49–010 

Calendar No. 466 

109TH CONGRESS REPORT " ! SENATE 2d Session 109–261 

INDIAN GAMING REGULATORY ACT AMENDMENTS OF 

2006 

JUNE 6, 2006.—Ordered to be printed 

Mr. MCCAIN, from the Committee on Indian Affairs, 

submitted the following 

R E P O R T 

[To accompany S. 2078] 

The Committee on Indian Affairs, to which was referred the bill, 

(S. 2078), to amend the Indian Gaming Regulatory Act to clarify 

the authority of the National Indian Gaming Commission to regulate Class III gaming, to limit the lands eligible for gaming, and 

for other purposes, having considered the same, reports favorably 

thereon with an amendment in the nature of a substitute and recommends that the bill (as amended) do pass. 

PURPOSE

The primary purpose of S. 2078, the Indian Gaming Regulatory 

Act Amendments of 2006, is to clarify and amend provisions of the 

Indian Gaming Regulatory Act of 1988, Public Law 100–497, 25 

U.S.C. §2501 et seq. (‘‘IGRA’’), applicable to the Department of Interior (‘‘DoI’’), the National Indian Gaming Commission (‘‘NIGC’’), 

and the Indian tribes. This legislation is necessary to make amendments to the IGRA so that Indian tribes may continue to be the 

primary beneficiaries of gaming operations conducted on Indian 

lands, and to reaffirm and further the original goals of the IGRA. 

BACKGROUND

1. Indian gaming pre-IGRA 

Indian gaming began in earnest in the late 1970s with several 

tribes, from New York to Florida conducting ‘‘high-stakes’’ bingo 

operations. Other tribes quickly followed suit, and by the mid1980s over 100 tribes were conducting bingo operations, which genVerDate Aug 31 2005 06:47 Jun 17, 2006 Jkt 049010 PO 00000 Frm 00001 Fmt 6659 Sfmt 6602 E:\HR\OC\SR261.XXX SR261

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1Pub. L. 100–497, 102 Stat. 2467, § 3 (1988). 

2See id. 

erated more than $100 million in annual revenues. Some states, 

particularly Florida and California, attempted to assert jurisdiction 

over these tribes. The tribes resisted strenuously, citing long-standing Federal law and policy which provided for Federal and tribal 

jurisdiction over Indian lands, instead of state jurisdiction. 

2. Supreme Court Cabazon decision 

These legal disputes culminated in a ruling by the Supreme 

Court in California v. Cabazon Band of Mission Indians, 480 U.S. 

202 (1987) (‘‘Cabazon’’). In that decision, the Supreme Court, using 

a balancing test between Federal, state, and tribal interests, found 

that tribes, in states that otherwise allow gaming, had a right to 

conduct gaming activities on Indian lands largely unhindered by 

state regulation. Specifically, the Cabazon Court held that Public 

Law 83–280 states with laws that regulated, but did not criminally 

prohibit, all forms of gaming within their borders, could not regulate gaming conducted by Indian tribes on Indian lands in those 

states. In reaching this decision, the Court also emphasized the 

Federal government’s policy of Indian tribal self-governance, including the policy of encouraging tribal self-sufficiency and economic development. 

3. IGRA 

The Cabazon decision engendered a great deal of discussion regarding the need for Federal legislation to address Indian gaming 

and its regulation. Tribes, satisfied with the Cabazon decision, saw 

no need for Federal legislation. States sought Federal legislation 

overruling Cabazon and providing an extension of state jurisdiction 

over Indian lands for gaming regulation. Some in Congress, including current and past members of this Committee, saw wisdom in 

creating a comprehensive regulatory framework under Federal law, 

that would bring some order to the complex relationship between 

the Federal government, tribes and states as it related to the conduct and regulation of Indian gaming. 

The result of those discussions was the IGRA, enacted a year 

after the Cabazon decision, which established a comprehensive 

framework for the operation of Indian tribal gaming across the 

United States. A primary purpose of the IGRA, as stated by Congress, was ‘‘to provide a statutory basis for the operation of gaming 

by Indian tribes as a means of promoting tribal economic development, self-sufficiency, and strong tribal governments.’’1 Another 

purpose was ‘‘to provide a statutory basis for the regulation of gaming by an Indian tribe adequate to shield it from organized crime 

and other corrupting influences, to ensure that the Indian tribe is 

the primary beneficiary of the gaming operation, and to assure that 

gaming is conducted fairly and honestly by both the operator and 

players.’’2

In enacting the IGRA, Congress expressly rejected arguments by 

states for abrogating tribal sovereignty and imposing state regulation of tribal gaming. Instead, the IGRA established three different 

categories of gaming and a regulatory system applicable to each. 

The IGRA also established a Federal regulatory commission, the 


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3See id., § 6(a)(4). 4See id., § 11(b)(2)(F). 5See id., § 6(a)(3). 6See id., § 7(b)(4) and § 11(b)(2)(C). 7See id., § 14. 8See infra Note 1, § 11(d)(7)(B)(vii). 

NIGC, to provide Federal oversight over certain forms of tribal 

gaming. 

The three categories of gaming established by the IGRA, and the 

regulatory system for each, are: 

• Class I, which refers to traditional and ceremonial games 

conducted by tribes, and for which the IGRA provides exclusive 

regulation by the tribes; 

• Class II, which refers to bingo, games similar to bingo, 

pulltabs, and some non-banked card games, and for which the 

IGRA provides primary day-to-day regulation by the tribes and 

regulatory oversight and enforcement by the NIGC; and 

• Class III, which refers to all other types of gaming, and for 

which the IGRA provides a unique method of shared regulation 

between tribes and states through mutually agreed upon compacts, and over which the NIGC exercises oversight and enforcement. 

The IGRA created the NIGC, a 3-member independent Federal 

regulatory agency charged with oversight of Indian gaming. Under 

its mandate, the NIGC is charged with approving management 

contracts; 3 conducting background investigations; 4 approving tribal gaming ordinances; 5 reviewing and conducting audits of the 

books and records of Indian gaming operations; 6 and enforcing violations of the IGRA, its own regulations, and approving tribal gaming ordinances. 7

Pursuant to the compact provisions of the IGRA, many Indian 

tribes and states developed sophisticated regulatory frameworks to 

oversee tribal gaming operations. These tribes and states have put 

in place effective standards for the conduct of Class III games, as 

well as financial and accounting standards for their operations. 

4. The Seminole decision 

The compacting process, originally envisioned as an opportunity 

for tribes and states to enter into mutually beneficial agreements 

addressing legitimate issues of concern to each, became an area of 

significant discord soon after enactment of the IGRA. Several 

states, including Florida, asserted legal challenges to the IGRA 

rather than enter into good faith negotiations for compacts. These 

challenges culminated in a decision by the U.S. Supreme Court in 

Seminole Tribe v. Florida, 517 U.S. 44 (1996) (‘‘Seminole’’). In that 

decision, the Court held that provisions in the IGRA which authorized tribes to bring suit in Federal court for ‘‘bad faith refusal to 

negotiate’’ were unconstitutional infringements on the State of 

Florida’s 11th Amendment immunity to suit. Following the Seminole decision, the Secretary of the Interior, using authority provided by IGRA, promulgated regulations pursuant to which a tribe 

can request ‘‘procedures’’ 8 for the regulation of Class III gaming in 

states where such gaming is permissible. Several states have challenged the constitutionality of the Secretary’s authority to issue 


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9See National Indian Gaming Commission, Press Release, July 13, 2005. 10Prior to the 1997 amendment, the NIGC budget was limited to Federal appropriations 

which could match fees collected from the tribes based on their Class II gaming revenues. The 

cap on those Class II fees was set at $3,000,000. 11See e.g. Hearing to Provide Information on the Activities of the National Indian Gaming 

Commission, Before the Senate Committee on Indian Affairs, S. Hrg. 106–730, 106th Cong., at 

p. 3 (2000) (Testimony of Montie Deer, Chairman, National Indian Gaming Commission). See 

also Hearing on Indian Gaming Regulatory Act: Role and Funding of the National Indian Gaming Commission, Before the Senate Committee on Indian Affairs, S. Hrg. 108–67, Pt. 1, 108th 

Cong., at pp. 3–4 (2003) (Testimony of Philip Hogen, Chairman, National Indian Gaming Commission). 

such procedures. To date the Secretary has not issued procedures 

for any tribe. 

5. The Indian Gaming industry in 2006: A snapshot 

At the time the IGRA was enacted, Indian gaming was a relatively modest industry consisting mainly of what are now known 

as ‘‘Class II’’ high-stakes bingo operations. At that time, virtually 

no one contemplated that Indian gaming would become the nearly 

$20 billion 9 industry that exists today. Indian gaming is providing 

tribes with much-needed capital for development and employment 

opportunities where few previously existed. 

Though gaming revenues have grown exponentially in the last 

eighteen years, the IGRA has been amended only once. In 1997, 

Committee on Indian Affairs Chairman Campbell introduced an 

amendment that authorized the NIGC to collect increased fees including, for the first time, fees from Class III operations, which 

would fund the Commission’s regulatory efforts in Indian Country.10 Before the change in the fees structure, the NIGC was funded almost exclusively with Federal appropriations, and was barely 

able to keep up with the ever-growing number of tribal gaming operations and its statutorily mandated duties under the IGRA. 

Since 1997, the NIGC has made significant strides in its role as 

the Federal regulatory body charged with oversight in the field of 

Indian gaming. It has opened five field offices and employed additional staff to oversee tribal gaming operations across the country 

and fulfill the NIGC’s monitoring responsibilities.11

Most recently, on May 12, 2006, the President signed Public Law 

109–221, which contained the operative provisions of S. 1295, the 

National Indian Gaming Commission Accountability Act of 2005. S. 

1295 was introduced by Senator McCain on June 23, 2005, to 

amend Section 18 of the IGRA to authorize the NIGC to collect fees 

from all Class II and Class III operations at a rate not to exceed 

.08 percent of the gross revenues from each such operation. As a 

result, for a year in which the Indian gaming industry has gross 

revenues of $20 billion, the new fee structure provides the NIGC 

with potential funding of $16 million. 

AN OVERVIEW OF THE PROVISIONS OF S. 2078 

On April 27, 2005, Chairman John McCain held an oversight 

hearing on Indian gaming. At that hearing, Senator McCain stated 

that the IGRA had not been substantively amended since its enactment in 1988, nearly 17 years before, and expressed his intention 

to conduct a series of oversight hearings into the IGRA, its implementation and the status of the Indian gaming industry. Subsequently, on May 18, July 27, and September 21, 2005, the Committee held additional oversight hearings on the IGRA, receiving 


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testimony from the DoI, NIGC, local government officials, local 

community groups, and Indian tribes engaged in gaming. 

On November 18, 2005, S. 2078 was introduced by Senator 

McCain. Following introduction of the bill, the Committee held additional oversight hearings on February 1, and February 28, 2006. 

On March 8, 2006, the Committee held a legislative hearing on S. 

2078. 

The hearings held in 2005 provided the Committee with significant information on much-needed updates and necessary improvements to the IGRA. S. 2078 was drafted based upon that information and information received from other parties. The legislative 

hearing held on S. 2078 provided additional critical feedback on the 

bill language. Based on this feedback, on March 29, 2006, the Committee approved a substitute amendment which addressed concerns 

raised about the bill’s language by Committee Members. 

As approved by the Committee, S. 2078 provides several amendments to the IGRA, including clarifications of the authorities and 

responsibilities of the NIGC, additional oversight over significant 

gaming contracts (and parties to those contracts), and several clarifications and amendments to the provisions providing eligibility for 

gaming under the IGRA on lands acquired after 1988. 

1. Amendments impacting the National Indian Gaming Commission 

A. Minimum Internal Control Standards. S. 2078 amends § 7 of 

the IGRA to provide express authority for the NIGC to promulgate 

and enforce Minimum Internal Control Standards (‘‘MICS’’) as to 

Class III gaming. These standards regulate the day-to-day operations of gaming facilities, including the rules that designate requirements for cash handling, surveillance over game play, and auditing procedures, among other things. Essentially these standards 

insure the fairness of play for gaming customers and the integrity 

of operations for the casino owner. 

The wisdom of implementing MICS in Indian gaming has long 

been accepted by Indian tribes. However, consensus on what the 

actual minimum standards should be was not universal. Therefore, 

in 1999 the NIGC began the process of promulgating regulations 

establishing MICS. A tribal advisory committee assisted the NIGC 

in drafting the MICS, which were published as final regulations in 

2000. To fulfill its oversight responsibilities the NIGC began auditing tribal gaming facilities for effective implementation of the 

MICS. 

Despite agreeing substantively on the advisability of MICS, some 

Indian tribes disagreed with the NIGC promulgating the standards 

as regulations. They felt that establishing internal control standards should be a regulatory role left to tribal and state regulation 

through compacts and tribal law. This disagreement came to a 

head when NIGC officials sought access to the Class III gaming operations of the Colorado River Indian Tribes to review and audit 

the Tribe’s conformity with MICS. The Tribe filed for an injunction 

in the United States District Court for the District of Columbia 

(the ‘‘District Court’’), claiming that the IGRA did not grant to the 

NIGC the authority to enforce MICS on its Class III gaming operations. In an August 24, 2005, decision the Court ruled that the 


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Commission did not have authority to audit the tribe for compliance with Class III MICS. 

On September 21, 2005, shortly after the District Court’s ruling, 

the Committee held a hearing addressing the need for oversight of 

Class III gaming. Testimony at that hearing made clear that the 

District Court’s ruling could create a large hole in the regulatory 

structure of Indian gaming. While some states actively enforce internal control standards over Class III, many have not exercised 

this authority. In fact, many states rely on the NIGC both to issue 

and enforce MICS in order to assure that, in addition to tribes, 

there is governmental oversight over the flow of money in Indian 

casinos. Subsequent to the hearing, the NIGC has presented evidence that some tribes are invoking the court decision as a basis 

for prohibiting NIGC from conducting oversight of their Class III 

facilities. In the opinion of the Committee, these actions will seriously detract from the strong regulatory structure created when 

the IGRA was enacted and that is necessary for the industry today. 

Therefore, it is the intent of the Committee that S. 2078 clarify 

the IGRA to assure that the NIGC has authority to issue and enforce Class III MICS. Section 5 of the bill amends the authorities 

of the NIGC contained in § 7 of IGRA to expressly provide oversight 

and auditing responsibilities with regard to Class II and III gaming 

operations, including promulgation of MICS. The Committee encourages NIGC to exercise this authority both actively and judiciously. Where tribes and states are adequately enforcing appropriate internal control standards, NIGC may not need to engage as 

actively in enforcement. The Committee intends that the Commission will focus its oversight energies where they are most necessary. 

The Committee acknowledges that some tribes and states have 

raised concerns from time to time regarding new regulatory initiatives pursued by the NIGC that may infringe on tribal regulatory 

powers or tribal-state compacts. In the opinion of the Committee 

the amendments to § 7 of the IGRA do not infringe on tribal-state 

compacts, nor do the amendments authorize the NIGC to regulate 

as to any matters within tribal government jurisdiction that are 

not gaming-related activities. While the Committee encourages the 

NIGC to fulfill its statutory duties and regulatory responsibilities, 

including oversight of MICS, the Committee also strongly encourages the NIGC to respect the primary day-to-day regulatory role of 

tribes and states through tribal-state compacts for Class III gaming. It is the intent of the Committee that the NIGC, in implementing these amendments, interpret S. 2078 consistent with the 

IGRA’s fundamental purpose to encourage strong tribal governments, while protecting the integrity of the industry. 

B. Requiring Consultation by the NIGC. S. 2078, through the 

substitute amendment approved by the Committee, requires that 

the NIGC maintain a formal consultation policy. It is the Committee’s belief and intent that this provision will encourage a level of 

cooperation and engagement between the regulator, the NIGC, and 

the regulated, the tribal gaming operations, that will provide the 

best environment for insuring the continuing effectiveness of regulation and success for the industry. 

It is the considered opinion of the Committee that regulatory 

matters affecting the industry nationwide, such as minimum interVerDate Aug 31 2005 06:47 Jun 17, 2006 Jkt 049010 PO 00000 Frm 00006 Fmt 6659 Sfmt 6602 E:\HR\OC\SR261.XXX SR261

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12See Oversight Hearing on the Regulation of Indian Gaming. Before the Senate Committee 

on Indian Affairs, S. Hrg. 109–50, Pt. 1, 109th Cong., at p. 9 (2005) (Testimony of Earl E. 

Devaney, Inspector General, Department of the Interior). 

nal control standards and background checks on major investors, 

should reflect consideration of the impact on the regulated community. Consultation is the most effective means of achieving that 

goal. While consultation does not mean capitulation by the NIGC 

to every demand by tribes or even necessarily agreement between 

the agency and tribes, opinions, views and proposals by tribes 

should receive significant consideration by the NIGC, particularly 

in the area of rulemaking. Therefore, the agency must balance 

those considerations with its responsibilities as the Federal regulator in order to protect the integrity of the industry and maintain 

public trust in it. 

While previous Commissioners disagreed with this Committee’s 

views that a consultation policy was needed, the Committee is 

strongly encouraged by the commitment of the current Commissioners to consulting with affected Indian tribes, including adoption 

of a Commission consultation policy. Therefore, it is not the Committee’s intent that the Commission rewrite its current policy, only 

that a policy be maintained and effectuated by future Commissioners and their administrations. 

C. Revenue Allocation Plan Enforcement. Section 7 of the substitute amendment to S. 2078 amends § 11 of IGRA by adding a 

new subsection (f) requiring the DoI to provide to the NIGC notice 

of approval of a revenue allocation plan (‘‘RAP’’), including any 

amendments or revisions, and copies of the plan and information 

used to approve the plan. The DoI Inspector General reported to 

the Committee that there has been a lack of enforcement of RAPs 

by DoI or NIGC.12 The NIGC has testified before the Committee 

that it cannot effectively enforce RAPs due to a lack of information. 

S. 2078 addresses this technical challenge by requiring the DoI to 

provide relevant information to the NIGC, the agency with enforcement responsibility, and expects that the NIGC will henceforth enforce those provisions of IGRA dealing with RAPs. 

2. Background checks on tribal gaming commissioners 

Section 7 of S. 2078, as amended by the substitute amendment, 

requires that tribes must conduct background checks on tribal 

gaming commissioners and tribal gaming commission employees on 

a regular basis, in addition to key employees and primary management officials as required by the IGRA. This amendment to § 11 of 

IGRA is designed to address a key concern regarding the operation 

of tribal gaming commissions: that the regulators themselves meet 

substantially the same criteria imposed on the individuals they 

regulate. 

The Committee notes that this provision does not delegate to either the NIGC or the Secretary of the Interior any authority to set 

standards regarding tribal gaming commissioners. This amendment 

requires that a tribe address the issue of background checks for 

tribal gaming commissioners and employees in its gaming ordinance. The actual standards a tribe adopts for its tribal gaming 

commission remain within the sovereign jurisdiction of the tribe. 

The Committee believes that this section provides an appropriate 

balance between respect for tribal sovereignty and the Congress’ 


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13See Senate Report 100–446, pg. 15. 

desire to protect the integrity of Indian gaming. Since IGRA has 

been enacted, the Committee has not received any testimony from 

tribes indicating that the required background checks for primary 

management and key officials have hindered tribal sovereignty by 

dictating who a tribe may hire. Like that provision, the provision 

in S. 2078 does not give NIGC authority over who the tribe hires 

or appoints. It does not mandate the use of tribal gaming commissions, nor does it allow the NIGC to mandate the makeup of those 

commissions. The section simply requires that tribes collect appropriate information so that—as with primary management officials 

and key employees—they know the background of potential tribal 

regulators and, thus, are able to make informed decisions about 

who should occupy those positions. 

3. Gaming-related contracts and contractors 

A. In the Beginning. When Congress enacted the IGRA in 1988, 

among the stated purposes of the law were to provide for tribal economic development and create strong tribal governments. These 

purposes were accomplished by providing within the IGRA several 

provisions that would ensure that tribes were the primary beneficiaries of their gaming operations. 

At the same time, in 1988, a number of Indian gaming operations were managed by non-Indian ‘‘management contractors.’’ 

Many of these management contractors were entrepreneurs willing 

to accept the risks of investing in a very uncertain venture. For 

many Indian tribes, this opened a positive avenue for capital investment. However, in some instances, this Committee found that 

the contract terms were clearly unconscionable, and given Congress’ plenary power over Indian affairs, statutory protections were 

needed to ensure that Indian tribes received the primary economic 

benefit from the gaming activity.13 These statutory protections included mandatory management contract terms, review of the management contracts by the NIGC, and background checks on the 

principal officers and shareholders of the management contractors. 

For several years, these statutory provisions had the desired result. Eventually, however, enterprising investors sought to avoid 

the scrutiny required of management contracts and contractors by 

engaging in so-called consulting agreements, development agreements or financing agreements. While these contracts did not contain indicia of management contracts, they still exerted significant 

influence over the operation of tribal gaming facilities and provided 

for compensation that equaled or exceeded that allowed for management contracts; yet they legally escaped review by the NIGC. 

B. The Need for Expanded Contract Review. During discussions 

with gaming tribes and gaming industry officials, including the 

NIGC, the Committee has been made aware of two primary reasons that gaming investors have sought to avoid having their gaming contracts reviewed by the NIGC. The first, and most obvious 

reason, is that some individuals do not want to disclose their business dealings and associations. While reluctance to disclose private 

business matters does not of itself connote criminal associations, 

the unique history of the casino industry has led to the conclusion 

that regulatory review and oversight of the individuals engaged in 


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14See Letter from William E. Moschella, Assistant Attorney General, Office of Legislative Affairs, U.S. Department of Justice, to the Hon. John S. McCain, Chairman, Committee on Indian 

Affairs, U.S. Senate (July 18, 2005), attachment p. 3. 

the gaming business is the most effective manner of preventing infiltration by organized crime and other unwanted elements. 

The Committee has been informed by the Department of Justice 

that, since the enactment of the IGRA, it has discovered no evidence of systematic infiltration of organized crime into the Indian 

gaming industry.14 The ability of tribes to protect their gaming operations from organized crime, in the opinion of the Committee, 

has been due in no small part to the unique tripartite regulatory 

structure enacted in the IGRA, including review and approval of 

management contracts by the NIGC. This rigorous regime has ensured that Indian tribes are the primary beneficiaries of their gaming operations. It has also protected both Indian gaming customers, 

by ensuring the fairness and integrity of games, and the general 

public, by preventing criminal syndicates from using gaming revenues to fund other criminal endeavors. It is the express intent of 

the Committee that this rigorous protection be continued and 

strengthened by S. 2078. 

The Committee has also been made aware, however, that there 

is another, purely economic reason that gaming contractors often 

seek to avoid the review of the NIGC: the significant review period 

allowed under the IGRA, and the even longer review timeframes 

often demanded by the NIGC. The IGRA provides for an initial 180 

day review period, with an extension allowed for up to an additional 90 days. This minimum of six to nine months for approval 

of a contract, on top of the time spent negotiating a deal, would be 

unacceptable in most business environments. The Committee has 

been informed that some approvals have taken as long as two years 

or more. A significant number of tribes have informed the Committee that these extremely long time frames have resulted in 

greatly inflated costs for them, including higher interest rates, increased material costs, and delays in opening facilities. 

In amending Section 12 of the IGRA, the Committee has sought 

to balance these two competing, but not mutually exclusive goals: 

to provide the tools for the NIGC and tribes to continue to effectively monitor the industry and exclude unwanted elements; and to 

smooth or streamline the contract review and approval process to 

allow for more efficient business dealings. To effectuate these goals 

the Committee has amended the definitions of contracts requiring 

review and approval, and the actual review and approval process 

through stricter timelines. 

C. Definitions. The substitute amendment to S. 2078 approved by 

the Committee expands the types of contracts requiring approval to 

include consulting, development, financing, and participation contracts, as well as management contracts. Each definition provides 

authority for the NIGC to establish by regulation, categorical exclusions for contracts that fall within the definition but do not involve 

either subject matters or dollar amounts that are of significance to 

the NIGC’s oversight. The Committee does not believe that such 

NIGC authority impairs in any way the authority of Indian tribes, 

or states through compacts, to review contracts or background 

checks, or to license persons doing business with tribal gaming operations. 


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15See, e.g., Senate Committee on Indian Affairs Oversight Hearing on Indian Gaming, April 

27, 2005, pg. 14. 

Management Contracts: It is the intent of the Committee that the 

NIGC, upon passage of S. 2078, continue to interpret the term 

‘‘management contract’’ consistent with the use of the term within 

NIGC administrative rulings, guidelines, and regulations, as well 

as any federal court precedent that may be relevant. Consistent 

with that intent, the definition categorically excludes employment 

contracts, except those that provide for compensation based on a 

share or percentage of profits from the casino. 

Consulting Contracts: In oversight hearings held by the Committee over multiple congresses, testimony has been provided by 

the NIGC regarding a growing practice by non-Indian investors of 

avoiding the review and scrutiny of the NIGC by entering into socalled ‘‘consulting’’ contracts.15 While the investor would be involved in the planning, financing, development or operation of an 

Indian gaming facility, and compensated handsomely therefor, no 

contract would be submitted to the NIGC because this involvement 

was purported to be merely for ‘‘consulting’’ services. The NIGC 

would only be made aware of such agreements after the fact, often 

after the gaming facility was operational. It is the intent of the 

Committee that these contracts be subjected to review by the 

NIGC, and the non-tribal parties to such contracts be subjected to 

the background checks required by IGRA. 

Development Contracts: The Committee has also been informed 

that, with increasing frequency, non-Indian investors have also 

sought to avoid the review and scrutiny of the NIGC by entering 

into so-called ‘‘development’’ contracts. Many of these ‘‘development’’ contracts provide for the planning, financing and construction of Indian gaming facilities. These types of contracts may not 

formally involve management or consulting on management of operations; however, compensation for these investors is usually 

taken from later operations, and that compensation is often far in 

excess of the market value of the services provided. Additionally, 

the Committee has been made aware that some developers, who 

would not be able to survive the scrutiny of background checks, actively market their development of ‘‘turnkey’’ facilities to other investors, for often exorbitant compensation. While the Committee is 

concerned with the involvement of these ‘‘unsuitable’’ investors in 

the Indian gaming industry, it is primarily concerned that the true 

loser in these scenarios are the tribes who are not receiving the full 

benefit of their gaming operations. 

The Committee recognizes that there are many types of construction and other contracts that might be considered ‘‘development’’ 

contracts, but are tangential to gaming activities and do not need 

scrutiny by the NIGC, including professional services contracts 

such as the architectural and engineering services integral to any 

construction project. It is the considered opinion of the Committee 

that only contracts for major gaming or gaming-related projects 

should be covered by this definition, particularly those for which 

compensation will be contingent upon gaming revenues derived 

from the new development. 

Financing Contracts. The Committee has been informed, through 

media reports and various government agencies, of concerns reVerDate Aug 31 2005 06:47 Jun 17, 2006 Jkt 049010 PO 00000 Frm 00010 Fmt 6659 Sfmt 6602 E:\HR\OC\SR261.XXX SR261

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garding the backgrounds and associations of some persons that 

have financed the building or expansion of Indian gaming facilities 

or operations. While the Committee does not intend to restrict the 

ability of tribes to access investment capital, it is concerned that 

tribes may unknowingly receive funding from organized crime or 

other unsuitable sources. Consistent with those concerns, the definition of financing contract approved by the Committee in the substitute amendment to S. 2078 is narrowly drafted to exclude contracts with entities regulated by other arms of the Federal government, including federally-chartered banks and companies regulated 

by the Securities and Exchange Commission. Also excluded are 

intergovernmental financial arrangements, either between tribes, 

or between tribes and states as is provided in some compacts. It 

is the intent of the Committee that the NIGC exercise its authority 

to approve finance contracts primarily with regard to private, unregulated sources of capital. 

Participation Contracts. The NIGC has long raised concerns regarding contracts for various services related to gaming operations 

or facilities where the compensation is based on receipt of a significant percentage of revenues, not on the actual value of the services 

performed. While the opportunity to participate in the success of a 

gaming operation via a percentage of revenues provides increased 

incentives for investors to commit capital to developing tribal casinos, it has also long been an area easily open to exploitation. It is 

the intent of the Committee that the NIGC rigorously review contracts and background checks on investors seeking participation 

contracts. The Committee expects that such increased scrutiny will 

likely discourage those seeking to obtain exorbitant profits at the 

expense of tribes. The Committee does not intend that the NIGC 

unnecessarily seek review of participation contracts that reflect 

common gaming industry practice, so long as such agreements provide services commensurate with the compensation provided and 

are in keeping with common industry standards or practices. 

D. Categorical Exclusions and Timelines. For each of the defined 

gaming-related contracts, the substitute amendment to S. 2078 provides authority to the NIGC to promulgate regulations, in consultation with tribes, that will categorically exclude contracts that fall 

within the broad statutory definitions provided, yet do not involve 

either subject matters or dollar amounts that are of significance to 

the NIGC’s oversight. It is the express intent of the Committee 

that, in expanding the authority of the NIGC to review and approve a broader range of gaming-related contracts, the increased 

regulatory oversight necessarily accompanying such expansion 

shall not overburden the industry and thereby artificially inflate 

otherwise routine business expenses or economic costs. 

In order to fulfill the intent of the Committee, the substitute 

amendment to S. 2078 amends § 12 of IGRA by adding a new paragraph (b)(5) which provides strict timelines for approval by the 

NIGC of gaming-related contracts. The Committee strongly encourages the NIGC to efficiently allocate personnel and resources needed to meet these new responsibilities and mandated deadlines. The 

Committee expressly intends that the NIGC not waste its resources 

unnecessarily on reviewing gaming-related contracts for which 

there is no danger of exploitation by unwanted or criminal persons, 

and that the NIGC, in consultation with tribes, exercise the authorVerDate Aug 31 2005 06:47 Jun 17, 2006 Jkt 049010 PO 00000 Frm 00011 Fmt 6659 Sfmt 6602 E:\HR\OC\SR261.XXX SR261

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ity given to promulgate regulations that will categorically exclude 

the more mundane types of gaming-related contracts. 

E. Review and Approval of Gaming-Related Contracts. Section 8 

of the substitute amendment to S. 2078 replaces § 12 of IGRA 

which currently governs the review and approval of management 

contracts. In updating and amending § 12 to conform to the expanded definition of gaming-related contracts which will require review and approval by the NIGC, the basic statutory contract requirements needed for approval in the current law were carried forward. Similarly, the basic standards whereby the NIGC will review 

the backgrounds of the gaming-related contractors remain the 

same as currently provided in IGRA. It is the intent of the Committee that the basic procedures required of gaming-related contractors and the NIGC under § 12 will continue to be utilized, consistent with the new timelines imposed by paragraph (b)(5) of 

amended § 12. 

The Committee has provided the NIGC with additional flexibility 

under amended § 12 to better balance the twin goals of rigorous 

regulatory enforcement and efficient business practices. In particular, the Committee strongly encourages the NIGC to utilize the 

authority given in new paragraphs (c)(3) and (c)(4) of § 12 to contract with Indian tribes or establish alternative methods of determining suitability and categorical exclusions to process background 

checks and approve gaming-related contracts in a more timely and 

efficient manner than past history has indicated. The Committee 

also encourages the NIGC to make clear to tribes and gaming-related contractors the information which, when provided at the beginning of the review process, will constitute a complete submission 

and thus make approval a more efficient process. 

F. New Regulatory Authority for Additional Gaming-Related Contracts. Section 5 of the substitute amendment to S. 2078 approved 

by the Committee provides amendments to § 7(b)(10) of IGRA 

granting new substantive regulatory authority to the NIGC to identify by regulation gaming-related contracts that do not fall within 

the statutory definitions but are of concern. The Committee determined this provision was needed to guard against the ingenuity of 

gaming contractors in seeking ways to avoid the scrutiny of NIGC 

regulators in the future. 

The Committee expressly intends that this authority be forwardlooking, and only be exercised after regulations have been duly promulgated for the defined gaming-related contracts pursuant to new 

§ 26 of IGRA, as mandated by § 12 of the substitute amendment to 

S. 2078. The Committee further acknowledges that this authority 

is far-reaching, and thus mandated that this authority only be exercised through the NIGC’s promulgation of regulations, in consultation with tribes. 

G. Implementation. Recognizing that substantial new responsibilities are placed on the NIGC by the expanded definitions of gaming-related contracts contained in the substitute amendment to S. 

2078 approved by the Committee, a second degree amendment to 

the substitute amendment was also approved by the Committee 

during markup of the bill which added a new § 26 to IGRA which 

would delay enforcement of the new gaming-related contract definitions until implementing regulations are promulgated. 


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The provision provides a two-year timeframe for the NIGC to 

promulgate regulations, in consultation with tribes, which will provide needed categorical exclusions for the gaming-related contracts 

definitions and persons subjected to suitability determinations. The 

NIGC is required to provide a status report back to the Committee 

and the House Committee on Resources within one year of enactment on the progress in promulgating the regulations. 

The provisions express the Committee’s intent that the NIGC 

shall continue to review and approve or disapprove management 

contracts using their current regulations until new regulations are 

developed. The Committee further intends that within the two-year 

timeframe, gaming-related contracts that are not management contracts may be entered into by tribes and contractors and will not 

be considered void or invalid by reason of not being approved by 

the NIGC. Conversely, the Committee does not intend to validate 

an otherwise void or invalid contract by reason of paragraph (c)(2) 

of § 26. 

In addition, the Committee encourages the NIGC to carefully 

consider any current regulations that do not conflict with the 

amendments to IGRA embodied in the substitute amendment to S. 

2078, and, where appropriate, maintain those regulations in effect. 

4. Indian lands eligible for gaming 

The IGRA generally prohibits gaming on lands acquired in trust 

outside of reservations after October 17, 1988, the date of enactment. However, § 20 of the IGRA contains several exceptions to this 

general rule, some of which have engendered debate and controversy. S. 2078 addresses these exceptions by eliminating one of 

them, the two-part determination, and amending three others dealing with land claims, initial reservations and restored lands. 

A. The Two-part Determination. When enacted, the IGRA § 20 included in subsection (b)(1)(A) an economic opportunity exception to 

the general ban on gaming on lands outside of reservations. This 

so-called ‘‘two-part determination’’ allows gaming on land acquired 

after October 17, 1988, that is, on ‘‘after-acquired lands’’ if: (1) the 

Secretary finds that gaming would benefit the tribe and not be to 

the detriment of the surrounding community; and (2) the Governor 

of the state in which the land is located concurs. This provision is 

unique in that it allows a tribe and a state to essentially create a 

new reservation solely for gaming purposes, even on lands to which 

the tribe may not have an historical connection. 

While the general purposes of the IGRA were to create economic 

development on reservations and strong tribal governments, this 

provision provided an avenue through which tribes, unable to engage in viable gaming on their current reservations, might have 

the opportunity to receive the economic benefits of gaming off their 

reservations. Unfortunately, this well-intentioned provision has 

caused a great deal of controversy between tribes and states and 

local communities, and even among tribes. 

During the 109th Congress, this Committee held four hearings 

during which witnesses raised concerns about the two-part determination. In testimony presented at these hearings, local governments, tribes and grassroots organizations expressed intense frustration with the process through which the Secretary and governors make decisions that allow tribes to site casinos off their resVerDate Aug 31 2005 06:47 Jun 17, 2006 Jkt 049010 PO 00000 Frm 00013 Fmt 6659 Sfmt 6602 E:\HR\OC\SR261.XXX SR261

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16See 25 U.S.C. § 177. 

ervations on lands to which they have no historical ties and that 

local communities and other impacted tribes did not foresee or do 

not want. These groups testified that they had insufficient input 

into the process of making a two-part determination, resulting in 

a lack of confidence that there were adequate limits to gaming by 

Indian tribes on lands far from existing reservations. 

Moreover, while the DoI testified that only three tribes have successfully navigated the two-part determination process, an increasing number of written requests for determinations have been filed 

and even more have been hinted at by tribes and developers. The 

costs to tribes, local communities, states and the Department of the 

Interior in investments of time, energy and money into these offreservation endeavors are extremely high. The mere threat of offreservation gaming to local communities and tribes that conduct 

gaming on their own nearby reservations engenders its own anxiety and consequent intangible costs. 

Based on the hearing record, and substantial information provided formally and informally from many interested parties, the 

Committee concludes that, as a matter of Federal Indian policy, 

there must be limits on where tribes can conduct gaming pursuant 

to the IGRA. Therefore, the Committee has determined that elimination of the two-part determination is the wisest policy choice 

among several. Consistent with the Committee’s determination, S. 

2078 eliminates the Secretary’s authority to make the determinations contained in existing subsection 20(b)(1)(A). This provision is 

not intended to affect the ability of a tribe to conduct commercial 

gaming activities off Indian lands and outside the authority of the 

IGRA. 

While committed to eliminating the two-part determination, the 

Committee is cognizant that there are some tribes that have already spent significant time, money, and energy into following the 

letter of the law to meet the two-part determination criteria. It is 

not the intent of the Committee to unfairly prevent these tribes 

from continuing through the process in which they are already 

deeply engaged. In fact, it is not uncommon for significant effort, 

resources, and time to be spent before an application is even filed. 

Therefore, § 10 of S. 2078 provides a ‘‘grandfather’’ clause that allows written requests for specific parcels of land submitted to the 

U.S. Department of the Interior before April 15, 2006, to continue 

to be considered pursuant to current subsection (b)(1)(A) of §20, 

and in accordance with the DoI administrative processes implementing that provision. 

The Committee does expressly intend, however, that the inclusion of the ‘‘grandfather’’ provision is in no way to be interpreted 

as encouraging approval of any existing two-part determination request. The Department of the Interior must continue to be as rigorous in evaluating the benefits to the tribe and detriments to the 

surrounding community as it has been in the past. 

B. Land claims. S. 2078 also amends the exception contained in 

subsection (b)(1)(B)(i) of § 20 of the IGRA addressing land claims. 

Generically, ‘‘land claims’’ refer to claims by tribes asserting legal 

title to real property pursuant to the Indian Trade and Intercourse 

Act.16 Settlements for such claims require congressional legislation. 


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17IGRA does not define ‘‘restore’’, ‘‘restored’’ or ‘‘restoration’’, but several courts have provided 

guidance. These courts have looked to the ordinary dictionary meaning such as ‘‘to give back, 

return, make restitution, reinstatement, renewal and restitution.’’ See Grand Traverse Band 

v.United States (III), 369 F.3d 960, 967. 

The amendment specifies that, to be eligible for gaming under the 

IGRA, lands taken into trust pursuant to a land claim must be 

within the state in which the tribe’s reservation or last recognized 

reservation is located. 

Testimony received by the Committee during hearings on lands 

taken into trust for gaming purposes through ‘‘land claims’’ raised 

several concerns. Among those raised was the concern that land 

claims are not being pursued in order for tribal members to move 

back to the claimed lands, but solely to establish casinos. Locating 

casinos out-of-state affects not only in-state tribes, but also land 

owners in land-claim states who live and work on land that they 

could not have foreseen would be subject to a claim. Additionally, 

tribes with in-state reservations raised concerns that out-of-state 

tribes will negotiate compacts that give away governmental prerogatives and sovereign rights at the expense of in-state tribes. These 

in-state tribes seek to protect the already existing and sometimes 

long-standing relationships between states and the tribes already 

within their borders. 

It is the considered opinion of the Committee that clear congressional direction is needed to address many of the concerns raised 

and to discourage those wishing to exploit ambiguities in the law. 

Therefore, § 10 of S. 2078 amends clause (b)(1)(B)(i) of § 20 of the 

IGRA to eliminate land claims that have been asserted by tribes 

for lands that are outside their current state, sometimes across the 

country, in order to find more lucrative gaming sites. This provision does not affect a tribe’s ability to utilize lands obtained 

through land claims for purposes other than gaming. S. 2078 also 

codifies what has heretofore been done in practice but not required 

by § 20, a mandate that there be Congressional approval of the 

land claim before gaming can be conducted. 

C. Initial reservations and restored lands. S. 2078 further 

amends clauses (b)(1)(B)(ii) and (iii) of § 20 of the IGRA, which provide exceptions to the general ban on post–1988 lands for newly 

recognized or restored tribes. Clause (ii) applies to the ‘‘initial reservation’’ of tribes that successfully petitioned for acknowledgment 

through the DoI’s Federal Acknowledgment Process. Clause (iii) applies to ‘‘the restoration of lands for an Indian tribe that is restored 

to Federal recognition.’’17

During hearings before the Committee, significant testimony was 

provided regarding the potentially high impact that gaming activities had on local communities. In their testimony, impacted communities and other nearby tribes raised concerns about the process 

whereby the DoI determines whether particular lands should be eligible for gaming for a newly recognized or restored tribe. Serious 

questions were raised regarding the transparency of the process 

and whether the Secretary was gathering sufficient information 

prior to making such a determination. 

Based on the hearings, several themes became clear: the fairness 

exceptions should not unfairly prejudice existing tribes; affected 

local communities and tribes must have a fair opportunity to 


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18See Grand Traverse Band of Ottawa & Chippewa Indian v. United States Atty., 198 F. Supp. 

2d 920, 937 (D. Mich. 2002) (‘‘The Band has introduced substantial and uncontradicted evidence 

that the parcel is located in an area of historical and cultural significance to the Band that was 

previously ceded to the United States. The Band also has introduced uncontradicted evidence 

of the intent of the Band in acquiring properties between 1988 and 1990. Finally, it has introduced evidence supporting the temporal proximity of restoration of all reservation holdings to 

the time of acknowledgment and approval of the tribal constitution, together with the absence 

of any substantial restoration of lands preceding the property at issue.’’); aff’d 369 F.2d 960 (6th 

Cir. 2004). 

present legitimate concerns; and, significant impacts to affected 

local communities and tribes should be addressed. 

To address these themes, S. 2078 significantly amends subsection 

(b)(1)(B) of § 20 of the IGRA. First it provides that: (1) for initial 

reservations the tribe must have a historical and geographical 

nexus to the land being acquired, and (2) for restored lands for 

tribes restored to Federal recognition the tribe must have the historical and geographical nexus, plus a temporal connection must 

exist between the acquisition of the land and the date of the tribe’s 

restoration to Federal recognition. Second, the Secretary must consult with the tribe and local and tribal officials, provide public notice and an opportunity to comment and a public hearing. Third, 

the Secretary must determine that a gaming establishment on the 

land would be in the tribe’s best interest and not create a significant, unmitigated impact on the surrounding community. 

The Committee notes that, for initial reservations, there is no requirement that there be a temporal connection between the land 

acquisition and tribe’s recognition. In the view of the Committee, 

the timing of that acquisition should not be relevant when a tribe 

is acquiring its first land following acknowledgment through the 

Federal Acknowledgment Process. Similarly, while not directly 

stated in S. 2078, the Committee is of the opinion that the DoI 

should consider the challenges a tribe may have faced in acquiring 

land when applying the temporal connection requirement to the 

tribe’s acquisition of its first restored lands following restoration. 

It is the intent of the Committee through S. 2078 to codify, for 

both initial reservations and restored lands exceptions, what has 

been done in practice, particularly in restored lands analyses, by 

requiring that tribes have a historical nexus to the land on which 

the gaming will be conducted. This nexus requirement is derived 

from case law on IGRA’s restored land exception which indicates 

that restored lands cannot be all lands with which a tribe has had 

minimal contact. Case law articulates that, for restored lands, a 

tribe have a historical nexus to the land and that the restoration 

be sufficiently close in time to the date of recognition.18 It is the 

considered opinion of the Committee that codifying the historical 

nexus requirement, and for restored lands, the temporal connection 

requirement, will help to clarify to all interested parties the standard that must be met for land to be deemed eligible for gaming 

pursuant to these exceptions. 

S. 2078 also amends subsection 20(b)(1)(B)(ii) and (iii) to require 

that there be public input into the process of determining whether 

gaming is an appropriate activity that may be conducted on lands 

acquired after October 17, 1988, even if there is a historical nexus 

between the tribe and the lands to be gamed upon. The Committee 

is very cognizant of the legitimate concerns raised by affected local 

communities and tribes that they had no input into the determination of whether gaming—a potentially high impact activity—should 


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17 

be conducted on nearby land. With these concerns in mind, the 

amendments in S.2078 require that the Secretary allow public comment and specify that a public hearing must be held. This language 

reflects the Committee’s view that it is imminently fair to the people who may be most affected by a nearby gaming operation to: (1) 

be informed that a tribe is seeking to conduct gaming on nearby 

land; (2) have the opportunity to comment on significant impacts 

that the gaming may have on their community; and, (3) have this 

input be considered by the Secretary when making a determination 

that lands are eligible for gaming. 

Conversely, it is not the intent of the Committee that the Secretary treat community opposition to a tribal gaming operation as 

a veto over use of the land for gaming. Thus, opposition to, or controversy over, a proposal to use land for gaming does not constitute 

an impact. Rather, it is the express intent of the Committee that 

the Secretary carefully weigh whether the tribe can mitigate identifiable significant impacts that the proposed gaming would have on 

the affected communities. The Committee notes that this is a different standard than the one used in the past for the two-part determination and expects that the Secretary will interpret this provision accordingly. The Committee intends that, for initial reservations and restored lands, the Secretary evaluate the efficacy of 

mitigation that is offered by the tribe to lessen the impact of the 

gaming activity on the surrounding community. If impacted local 

communities and tribes reach a mutual agreement on mitigation, 

or, in the Secretary’s estimation, the tribe has offered reasonable 

mitigation to identified significant impacts, the Secretary should 

determine that the gaming would not ‘‘create significant, unmitigated impacts.’’ 

D. Determinations Regarding Land Eligibility for Gaming. In the 

past, both the Secretary and the NIGC have issued lands opinions 

regarding the eligibility of lands for gaming. Based on testimony 

presented during hearings on lands eligible for gaming, the Committee is of the considered opinion that the process of determining 

eligibility and acquiring land into trust should be streamlined at 

one agency. Therefore S. 2078 provides that, after enactment, the 

Secretary and not the NIGC is to make initial reservation and restored lands determinations for land that has not been taken into 

trust or is in the process of being taken into trust. By designating 

the DoI as the agency responsible for these determinations, the 

Committee also imposes a responsibility on the agency to make 

these determinations in a timely manner. 

Notwithstanding that S. 2078 clarifies that the Secretary has 

sole responsibility for making §20 determinations, the Committee 

is aware that there are instances when the NIGC must make a determination, to meet its regulatory responsibilities, whether a 

given parcel of land is Indian land such that the agency has jurisdiction over the gaming activity on it. The Committee does not intend to preclude the NIGC from determining whether lands are Indian lands for the purposes of determining its jurisdiction. 

E. Prior Determinations. S. 2078 includes a provision stating 

that the amendments to §20 shall not affect the validity of any determination already made by the Secretary or Chairman. This is 

intended to preserve already-issued determinations by the Secretary or Chairman regarding eligibility of gaming on trust lands. 


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The Committee does not intend the Secretary or Chairman to reconsider decisions they have already made. On the other hand, the 

Committee anticipates that opinions for restored lands and initial 

reservations that are pending at the time of enactment of S.2078 

will in fact be subject to the amended subsection. 

LEGISLATIVE HISTORY

S. 2078 was introduced on November 18, 2005, by Senator 

McCain and was referred to the Committee on Indian Affairs. Subsequent to introduction, hearings were held February 1, 2006; February 28, 2006; and March 8, 2006. 

On March 29, 2006, at a business meeting duly noticed, the Committee considered S. 2078. During the business meeting Senator 

McCain introduced a substitute amendment. In addition to the substitute amendment, Senator McCain and several other Members of 

the Committee offered stand-alone amendments to the substitute 

amendment. 

By voice vote, the Committee adopted an amendment to the substitute amendment by Senator McCain changing the cut-off date 

for considering written requests for determinations under the twopart determination set forth in the existing Act at Section 

20(b)(1)(A). Senator McCain’s amendment changed the date in the 

substitute amendment from June 1, 2006, to March 29, 2006. After 

discussion during which several senators expressed concern that 

tribes have an opportunity after the date of mark-up to submit requests for two-part determinations, Senator Dorgan offered a second degree amendment extending the time to file a request until 

April 15, 2006. Senator Dorgan’s second degree amendment was 

adopted by a voice vote. 

A second amendment to the substitute amendment was offered 

by Senators McCain and Dorgan to add a new Section 26 to S. 2078 

providing that, after consultations with tribes and no later than 

two (2) years after the section’s enactment, the Commission must 

promulgate regulations implementing the bill’s definitions. The 

amendment also provides that, with respect to gaming-related contracts other than management contracts, the contracts section of 

the bill will not take effect until the Commission promulgates regulations. New Section 26(c)(2) would additionally provide that nothing in the contracts section of the bill affects the validity or invalidity of contracts already entered into prior to the effective date 

of this this new section. The amendment was adopted unanimously 

by voice vote. 

An amendment was offered by Senator Inouye which would 

amend Section 7(2) of Senator McCain’s substitute amendment by 

imposing a time limit of 180 days on the Secretary’s duty to prescribe procedures for Class III gaming. Following a discussion 

among the Members, a roll call vote was taken. With six (6) senators voting aye and six (6) voting nay, the amendment was not 

adopted. 

Senator Coburn offered an amendment inserting into Section 5 

of the substitute amendment the requirement that once a year the 

Commission submit to the Secretary a report, for publication, describing all revenues from Indian gaming for each Indian tribe engaged in gaming. Following discussion among the Members, Senator McCain offered a second degree amendment to clarify that the 


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disclosures required by the amendment would only be provided to 

members of such tribe. The second degree amendment was adopted, and then the Coburn amendment was adopted by voice vote. 

Having considered all amendments offered to the substitute 

amendment, the Committee adopted the substitute amendment. 

The Committee then approved S. 2078, as amended, and agreed 

that the bill would be forwarded for consideration by the full Senate, with a favorable recommendation that the Senate pass the bill. 

SECTION-BY-SECTION ANALYSIS

Section 1. Short title 

The act may be cited as the ‘‘Indian Gaming Regulatory Act 

Amendments of 2006’’. 

Section 2. Definitions 

The bill amends Section 4 of the Indian Gaming Regulatory Act 

(‘‘IGRA’’) by adding several definitions needed for amendments 

made to operative sections of the IGRA, including: ‘‘Gaming-Related Contract’’; ‘‘Gaming-Related Contractor’’; ‘‘Consulting Contract’’; ‘‘Development Contract’’; ‘‘Financing Contract’’; ‘‘Management Contract’’ and ‘‘Participation Contract’’. The definitions of 

‘‘Consulting Contract’’; ‘‘Development Contract’’; ‘‘Financing Contract’’; ‘‘Management Contract’’ and ‘‘Participation Contract’’ expressly authorize the National Indian Gaming Commission (NIGC), 

by regulation, to provide categorical exclusions of certain contracts 

from the broader definition. 

Section 3. National Indian Gaming Commission 

The bill makes technical amendments to Section 5 of the IGRA 

to clarify how NIGC vacancies are filled, and authorizing the Vice 

Chairman to act in the absence or disability of the Chairman. 

Section 4. Powers of the Chairman 

The bill amends Section 6 of the IGRA by adding to the NIGC 

Chairman’s authority the power to approve gaming-related contracts, and to conduct a background investigation and make a suitability determination as to any party to a gaming-related contract. 

The bill also makes technical amendments to Section 6 of the IGRA 

to clarify how the NIGC Chairman may delegate authorities to individual Commissioners. 

Section 5. Powers of the Commission 

The bill amends Section 7 of the IGRA to clarify the NIGC’s oversight and auditing responsibilities with regard to Class II and III 

gaming operations. It also directs the NIGC to promulgate and enforce Minimum Internal Control Standards as to Class III gaming. 

This authority was recently called into question by a decision of the 

United States District Court for the District of Columbia. 

The NIGC is also directed to develop regulations determining 

other categories of contracts for goods and services directly related 

to tribal gaming activities that will require NIGC approval and 

background checks. 

The bill also requires that the NIGC submit to the Secretary of 

the Interior, at least once each year, a report describing aggregate 


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revenues of each tribe’s gaming activities. The Secretary shall develop regulations governing the provision of this information to individual tribal members. 

Section 6. Commission staffing 

The bill makes technical amendments to Section 8 of the IGRA 

to update the statutory rates of pay for NIGC Commissioners, staff 

and temporary services to comport with the current Federal Executive and General Schedule pay rates. 

Section 7. Tribal gaming ordinances. 

The bill amends Section 11(b)(2)(F) of the IGRA to require that 

tribal gaming ordinances provide that background investigations 

will be conducted for tribal gaming commissioners and key tribal 

gaming commission employees; primary management officials and 

other key employees of the gaming enterprise; and persons that 

provide goods or services directly relating to the tribal gaming activity. The bill clarifies that the background checks required on 

tribal gaming commissioners will not also require licenses (since 

the tribal commissioners issue these licenses, and it is unnecessary 

for them to license themselves). 

The bill further amends Section 11 by requiring the Secretary of 

the Interior to share information relating to approved tribal revenue allocation plans with the NIGC Chairman. 

Section 8. Gaming-related contracts 

The bill substantially amends section 12 of the IGRA by extending the NIGC Chairman’s authority to approve all gaming-related 

contracts (defined in the bill as management, consulting, development, financing, participation, and other contracts as further defined by NIGC regulation). Gaming-related contracts that are not 

approved by the NIGC Chairman under the bill would be void ab 

initio. 

The bill further requires that gaming-related contractors must be 

deemed ‘‘suitable’’ by the Chairman after conducting an appropriate background check. Under the bill, the Chairman is required 

to make the required suitability and contract determinations within specified timeframes: 30 days for consulting and financing contracts and 90 days for all other gaming-related contracts. 

The bill retains the same basic substantive requirements for contract approvals and background checks as are currently provided in 

IGRA; however, the Chairman is provided new flexibility to utilize 

alternative licensing or suitability findings, or categorically exclude 

certain persons or entities that are already licensed by government 

agencies or professional associations. The bill further requires the 

Commission to establish and maintain a registry of suitability determinations made by the Chairman and tribes. 

The bill also provides the Chairman authority to waive any requirement under this section for reasons of emergencies or imminent danger to the public health and safety. 

Section 9. Civil penalties 

The bill amends Section 14 of the IGRA, which provides for civil 

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alties against any individual or entity, not just against tribes or 

management contractors, that violate IGRA or federal regulations. 

Section 10. Gaming on later-acquired land 

The bill amends Section 20 of the IGRA to further restrict tribes’ 

ability to game on lands acquired after 1988 and to provide members of the local community more input into the process for allowing gaming on tribal lands. 

The bill eliminates the Secretary’s authority to take land into 

trust pursuant to the so-called ‘‘two-part determination’’ contained 

in subsection 20(b)(1)(A) after the date of enactment of this bill, 

while ‘‘grandfathering’’ for consideration written requests to have 

lands deemed eligible for gaming that are submitted by tribes to 

the Secretary of the Interior by April 15, 2006. The bill further 

amends subsection 20(b)(1)(B) of IGRA by specifying that, to be eligible for gaming, lands taken into trust as part of a land claim 

must be approved by congressional action and cannot be outside of 

the state in which the tribe is located. The bill requires that lands 

taken into trust as part of an initial reservation have a historic and 

geographical nexus to the tribe, and that the Secretary of the Interior determine, after consultation with the tribe and appropriate 

local and tribal officials, and after providing public notice and an 

opportunity to comment, that a gaming establishment on that land 

would be in the best interest of the tribe and would not create significant, unmitigated impacts on the surrounding community. 

Lands taken into trust as part of a restoration of lands would, 

under the bill, have to meet the same requirements as lands taken 

into trust as part of an initial reservation, and there would have 

to be a temporal connection between the acquisition of the land and 

the date of restoration of the tribe. 

The bill does not affect the validity of any determinations made 

by the Secretary of the Interior or NIGC Chairman prior to enactment of the bill regarding the eligibility of land for gaming. 

Section 11. Consultation policy 

The bill requires the NIGC to establish and maintain a consultation policy in accordance with the Federal trust responsibility and 

the government-to-government relationship with Indian tribes. 

Section 12. Implementation 

The bill requires the NIGC to develop, no later than 2 years from 

the date of enactment, rules and regulations implementing the definitions, authorities, responsibilities and restrictions set forth in the 

bill. The regulations are required to be developed in consultation 

with Indian tribes, and the NIGC must provide the Senate Committee on Indian Affairs and the House Committee on Resources 

with a report on the status of the regulations no later than one 

year after the date of enactment of the bill. The bill delays the effective date of the new provisions relating to gaming-related contracts until the date on which the NIGC promulgates rules and 

regulations implementing those provisions. The bill makes clear 

that current law regarding management contracts remains in effect 

until the NIGC promulgates rules and regulations implementing 

the new provisions relating to gaming-related contracts. 


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The bill also validates otherwise legal gaming-related contracts 

entered into before the date of enactment of the bill. 

Section 13. Conforming amendments 

The bill will amend Public Law 105–83, the Department of the 

Interior and Related Agencies Appropriations Act of 1998, by striking subparagraph (C). It also clarifies that all tribes are subject to 

the NIGC’s fee structure if they conduct gaming. 

COMMITTEE RECOMMENDATION AND TABULATION OF VOTE

On March 29, 2006, the Committee, in an open business session, 

considered S. 2078, approved a substitute amendment and three 

additional amendments to the bill, and ordered S. 2078, as amended, favorably reported to the full Senate with a recommendation 

that the bill do pass. 

COST AND BUDGETARY CONSIDERATIONS

The cost estimate for S. 2078 as calculated by the Congressional 

Budget Office, is set forth below: 

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, May 17, 2006. 

Hon. JOHN MCCAIN, 

Chairman, Committee on Indian Affairs, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed estimate for S. 2078, the Indian Gaming Regulatory Act Amendments of 2006. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contacts are Matthew Pickford (for 

federal costs), Marjorie Miller (for the impact on state, local, and 

tribal governments), and Craig Cammarata (for the impact on the 

private sector). 

Sincerely, 

DONALD B. MARRON, Acting Director. 

Enclosure. 

S. 2078—the Indian Gaming Regulatory Act Amendments of 2006 

Summary: S. 2078 would amend provisions of the Indian Gaming 

Regulatory Act (IGRA) to clarify and expand the authority of the 

National Indian Gaming Commission (NIGC) to regulate and oversee Indian gaming. In addition, S. 2078 would restrict off-reservation gambling. CBO estimates that implementing S. 2078 would 

not have a significant impact on the budget. Enacting the bill could 

affect revenues, but CBO estimates that any such effects would not 

be significant. Enacting the bill would not affect direct spending. 

S. 2078 contains intergovernmental mandates as denied in the 

Unfunded Mandates Reform Act (UMRA) because it would limit 

the ability of tribes to operate gaming on land put in trust after 

1988 and increase federal regulation of tribal gaming operations. 

While the impact of these changes on tribes with such operations 

is very uncertain, CBO estimates that the aggregate costs probably 


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would not exceed the annual threshold established in UMRA ($64 

million in 2006, adjusted annually for inflation) in the next five 

years. Enacting this bill would impose no other significant costs on 

state, local, or tribal governments. 

S. 2078 would impose a private-sector mandate, as defined in 

UMRA, on certain contractors in the Indian gaming industry by 

making them subject to federal regulation of Class II and Class III 

gaming-related contracts. Based on information from industry and 

government sources, CBO estimates that the aggregate direct costs 

associated with complying with the mandate would fall below the 

annual threshold established by UMRA for private-sector mandates 

($128 million in 2006, adjusted annually for inflation). 

Estimated cost to the Federal Government: The NIGC is authorized to collect and spend annual assessments on the revenues of 

tribal gaming operators. The NIGC is currently authorized to collect and spend up to 0.080 percent (80 cents per $1,000) of all tribal 

gaming revenues subject to NIGC regulation. Based on information 

from NIGC, CBO estimates that the agency’s current collection and 

spending authority would be sufficient to accommodate the additional costs under the bill. 

Enacting S. 2087 could affect federal revenues because the legislation would amend civil penalties related to Indian gaming. Collections of the civil penalties are recorded in the budget as revenues. CBO estimates, however, that any change in revenues that 

would result from enacting the bill would not be significant. 

Estimated impact on state, local, and tribal governments: S. 2078 

contains intergovernmental mandates as defined in UMRA because 

it would limit the ability of tribes to operate gaming on land put 

in trust after 1988 and increase federal regulation of tribal gaming 

operations. While the impact of these changes on tribes with gaming operations is very uncertain, CBO estimates that the aggregate 

costs probably would not exceed the annual threshold established 

in UMRA ($64 million in 2006, adjusted annually for inflation) in 

any of the next five years. Enacting this bill would impose no other 

significant costs on state, local, or tribal governments. 

Off-Reservation gaming 

The bill would amend section 20 of the Indian Gaming Regulatory Act to further restrict the ability of tribes to establish gaming operations on lands taken into trust after the IGRA was enacted. That section generally prohibits gaming on lands placed into 

trust after October 17, 1988. It includes a number of exceptions to 

that rule, but this bill would further narrow those exceptions. First, 

the bill would eliminate the exception for a tribe that receives a 

special determination from the Department of the Interior and approval of the state’s governor (referred to as two-part determinations) for all but those tribes that had an application pending before April 15, 2006. Second, it would add new conditions to the exceptions for newly created or restored tribes. 

These changes would have limited impact on the ability of tribes 

to open gaming operations. Eliminating two-part determinations 

probably would affect few, if any, tribes in the next few years because, according to government officials, most tribes that had any 

plans to seek such a determination filed applications before the 

April 15 deadline. Further, the Department of the Interior has apVerDate Aug 31 2005 06:47 Jun 17, 2006 Jkt 049010 PO 00000 Frm 00023 Fmt 6659 Sfmt 6602 E:\HR\OC\SR261.XXX SR261

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24 

proved only three applications for two-part determinations since 

IGRA was enacted. The new conditions affecting newly created or 

restored tribes generally reflect those already imposed administratively by the Department of the Interior. 

Additional oversight of tribal gaming 

Several provisions in S. 2078 would increase the National Indian 

Gaming Commission’s role in regulating tribal gaming operations 

and so would impose further mandates on tribes. The bill would 

broaden existing requirements for NIGC review of tribal contracts 

and would require additional background checks of tribal gaming 

commissioners and contractors. It also would clarify the Commission’s authority to oversee tribal gaming establishments that fall 

within Class III (generally, slot machines and other casino games) 

and to establish minimum standards for internal controls exerted 

by tribes over such operations. The impact of these new mandates 

is very uncertain and would depend to a great extent on the 

NIGC’s implementing regulations. 

Some of the new requirements in this bill focus on oversight of 

gaming-related contracts and contractors. The law already requires 

that NIGC review contracts for managing tribal gaming operations, 

but S. 2078 would broaden the existing requirement to cover other 

types of gaming-related contracts and would make these additional 

contractors subject to NIGC background investigations. While these 

new requirements fall on both the tribes and businesses as parties 

to the covered contracts, the direct cost of these changes would fall 

initially on the businesses that contract with tribes. The direct 

costs incurred by tribes could include legal costs and delays in implementing new contracts. The tribes could also bear a substantial 

part of the costs initially incurred by contractors, however, if those 

costs are passed through under the terms of these contracts. 

Other requirements would fall entirely on the tribes with gaming 

operations. For example, the bill would require tribes to conduct 

background investigations of tribal gaming commissioners and key 

commission employees. CBO estimates that, even if tribes conduct 

relatively extensive background checks, the total cost of this mandate would not exceed $5 million per year, and the costs could be 

much less. The bill also includes explicit authority for NIGC to establish minimum standards for tribes’ internal controls. Such 

standards have already been established by the NIGC under current law, but its authority to do so is currently under litigation. 

This provision would settle those legal challenges. While CBO cannot predict the outcome of the current litigation, we would not expect the cost of this provision to be significant in any case because 

most tribes have substantially adopted the standards. Finally, the 

bill would require all tribes with gang operations to pay fees to the 

NIGC, and remove an existing exception for certain tribes. This 

would not change the total amount of fees paid by tribes but would 

slightly reallocate the burden of those fees. 

Impact on the private sector: S. 2078 would impose a private-sector mandate, as defined in UMRA, on certain contractors in the Indian gaming industry by making them subject to federal regulation 

of Class II and Class III gaming-related contracts. Based on information from industry and government sources, CBO estimates that 

the aggregate direct costs associated with complying with the manVerDate Aug 31 2005 06:47 Jun 17, 2006 Jkt 049010 PO 00000 Frm 00024 Fmt 6659 Sfmt 6602 E:\HR\OC\SR261.XXX SR261

ycherry on PROD1PC64 with REPORTS
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date would fall below the annual threshold established by UMRA 

for private-sector mandates ($128 million in 2006, adjusted annually for inflation). 

S. 2078 would clarify and broaden the National Indian Gaming 

Commission’s authority to regulate all Class II and Class III gaming-related contracts. Currently, the Commission regulates all 

management contracts for Class II and Class III Indian gaming. 

The bill would expand the Commission’s authority to regulate additional types of Class II and Class III contracts, including, but not 

be limited to: consulting contracts; development contracts; financing contracts; and participation contracts. By regulating the terms 

of such contract, the bill would impose a mandate on certain private contractors. 

The bill would require new gaming-related contracts and any 

changes in existing contracts to be approved by NIGC. Such gaming-related contracts would have to meet certain minimum standards outlined in the bill to be eligible for approval by the Commission. In approving such contracts, NIGC would have to determine 

if contractors or subcontractors are suitable to engage in business 

with Indian tribes. In addition, in the case of a change in a contract, the bill would require contractors to provide a notice to the 

NIGC if there is any change in the information they reported during a suitability determination. The bill would exclude from the 

suitability determinations any contractor that is either regulated, 

by the Securities and Exchange Commission (SEC) or wholly or 

partially owned by an entity regulated by the SEC. 

The cost of the mandate would be the incremental expenditures 

incurred in meeting the new requirements on gaming-related contracts. The bill would require that gaming-related contractors pay 

the costs of any investigation activities carried out during the suitability determination. According to government sources, such activities would include, but may not be limited to, FBI background 

checks and fingerprinting procedures. Currently, NIGC only requires management officials and other key employees of gaming enterprises of Class II and Class III Indian gaming to be subject to 

background checks and fingerprinting. CBO estimates that the incremental costs associated with the additional background checks 

and fingerprinting for those entities would be minimal. 

Estimate prepared by: Federal Costs: Matthew Pickford. Impact 

on State, Local, and Tribal Governments: Marjorie Miller. Impact 

on the Private Sector: Craig Cammarata and Tyler Kruzich. 

Estimate approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis. 

REGULATORY AND PAPERWORK IMPACT STATEMENT

Paragraph 11(b) of rule XXVI of the Standing Rules of the Senate requires that each report accompanying a bill evaluate the regulatory and paperwork impact that would be incurred in carrying 

out the bill. 

S. 2078 would require additional parties seeking to do business 

with Indian gaming operations to submit their gaming-related contracts to the NIGC for approval, and requires the parties to these 

contracts to undergo background investigations. The bill would also 

require tribal gaming commissioners and key commission employVerDate Aug 31 2005 06:47 Jun 17, 2006 Jkt 049010 PO 00000 Frm 00025 Fmt 6659 Sfmt 6602 E:\HR\OC\SR261.XXX SR261

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ees to undergo background checks. These reviews could impose paperwork requirements on these parties to gaming-related contracts. 

S. 2078 provides that gaming-related contractors are to pay the 

cost of their background investigations. As for the cost to NIGC of 

reviewing additional contracts, the Committee anticipates that the 

NIGC will recover this through fees assessed on all Class II and 

III tribal gaming operations. Because of the fast turn-around times 

for reviews specified in the substitute amendment adopted by the 

Committee, the Committee does not expect the new regulatory requirements to result in significant indirect costs, such as loss of 

contract opportunities or increased costs of capital. 

The Committee believes that the regulation of additional parties 

seeking to do business in Indian gaming, and the attendant paperwork burden, is necessary, consistent with IGRA, to protect the integrity of Indian gaming operations and ensure that tribes are the 

principal beneficiaries of them. 

EXECUTIVE COMMUNICATIONS

The Committee has received the following communications from 

the Executive Branch regarding S. 2078. 

NATIONAL INDIAN GAMING COMMISSION, 

Washington, DC, March 28, 2006. 

Re Regulation of Indian Gaming. 

Hon. JOHN MCCAIN, Chairman, 

Hon. BYRON DORGAN, Vice-Chairman, 

Committee on Indian Affairs, U.S. Senate, Hart Office Building, 

Washington, DC. 

DEAR SENATORS: As the Senate Indian Affairs Committee prepares to mark up S. 2078 the NIGC observes that much of the information in the public and some in the testimony before the Committee does not portray a complete picture of Indian gaming. This 

letter is an attempt to give facts and examples, some of which has 

been previously provided to the Committee, that will help create a 

more comprehensive view of the opportunities and challenges facing Indian gaming. 

IGRA, in effect, anticipated the wide range of regulatory structures in the various Tribal-state compacts through the establishment of the NIGC as an independent federal regulatory authority 

for gaming on Indian lands. With respect to NIGC’s regulatory 

oversight responsibilities, IGRA authorized the Commission to penalize violations of the Act, violations of the Commission’s own regulations, and violations of the Commission-approved tribal gaming 

ordinances by the way of imposition of civil fines and orders for closure of tribal gaming facilities. 

IGRA mandates that Tribes may conduct Class III gaming only 

in states where such activity is permissible under state law, and 

where the tribes enter into compacts with states relating to this activity, which compacts require approval of the Secretary of the Interior. Compacts might include specific regulatory structures and 

give regulatory responsibility to the tribe, to the state, or to both 

in some combination of responsibilities. Since the passage of IGRA, 

232 tribes have executed 249 Class III compacts with 22 states, 


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27 

and the allocation of regulatory responsibility, if addressed at all, 

is as diverse as the states and Tribes that have negotiated them. 

Typically, the regulatory role a particular state undertakes in its 

compact was taken from and modeled on that state’s experience 

with the regulation of its own legalized gaming at the time the 

compact was negotiated. Where such states develop effective regulatory programs, the need for NIGC oversight is greatly reduced. 

For example, in states where the tribal-state compacts call for regular state oversight, institute technical standards and testing protocols for gaming machines and establish internal control requirements, the NIGC’s oversight role will be limited; such as in the 

case of Arizona. Some states, however, have assumed a minimal 

regulatory role, such as Michigan and North Dakota. In some cases 

compacts have become little more than a revenue sharing agreement between the state and the Tribe. Further, some compacts establish ineffective remedies for major violations. Consequently, 

under circumstances where the states do not have a significant regulatory presence, the NIGC must undertake a range of oversight 

activities. 

The oversight responsibilities of the NIGC give it a unique view 

from which to report the variety of challenges confronting Indian 

gaming in terms of regulatory violations and enforcement actions 

taken. It must be said that the primary responsibility for meeting 

these challenges ought to be on the shoulders of the Tribes. The 

NIGC encourages strong Tribal regulation and applauds the resources that Indian gaming currently applies to regulation and 

other oversight activities. As Indian gaming continues to grow and 

the sophistication of operations expands and as the levels of the 

revenues increase accordingly, regulation must stay ahead of this 

growth if the integrity of the industry is to be protected. It is in 

this context that the following examples of the numbers and types 

of violations the NIGC has uncovered are offered. 

MINIMUM INTERNAL CONTROL STANDARDS

The NIGC has compiled the following review of Minimum Internal Control Standards (‘‘MICS’’) Compliance Audits—January 2001 

to February 2006. The number of tribal gaming operations is taken 

from those reporting financial information to NIGC. 

Gaming Operations ................................................................................................ 367 

Number of NIGC Audits ........................................................................................ 37 

Total MICS Violations ........................................................................................... 2,355 

Average MICS Violations ...................................................................................... 64 

• In the past year the NIGC has completed 11 MICS audits with 

559 violations. 

• Findings common to most compliance audits: 

Lack of statistical game analysis; 

Ineffective key control procedures; 

Failure to secure gaming machine jackpot/fill system; 

Failure to effectively investigate cash variances/missing supporting documentation for the cage accountability/failure to 

reconcile cage accountability to general ledger on a monthly 

basis; 

Inadequate segregation of duties and authorization of players tracking system account adjustments; 


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Ineffective internal audit department audit programs, testing 

procedures, report writing and/or follow-up; 

Deficient surveillance coverage and recordings; 

Noncompliance with Internal Revenue Service Regulation 31 

CFR Part 103; 

Failure to exercise technical oversight or control over the 

computerized gaming machine systems, including the maintenance requirements for personnel access; 

Failure to properly document receipt and withdrawal transactions involving pari-mutuel patrons’ funds and a lack of a 

comprehensive audit procedure of all pari-mutuel transactions; 

Failure to adequately secure and account for sensitive inventory items, including playing cards, dice, bingo paper and keno/ 

bingo balls; and 

Failure to adopt appropriate overall information technology 

controls specific to hardware and software access to ensure 

gambling games and related functions are adequately protected. 

Although the NIGC identified the above violations, it is impossible to accurately determine the financial losses the tribes incurred because of not maintaining the minimum internal controls 

required by the NIGC standards. These violations show that certain tribes are not adequately protecting their gaming assets. 

SUITABILITY OF KEY EMPLOYEE AND PRIMARY MANAGEMENT

OFFICIALS

Since the inception of the NIGC we have encountered 178 instances where Tribes licensed key employees or primary management officials over NIGC objections. 

REGULATORY VIOLATIONS

In the year the NIGC has identified the following violations: 

Fee Submissions ..................................................................................................... 92 

Audit Submissions ................................................................................................. 30 

MICs Report Submissions ..................................................................................... 24 

Background Violations ........................................................................................... 20 

Managing Without an Approved Contract—Investigations Pending ................. 10 

Misuse of Gaming Revenues—Investigations Pending ....................................... 6 

Health and Safety Violations ................................................................................ 16 

Referrals of Possible Illegal Activity .................................................................... 25 

Total ............................................................................................................. 207 

BREAKDOWN IN TRIBAL REGULATION

The NIGC oversight regularly uncovers serious breakdowns in 

regulation at Class II and Class III tribal gaming operations 

throughout the country. This is true even where there is apparent 

adequate tribal regulation and control is in place. • Examples of instances where tribal gaming operational and 

regulatory efforts have been found deficient include the following: 

During the course of investigations and MICS compliance 

audits, NIGC investigators and auditors discovered that an extraordinary amount of money was flowing through two off 

track betting (OTB) operations on two reservations. The 

amount of money was so high in comparison to the amount 

that could reasonably flow through such OTB operations that 


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our investigators immediately suspected money laundering or 

similar activities. These two operations were the first referrals 

to the FBI’s working group in which we participate. The FBI 

investigations found they were part of a wide spread network 

of such operations with organized crime links and several federal criminal law violations. Unfortunately, the tribes’ gaming 

management allowed them to gain access and operate as part 

of their Class III tribal gaming operations, and the tribes’ gaming regulators completely failed to take any action against 

these illegal OTB operations. 

There are also examples where tribes continued to operate, 

without modification or correction, a gaming facility that had 

long been identified as a serious fire hazard; permitted gaming 

activities to be conducted by companies owned by individuals 

with known criminal associations; distributed large amounts of 

gaming revenues without requisite approved revenue allocation 

plans or the financial controls necessary to account for them; 

knowingly operated gaming machines that were plainly illegal; 

and appointed gaming commissioners and regulatory employees and licensed and employed gaming employees whose criminal histories indicated that they were unsuitable and serious 

risks to the tribes’ gaming enterprise. An accurate assessment 

of Indian gaming regulation must also reflect the unfortunate 

examples of tribes that are so politically divided that they are 

unable to adequately regulate their gaming activities, as well 

as instances where tribal officials have personally benefited 

from gaming revenues at the expense of the tribe itself. In addition, there have been many instances where apparent conflicts of interest have undermined the integrity and effectiveness of tribal gaming regulation. In all of these troubling situations it was necessary for the NIGC to step in to address the 

problems. 

The above examples illustrate that Indian gaming has many regulatory challenges that without comprehensive well informed oversight and enforcement the integrity of the industry would be in 

jeopardy. 

The NIGC has compiled a list of potential risks to Indian gaming 

if strong oversight is not maintained: 

Risk of not catching misuse of gaming revenues by tribal officials; 

Risk of not catching employee embezz1ement; 

Risk of not catching manipulations and/or theft from gaming 

machines; 

Less direct ways to investigate allegations of criminal activity or the presence of organized crime influence; 

Unable to determine whether third parties are managing the 

gaming facility without an approved contract; 

Unable to determine whether imminent jeopardy exists with 

regard to the safety of employees and patrons of the gaming 

establishment; 

Unable to determine whether individuals other than the recognized tribal government are asserting authority over the 

gaming operation; 


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Unable to determine whether outside investors have unduly 

influenced tribal decision-making or made improper payments 

to tribal officials; 

Unable to perform operational audits, which track the movement of money throughout the casino; 

Risk that tribal surveillance and gaming commission funding 

could decrease rapidly, as these are expensive and are not seen 

as increasing the casino bottom line. 

POTENTIAL IMPACT OF CRIT DECISION

Tribes argue that the CRIT decision should be read broadly. This 

interpretation may impact on the ability of the NIGC to enforce its 

regulations as follows: 

Activity Impact 

Bingo ........................................................ Unchanged. 

Pull-Tabs .................................................. Unchanged. 

Card Games ............................................. Unchanged. 

Keno ......................................................... No enforcement. 

Pari-Mutuel Wagering .............................. No enforcement. 

Table Games ............................................ No enforcement. 

Gaming Machines .................................... No enforcement. 

Cage ......................................................... Scope limited—Bingo/Pull-Tab/Card Game Inventory Items. 

Credit ....................................................... Scope limited—Bingo/Pull-Tab/Card Game Inventory Items. 

Information Technology ............................ Scope limited—Bingo/Pull-Tab/Card Game Related Software and Hardware. 

Complimentary Services and Items. ........ Scope limited—Bingo/Pull-Tab/Card Transactions. 

Drop and Count ....................................... Scope limited—Bingo/Pull-Tab/Card Game Cash, Cash Equivalents and Documents. 

Surveillance .............................................. Scope limited—Bingo/Pull-Tab/Card Game Areas. 

Internal Audit ........................................... Scope limited—Bingo/Pull-Tab/Card Game Transactions. 

The above examples illustrate that the regulation of Indian gaming is.. a complicated matter. At the Tribal level it can often be impacted by internal politics that may lead to uneven enforcement or 

at times little effect regulation regardless of overall intention. It is 

nevertheless clear that Tribes have a very strong interest in assuring that their operations are adequately regulated. 

LACK OF INDEPENDENT TRIBAL REGULATIONS

Some gaming commissions are not sufficiently independent of the 

tribal governments or the managers that operate the gaming operation. In this connection the history of Nevada’s regulatory structure may be instructive. Effective gaming regulatory authority in 

Nevada was a process that evolved over a forty year period and is 

continuing to improve and respond to change today. Only after creation of a separate gaming regulatory authority did oversight of the 

industry have an effective champion. Beginning in the late 70’s, 

significant progress was made into the identification and removal 

of individuals and entities intent upon exploitation and corruption. 

Although many factors contributed to corruptive influences in Nevada, one aspect was key. At the time gaming was legalized in Nevada, the state and local governments were in a rather deprived financial position therefore the governmental agencies charged with 

regulatory oversight were also dependent, albeit desperate, for the 

potential revenues this growing industry could provide. The Nevada experience demonstrates a critical policy question when gaming regulations are considered: that as the government charged 


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31 

with regulation becomes increasingly dependent upon the profitability of the industry being regulated; the effectiveness of the regulatory effort may diminish. 

Generally, in tribal gaming, the tribal council is the ultimate 

governmental authority responsible for ensuring the gaming operation generates the greatest return on investment and that, in 

doing so, is effectively regulated. Such an organizational structure 

has challenges because the motivations lack congruity. Inevitably, 

from time to time, one objective may be foregone in pursuit of the 

other and, many times it is the oversight function. Although some 

tribes have recognized the organizational weakness and have installed procedures to counteract its effect, others have not and, as 

a result, the effectiveness of their regulatory processes is significantly diminished. 

In conclusion, for the many reasons stated above and the continued dramatic growth in Indian gaming (see Attachment #1), it 

seems to be abundantly clear that Indian gaming needs broad and 

effective oversight in order to continue growing and benefiting Indian communities. 

We appreciate your consideration of the above information and 

hope you find it helpful as the Committee marks up S. 2078 preparing it for further consideration. We wish to thank you for your 

considerable hard work and leadership on all of these issues. We 

will remain available to you and your staffs regarding Indian gaming. 

Sincerely, 

PHILIP N. HOGEN, 

Chairman. 

ATTACHMENT #1 

Overview of Indian gaming 

Indian gaming has been the most effective economic development 

tool ever brought to Indian country. It is recognized that since the 

passage of the Indian Gaming Regulatory Act in 1988 the diversity 

and dramatic growth of Indian gaming is unprecedence. Indian 

gaming has grown from revenues $5.4 billion in 1995 to today over 

$20 billion in gross gaming revenues today. 

Revenue generation, of course, is not the only objective or benefit 

for tribes. In many instances, even small, rural tribal gaming operations have brought employment opportunities to tribal members 

where none existed before. For many, these employment opportunities were the first long-term jobs they ever held or had the prospect 

to hold. 

This gaming is conducted on Indian lands throughout the country by approximately 225 tribes. The diversity among these operations is dramatic. With this diversity in mind, it is instructive to 

examine how gaming revenue is distributed among the 367 tribal 

gaming operations reporting financial information to NIGC. The 

following chart gives the complete picture. 

Gross gaming revenue ranges Number of op- erations 

Percent of 

total operations 

Gross 

gaming 

revenues (billion) 

Percent of 

total 

gross 

gaming 

revenues 

Median gross 

gaming 

revenues 

(million) 

Over $100 million ............................................. 55 15.0 $13.47 69.5 $178.7 


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32 

Gross gaming revenue ranges Number of operations 

Percent of 

total operations 

Gross 

gaming 

revenues (billion) 

Percent of 

total 

gross 

gaming 

revenues 

Median gross 

gaming 

revenues 

(million) 

$25 million to $100 .......................................... 93 25.3 $4.38 22.6 $43.5 

$5 million to $25 million .................................. 103 28.1 $1.37 7.1 $1.32 

Under $5 million ............................................... 116 31.6 0.17 0.9 $.98 

Total ..................................................... 367 100.0 $19.41 100.0 ........................

As this demonstrates, a relatively small number of Tribes have 

very large gaming revenues, while a large number of Tribes have 

relatively small gaming revenues. 

At the time of IGRA’s passage, the primary Indian gaming activity was bingo generally and high stakes bingo in particular, it 

would not be surprising if those in Congress that supported IGRA 

envisioned such Class II gaming to remain the dominant activity 

that would be conducted under IGRA. As we all know this has not 

been the case—over 80% of Indian gaming is now Class III. 

CHANGES IN EXISTING LAW

In compliance with subsection 12 of rule XXVI of the Standing 

Rules of the Senate, changes in existing law made by the bill S. 

2078, as ordered reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is 

printed in italic, existing law in which no change is proposed is 

shown in roman): 

Public Law 100–497 

AN ACT To regulate gaming on Indian lands 

Be it enacted by the Senate and House of Representatives of the 

United States of America in Congress assembled, 

* * * * * * * 

øDEFINITIONS 

øSEC. 4. For purposes of this Act—¿ 

SEC. 4. DEFINITIONS. 

In this Act: 

* * * * * * * 

ø(6)¿ (3) The term ‘‘class I gaming’’ means social games solely for prizes of minimal value or traditional forms of Indian 

gaming engaged in by individuals as a part of, or in connection 

with, tribal ceremonies or celebrations. 

ø(7)¿ (4) (A) The term ‘‘class II gaming’’ means— 

* * * * * * * 

(E) Notwithstanding any other provision of this paragraph, the term ‘‘class II gaming’’ includes, during the 1- 

year period beginning on the date of enactment of this subparagraph [enacted Dec. 17, 1991], any gaming described 

in subparagraph (B)(ii) that was legally operated on Indian 

lands in the State of Wisconsin on or before May 1, 1988, 

if the Indian tribe having jurisdiction over the lands on 

which such gaming was operated requested the State, by 


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33 

no later than November 16, 1988, to negotiate a TribalState compact under section 11(d)(3)ø of the Indian Gaming Regulatory Act (25 U.S.C. 2710(d)(3))¿. 

* * * * * * * 

ø(8)¿ (5) The term ‘‘class III gaming’’ means all forms of 

gaming that are not class I gaming or class II gaming. 

ø(3)¿ (6) The term ‘‘Commission’’ means the National Indian 

Gaming Commission established pursuant to section 5 of this 

Act. 

(7) CONSULTING CONTRACT.—The term ‘consulting contract’ 

means any contract or subcontract between an Indian tribe and 

a gaming-related contractor, or between a gaming-related contractor and a subcontractor, that provides for advising or consulting with a person that exercises management over all or a 

significant part of a gaming operation, subject to such categorical exclusions as the Commission may establish, by regulation. 

(8) DEVELOPMENT CONTRACT.—The term ‘development contract’ means any contract or subcontract between an Indian 

tribe and a gaming-related contractor, or between a gaming-related contractor and a subcontractor, that provides for the development or construction of a facility to be used for an Indian 

gaming activity, subject to such categorical exclusions as the 

Commission may establish, by regulation. 

(9) FINANCING CONTRACT.— 

(A) IN GENERAL.—The term ‘financing contract’ means 

any contract or subcontract between an Indian tribe and a 

gaming-related contractor, or between a gaming-related 

contractor and a subcontractor— 

(i) that is not a management contract, a consulting 

contract, a development contract, or a participation 

contract; 

(ii) pursuant to which a gaming-related contractor or 

subcontractor provides services or property of any kind, 

or financing of any nature, to be used for an Indian 

gaming activity; and 

(iii) for compensation (including interest and fees), 

denominated in any manner— 

(I) of more than $250,000 during the term of the 

contract or subcontract (as periodically adjusted 

for inflation in accordance with rules adopted by 

the Commission); and 

(II) that is provided by— 

(aa) loan; 

(bb) lease; or 

(cc) deferred payments. 

(B) EXCLUSIONS.—The term ‘financing contract’ does not 

include— 

(i) a contract or agreement between an Indian tribe 

and— 

(I) a federally-chartered or State-chartered bank; 

(II) another Indian tribe; 

(III) another Indian tribe, or a State, pursuant 

to a Tribal-State compact; or 

(IV) an entity that is— 


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(aa) regulated by the Securities and Exchange Commission; or 

(bb) wholly owned, directly or indirectly, by 

an entity that is regulated by the Securities 

and Exchange Commission; 

(ii) a contract or agreement that is subject to the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.); 

or 

(iii) any other agreement or contract that the Commission, by regulation, determines should be categorically excluded from consideration as a financing contract. 

(10) GAMING-RELATED CONTRACT.—The term ‘gaming-related 

contract’ means any management contract, consulting contract, 

development contract, financing contract, participation contract, 

or other agreement determined by the Commission pursuant to 

a rulemaking under section 7 to be subject to the requirements 

of section 12, and any collateral agreement related to any of the 

foregoing. 

(11) GAMING-RELATED CONTRACTOR.—The term ‘gaming-related contractor’ means an entity of person, including an individual who is an officer, or who serves on the board of directors, 

of an entity, or a stockholder that directly or indirectly holds at 

least 5 percent of the issued and outstanding stock of an entity, 

that enters into a gaming-related contract with— 

(A) an Indian tribe; or 

(B) an agent of an Indian tribe. 

ø(4)¿ (12) The term ‘‘Indian lands’’ means— 

* * * * * * * 

ø(5)¿ (13) The term ‘‘Indian tribe’’ means any Indian tribe, 

band, nation, or other organized group or community of Indians which— 

* * * * * * * 

(14) MANAGEMENT CONTRACT.— 

(A) IN GENERAL.—The term ‘management contract’ means 

any contract or subcontract between an Indian tribe and a 

gaming-related contractor, or between a gaming-related 

contractor and a subcontractor, that provides for the management of all or a part of a gaming operation, subject to 

such categorical exclusions as the Commission may establish, by regulation. 

(B) EXCLUSIONS.—The term ‘management contract’ does 

not include a personal employment contract under which 

compensation is not based on a percentage of the revenues 

or profit increases of an Indian gaming activity or a prospective Indian gaming activity. 

ø(9)¿ (15) The term ‘‘net revenues’’ means gross revenues of 

an Indian gaming activity less amounts paid out as, or paid 

for, prizes and total operating expenses, excluding management fees. 

(16) PARTICIPATION CONTRACT.—The term ‘participation contract’ means any contract or subcontract between an Indian 

tribe and a gaming-related contractor, or between a gaming-related contractor and a subcontractor, under which compensaVerDate Aug 31 2005 06:47 Jun 17, 2006 Jkt 049010 PO 00000 Frm 00034 Fmt 6659 Sfmt 6603 E:\HR\OC\SR261.XXX SR261

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35 

tion to the gaming-related contractor or subcontractor is based, 

in whole or in part, on a percentage of the revenues or profit 

increases of an Indian gaming activity or a prospective Indian 

gaming activity, subject to such categorical exclusions as the 

Commission may establish, by regulation. 

ø(10)¿ (17) The term ‘‘Secretary’’ means the Secretary of the 

Interior. 

* * * * * * * 

NATIONAL INDIAN GAMING COMMISSION 

SEC. 5. * * * 

ø(c) Vacancies occurring on the Commission shall be filled in the 

same manner as the original appointment. A member may serve 

after the expiration of his term of office until his successor has 

been appointed, unless the member has been removed for cause 

under subsection (b)(6).¿ 

(c) VACANCIES.— 

(1) IN GENERAL.—Except as provided in paragraph (2), a vacancy on the Commission shall be filled in the same manner as 

the original appointment. 

(2) VICE CHAIRMAN.—The Vice Chairman shall act as Chairman in the absence or disability of the Chairman. 

(3) EXPIRATION OF TERM.—Unless a member of the Commission is removed for cause under subsection (b)(6), the member 

may— 

(A) serve after the expiration of the term of office of the 

member until a successor is appointed; or 

(B) be reappointed to serve on the Commission. 

* * * * * * * 

(e) The Commission shall select, by majority vote, one of the 

members of the Commission to serve as Vice Chairman. The Vice 

Chairman shall serve as Chairman during meetings of the Commission in the absence or disability of the Chairman. 

* * * * * * * 

POWERS OF THE CHAIRMAN 

SEC. 6. (a) The Chairman, on behalf of the Commission, shall 

have power, subject to an appeal to the Commission, to— 

* * * * * * * 

(3) approve tribal ordinances or resolutions regulating class 

II gaming and class III gaming as provided in section 11; øand 

(4) approve management contracts for class II gaming and 

class III gaming as provided in sections 11(d)(9) and 12¿ 

(4) approve gaming-related contracts for class II gaming and 

class III gaming under section 12; and 

(5) conduct a background investigation and make a determination with respect to the suitability of a gaming-related contractor, as the Chairman determines to be appropriate. 

* * * * * * * 

(c) DELEGATION OF AUTHORITY.— 


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36 

(1) IN GENERAL.—The Chairman may delegate any authority 

under this section to any member of the Commission, as the 

Chairman determines to be appropriate. 

(2) REQUIREMENT.—In carrying out an activity pursuant to a 

delegation under paragraph (1), a member of the Commission 

shall be subject to, and act in accordance with— 

(A) the general policies formally adopted by the Commission; and 

(B) the regulatory decisions, findings, and determinations 

of the Commission pursuant to Federal law. 

POWERS OF THE COMMISSION 

SEC. 7. * * * 

(b) The Commission— 

(1) shall monitor class II gaming and class III gaming conducted on Indian lands on a continuing basis; 

(2) shall inspect and examine all premises located on Indian 

lands on which class II gaming or class III gaming is conducted; 

(3) shall conduct or cause to be conducted such background 

investigations as may be necessary; 

(4) may demand access to and inspect, examine, photocopy, 

and audit all papers, books, and records respecting gross revenues of class II gaming and class III gaming conducted on Indian lands and any other matters necessary to carry out the 

duties of the Commission under this Act; 

(5) may use the United States mail in the same manner and 

under the same conditions as any department or agency of the 

United States; 

(6) may procure supplies, services, and property by contract 

in accordance with applicable Federal laws and regulations; 

(7) may enter into contracts with Federal, State, tribal and 

private entities for activities necessary to the discharge of the 

duties of the Commission and, to the extent feasible, contract 

the enforcement of the Commission’s regulations with the Indian tribes; 

(8) may hold such hearings, sit and act at such times and 

places, take such testimony, and receive such evidence as the 

Commission deems appropriate; 

(9) may administer oaths or affirmations to witnesses appearing before the Commission; and 

ø(10) shall promulgate such regulations and guidelines as it 

deems appropriate to implement the provisions of this Act.¿ 

(10) shall promulgate such regulations and guidelines as the 

Commission determines to be appropriate to implement this Act, 

including— 

(A) regulations addressing minimum internal control 

standards for class II gaming and class III gaming activities; and 

(B) regulations determining categories of contracts for 

goods and services directly relating to tribal gaming activities that shall be— 

(i) considered to be gaming-related contracts; and 


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37 

(ii) subject to the requirements of section 12. 

* * * * * * * 

COMMISSION STAFFING 

SEC. 8.(a) The Chairman shall appoint a General Counsel to the 

Commission who shall be paid at the annual rate of øbasic pay 

payable for GS–18 of the General Schedule under section 5332 of 

title 5, United States Code¿ pay payable for level IV of the Executive Schedule under chapter 11 of title 2, United States Code, as adjusted by section 5318 of title 5, United States Code. 

(b) The Chairman shall appoint and supervise other staff of the 

Commission without regard to the provisions of title 5, United 

States Code, governing appointments in the competitive service. 

Such staff shall be paid without regard to the provisions of chapter 

51 and subchapter III of chapter 53 of such title relating to classification and General Schedule pay rates, except that no individual 

so appointed may receive pay in excess of the annual rate of øbasic 

pay payable for GS–17 of the General Schedule under section 5332 

of that title¿ pay payable for level IV of the Executive Schedule 

under chapter 11 of title 2, United States Code, as adjusted by section 5318 of title 5, United States Code. 

(c) The Chairman may procure temporary and intermittent services under section 3109(b) of title 5, United States Code, but at 

rates for individuals not to exceed the daily equivalent of the maximum annual rate of øbasic pay payable for GS–18 of the General 

Schedule¿ pay payable for level IV of the Executive Schedule under 

chapter 11 of title 2, United States Code, as adjusted by section 

5318 of title 5, United States Code. 

* * * * * * * 

TRIBAL GAMING ORDINANCES 

SEC. 11. * * * 

(b)(1) An Indian tribe may engage in, or license and regulate, 

class II gaming on Indian lands within such tribe’s jurisdiction, if— 

(A) such Indian gaming is located within a State that permits such gaming for any purpose by any person, organization 

or entity (and such gaming is not otherwise specifically prohibited on Indian lands by Federal law)ø, and¿ ; and 

(B) the governing body of the Indian tribe adopts an ordinance or resolution which is approved by the Chairman. 

A separate license issued by the Indian tribe shall be required for 

each place, facility, or location on Indian lands at which class II 

gaming is conducted. 

(2) The Chairman shall approve any tribal ordinance or resolution concerning the conduct, or regulation of class II gaming on the 

Indian lands within the tribe’s jurisdiction if such ordinance or resolution provides that— * * * 

(F) there is an adequate system which— 

ø(i) ensures that background investigations are conducted on the primary management officials and key employees of the gaming enterprise and that oversight of 

such officials and their management is conducted on an 

ongoing basis; and¿ 


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38 

(i) ensures that background investigations and ongoing 

oversight activities are conducted with respect to— 

(I) tribal gaming commissioners and key tribal gaming commission employees, as determined by the Chairman; 

(II) primary management officials and other key employees of the gaming enterprise, as determined by the 

Chairman; and 

(III) persons that provide goods or services directly 

relating to the tribal gaming activity; and 

(ii) includes— 

(I) tribal licenses for øprimary management officials 

and key employees of the gaming enterprise with¿ the 

individuals and entities described in subclauses (II) 

and (III) of clause (i), including prompt notification to 

the Commission of the issuance of such licenses; * * * 

(4) * * * 

(B)(i) The provisions of subparagraph (A) of this paragraph 

and the provisions of subparagraphs (A) and (B) of paragraph 

(2) shall not bar the continued operation of an individually 

owned class II gaming operation that was operating on September 1, 1986, if— 

(I) such gaming operation is licensed and regulated 

by an Indian tribe pursuant to an ordinance reviewed 

and approved by the Commission in accordance with 

section 13 øof the Act,¿; 

(II) income to the Indian tribe from such gaming is 

used only for the purposes described in paragraph 

(2)(B) øof this subsection,¿; 

(III) not less than 60 percent of the net revenues is 

income to the Indian tribeø, and¿; and 

(IV) the owner of such gaming operation pays an appropriate assessment to the øNational Indian Gaming¿ Commission under section 18(a)(1) for regulation 

of such gaming. * * * 

(d)(1) Class III gaming activities shall be lawful on Indian lands 

only if such activities are— 

(A) authorized by an ordinance or resolution that— 

(i) is adopted by the governing body of the Indian tribe 

having jurisdiction over such ølands,¿ lands; 

(ii) meets the requirements of subsection (b) ø, and¿; 

and 

(iii) is approved by the Chairmanø,¿; 

(B) located in a State that permits such gaming for any purpose by any person, organization, or entityø, and¿; and 

(C) conducted in conformance with a Tribal-State compact 

entered into by the Indian tribe and the State under paragraph 

(3) that is in effect. 

(2)(A) If any Indian tribe proposes to engage in, or to authorize 

any person or entity to engage in, a class III gaming activity on Indian lands of the Indian tribe, the governing body of the Indian 

tribe shall adopt and submit to the Chairman an ordinance or resolution that meets the requirements of subsection (b). 


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(B) The Chairman shall approve any ordinance or resolution described in subparagraph (A), unless the Chairman specifically determines that— 

(i) the ordinance or resolution was not adopted in compliance 

with the governing documents of the Indian tribeø, or¿; or 

(ii) the tribal governing body was significantly and unduly 

influenced in the adoption of such ordinance or resolution by 

any person identified in section 12(e)(1)(D). 

Upon the approval of such an ordinance or resolution, the Chairman shall publish in the Federal Register such ordinance or resolution and the order of approval. 

* * * * * * * 

(D) * * * 

(iii) Notwithstanding any other provision of this subsection— 

(I) any person or entity operating a class III gaming activity pursuant to this paragraph on the date on which an 

ordinance or resolution described in clause (i) that revokes 

authorization for such class III gaming activity is published in the Federal Register may, during the 1-year period beginning on the date on which such revocation ordinance or resolution is published under clause (ii), continue 

to operate such activity in conformance with the TribalState compact entered into under paragraph (3) that is in 

effectø, and¿; and 

(II) any civil action that arises before, and any crime 

that is committed before, the close of such 1-year period 

shall not be affected by such revocation ordinance or resolution. 

* * * * * * * 

(7) * * * 

(B) * * * 

(ii) In any action described in subparagraph (A)(i), upon 

the introduction of evidence by an Indian tribe that— 

(I) a Tribal-State compact has not been entered into 

under paragraph (3)ø, and¿; and 

(II) the State did not respond to the request of the 

Indian tribe to negotiate such a compact or did not respond to such request in good faith, 

the burden of proof shall be upon the State to prove that 

the State has negotiated with the Indian tribe in good 

faith to conclude a Tribal-State compact governing the conduct of gaming activities. 

(iii) If, in any action described in subparagraph (A)(i), 

the court finds that the State has failed to negotiate in 

good faith with the Indian tribe to conclude a Tribal-State 

compact governing the conduct of gaming activities, the 

court shall order the State and the Indian Tribe to conclude such a compact within a 60-day period. In determining in such an action whether a State has negotiated 

in good faith, the court— 

(I) may take into account the public interest, public 

safety, criminality, financial integrity, and adverse 

economic impacts on existing gaming activitiesø, and¿; 

and 


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40 

(II) shall consider any demand by the State for direct taxation of the Indian tribe or of any Indian lands 

as evidence that the State has not negotiated in good 

faith. 

* * * * * * * 

(vii) If the State does not consent during the 60-day period described in clause (vi) to a proposed compact submitted by a mediator under clause (v), the mediator shall 

notify the Secretary and the Secretary shall prescribe, in 

consultation with the Indian tribe, procedures— 

(I) which are consistent with the proposed compact 

selected by the mediator under clause (iv), the provisions of this Act, and the relevant provisions of the 

laws of the øState, and¿ State; and 

(II) under which class III gaming may be conducted 

on the Indian lands over which the Indian tribe has 

jurisdiction. 

(8)(A) The Secretary is authorized to approve any Tribal-State 

compact entered into between an Indian tribe and a State governing gaming on Indian lands of such Indian tribe. 

(B) The Secretary may disapprove a compact described in subparagraph (A) only if such compact violates— 

(i) any provision of this Actø,¿; 

(ii) any other provision of Federal law that does not relate 

to jurisdiction over gaming on Indian landsø, or¿; or 

(iii) the trust obligations of the United States to Indians. 

* * * * * * * 

ø(9) An Indian tribe may enter into a management contract for 

the operation of a class III gaming activity if such contract has 

been submitted to, and approved by, the Chairman. The Chairman’s review and approval of such contract shall be governed by 

the provisions of subsections (b), (c), (d), (f), (g), and (h) of section 

12.¿ 

* * * * * * * 

(f) PROVISION OF INFORMATION TO CHAIRMAN.—Immediately after 

approving a plan (including any amendment, revision, or rescission 

of any part of a plan) under subsection (b)(3), the Secretary shall 

provide to the Chairman— 

(1) a notice of the approval; and 

(2) the plan, and any information used by the Secretary in 

approving the plan. 

øMANAGEMENT CONTRACTS 

SEC. 12(a)(1). Subject to the approval of the Chairman, an Indian 

tribe may enter into a management contract for the operation and 

management of a class II gaming activity that the Indian tribe may 

engage in under section 11(b)(1), but, before approving such contract, the Chairman shall require and obtain the following information: 

(A) the name, address, and other additional pertinent background information on each person or entity (including individuals comprising such entity) having a direct financial interest 

in, or management responsibility for, such contract, and, in the 


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41 

case of a corporation, those individuals who serve on the board 

of directors of such corporation and each of its stockholders 

who hold (directly or indirectly) 10 percent or more of its 

issued and outstanding stock; 

(B) a description of any previous experience that each person 

listed pursuant to subparagraph (A) has had with other gaming contracts with Indian tribes or with the gaming industry 

generally, including specifically the name and address of any 

licensing or regulatory agency with which such person has had 

a contract relating to gaming; and 

(C) a complete financial statement of each person listed pursuant to subparagraph (A). 

(2) Any person listed pursuant to paragraph (1)(A) shall be required to respond to such written or oral questions that the Chairman may propound in accordance with his responsibilities under 

this section. 

(3) For purposes of this Act, any reference to the management 

contract described in paragraph (1) shall be considered to include 

all collateral agreements to such contract that relate to the gaming 

activity. 

(b) The Chairman may approve any management contract entered into pursuant to this section only if he determines that it provides at least— 

(1) for adequate accounting procedures that are maintained, 

and for verifiable financial reports that are prepared, by or for 

the tribal governing body on a monthly basis; 

(2) for access to the daily operations of the gaming to appropriate tribal officials who shall also have a right to verify the 

daily gross revenues and income made from any such tribal 

gaming activity; 

(3) for a minimum guaranteed payment to the Indian tribe 

that has preference over the retirement of development and 

construction costs; 

(4) for an agreed ceiling for the repayment of development 

and construction costs; 

(5) for a contract term not to exceed five years, except that, 

upon the request of an Indian tribe, the Chairman may authorize a contract term that exceeds five years but does not exceed 

seven years if the Chairman is satisfied that the capital investment required, and the income projections, for the particular 

gaming activity require the additional time; and 

(6) for grounds and mechanisms for terminating such contract, but actual contract termination shall not require the approval of the Commission. 

(c)(1) The Chairman may approve a management contract providing for a fee based upon a percentage of the net revenues of a 

tribal gaming activity if the Chairman determines that such percentage fee is reasonable in light of surrounding circumstances. Except as otherwise provided in this subsection, such fee shall not exceed 30 percent of the net revenues. 

(2) Upon the request of an Indian tribe, the Chairman may approve a management contract providing for a fee based upon a percentage of the net revenues of a tribal gaming activity that exceeds 

30 percent but not 40 percent of the net revenues if the Chairman 

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tions, for such tribal gaming activity require the additional fee requested by the Indian tribe. 

(d) By no later than the date that is 180 days after the date on 

which a management contract is submitted to the Chairman for approval, the Chairman shall approve or disapprove such contract on 

its merits. The Chairman may extend the 180-day period by not 

more than 90 days if the Chairman notifies the Indian tribe in 

writing of the reason for the extension. The Indian tribe may bring 

an action in a United States district court to compel action by the 

Chairman if a contract has not been approved or disapproved within the period required by this subsection. 

(e) The Chairman shall not approve any contract if the Chairman 

determines that— 

(1) any person listed pursuant to subsection (a)(1)(A) of this 

section— 

(A) is an elected member of the governing body of the Indian tribe which is the party to the management contract; 

(B) has been or subsequently is convicted of any felony 

or gaming offense; 

(C) has knowingly and willfully provided materially important false statements or information to the Commission 

or the Indian tribe pursuant to this Act or has refused to 

respond to questions propounded pursuant to subsection 

(a)(2); or 

(D) has been determined to be a person whose prior activities, criminal record if any, or reputation, habits, and 

associations pose a threat to the public interest or to the 

effective regulation and control of gaming, or create or enhance the dangers of unsuitable, unfair, or illegal practices, methods, and activities in the conduct of gaming or 

the carrying on of the business and financial arrangements 

incidental thereto; 

(2) the management contractor has, or has attempted to, unduly interfere or influence for its gain or advantage any decision or process of tribal government relating to the gaming activity; 

(3) the management contractor has deliberately or substantially failed to comply with the terms of the management contract or the tribal gaming ordinance or resolution adopted and 

approved pursuant to this Act; or 

(4) a trustee, exercising the skill and diligence that a trustee 

is commonly held to, would not approve the contract. 

(f) The Chairman, after notice and hearing, shall have the authority to require appropriate contract modifications or may void 

any contract if he subsequently determines that any of the provisions of this section have been violated. 

(g) No management contract for the operation and management 

of a gaming activity regulated by this Act shall transfer or, in any 

other manner, convey any interest in land or other real property, 

unless specific statutory authority exists and unless clearly specified in writing in said contract. 

(h) The authority of the Secretary under section 2103 of the Revised Statutes (25 U.S.C. 81), relating to management contracts 

regulated pursuant to this Act, is hereby transferred to the Commission. 


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43 

(i) The Commission shall require a potential contractor to pay a 

fee to cover the cost of the investigation necessary to reach a determination required in subsection (e) of this section.¿ 

SEC. 12. GAMING-RELATED CONTRACTS. 

(a) APPROVAL BY CHAIRMAN.— 

(1) GAMING-RELATED CONTRACTS.—To be enforceable and 

valid, a gaming-related contract must be approved by the 

Chairman under subsection (b). 

(2) GAMING-RELATED CONTRACTORS.—Each gaming-related 

contractor shall be subject to a suitability determination by the 

Chairman under subsection (c). 

(3) FAILURE TO APPROVE.—For any gaming-related contract 

that is not approved by the Chairman under subsection (b)— 

(A) the gaming-related contract shall be void ab initio; 

and 

(B) any party to the gaming-related contract shall be subject to such civil penalties as the Chairman determines to 

be appropriate under section 14. 

(b) CONTRACT REVIEW.— 

(1) MINIMUM CONTRACT REQUIREMENTS.—A gaming-related 

contract under this Act shall provide, at a minimum, provisions 

relating to— 

(A) accounting and reporting procedures, including, as 

appropriate, provisions relating to verifiable financial reports; 

(B) the access required to ensure proper performance of 

the gaming-related contract, including access to— 

(i) the daily operations of the gaming activity; 

(ii) real property relating to the gaming activity; 

(iii) equipment associated with the gaming activity; 

and 

(iv) any other tangible or intangible property used to 

carry out the gaming activity; 

(C) assurances of performance by each party to the gaming-related contract, as the Chairman determines to be necessary; 

(D) the reasons for, and method of, termination of the 

gaming-related contract; and 

(E) such other provisions as the Chairman determines to 

be necessary to ensure that the Indian tribe will receive the 

primary benefit as the sole proprietor of the gaming activity. 

(2) TERM.— 

(A) IN GENERAL.—Except as provided in subparagraph 

(B), the term of a gaming-related contract shall not exceed 

5 years. 

(B) EXCEPTIONS.— 

(i) EXTRAORDINARY CIRCUMSTANCES.—Notwithstanding subparagraph (A), a gaming-related contract 

may have a term of not more than 7 years if the Chairman determines the term is appropriate, taking into 

consideration any extraordinary circumstances relating 

to the gaming-related contract. 


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(ii) FINANCING CONTRACTS.—The terms described in 

subparagraph (A) and clause (i) shall not apply to a financing contract. 

(3) FEES.— (A) IN GENERAL.—Except as provided in subparagraph 

(B), the fee provided pursuant to a gaming-related contract 

shall not exceed an amount equal to 30 percent of the net 

revenues of the gaming operation that is the subject of the 

gaming-related contract. 

(B) EXCEPTIONS.— (i) EXTRAORDINARY CIRCUMSTANCES.—The fee provided pursuant to a gaming-related contract may be in 

an amount equal to not more than 40 percent of net 

revenues of the gaming operation that is the subject of 

the gaming-related contract if the Chairman determines that such a fee is appropriate, taking into consideration any extraordinary circumstances relating to 

the gaming-related contract. 

(ii) FINANCING CONTRACTS.—The limitations described in subparagraph (A) and clause (i) shall not 

apply to a financing contract. 

(4) REQUIREMENTS FOR DISAPPROVAL.—The Chairman shall 

disapprove a gaming-related contract under this subsection if 

the Chairman determines that— 

(A) the gaming-related contract fails to meet any requirement under paragraph (1), (2), or (3); 

(B) a gaming-related contractor that is a party to the 

gaming-related contract is unsuitable under subsection (c); 

(C) a gaming-related contractor or beneficiary of the 

gaming-related contract— 

(i) unduly interfered with or influenced a decision or 

process of tribal government relating to the gaming activity; or 

(ii) deliberately or substantially failed to comply with 

a tribal gaming ordinance or resolution; 

(D) the Indian tribe will not receive the primary benefit 

as the sole proprietor of the gaming activity; 

(E) a trustee would not approve the gaming-related contract because the compensation or fees do not bear a reasonable relationship to the cost of the goods or benefit of the 

services provided; or 

(F) a person or an Indian tribe would violate a provision 

of this Act— 

(i) on approval of the gaming-related contract; or 

(ii) in carrying out the gaming-related contract. 

(5) TIMELINES.— 

(A) SUBMISSION OF GAMING-RELATED CONTRACTS.—To be 

approved under this subsection, a gaming-related contract 

shall be submitted to the Chairman by the appropriate Indian tribe by not later than 30 days after the date on which 

the gaming-related contract is executed. 

(B) DETERMINATION OF CHAIRMAN.— (i) IN GENERAL.—Subject to clause (ii), the Chairman 

shall approve or disapprove a management contract, a 

development contract, a participation contract, or other 


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45 

gaming-related contract designated by the Chairman 

under section 7 by not later than 90 days after the date 

on which such a contract is submitted under subparagraph (A). 

(ii) FINANCING CONTRACTS AND CONSULTING CONTRACTS.—The Chairman shall approve or disapprove a 

financing contract or a consulting contract by not later 

than 30 days after the date on which such a contract 

is submitted under subparagraph (A). 

(iii) EXTENSIONS.—The Chairman may extend a 

deadline under clause (i) or (ii) on approval of the Indian tribe that is party to the applicable contract. 

(6) ADDITIONAL FACTORS FOR CONSIDERATION.—In determining whether to approve a gaming-related contract under 

this subsection, the Chairman may take into consideration any 

information relating to the terms, parties, and beneficiaries of— 

(A) the gaming-related contract; and 

(B) any other agreement relating to the Indian gaming 

activity, as the Chairman determines to be appropriate. 

(7) MODIFICATIONS.—Notwithstanding an approval of a gaming-related contract under this subsection, or a determination of 

suitability of a gaming-related contractor under subsection (c), 

if the Chairman determines, based on information that was not 

disclosed at the time of the approval or determination, that a 

gaming-related contract violates this Act, or that a determination of suitability should not have been made, the Chairman, 

after providing notice and an opportunity for a hearing, may— 

(A) require any modification of the gaming-related contract that the Chairman determines to be necessary to comply with this Act; 

(B) suspend performance under the gaming-related contract; 

(C) revoke a determination of suitability under subsection 

(c); or 

(D) void the gaming-related contract. 

(c) SUITABILITY DETERMINATIONS.— 

(1) IN GENERAL.—Subject to paragraph (4), a gaming-related 

contract shall not be approved under subsection (b) unless, on 

receipt of an application for a determination of suitability, the 

Chairman determines under this subsection that each applicable gaming-related contractor is suitable. 

(2) STANDARD.—The Chairman, by regulation, shall establish 

a suitability standard under which a gaming-related contractor 

shall not be considered to be suitable under this subsection if, 

as determined by the Chairman— 

(A) the gaming-related contractor— 

(i) is an elected member of the governing body of an 

Indian tribe that is a party to an applicable gamingrelated contract; 

(ii) at any time, was convicted of any felony or gaming offense; or 

(iii) (I) has knowingly and willfully provided materially important false statements or information to the 

Commission or the Indian tribe under this Act; or 


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(II) has refused to provide information requested by 

the Commission under this Act; 

(B) the prior activities, criminal record (if any), reputation, habits, or associations of the gaming-related contractor— 

(i) pose a threat to— 

(I) the public interest; or 

(II) the effective regulation of gaming; or 

(ii) create or enhance the risk of unsuitable, unfair, 

or illegal practices, methods, or activities with respect 

to— 

(I) a gaming activity; or 

(II) the operation of a gaming facility. 

(3) AGREEMENTS WITH INDIAN TRIBES.—In carrying out this 

subsection, the Chairman may enter into a contract with any 

Indian tribe— 

(A) to conduct a background investigation of a gamingrelated contractor; 

(B) to assist in determining the suitability of a gamingrelated contractor; or 

(C) to facilitate tribal licensing of a person that provides 

goods or services directly relating to the tribal gaming activity or a gaming-related contractor in accordance with the 

standards established under paragraph (2). 

(4) ALTERNATIVE DETERMINATIONS AND EXCLUSIONS.—The 

Commission, by regulation, may establish, as the Commission 

determines to be appropriate— 

(A) alternative methods of determining suitability; and 

(B) categorical exclusions for persons or entities that are 

subject to licensing or suitability determinations by— 

(i) a Federal, State, or tribal agency; or 

(ii) a professional association. 

(5) REGISTRY.—The Chairman shall establish and maintain 

a registry of— 

(A) each suitability determination made under this subsection; and 

(B) each suitability determination of an Indian tribe provided under section 11. 

(6) RESPONSIBILITY OF GAMING-RELATED CONTRACTOR.—A 

gaming-related contractor shall— 

(A) pay the costs of any investigation activity of the 

Chairman in carrying out this subsection; and 

(B) provide to the Chairman a notice of any change in information provided during an investigation on discovery of 

the change. 

(d) CONVEYANCE OF REAL PROPERTY.—No gaming-related contract under this Act shall transfer or otherwise convey any interest 

in land or other real property unless the transfer or conveyance— 

(1) is authorized under law; and 

(2) is specifically described in the gaming-related contract. 

(e) CONTRACT AUTHORITY.—The authority of the Secretary under 

section 2103 of the Revised Statutes (25 U.S.C. 81) relating to contracts under this Act is transferred to the Commission. 

(f) NO EFFECT ON TRIBAL AUTHORITY.—This section does not expand, limit, or otherwise affect the authority of any Indian tribe or 


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47 

any party to a Tribe-State compact to investigate, license, or impose 

a fee on a gaming-related contractor. 

(g) APPEALS.—The Chairman, by regulation, shall provide an opportunity for an appeal, conducted through a hearing before the 

Commission, of any determination of the Chairman under this section by not later than 30 days after the date on which the determination is made. 

(h) EMERGENCY WAIVERS.—The Chairman may promulgate regulations providing for a waiver of any requirement under this section 

because of— 

(1) an emergency; or 

(2) an imminent threat to the public health or safety. 

* * * * * * * 

[Civil Penalties 

SEC. 14.(a)(1) 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 Act, any regulation prescribed by the Commission pursuant to 

this Act, or tribal regulations, ordinances, or resolutions approved 

under section 11 or 13. 

(2) The Commission shall, by regulation, provide an opportunity 

for an appeal and hearing before the Commission on fines levied 

and collected by the Chairman. 

(3) Whenever the Commission has reason to believe that the tribal operator of an Indian game or a management contractor is engaged in activities regulated by this Act, by regulations prescribed 

under this Act, or by tribal regulations, ordinances, or resolutions, 

approved under section 11 or 13, that may result in the imposition 

of a fine under subsection (a)(1), the permanent closure of such 

game, or the modification or termination of any management contract, the Commission shall provide such tribal operator or management contractor with a written complaint stating the acts or 

omissions which form the basis for such belief and the action or 

choice of action being considered by the Commission. The allegation 

shall be set forth in common and concise language and must specify the statutory or regulatory provisions alleged to have been violated, but may not consist merely of allegations stated in statutory 

or regulatory language.¿ 

SEC. 14. CIVIL PENALTIES. 

(a) PENALTIES.— 

(1) VIOLATION OF ACT.— 

(A) IN GENERAL.—Except as provided in subparagraph 

(B), an Indian tribe, individual, or entity that violates any 

provision of this Act (including any regulation of the Commission and any Indian tribal regulation, ordinance, or 

resolution approved under section 11 or 13) may be subject 

to, as the Chairman determines to be appropriate— 

(i) an appropriate civil fine, in an amount not to exceed $25,000 per violation per day; or 

(ii) an order of the Chairman for an accounting and 

disgorgement, including interest. 


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48 

(B) APPLICATION TO INDIAN TRIBES.—Subparagraph 

(A)(ii) shall not apply to any Indian tribe. 

(2) APPEALS.—The Chairman shall provide, by regulation, an 

opportunity to appeal a determination relating to a violation 

under paragraph (1). 

(3) WRITTEN COMPLAINTS.— (A) IN GENERAL.—If the Commission has reason to believe that an Indian tribe or a party to a gaming-related 

contract may be subject to a penalty under paragraph (1), 

the final closure of an Indian gaming activity, or a modification or termination order relating to the gaming-related 

contract, the Chairman shall provide to the Indian tribe or 

party a written complaint, including— 

(i) a description of any act or omission that is the 

basis of the belief of the Commission; and 

(ii) a description of any action being considered by 

the Commission relating to the act or omission. 

(B) REQUIREMENTS.—A written complaint under subparagraph (A)— 

(i) shall be written in common and concise language; 

(ii) shall identify any statutory or regulatory provision relating to an alleged violation by the Indian tribe 

or party; and 

(iii) shall not be written only in statutory or regulatory language. 

ø(b)(1) The Chairman¿ (b) TEMPORARY CLOSURES.— (1) IN GENERAL.—The Chairman shall have power to order 

temporary closure of an øIndian game¿ Indian gaming activity, 

or any part of such a gaming activity, for substantial violation 

of the provisions of this Act, of regulations prescribed by the 

Commission pursuant to this Act, or of tribal regulations, ordinances, or resolutions approved under section 11 or 13 øof this 

Act¿. ø(2) Not later than thirty¿ (2) HEARINGS.— 

(A) IN GENERAL.—Not later than 30 days after the 

issuance by the Chairman of an order of temporary closure, the Indian tribe or ømanagement contractor¿ party 

to a gaming-related contract involved shall have a right to 

a hearing before the Commission to determine whether 

such order should be made øpermanent¿ final or dissolved. 

øNot later than sixty¿ 

(B) DETERMINATION OF COMMISSION.—Not later than 60 

days following such hearing, the Commission shall, by a 

vote of not less than two of its members, decide whether 

to order a øpermanent¿ final closure of the gaming operation. 

ø(c) A decision¿ (c) APPEAL OF FINAL DETERMINATIONS.—A determination of the Commission to give final approval of a fine levied 

by the Chairman or to order a permanent closure pursuant to this 

section shall be appealable to the appropriate Federal district court 

pursuant to chapter 7 of title 5, United States Code. 

ø(d) Nothing¿ (d) EFFECT ON REGULATORY AUTHORITY OF INDIAN

TRIBES.—Nothing in this Act precludes an Indian tribe from exercising regulatory authority provided under tribal law over a gaming 

establishment within the Indian tribe’s jurisdiction if such regulaVerDate Aug 31 2005 07:31 Jun 17, 2006 Jkt 049010 PO 00000 Frm 00048 Fmt 6659 Sfmt 6602 E:\HR\OC\SR261.XXX SR261

ycherry on PROD1PC64 with REPORTS
49 

tion is not inconsistent with this Act or with any rules or regulations adopted by the Commission. 

* * * * * * * 

øGAMING ON LANDS ACQUIRED AFTER ENACTMENT OF 

THIS ACT 

Sec. 20. * * * 

(b)(1) Subsection (a) will not apply when— 

ø(A) the Secretary, after consultation¿ (A)(i) before April 15, 

2006 an Indian tribe has submitted to the Secretary a written 

request to have land deemed eligible for gaming under this subparagraph; and 

(ii) the Secretary, after consultation with the Indian tribe 

and appropriate State and local officials, including officials 

of other nearby Indian tribes, determines that a gaming 

establishment on newly acquired lands would be in the 

best interest of the Indian tribe and its members, and 

would not be detrimental to the surrounding community, 

but only if the Governor of the State in which the gaming 

activity is to be conducted concurs in the Secretary’s determination; or 

(B) lands are taken into trust as part of— 

(i) a settlement of a land claimø,¿ under Federal statutory law, if the land is within a State in which is located— 

(I) the reservation of such Indian tribe; or 

(II) the last recognized reservation of such Indian 

tribe; 

ø(ii) the initial reservation of an Indian tribe acknowledged by the Secretary under the Federal acknowledgment 

process, or¿ 

(ii) the initial reservation of an Indian tribe acknowledged by the Secretary pursuant to the Federal acknowledgment process, if— 

(I) the Indian tribe has an historical and geographical nexus to the land, as determined by the Secretary; and 

(II) after consultation with the Indian tribe and appropriate local and tribal officials, and after providing 

for public notice and an opportunity to comment and 

a public hearing, the Secretary determines that a gaming establishment on the land— 

(aa) would be in the best interests of the Indian 

tribe and members of the tribe; and 

(bb) would not create significant, unmitigated 

impacts on the surrounding community; or 

ø(iii) the restoration of lands for an Indian tribe that is 

restored to Federal recognition.¿ 

(iii) the restoration of land for an Indian tribe that is restored to Federal recognition, if— 

(I) the Indian tribe has an historical and geographical nexus to the land, as determined by the Secretary; 


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50 

(II) a temporal connection exists between the acquisition of the land and the date of recognition of the tribe, 

as determined by the Secretary; and 

(III) after consultation with the Indian tribe and appropriate local and tribal officials, and after providing 

for public notice and an opportunity to comment and 

a public hearing, the Secretary determines that a gaming establishment on the land— 

(aa) would be in the best interests of the Indian 

tribe and members of the tribe; and 

(bb) would not create significant, unmitigated 

impacts on the surrounding community. 

* * * * * * * 

(4) EFFECT OF SUBSECTION.—Nothing in this subsection affects 

the validity of any determination regarding the eligibility of land 

for gaming made by the Secretary or Chairman before the date of 

enactment of this paragraph. 

* * * * * * * 

SEC. 25. CONSULTATION POLICY. 

In promulgating rules and regulations pursuant to this Act, the 

Commission shall establish and maintain a policy of consultation 

with Indian tribes in accordance with the Federal trust responsibility and the government-to-government relationship that exists between Indian tribes and the Federal Government. 

* * * * * * * 

Public Law 105–83 

Making appropriations for the Department of the Interior and related agencies for 

the fiscal year ending September 30, 1998, and for other purposes 

Be it enacted by the Senate and House of Representatives of the 

United States of America in Congress assembled, 

* * * * * * * 

SEC. 123. Assessment of Fees. (a) COMMISSION FUNDING.— Section 18(a) of the Indian Gaming Regulatory Act (25 U.S.C. 2717(a)) 

is amended— 

(1) in paragraph (1), by striking ‘‘class II gaming activity’’ 

and inserting ‘‘gaming operation that conducts a class II or 

class III gaming activity’’; and 

(2) in paragraph (2)— 

(A) in subparagraph (A)(i), by striking ‘‘no less than 0.5 

percent nor’’ and inserting ‘‘no’’; and 

(B) in subparagraph (B), by striking ‘‘$1,500,000’’ and inserting ‘‘$8,000,000’’ø; and≈. 

ø(C) nothing in subsection (a) of this section shall apply 

to self-regulated tribes such as the Mississippi Band of 

Choctaw.¿ 

* * * * * * * 

Æ 


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