‘meaningful and timely input by tribal officials in the formulating, amending, implementing, or rescinding [of] policies that have tribal implications.’’ The 

broad and varied range of stakeholders to which the NIGC must at some level answer, including Congress, tribes, states, industry, and the public, further complicates the issue of agency accountability. 

The attempt to promulgate Class II regulations illustrates several additional 

issues related to accountability. Some have suggested that, given the NIGC’s 2002 

amendments and subsequent application of the same in the federal courts, the proposed regulations were the result of pressure from the Justice Department and some 

members of Congress rather than any real need for new standards. From that perspective, the NIGC’s accountability to Congress and other federal agencies trumped 

accountability to tribes. The distinction between a Class II technologic aid and a 

Class III electronic facsimile is, in many ways, a technical one. Game manufacturers 

and tribal regulators complained that the proposed standards lacked cognizance of 

game technology and were too rigid to accommodate innovation, therefore 

hamstringing the manufacture of games that would allow tribes to maintain and 

further develop the Class II market through the use of ‘‘modern methods’’ of conducting games. Some tribes have been critical of what they saw as continual NIGC 

lip service to tribal sovereignty and self-government, while perhaps embodying the 

stereotype of a federal agency that purports to be ‘‘here to help’’ but in reality simply assumes control. Others pointed out that with an estimated impact of $1 billion 

to $2.8 billion in lost revenues, the proposed regulations would undermine IGRA’s 

goals of tribal economic development, tribal self-sufficiency, and strong tribal governments. 

The NIGC frequently must deal with and resolve highly controversial and technically complicated issues in which the varied nature of stakeholders and their interests make it difficult to assess the outcomes. The question here is how best to 

assess whether the NIGC is ‘‘doing its job’’ while appropriately balancing relevant 

imperatives. 

C. Agency capture 

A frequently expressed concern in regulatory administration is the evolution of a 

capture effect. Agency capture occurs as regulator and industry develop an iterated 

relationship in which industry views come to govern how regulation occurs. Without 

sufficient and appropriate legislative oversight, the agency becomes a tool of those 

it seeks to regulate. The conditions under which this model prevails are found in 

49 

the relationship between the public and private sectors. The profit motive is best 

served by a favorable regulatory environment, and agency independence is sacrificed 

at the altar of private gain. Ultimately, the agency fails to promote the public interest. One need only look at recent headlines concerning American Airlines and the 

FAA to find evidence of agency capture—and calls for more and better legislative 

oversight in the future. 

In the context of the regulation of Indian gaming by the NIGC, the capture criticism stems from two oft-made assertions: the NIGC is a ‘‘toothless tiger,’’ and tribal 

government gaming commissions are akin to ‘‘the fox guarding the henhouse.’’ See, 

e.g., Donald L. Barlett & James B. Steele, Wheel of Misfortune, TIME (Dec. 16, 

2002), 48, 59. The charge is that the NIGC is unwilling or lacks the resources to 

guard against capture by the numerous gaming tribes it regulates or that tribal and 

industry interests may align in such a way as to exacerbate the risk. For instance, 

in the context of the development of the proposed Class II ‘‘bright line’’ regulations, 

both tribes and game manufacturers have vested interests in a competitive and lucrative Class II market. Both groups possess valuable and relevant knowledge and 

technical expertise that the NIGC has taken into account through what has ended 

up being a protracted and iterated process of consultation with working groups comprised of tribal officials and game manufacturers. 

As we explained to this Committee in our 2005 testimony, our views on agency 

capture are based on our sense of at least three key differences between the Indian 

gaming and commercial gambling industries: regulatory structures, policy impetus, 

and who benefits. At the structural level, capture theory focuses on the capture of 

an entire agency by the industry. However, in contrast to commercial gaming, we 

note that tribal gaming operations are subject to extensive tribal, state, and federal 

regulations. Simply put, there are too many regulatory authorities involved to allow 

one (or the capture of one) to dominate. The policy impetus behind Indian gaming 

revolves around the goals stated in IGRA: tribal economic development, self-sufficiency, and self-governance. Tribal gaming commissions have a clear stake in promoting these goals, which are quite different than the profit motivation in the private sector. The vast majority of gaming tribes see Indian gaming as the first viable 

means of economic development in generations, and tribal regulatory authorities are 

less likely to lose sight of effective regulation and compliance with policy goals than 

if they were regulating private industry. These policy motivations relate to the third 

key difference between the private and public sectors: who benefits. Agency capture 

subverts a public interest. But Indian gaming directly supports tribal governments 

and underwrites their ability to provide essential government services—a clear public interest. 

Here, then, the question is how to balance appropriate government-to-government 

tribal consultation and accountability to stakeholders with the risk of agency capture. 

III. Recommendations 

In exercising oversight of the NIGC and its role in regulating the Indian gaming 

industry, Congress should be guided by the best available data and analysis. The 

same definitely is true for the NIGC in exercising its authority as an independent 

regulatory agency. In our prior work, we have identified three lodestar policy goals 

for Indian gaming law and policy. The three goals—sound regulation, tribal institution building, and improving tribal-state relations, each of which is based on 

Congress’s original intent in enacting IGRA—should serve to guide this Committee 

in its consideration of the issues raised in today’s hearing. See Rand & Light, How 

Congress Can and Should ‘‘Fix’’ the Indian Regulatory Act. 

We wish to offer a few preliminary concrete recommendations that may be useful 

to the Committee in exercising its oversight function. 

A. Communication and consultation policies and practices 

1. Compare other agency consultation and communication practices. We recommend gathering information about how other federal agencies interact with sovereign tribal governments, including assessment of the success of these practices, as 

measured in large part through the degree to which they align with and serve the 

articulated goals of federal Indian policy with regard to tribal self-government and 

self-determination. 

2. Clarify the nature of government-to-government communication and consultation. As both Executive Order 13175 and the NIGC’s tribal consultation policy acknowledge, tribal sovereignty and the federal government’s trust obligation shape 

tribes’ unique status in the American political system. Accordingly, the NIGC’s consultation policy should be uniquely geared to tribes’ governmental status and relationship with the federal government, both in theory and in practice. The challenge, 

50 

of course, is ensuring that the promises of both the Executive Order and the NIGC 

policy are kept in their implementation. Along with willpower and oversight, truly 

meaningful consultation requires resources, concretely realized in NIGC funding 

and personnel. 

3. Consider requiring consent-based policymaking in the form of negotiated or hybrid rulemaking. Further, government-to-government consultation with tribes may 

require more than notice-and-comment periods and consultation sessions in which 

tribes may be listened to, but which do not provide tribes a direct role in setting 

priorities or shaping policy outcomes. Government-to-government consultation perhaps should include a defined role for affected tribes in the decision-making process. 

This may be appropriate, given not only tribes’ unique status, but also the fact that 

unlike state governments, tribes have not delegated authority to the federal government. On a practical level, our point here is that the NIGC’s consultation policy 

promises to ‘‘explore and consider the use of consensual policy making mechanisms, 

including negotiated rulemaking,’’ but the criteria for the NIGC’s decision on whether and when to use that process appear to be at the sole discretion of the agency. 

Clear criteria, along with a mechanism to trigger negotiated or hybrid rulemaking, 

should be established. 

4. Define and implement meaningful consultation and communication policies and 

practices. Perhaps taking a cue from the impetus behind H.B. 5608, Congress’s intent and expectations regarding government-to-government consultation in the 

NIGC’s exercise of its statutory authority should be made clear. In addition to the 

points made above, this should include timeliness of notice and appropriate opportunity for input, guidelines for expanding or adjusting the usual formal notice-andcomment requirements, and guidelines and outcome measures for adherence to the 

goals of both IGRA and federal Indian policy. 

B. Accountability 

1. Further IGRA’s goal of tribal economic development. The NIGC’s regulatory role 

is distinct from that of other federal agencies, such as the BIA or the IHS, that implement or provide programmatic services to tribes and American Indian people. Indian gaming is neither a public entitlement program nor a federal obligation, but 

an aspect of tribal governmental authority, as Congress recognized in IGRA. One 

of IGRA’s goals is to foster tribal economic development, a point to keep in mind 

in balancing the NIGC’s relevant imperatives created by its varied stakeholders. 

Elsewhere we have discussed the social and economic impacts of tribal gaming, and 

we note that these considerations are relevant to both Congress’s and the NIGC’s 

decisions. As the economic impact studies connected to the Class II ‘‘bright line’’ 

rules clearly illustrate, the NIGC’s decisions have a very real impact on tribes and 

tribal members, and the future of tribal communities. 

2. Preserve the NIGC’s role in tribal institution building. The NIGC is in the difficult position of both facilitating and overseeing tribal regulation of an industry 

that, in the private sector, traditionally has merited stringent governmental control. 

The NIGC has a dual role with regard to tribal regulation, as it provides technical 

assistance to tribes and encourages tribal institution building necessary for effective 

tribal regulation of gaming enterprises. As the NIGC’s consultation policy promises, 

tribes should be given the maximum administrative and regulatory discretion possible. The NIGC should resort to federal policy or regulation only where required 

by IGRA or necessary to meet IGRA’s policy goals. Thus, accountability measures 

must take into account the NIGC’s effective facilitation of tribal regulation, and not 

merely its direct regulatory role. 

3. Account for effective gaming regulation. Another challenge faced by the NIGC 

is the effective regulation of gambling itself. In enacting IGRA, Congress was well 

aware of the challenges of gaming regulation, particularly for casino-style gaming. 

IGRA’s regulatory framework, which involves tribal, state, and federal regulation, 

balances federal standards with the need for regulation tailored to local concerns 

and needs. In assigning Class II regulation primarily to tribes, and Class III regulation primarily to tribal-state compacts, Congress recognized the need to tailor regulation to specific jurisdictional circumstances. Accountability, then, must not be 

measured solely by uniformity imposed by the NIGC through federal standards and 

regulations. Here, too, we emphasize the need for information gathering to build 

federal expertise in gaming regulation and to tailor general gaming policy to the 

specific goals and challenges of the Indian gaming industry. 

4. Increase transparency. The NIGC should be applauded for its efforts to maintain an accessible and informative Web site. As with nearly any government agency, 

however, more could be done to make information readily available to stakeholders, 

including Congress, tribes, states, industry, and the public. We note that increased 

51 

transparency also serves the constituents of the governments charged with tribal 

gaming regulation at the tribal, state, and federal levels. 

C. Agency capture 

1. Ensure sufficient funding and personnel. Both the NIGC and tribes need sufficient resources to fulfill their obligations under IGRA. The NIGC’s current levels of 

funding and personnel may constrain its ability to engage in meaningful government-to-government consultation with tribes, and also subject the NIGC to criticisms concerning its investigative and enforcement responsibilities as well as to 

charges of secrecy and behind-the-scenes decision making. 

2. Balance accountable consultation and agency capture. Perceptions of the risk 

of agency capture must take into account the goals of IGRA and federal Indian policy, as well as the NIGC’s role in facilitating effective tribal regulation. A perceived 

threat of agency capture must not be allowed to undermine the primacy of tribal 

regulation under IGRA or the NIGC’s responsibility to consult with tribes on a government-to-government basis. Additionally, as the Class II ‘‘bright line’’ regulations 

illustrate, there is a need for industry and technical expertise to inform the NIGC’s 

decisions. The work groups and advisory committees convened as part of the NIGC’s 

process in promulgating the proposed Class II regulations should serve as a model 

for instituting a more formal and less ad hoc process. Guidelines and mechanisms 

concerning the formation of and input by such groups should be developed. 

At the Committee’s request, we would be glad to elaborate further on the points 

made in this written statement or other issues related to the NIGC that the Committee deems pertinent. 

Attachment 

INSTITUTE FOR THE STUDY OF TRIBAL GAMING LAW AND POLICY AT THE UNIVERSITY

OF NORTH DAKOTA

About the Institute 

Co-Directors Kathryn R.L. Rand (Law) and Steven Andrew Light (Political 

Science) founded the Institute for the Study of Tribal Gaming Law and Policy at 

the University of North Dakota in 2002 as the first university-affiliated institute in 

the U.S. dedicated to the study of Indian gaming. The Institute provides legal and 

policy assistance and analysis to all interested individuals, governments, and organizations, and conducting scholarly and practical research in the area of tribal gaming. 

The Institute adopts a unique ‘‘team-based’’ interdisciplinary approach to legal 

and policy analysis of the complicated and technical issues related to Indian gaming, 

including regulation and agency authority, policy and socioeconomic impact analysis, 

tribal-state compacting, Class II vs. Class III gaming, tribal law and sovereignty, 

federal Indian law, labor relations, state referenda and voter initiatives, the federal 

acknowledgment process, land-into-trust applications, and ‘‘off-reservation’’ gaming. 

About the Co-Directors 

Kathryn R.L. Rand (J.D., University of Michigan School of Law; B.A., University 

of North Dakota) is Floyd B. Sperry Professor of Law and Associate Dean for Academic Affairs and Research at the University of North Dakota School of Law. Steven Andrew Light (Ph.D., Northwestern University; B.A., Yale University) is Associate Professor of Political Science and Public Administration at the University of 

North Dakota College of Business and Public Administration. 

Rand and Light are internationally recognized experts on Indian gaming, with 

over 30 publications and three books: Indian Gaming Law: Cases and Materials 

(Carolina Academic Press, 2008), Indian Gaming Law and Policy (Carolina Academic Press, 2006), and Indian Gaming and Tribal Sovereignty: The Casino Compromise (University Press of Kansas, 2005). They have testified on Indian gaming 

regulation before the U.S. Senate Committee on Indian Affairs in Washington, D.C., 

and were featured on C–SPAN’s Book TV. They frequently present their research 

and perspectives on Indian gaming before diverse audiences, including professional 

and trade groups, tribal and non-tribal civic associations, academic conferences, and 

university endowed lectures. Rand and Light have been quoted extensively by media 

throughout the world, including the New York Times, Boston Globe, Miami Herald, 

Sydney (Australia) Morning Herald, International Herald Tribune, San Diego 

Union-Tribune, and Bloomberg Media. Both are members of the International Masters of Gaming Law, and Rand is on the Editorial Board of the Gaming Law Review. 

Rand and Light write a column, ‘‘Indian Gaming Today,’’ that appears regularly in 

Casino Lawyer magazine, and have written for Casino Enterprise Management and 

Indian Gaming magazines. They blog on Indian gaming and the legal, political, and 

52 

public policy issues raised by the tribal gaming industry at their website, Indian 

Gaming Today, at indiangamingtoday.com. 

Selected Publications Related to Indian Gaming 

Books 

Kathryn R.L. Rand & Steven Andrew Light. 2008. INDIAN GAMING LAW: 

CASES AND MATERIALS (Durham, NC: Carolina Academic Press) 

Kathryn R.L. Rand & Steven Andrew Light. 2006. INDIAN GAMING LAW AND 

POLICY (Durham, NC: Carolina Academic Press) 

Steven Andrew Light & Kathryn R.L. Rand. 2005. INDIAN GAMING AND TRIBAL SOVEREIGNTY: THE CASINO COMPROMISE (Lawrence, KS: University 

Press of Kansas) 

Book Chapters 

Kathryn R.L. Rand & Steven Andrew Light. Forthcoming 2009. Morality Policymaking and Indian Gaming: Negotiating a Different Terrain. In Alan Wolfe & Erik 

Owens, eds., GAMBLING AND THE AMERICAN MORAL LANDSCAPE 

Kathryn R.L. Rand & Steven Andrew Light. Forthcoming 2009. Within Boundaries: Indian Gaming in North Dakota and Beyond. In Pauliina Raento & David 

Schwartz, eds., GAMBLING, SPACE, AND TIME (Reno: University of Nevada 

Press) 

Steven Andrew Light. Forthcoming 2008. Indian Gaming and State-Level Constraints on Tribal Interest-Group Behavior. In Tracy A. Skopek & Kenneth N. Hansen, eds., ENFRANCHISING INDIAN COUNTRY: THE POLITICS AND ORGANIZATION OF NATIVE AMERICAN GAMING INTERESTS (Reno: University of Nevada Press) 

Kathryn R.L. Rand. Forthcoming 2008. State Law, State Politics, and State 

Courts: Indian Gaming and Intergovernmental Relations. In Tracy A. Skopek & 

Kenneth N. Hansen, eds., ENFRANCHISING INDIAN COUNTRY: THE POLITICS 

AND ORGANIZATION OF NATIVE AMERICAN GAMING INTERESTS (Reno: 

University of Nevada Press) 

Kathryn R.L. Rand & Steven Andrew Light. 2007. North Dakota. In William 

Thompson & Anthony Cabot, eds., INTERNATIONAL CASINO LAW (Reno: Institute for the Study of Gambling and Commercial Gaming) 

Journal and Law Review Articles 

Kathryn R.L. Rand, Steven Andrew Light, & Alan P. Meister. Forthcoming 2008. 

Questionable Federal ‘‘Guidance’’ on Off-Reservation Indian Gaming: Legal and Economic Issues. GAMING LAW REVIEW 12 

Steven Andrew Light. Forthcoming 2008. Indian Gaming and Intergovernmental 

Relations: State-Level Constraints On Tribal Political Influence Over Policy Outcomes. AMERICAN REVIEW OF PUBLIC ADMINISTRATION 38 

Kathryn R.L. Rand. 2007. Caught in the Middle: How State Politics, State Law, 

and State Courts Constrain Tribal Influence Over Indian Gaming. MARQUETTE 

LAW REVIEW 90(4): 971–1008 

Kathryn R.L. Rand & Steven Andrew Light. 2006. How Congress Can and Should 

‘‘Fix’’ the Indian Gaming Regulatory Act: Recommendations for Law and Policy Reform. VIRGINIA JOURNAL OF SOCIAL POLICY & THE LAW 13(3): 396–473 

Steven Andrew Light & Kathryn R.L. Rand. 2006. The ‘‘Tribal Loophole’’: Federal 

Campaign Finance Law and Tribal Political Participation After Jack Abramoff. 

GAMING LAW REVIEW 10: 230–39 

Steven Andrew Light, Kathryn R.L. Rand, & Alan P. Meister. 2004. Spreading the 

Wealth: Indian Gaming and Tribal-State Revenue-Sharing Agreements. NORTH DAKOTA LAW REVIEW 80(4): 657–79 

Steven Andrew Light & Kathryn R.L. Rand. 2004. Reconciling the Paradox of 

Tribal Sovereignty: Three Frameworks for Developing Indian Gaming Law and Policy. NEVADA LAW JOURNAL 4(2): 262–84 

Steven Andrew Light. 2004. The Third Sovereign: Indian Gaming as a Teaching 

Case in Intergovernmental Relations and Public Administration. JOURNAL OF 

PUBLIC AFFAIRS EDUCATION 10(4): 311–27 

Steven A. Light & Kathryn R.L. Rand. 2001. Are All Bets Off? Off-Reservation Indian Gaming in Wisconsin. GAMING LAW REVIEW 5: 351–63 

Kathryn R.L. Rand & Steven A. Light. 2001. Raising the Stakes: Tribal Sovereignty and Indian Gaming in North Dakota. GAMING LAW REVIEW 5: 329–40 

53 

Kathryn R.L. Rand & Steven A. Light. 1998. Do ‘‘Fish and Chips’’ Mix? The Politics of Indian Gaming in Wisconsin. GAMING LAW REVIEW 2: 129–42 

Kathryn R.L. Rand and Steven A. Light. 1997. Virtue or Vice? How IGRA Shapes 

the Politics of Native American Gaming, Sovereignty, and Identity. VIRGINIA 

JOURNAL OF SOCIAL POLICY & THE LAW 4: 381–437 

Prior Congressional Testimony 

Kathryn R.L. Rand and Steven Andrew Light. Prepared Statement and Oral Testimony, Oversight Hearing on the Regulation of Indian Gaming, United States Senate, Committee on Indian Affairs (John McCain, Chair), 109th Congress, 1st Session 

(April 27, 2005). 

Senator TESTER. Thank you, Ms. Rand. 

Chairman Dorgan, do you have comments? 

STATEMENT OF HON. BYRON L. DORGAN, 

U.S. SENATOR FROM NORTH DAKOTA 

The CHAIRMAN. [Presiding.] Senator Tester, first of all thank you 

for filling in this morning as Chair. I was called over to Senator 

Reid’s office for a leadership meeting and it just lasted longer than 

we had expected. So my apologies to the witnesses. I have had a 

chance to review the testimony, however, and I thank you again, 

Senator Tester, for being such a significant part of our Committee. 

Why don’t you proceed with your questions, Senator Tester? 

Senator TESTER. Thank you. I will just say that any time that 

you need to be away from the Committee for leadership reasons, 

it is time well spent. So thanks. 

I do have a bunch of questions. I guess I will just start out with 

a pretty basic one to Mr. Hogen. You have heard the testimony 

here today, as have I. Do you think that there is a problem in communication between the NIGC and the tribes? 

Mr. HOGEN. Yes, there is a problem. We continually work on it, 

as how can we better come up with a system that permits us to 

get the views of 230 tribal governments across the Nation when we 

confront an issue that we might act on that is going to impact upon 

them. 

We are currently engaged in consultation. We are going out to 

the National Indian Gaming Association’s meeting next week. We 

have scheduled consultations with tribes that will be attending 

there. We had more people ask for a slot than we had time for, 

given the other demands of the National Indian Gaming Association. So we have set up the overflow to go both to the Great Plains 

Association’s meeting in Minneapolis and out to Reno for the National Congress of American Indians. So having the time to do it 

all is one of the challenges. 

Ms. Carlyle referenced a consultation we held out in the Southwest and talked about our adoption of this facility license regulation and how we put on our letter inviting to talk about things that 

we wanted to talk about the status of that. When we got there, we 

said it has already been adopted, and that is true. That was the 

status of it. It was in the transition period of going to the Federal 

Register. 

Why did we do it when we did it? Well, we had a long consultation period. We significantly modified the proposal based on the 

consultation that we had received. But as you just observed, Senator Tester, we are short a commissioner. Commissioner Choney, 

54 

the non-Republican, we wanted to get his view. He was there with 

us through the formulation of that. He was leaving on the 31st of 

December. You know, sometimes there comes a time when you just 

have to get it done. 

So we adopted that policy and we don’t micro-manage the environment for health and public safety. We merely ask tribes, please 

tell us what your roles are and certify as you license your gaming 

facility that you are in compliance. 

Senator TESTER. A couple of questions, and maybe I should ask 

you if this is correct. Delia, Mr. Hogen cited the facility regulations 

and your testimony said there was no time for comment, there was 

no consultation. And I just wanted to make sure that was correct. 

That’s what you did say, right? 

Ms. CARLYLE. Yes. 

Senator TESTER. Mr. Hogen, I kind of feel like I am up here as 

judge and jury, but the fact is that if there is one thing that can 

get me fired up about Government quicker than anything is lack 

of public opportunity for input. Sometimes the public takes advantage of it; sometimes the public doesn’t take advantage of it. But 

if you presented those regs, I am sure that you heard that there 

was unhappiness in the hinterlands because the truth is as I heard 

it from everyone of these folks that were testifying here today. 

At what time do you step back and say, maybe we need to rethink this and actively pursue more participation, knowing full 

well that the input you might get may not be input you agree with 

or the input you want to deal with, but that is the nature of this 

beast. It is the nature of where I sit and it is the nature of where 

you sit. It is probably the nature of where every one of these guys 

sit, too, from their constituents. 

So at what point in time do you step back and say, hold it, be 

honest with ourselves, we didn’t give enough time for public input. 

Let’s go back to the drawing board and let’s do it again. 

I appreciate the fact that there is a point in time where you have 

to get it done, but I never heard, with the exception of one of them, 

that said the relationship overall is positive, Mr. Patterson, that 

the relationship overall is positive with the NIGC. I never heard 

a lot of glowing comments out of the testimony here today. 

Mr. HOGEN. With respect to this example, and I think it probably 

serves to exemplify how we often do this, we started the process 

by writing a letter to tribal leaders saying the Indian Gaming Regulatory Act says that you have to license your gaming facilities, 

and it says if you are going to build and operate a tribal gaming 

facility, you have to take steps to protect the environment, health 

and public safety, but it doesn’t have a lot more detail than that, 

and we are thinking about writing a regulation to kind of tie those 

together, licensing and complying with those concerns. 

And then we send our a draft of what we were thinking about. 

We got a lot of criticism, particularly with respect to the information we want to gather about the Indian lands where the gaming 

facilities were located. I have forgotten exactly the sequence, but 

then we published the regulation and we received comments, and 

every time we went on one of these consultation stops, that was on 

the agenda. At a point, we said we have it wrong here. 

55 

Senator TESTER. How many days from the time you announced 

it until the time you adopted it? 

Mr. HOGEN. I would guess more than six months, but I don’t 

know for sure. 

Senator TESTER. Could you get that for me? 

Mr. HOGEN. I absolutely can, Senator. 

Senator TESTER. That is the first thing. 

The second thing is, do you have enough people to do the job adequately? 

Mr. HOGEN. I think yes, I think we do. 

Senator TESTER. Okay. How many people do you have working 

for you? 

Mr. HOGEN. One hundred and four. 

Senator TESTER. You have 400 gaming enterprises, 230 reservations in 30 States, 104 people. I just want to make sure that is fine. 

When you receive the tribal comments, how do you utilize them 

in your decision-making process? It shouldn’t just be tribal comments, any comments. How do you utilize those in your decisionmaking process? 

Mr. HOGEN. We read them. We discuss them. And if we think a 

step forward is going to be the adoption of the regulation, we know 

that in the preamble that we publish in the Federal Register with 

the final regulation, we have to say what they are and why we 

agreed or disagreed with them. 

Senator TESTER. So do you get back to the people who put forth 

their recommendations or the comments and say, you know, we 

don’t agree on this and here is why? Or is that not something that 

you do? 

Mr. HOGEN. I don’t know that we send a letter to each and every 

author of the comments. During this ongoing consultation process, 

we attempt to share our thinking, yes. 

Senator TESTER. Okay. Have you looked at other agencies? I 

know that one of the individuals brought up IHS. I am not sure 

that that is a good example. But have you looked at other agencies 

to see how they do it? Is your consultation process on rulemaking 

similar to what other agencies do? 

Mr. HOGEN. I believe it is. When we drafted the consultation policy, we looked at every other Federal agency’s policy that we could 

get our hands on, including the Indian Health Service. And we 

tried to put the best of all of those in our policy. 

Now, having it in the policy and doing it are two different things. 

Senator TESTER. That is kind of your job, though. 

Mr. HOGEN. Absolutely, absolutely. So I think it is important to 

bear in mind as you look at what IHS does, providing health care 

to a greater or lesser extent for Indian people, and what we do are 

qualitatively different. We are a regulatory agency. We are the 

traffic cop. That is not a fun job to have. We don’t provide services 

in the same way the Indian Health Service does. So what we agree 

on may have some limits. 

Senator TESTER. Okay. I preface the letter that Senator Baucus 

and I sent to you a while back. I am just curious. I mean, why were 

tribes given one month to comment on the economic impact and 

really no time to comment on the cost/benefit analysis? I think just 

56 

why, that is all. I think that that kind of action really doesn’t do 

much for me as a policy-maker, period. 

Mr. HOGEN. One reason is we agreed absolutely with their view 

of the cost/benefit study. First of all, it wasn’t the initial cost/benefit study. It was a modification of the cost/benefit study based on 

our modification of the proposal which we made because they made 

the comments. But if we adopt the regulations, they will have a 

draconian effect on the dollars generated by Class II gaming, but 

that doesn’t necessarily make them wrong. It is just that is a fact 

of life. 

Senator TESTER. I am not saying that. I am not saying whether 

their comments are right or wrong. I am saying 30 days, I don’t 

know how many Class II operations are out there, but you have a 

pretty big area you are taking on. And you obviously felt 30 days 

was adequate, whether you agree with them or not, just the comment period, the time, 30 days from your perspective you felt was 

adequate? 

Mr. HOGEN. It was part of the package. We had four discrete regulatory proposals. Part of the process was we decided we better to 

the cost/benefit or the economic impact study. 

Senator TESTER. Consultation and listening to folks is a big deal. 

The question is, as it is coming out of this meeting, do you think 

it is going to take an act of Congress to make it happen? Or do you 

think the way things are, and I am sorry I haven’t focused any 

questions to the rest of you guys, and I am sorry that I have focused them all on you, Mr. Hogen, too, but is it going to take an 

act of Congress to get this done? Or will an act of Congress do any 

good? 

Mr. HOGEN. I think the proposed act of Congress that is the 

House bill would do a disservice to us, the regulators who have a 

job to do. Then we would need more people. We would need a lot 

more lawyers because everything we would try to do would be resulting in a lawsuit brought by one of the 230 tribes that the regulations might affect. 

But cut to the chase, Senator. The hue and cry for the consultation concern has to do with what we have proposed in our Class 

II regulations. You have heard from the tribes, they are not listening. They haven’t modified their proposal based on what we have 

said. Nobody has asked us what is our point of view, what changes 

have we made. But more importantly, why do we take the position 

that we do? We take the position that we do because that is exactly 

how we read the Indian Gaming Regulatory Act. 

I would be delighted if Congress would amend that and say 

tribes can do whatever they want with bingo machines. But they 

haven’t. They said if they use electronic and electric facsimiles of 

games of chance, then they are Class III. They have to have a compact. I would be happy to explain that further. 

Senator TESTER. I have taken too much time. I am going to turn 

this over to Senator Dorgan. But I do want to make one last comment in relation to that comment. It is your job to communicate. 

It is my job to communicate. I have to tell people what I am doing 

and you have to tell people what their doing. And the truth is to 

say that do away with the rules so that we don’t have to regulate 

anymore I don’t think was the intent of NIGC. 

57 

So I think that what I heard at this Committee, and I came in 

here with, well, with a little bit because of our letter we sent off 

and we were denied on that extension, and I thought that was kind 

of interesting and actually raised some red flags there. But when 

I come into these meetings and I hear people that are working on 

the ground saying nobody is listening to us, I understand. I make 

decisions all the time that people don’t agree with, but I try to 

make sure that those statements don’t happen because it is your 

job and it is my job and it is policy-makers and part of the bureaucracy that if we don’t listen to the people we are working for, we 

aren’t going to be there very long. 

Senator Dorgan? 

The CHAIRMAN. Senator Tester, thank you very much. 

This is not only an interesting, but also a very important issue. 

The gross revenues for Indian gaming have now reached I believe 

$25 billion. They have grown very rapidly. I think all of us understand the urgency and the need for effective regulatory capability. 

I know there are very different views about what form that should 

take from time to time. Mr. Luger and I have had long discussions 

over time. 

Maybe, Kurt, you would take the position we don’t need a National Indian Gaming Commission because the States have a regulatory authority and the tribes have a regulatory authority. So in 

most cases, you have two regulatory authorities. Others would take 

the position that you must have a national regulatory commission 

because some States say they regulate, but in fact do not effectively 

regulate, and all you have is the tribe, at which one level is not 

sufficient. 

So this is very important. The one thing all of us would share, 

I believe, is we want to make certain that Indian gaming is able 

to continue free of scandal, free of difficulty, free of any criminal 

element. We understand. We have watched areas of gaming long 

before Indians had gaming in this Country. In every area where 

there is billions of dollars of gaming, it is a magnet for criminal elements, a magnet for fraud, a magnet for stealing and so on. 

So that is why we have a long history in this Country, and just 

using Nevada as an example, of very aggressive, very, very certain 

kinds of regulatory authority with respect to gaming. It is different 

than many other enterprises. 

Having said all that, I want to ask a couple of questions with respect to the commission itself. 

Mr. Hogen, I am trying to understand. We are told by some, and 

I don’t know this as a fact, that you have as much as $12 million 

in reserves. We have tried to get information from the commission 

about that, excess fees. Do you have a reserve? If so, how big is 

it? 

Mr. HOGEN. About $10 million, Senator. 

The CHAIRMAN. And what do you do with the reserve? 

Mr. HOGEN. Well, we are, as I mentioned earlier, not funded by 

taxpayers’ dollars. Rather, we are funded by the fees we collect. If 

we were a Department of the Interior, on the first of October every 

fiscal year, we would get the dollars and we would have them to 

spend. But we collect those dollars on a quarterly basis. They come 

in over the year. So if we didn’t have some money in the bank, so 

58 

to speak, we wouldn’t be able to pay the rent. So we need a little 

money there to tide us over. 

The CHAIRMAN. I understand that. But do you have a detailed accounting of fees versus and operating budget? 

Let me say to Senator Tester, I appreciate your chairing this 

morning and appreciate your work on the Committee. I know you 

have to run. I am going to continue to ask questions of the panel, 

so thank you, Senator Tester. 

Do you have an operating budget and an accounting of fees that 

you can provide to the Committee? We have not seen that and that 

would be helpful to us. 

Mr. HOGEN. We certainly do. I have it with me if you would like 

it now, Senator. 

The CHAIRMAN. And you say you have a reserve because I think 

you make the point you need a reserve, given the financial mechanism with which we finance the commission. What size a reserve 

do you think is necessary? 

Mr. HOGEN. We are trying to draw down on the carryover 

amount. It is probably excessive the way it is. 

The CHAIRMAN. What size is the reserve you think you need? 

Mr. HOGEN. Probably $5 million would be closer to ensure that 

there is no risk in terms of a smooth operation. 

The CHAIRMAN. But the other way of looking at this, and the reason I ask the question is these come from fees sent in by tribes. 

So we need to work with you on an accounting here so we understand what is your operating budget, what kind of a reserve do you 

need. Because if you have $5 million in excess fees, it probably 

ought to go back to the tribes if you don’t need them for operating 

purposes. 

You have an Acting General Counsel, I understand, since 2002. 

Why has that position been only acting for now nearly six years? 

Mr. HOGEN. The Chairman hires the General Counsel, and I 

have been the Chairman since December of 2002. It is not my first 

stint on the commission. I served as an Associate Commissioner 

and for a little while as Vice Chairman for a four-year period from 

1995 to 1999. During that time, Penny Coleman, who is our Acting 

General Counsel, was in the Office of General Counsel. She came 

to NIGC from the Solicitor’s Office over at the Department of Interior when IGRA was enacted. So she is kind of the institutional 

memory with respect to a lot of these things. 

Penny is a career employee, not a political appointee, which she 

would be if she were the General Counsel of the NIGC. I found 

that her style, her knowledge, her experience served the commission very well. Rather than have her risk her career status and 

have her come on board and be political and then maybe have no 

place to go, it worked fine, in my experience, to have her serve as 

our Acting General Counsel. I am glad that we have done it that 

way. 

The CHAIRMAN. Well, that is a curious thing, though, isn’t it? 

Think of how many places in our government we would have if people said, well, I don’t want to assume the risk of actually assuming 

the office. So we would have a whole government full of acting people. Would they have the responsibility and the authority? You do 

what you need to do on that, but I don’t think that is necessarily 

59 

a good way to handle that responsibility. You have a specific post 

for a General Counsel, and to have an Acting General Counsel for 

six years makes little sense to me. 

I am going to ask you a couple of other questions, and then I am 

going to have some questions of the rest of the panel. 

I think that you need to publish some kinds of financial statements so that the Congress and also the tribes who are funding the 

commission understand what is happening. You don’t now do that. 

Is there a reason you don’t do that? And will you be doing that? 

Mr. HOGEN. Well, we do it, Senator, in part in the appropriations 

process. We get, like every other Federal agency, what is referred 

to as the green book, where we break down the dollars. One of the 

reasons that is not particularly informative with respect to us is we 

are so small that the million-dollar increments that they use there 

makes it harder to get a good picture. 

When I go to tribal gaming association meetings, I will display 

on a PowerPoint this is what we spend for compensation; this is 

what we are spending for rent and travel; these are our plans for 

the coming year, and so forth. But your advice is well taken. We 

will not only provide you, but the Indian tribal constituency that 

we serve with more of that information. 

The CHAIRMAN. Let me suggest you do a yearly report so that it 

is not just when you go out and make a presentation. I am not suggesting you are hiding anything, far from it. But I think those that 

are financing you through fees should understand what your financial report is and shows. We would like to see that as well, so that 

would be something I would recommend. 

Let me now talk just a bit about the issue of consultation. I understand this is kind of a unique situation. First of all, consultation, as I have said as Chairman of this Committee, is critically important. That is the hallmark, in my judgment. Our government 

needs to consult with tribes. I think the Indian Gaming Commission needs to consult with tribes. Consultation is critically important. 

Obviously, you know from the testimony at this hearing and you 

know from other circumstances that there are discordant voices out 

there who feel you have not engaged in the consultation they would 

like. You say, well maybe that is because they don’t like the result 

of some of our rulings. Maybe so, but whatever your rulings, it 

seems to me the issue of consultation is a continuum that I think 

is required of you and should be expected of you by us and by the 

tribes. 

Let me ask Ms. Rand. You are at the law school, correct? 

Ms. RAND. That is correct. 

The CHAIRMAN. Tell me about how you see the consultation as 

you know it exists here or doesn’t exist here, either one, with respect to consultation in other circumstances with other Federal entities and jurisdictions. 

Ms. RAND. Senator, I think that we would suggest that government-to-government consultation with tribes should be distinct 

from the ordinary public notice and comment period required by 

Federal law; that it should be uniquely tailored to tribes’ status as 

governments and their relationship with the Federal Government. 

60 

We brought up the IHS policy for two purposes. First, that there 

may be a more concrete way to address some of the issues either 

in the NIGC’s own policy or through a directive to the NIGC. But 

also as Senator Tester implied, that what is promised on paper 

may not be implemented in practice. We think that that might be 

a very important issue for the commission or the Committee to 

grapple with. 

The CHAIRMAN. I am not sure the IHS is necessarily a good 

model, as we have noticed before. If you want to take a look at an 

institution that pays very little attention to consultation, look at 

the Indian Health Service. I have a couple of investigations I have 

requested of them precisely because instead of consulting with anybody, they do whatever they damn well please. They are shifting 

incompetents around to various places in the Country instead of 

getting rid of the incompetents. 

But the issue of consultation with respect to a regulatory authority and those that would be regulated I understand is different and 

interesting to discuss, but nonetheless still required. What are the 

conditions under which it is required and how should it be conducted? That is what I think we are trying to understand. 

Mr. Luger, you discussed this in your testimony. I probably spoke 

for you when I said you would probably prefer that we not have 

a National Indian Gaming Commission. Was I accurate about that? 

Mr. LUGER. Fairly accurate. I think it has its role. I just think 

that the role as it is currently taking place is bureaucratic. Phil is 

in a tough position. Phil and I are friends so it is not a personal 

thing, but they are just moving boxes around, Senator. We have 

regulatory problems out there. 

Any time, for example—and I will be very brief—the Standing 

Rock Sioux Tribe calls up NIGC and thinks that they may have 

something wrong in their system. You are having a punitive conversation automatically. You can’t have a confidential conversation 

saying I think maybe this might be it, but I am not sure, but you 

have the expertise and I want you to come in and look at it. 

Standing Rock just subjected themselves to punitive action. I 

cannot stress this enough. Again, it is not a personal attack on 

NIGC. I would say this with any agency that any entity has to deal 

with. Bring in some experts. You have too many P.E. majors working for him and trying to help us in the gaming industry. I am generalizing. 

The CHAIRMAN. We are not talking about Class III today. We are 

talking about Class II, because we are just talking about consultations here. 

But with respect to Class II gaming, if the NIGC received a complaint and they said the Standing Rock Reservation is absolutely 

defying regulations, they are going to call you. They are going to 

send people in. They have a right, it seems to me, in that circumstance to say, here are the regulations and you at this point 

are not in compliance. So they are purely regulatory and everyone 

who is aggrieved by that would feel it is all punitive, but that is 

the role of a regulator, number one. 

Number two, in the circumstance you just described, when you 

call the commission, you ought not when you call the commission 

get some notion there is some punitive voice on the other end of 

61 

the line. That is a culture issue with the NIGC. I don’t know 

whether that is true or not, but you say it is true. 

Mr. Hogen, what about that? 

Mr. HOGEN. I think the record will reflect almost without exception whenever we learn, whether it is by the tribe telling us or 

some other, that there is a problem, the first thing we do is say 

let’s fix this. Let us help you fix this. And only at the last resort 

do we end up with a notice of violation that might result in a fine, 

or in a worst-case scenario result in closure. 

But Kurt is right that there are some tensions there in the relationship. If you hire your lawyer and you go in and say I want to 

ask you whether this is wrong or not, you hope he doesn’t have to 

turn around and tell the FBI. We are supposed to provide this technical assistance, which I think we do a pretty good job of, but we 

also wear the traffic cop hat. We have to do that. 

But the practice as borne out is very seldom do we—we have 

never issued a notice of violation for failure to adhere to the minimum internal control standards. We have always gotten it fixed, 

sometimes by way of an agreement, a kind of settlement agreement. 

The CHAIRMAN. Let me ask Ms. Carlyle, you are from Arizona? 

Ms. CARLYLE. Yes. 

The CHAIRMAN. Arizona is reputed to have a fine statewide Indian gaming regulatory strata. Is that correct? 

Ms. CARLYLE. I would be a little biased, but say yes. 

The CHAIRMAN. You have a pretty substantial statewide effort 

with respect to Indian gaming regulatory practices. 

Ms. CARLYLE. Yes, we do, Senator. I am very proud of that process. 

The CHAIRMAN. If you pick up the phone and call the Nevada 

folks and say, look, we think we have a wrinkle here, is it different 

than calling the NIGC in terms of consultation from you to them? 

Ms. CARLYLE. Nevada? 

The CHAIRMAN. Yes. 

Arizona, I am sorry. 

Ms. CARLYLE. That is why I looked, Nevada. 

[Laughter.] 

The CHAIRMAN. Don’t call Nevada. Call Arizona. 

[Laughter.] 

Let’s assume that you pick up the phone and you call the regulatory authorities in the State, as opposed to calling the Indian 

Gaming Commission. Do you detect a cultural difference there? 

Ms. CARLYLE. No. 

The CHAIRMAN. Okay. 

Ms. CARLYLE. I think based on the process that we have started 

that has been in Arizona, that relationship is understood, I want 

to say, so there is not a problem in picking up the phone and saying there could be a problem. 

The CHAIRMAN. I see. 

Mr. Patterson, you are from Tennessee? 

Mr. PATTERSON. Oneida Indian Nation, Upstate and Central New 

York. 

The CHAIRMAN. I see. The organization is in Nashville. 

Mr. PATTERSON. Yes, Senator. 

62 

The CHAIRMAN. How many people does the State of New York 

employ to be involved in the State regulatory process of Indian 

gaming? Do you know? 

Mr. PATTERSON. Mr. Chairman, I do not have that answer, but 

I would be glad to research that. 

The CHAIRMAN. Would you submit that? 

Mr. PATTERSON. Yes, sir. 

The CHAIRMAN. And Mr. Mathews, you are here accompanied by 

Mark Van Norman. He is an acquaintance of this Committee. He 

has testified here a good number of times. You heard Mr. Luger 

talk about the issue of a tribe seeking information from the NIGC, 

or at least going to the NIGC, suggesting they have an issue. Do 

you have experience with that at all? 

Mr. MATHEWS. Yes, we do. 

The CHAIRMAN. Tell me your experience. 

Mr. MATHEWS. I would just like to say this, that for our own 

tribe, the Quapaw Tribe of Oklahoma, we did have an issue several 

years ago, that the NIGC brought to us, with a management contract and a person that was working with us. I have to say that 

through the efforts of the NIGC, along with our tribe, we ended up 

getting rid of this guy. It was a very bad situation. We learned a 

lot. We have become a much stronger tribe with our regulatory 

issues. We have a very, very strong regulatory body, and it is due 

to the assistance that we got through the NIGC. We are very proud 

of that fact. 

On the other hand, what they are doing now, we do have a problem with, in the publication of these four regulations, with the consultation that we don’t feel is thorough, that we feel is a rush to 

judgment. It is a pre-determined consultation. As Phil has even 

said, consultation does not mean agreement, but when you have so 

many tribes in Indian Country that are against what they are 

doing and the way they are doing it, there has to be some red flag 

thrown up there. 

We think they should consider cost/benefit alternatives to their 

current approach. They should reopen these regs for comments, 

along with the cost/benefit analysis. It is funny that the regulators 

expect us to comply with some of their rules when they don’t even 

comply with their own. So we have issues there. 

But it is very obvious that Indian Country wants regulation. We 

have 3,300 regulators across the Country. They spend an enormous 

amount of money on regulations. It is very important to keep out 

those bad elements, to make sure that we are providing a safe environment for our patrons and our employees. By doing that, we 

feel that we have to have strong regulations. 

The CHAIRMAN. Mr. Hogen, the commission regulations on Class 

II, you have heard today concern and you have heard that concern 

before about lack of consultation. My understanding is that the National Indian Gaming Commission authorized a study to examine 

the potential impact of the proposed regulations. According to at 

least one of the comments we received, the commission determined 

that 57 percent of the Class II games in play would be considered 

unlawful if the proposed classification standards were adopted in 

the current form. Is that correct? 

Mr. HOGEN. Yes. I consider them unlawful right now. 

63 

The CHAIRMAN. You did an economic impact. When did you 

launch that economic impact study? Was it through a consultant? 

Mr. HOGEN. Yes. We hired a consultant who punches a lot of Indian gaming numbers. When we first published, I think that was 

in May of 2006, we published some regulations. We hired the expert to do the study. Then after we got those results and we heard 

comments, we withdrew that proposal. We then supplemented it 

with a pared-down version and had a renewal or an extension of 

that impact study done to reflect the changes. 

The CHAIRMAN. Which of the practices will be shut down under 

the Class II regulations? 

Mr. HOGEN. One-touch bingo machines primarily. However, as a 

result of the comments we received, the concern tribes expressed 

about the economic impact and so forth, we put in—and understand these are just drafts. We haven’t done a thing yet. They are 

just a draft. But we put in a five-year grandfather clause. We said 

we know it is going to be a tough economic impact, so to soften that 

blow, the useful life of this equipment is probably about five years, 

use them until they are used up, and then comply. 

The CHAIRMAN. This Committee is not in the business of trying 

to do your work or look over your shoulder and determine whether 

you are making judgments that are appropriate. Those are judgments you make. But the Committee is concerned, as Senator Tester has indicated, that in the conduct of the work of the National 

Indian Gaming Commission, that consultation exists as between 

the tribes and the commission so that there is some mutual understanding of what is happening and what are the consequences. 

You have in your own commission adoption going back to 2004 

government-to-government tribal consultation policies. So those 

exist. Do you feel like you have followed those policies sufficiently 

with respect to the Class II proposed rules, number one? And number two, given the concern by tribal authorities, do you feel that 

even if you did follow them, do you feel those policies are sufficient 

so that tribes feel like you have consulted adequately? 

Mr. HOGEN. Obviously, they do not feel we have consulted adequately. I think we have made a really good-faith effort, Senator, 

to do that. We had four different versions of these proposals on our 

website to talk about with tribes before we actually put them in the 

Federal Register. When we were about ready to do that the first 

time, the Justice Department came along and said to us, these 

aren’t tough enough; you can’t do that. 

Thereafter, we published another set. We met with I think about 

70 tribes on the record government-to-government consultation. If 

you look on our website you will find the transcript of each one of 

those 67 or 70 meetings. We asked tribes to send us their best and 

their brightest in terms of a tribal advisory committee, tribal regulators and so forth, to help us with this. 

Did we agree with everything they told us? No, we disagreed 

with some of it, but we sure learned a lot and we did make lots 

of changes. If you have the time, I could enumerate some of those 

changes. But we have extended the comment period numerous 

times, sometimes to accommodate comment on the economic impact 

study and so forth. 

64 

But Senator, I am going home some time soon. I am going back 

to the Black Hills, and when you hear that hurrah out in Indian 

Country, you will know that has happened. But the thing is, I have 

to get this done. I have been at it now for more than five years. 

It is time to draw this bright line so the industry, the manufacturers, the tribes, the States, can know what is going on. 

Right now, there is confusion. That is not good for the industry, 

and if and when it appears that there is a loss of the integrity in 

the system, then the goose that laid the golden egg will be at risk. 

I don’t want to be responsible for that. I want to leave it with some 

clarity. 

The CHAIRMAN. I believe there should be a bright line, and I 

think that bright line is something that would be embraced by 

tribes. There needs to be definition. If you don’t have definition, 

there is chaos. This is, as I said, a $25 billion growing industry. 

It is very important that the reputation of this industry be in tact, 

that there be effective levels of regulation that give all of us the 

assurance that this gaming and the stream of income from the 

gaming that can improve and invest in people’s lives will be able 

to continue. 

But that will only happen if we are free of scandal and free of 

the kind of criminal element that always tries to attach to any center of gaming anyplace in this world. We have plenty of experience 

with that. 

Mr. Luger? 

Mr. LUGER. Mr. Chairman, just indulge me for 30 seconds. 

One, I just want to leave a note that I don’t have quite the 

gloom-and-doom feeling that Phil does. I don’t know if our dateline 

should be predicated upon his retirement back to the Black Hills. 

But on a separate note, and this is a pledge that I give to my folks 

at home, I cannot tell you now grateful and appreciative I am of 

you and our North Dakota and South Dakota delegation for what 

you did for Woodrow Wilson Keeble. 

Everybody in this room knows about it. I love and honor you for 

that. That was something that needed to be done. It was a sore 

spot in Indian Country. I personally invite you at that third week 

in May we will have Woodrow Wilson Keeble Day, and we would 

be honored if you would be a part and master of ceremonies at 

that. Senator Daschle will be there. I have so much respect for the 

work that you did with that that I had to make that comment 

today. 

From the Standing Rock Sioux Tribe, Sisseton-Wahpeton, Ayata, 

the Lakotas and the Dakotas, I want to thank you very, very much. 

The CHAIRMAN. Mr. Luger, thank you very much. I was honored 

to be a small part of trying to rectify a mistake that was made 

many, many years ago of not giving the Medal of Honor to someone 

who had earned it, deserved it, and should have received it except 

for lost paperwork. It was an emotional moment to be in the East 

Room of the White House and have the President present to the 

relatives of Woodrow Wilson Keeble the Medal of Honor that he so 

richly deserved. 

This was a very courageous, very brave American who risked his 

life many times and received a number of Purple Hearts, Silver 

Star, Bronze Star, the highest honors this Country could bestow on 

65 

a very brave soldier. Many years after his death, he finally received 

the Medal of Honor. 

I regret that his wife, Blossom Keeble, was very hopeful that this 

would be done before she passed, but it did not happen. She passed 

away last summer. But I know that there is great pride in Indian 

Country for this Medal of Honor. 

Let me thank all of you for being here. 

Yes, Ms. Carlyle? 

Ms. CARLYLE. Senator, if I could real fast, and I don’t want to 

touch on Class II because we have a limited number of that in Arizona, but my biggest concern again, well really, I wouldn’t want to 

be in NIGC’s shoes. So I have to give them kudos for stepping up 

to the plate and taking on that responsibility. 

But I truly feel that meaningful consultation, not just sitting 

across the table, can occur. If it can happen in Arizona and other 

areas, it can happen with the NIGC. My tribe’s biggest concern was 

the rush on the facility regulations that was placed on tribes. When 

we talk about meaningful consultation, this is a bit of information 

that the Arizona Department of Gaming employs 111 people, and 

they have a $15.6 million budget. I will say that Arizona and the 

State, the collaboration is great. 

I always like to end it with saying that we have our respective 

meetings. It may be a slow process, but we do come to a compromise which I was told that when both sides are equally unhappy, then we have met a true compromise. I think that is how 

in Arizona we try to work on that basis somewhat. I would like to 

see that with NIGC because the time-frames given to tribes is not 

enough. It is not adequate. My counsel only meets twice a month, 

but we have to call specials if we have deadlines. Then we have 

to include our regulators, too, to make sure that our comments are 

appropriate or at least heard and considered. 

Thank you. 

The CHAIRMAN. Well said. 

Mr. Patterson? 

Mr. PATTERSON. Mr. Chairman, I would just like to leave with 

the thought to say that my mother always said how naive I was, 

but I have a glass in front of me and I say that it is half full, not 

half empty. 

[Laughter.] 

Mr. PATTERSON. I believe that NIGC and USET share the same 

common goal to ensure that Indian gaming operates in a manner 

which benefits and protects tribal interests in that respect. I also 

believe that a lot of hard work has already been done to develop 

consensus positions. I think that is a great place to re-engage and 

build consensus. 

As far as consultations, sir, my people have had a long history 

of consultation, beginning in the 1600s and the Two-Row Wampum 

Treaty that my people negotiated with the Europeans when they 

first arrived. We have been in consultation for 400 years, and I 

support meaningful dialogue. 

Thank you, sir. 

The CHAIRMAN. That is an interesting way of describing the fact 

that you know what consultation is when you see it. 

66 

Mr. Hogen, let me thank you for chairing the commission. We 

have sometimes tensions about various regulations and things, but 

our Committee has enjoyed working with you and will continue 

until you depart. 

I do hope, and I say this to the Indian Health Service and BIA 

and every organization, I hope that everyone understands the need 

for effective communications. The issue of consultation—consultation is more than a word. It is an attitude and it is a culture. It 

is very important to remind every agency and every organization 

that works with tribes about the meaning of consultation. 

So take that from this hearing, and understand that we want 

you to succeed. It is in our interest that the NIGC succeed. I think 

it is in the tribes’ interest for you to succeed in a way that makes 

them a significant part of the future of regulation effective—and I 

underline the word effective—effective regulation of Indian gaming. 

All of us have a big stake in the effective regulation of Indian gaming. 

This Committee will certainly be considering these issues going 

forward. 

Ms. Rand, let me also say to you something that I think is important to be said. We have tried to build at the University of North 

Dakota a very effective Indian Studies Program in a wide range of 

areas, Indian doctors, Indian psychologists, Indian lawyers—a wide 

range of areas. And I think we have done that over a long period 

of time very successfully. I am enormously proud of those programs 

and proud that you are able to come from those programs and be 

a part of the hearing here in Washington, D.C. So I welcome you. 

Ms. RAND. Thank you. 

The CHAIRMAN. Mr. Luger? 

Mr. LUGER. Senator Dorgan, I know there is a rumor out there 

that I have few friends, but Kathryn is one of them. 

[Laughter.] 

The CHAIRMAN. Let me thank all of you for being here today. 

This Committee will, as I said, consider all of the issues we have 

received today. 

The hearing is now adjourned. 

[Whereupon, at 11:55 a.m., the Committee was adjourned.] 

(67) 

A P P E N D I X 


417b1.eps
68 


417b2.eps
69 


417b3.eps
70 


417b4.eps
71 


417b5.eps
72 


417b6.eps 417b7.eps
73 


417b8.eps
74 


417b9.eps
75 


417g1.eps
76 


417g2.eps
77 


417g3.eps
78 


417g4.eps
79 


417g5.eps
80 


417g6.eps
81 


417g7.eps
82 


417g8.eps
83 


417g9.eps
84 


417g10.eps
85 


417g11.eps
86 


417g12.eps
87 


417g13.eps
88 


417g14.eps
89 


417g15.eps
90 


417g16.eps
91 


417g17.eps
92 


417g18.eps
93 


417g19.eps
94 


417g20.eps
95 


417g21.eps
96 


417g22.eps
97 


417g23.eps
98 


417g24.eps
99 


417g25.eps
100 


417g26.eps
101 


417g27.eps
102 


417g28.eps
103 


417g29.eps
104 


417g30.eps
105 


417g31.eps
106 


417g32.eps
107 


417g33.eps
108 


417g34.eps
109 


417g35.eps
110 


417g36.eps
111 


417g37.eps
112 


417g38.eps
113 


417g39.eps
114 


417g40.eps
115 


417g41.eps
116 


417g42.eps
117 


417g43.eps
118 


417g44.eps
119 


417g45.eps
120 


417g46.eps
121 


417g47.eps
122 


417g48.eps
123 


417g49.eps
124 


417g50.eps
125 


417g51.eps
126 


417g52.eps
127 


417g53.eps
128 


417g54.eps
129 


417g55.eps
130 


417g56.eps
131 


417g57.eps
132 


417g58.eps
133 


417g59.eps
134 


417g60.eps
135 


417g61.eps
136 


417g62.eps
137 


417g63.eps
138 


417g64.eps
139 


417g65.eps
140 


417g66.eps
141 


417g67.eps
142 


417g68.eps
143 


417g69.eps
144 


417h1.eps
145 


417h2.eps
146 


417h3.eps
147 


417h4.eps
148 


417h5.eps
149 


417h6.eps
150 


417h7.eps
151 


417h8.eps
152 


417h9.eps
153 


417h10.eps
154 


417h11.eps
155 


417h12.eps
156 


417h13.eps
157 


417h14.eps
158 


417h15.eps
159 


417h16.eps
160 


417h17.eps
161 


417h18.eps
162 


417h19.eps
163 


417h20.eps
164 


417h21.eps
165 


417h22.eps
166 


417h23.eps
167 


417h24.eps
168 


417p1.eps
169 


417p2.eps
170 


417p3.eps
171 


417p4.eps
172 


417p5.eps
173 


417p6.eps
174 


417p7.eps
175 


417p8.eps
176 


417p9.eps
177 


417p10.eps
178 


417p11.eps
179 


417p12.eps
180 


417p13.eps
181 


417p14.eps
182 


417p15.eps
183 


417p16.eps
184 


417p17.eps
185 


417p18.eps
186 


417p19.eps
187 


417p20.eps
188 


417p21.eps
189 


417p22.eps
190 


417p23.eps
191 


417p24.eps
192 


417s1.eps
193 


417s2.eps
194 


417s3.eps
195 


417s4.eps
196 


417s5.eps
197 


417s6.eps
198 


417s7.eps
199 


417s8.eps
200 


417k1.eps
201 


417k2.eps
202 


417k3.eps
203 


417v1.eps
204 


417v2.eps
205 


417v3.eps
206 


417v4.eps
207 


417v5.eps
208 


417v6.eps
209 


417v7.eps
210 


417v8.eps
211 


417v9.eps
212 


417v10.eps
213 


417v11.eps
214 


417v12.eps
215 


417v13.eps
216 


417v14.eps
217 


417v15.eps
218 


417v16.eps
219 


417v17.eps
220 


417v18.eps
221 


417v19.eps
222 

Æ 


417v20.eps