U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

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

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

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

78–446 PDF 2013

S. HRG. 112–706

REGULATION OF TRIBAL GAMING: FROM BRICK

AND MORTAR TO THE INTERNET

HEARING

BEFORE THE

COMMITTEE ON INDIAN AFFAIRS 

UNITED STATES SENATE

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

JULY 26, 2012

Printed for the use of the Committee on Indian Affairs

(

(II)

COMMITTEE ON INDIAN AFFAIRS 

DANIEL K. AKAKA, Hawaii, Chairman 

JOHN BARRASSO, Wyoming, Vice Chairman 

DANIEL K. INOUYE, Hawaii 

KENT CONRAD, North Dakota 

TIM JOHNSON, South Dakota 

MARIA CANTWELL, Washington 

JON TESTER, Montana 

TOM UDALL, New Mexico 

AL FRANKEN, Minnesota 

JOHN MCCAIN, Arizona 

LISA MURKOWSKI, Alaska 

JOHN HOEVEN, North Dakota 

MIKE CRAPO, Idaho 

MIKE JOHANNS, Nebraska 

LORETTA A. TUELL, Majority Staff Director and Chief Counsel 

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

(III)

C O N T E N T S 

Page 

Hearing held on July 26, 2012 ............................................................................... 1

Statement of Senator Akaka ................................................................................... 1

Statement of Senator Barrasso ............................................................................... 2 

Statement of Senator Franken ............................................................................... 2

Statement of Senator Udall .................................................................................... 8

WITNESSES

Bozsum, Hon. Bruce ‘‘Two Dogs’’, Chairman, the Mohegan Tribe ...................... 14

Prepared statement .......................................................................................... 16

Gobin, Glen, Secretary, Tulalip Tribes of Washington ......................................... 18

Prepared statement .......................................................................................... 19

Hummingbird, Jamie, Chairman, National Tribal Gaming Commissioners/

Regulators Association ......................................................................................... 26

Prepared statement .......................................................................................... 28

Homer, Elizabeth Lohah, Attorney, Homer Law .................................................. 31

Prepared statement .......................................................................................... 33

Johnson, Gene, Senior Vice President, Market Research and Online Studies, 

Spectrum Gaming Group ..................................................................................... 40

Prepared statement .......................................................................................... 41

Porter, Hon. Jon C., Former Congressman; President, Porter Gordon Silver 

Communications ................................................................................................... 35

Prepared statement .......................................................................................... 37

Stevens, Hon. Tracie, Chairwoman, National Indian Gaming Commission ....... 4

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

APPENDIX

Eve, Grant W., CPA, CFE, Partner, JOSEPH EVE, prepared statement .......... 49

Porter, Hon. Robert Odawi, President, Seneca Nation of Indians, prepared 

statement .............................................................................................................. 53

Rand, Kathryn R.L., J.D. and Steven Andrew Light, Ph.D., Co-Directors, 

Institute for the Study of Tribal Gaming Law and Policy, joint prepared 

statement .............................................................................................................. 50

(1)

REGULATION OF TRIBAL GAMING: FROM 

BRICK AND MORTAR TO THE INTERNET 

THURSDAY, JULY 26, 2012

U.S. SENATE, 

COMMITTEE ON INDIAN AFFAIRS, 

Washington, DC. 

The Committee met, pursuant to notice, at 2:30 p.m. in room 

628, Dirksen Senate Office Building, Hon. Daniel K. Akaka,

Chairman of the Committee, presiding. 

OPENING STATEMENT OF HON. DANIEL K. AKAKA,

U.S. SENATOR FROM HAWAII 

The CHAIRMAN. I call this hearing on the Committee of Indian 

Affairs to order. 

Aloha and welcome to all of you here. Welcome to the Committee’s oversight hearing on the Regulation of Tribal Gaming: From 

Brick and Mortar to the Internet. 

Today we are here to discuss the regulation of Tribal gaming. 

Tribal gaming is now a $27 billion industry. In total, the Tribal 

gaming makes up approximately 40 percent of the commercial gaming industry in the United States. Gaming, like many industries, 

does not remain stagnant. That is why today we will discuss the 

current regulatory structure of Indian gaming under the Indian 

Gaming Regulatory Act, as well as examine regulation of online 

gaming should Federal legislation be enacted. 

Gaming has been the single most effective of economic development for Indian Country. Revenues from gaming provide essential 

services to Tribal members, including education, health care, and 

housing. Indian gaming also provides jobs to members of the surrounding communities. In many counties across the Nation, Tribes 

are the largest employer, with nearly 75 percent of those jobs going 

to non-Indians. 

With these types of economic tools comes great responsibility. 

Tribes are the first line regulators for Tribal gaming. We, in Congress, and especially on this Committee, also have a responsibility 

to ensure that Tribal views and priorities are part of any legislation that could impact Tribal gaming. 

That is why I have developed a draft online gaming bill, the 

Tribal Online Gaming Act of 2012. This bill is intended to further 

the dialogue with Tribes, my colleagues here in the Senate, and 

other affected stakeholders as well. I encourage all of you to review 

the bill and provide any comments. 

2

In any expansion of gaming we must make sure that the unique 

circumstances surrounding Tribal sovereignty are maintained in 

any legislation and we must also enable Tribes to participate fully, 

should any legislation be considered, so Tribes are on equal footing 

with their counterparts in the commercial gaming industry. 

I look forward to hearing from all of our witnesses on how we 

can ensure that Tribal gaming is properly regulated and it exists 

now and into the future. 

Today we have the Chair of the NIGC, who will update the Committee on that agency’s regulatory efforts over the years. We also 

have Tribal leaders from the Mohegan and Tulalip Tribes. Both 

these gentlemen have testified on the online gaming issue in the 

past and will update us on their Tribe’s activities on this issue. 

Finally, we will hear from experts in the field of gaming. I am 

sure all of you will provide valuable insights today. 

Let me now call on our Vice Chairman, Senator Barrasso, for his 

opening statement. 

STATEMENT OF HON. JOHN BARRASSO,

U.S. SENATOR FROM WYOMING 

Senator BARRASSO. Mr. Chairman, thank you very much for holding this hearing. 

Last November, this Committee held an oversight hearing on the 

future of Internet gaming in Indian Country. Early this year we 

held an oversight hearing on the Department of Justice’s opinion 

regarding Internet gaming and its implications for Indian Country. 

While there are many unanswered questions regarding Internet 

gaming in the United States, one thing is clear: the regulation of 

Internet gaming must be sufficient and effective. We are going to 

hear today how Tribes are preparing for such regulation. We will 

also hear from the National Indian Gaming Commission about developments since our hearing about a year ago. 

As you mentioned, Mr. Chairman, according to the Commission, gross revenues for Indian gaming in 2011 were over $27 billion 

and, as you said, that is a significant amount of money. Again, 

though, as we discussed a year ago, the annual compliance reports 

do not effectively assess how theft and crime at gaming facilities 

are being addressed. So I am looking forward to hearing what, if 

any, progress on this issue and other issues raised last year has 

been made. 

So thank you, Mr. Chairman, for your leadership on this important matter. I look forward to the witnesses’ testimony and welcome them here. 

The CHAIRMAN. Thank you very much, Senator Barrasso. 

Let me now call on Senator Franken for any comments he may 

have. 

STATEMENT OF HON. AL FRANKEN,

U.S. SENATOR FROM MINNESOTA 

Senator FRANKEN. Thank you, Mr. Chairman. 

As we all know, gaming has been an incredibly powerful economic development tool for Tribes. Gaming enterprises have 

brought much needed revenue and jobs to Indian Country. Tribes 

3

have used gaming revenue to become self-sufficient to invest in 

their communities and to provide basic services its members. 

The Mille Lacs Band of Ojibwe in Central Minnesota uses revenue from its two casinos to fund health clinics, an impressive assisted living facility, a police department, wastewater treatment facility, and schools. Mille Lacs is committed to providing affordable, 

safe, and comfortable housing to all of its members. Since 1991, the 

Band has built more than 200 new homes and renovated many existing homes. Mille Lacs has also been able to invest in a number 

of non-gaming businesses and runs a small business development 

program to support members who want to start their own businesses. 

Indian gaming has also had a much broader economic impact. 

The Shakopee Mdewakanton Sioux Community, southwest of the 

Twin Cities, about 45 minutes southwest, is a great example of 

how gaming revenue can transform an entire community. Shakopee 

employs over 4,000 individuals, both gaming and non-gaming enterprises. They are the largest employer in Scott County, providing 

one in every ten jobs. In 2011, the Shakopee gaming enterprise was 

named one of the Minneapolis Star Tribune’s top workplaces in the 

State based on a survey of employees. 

Shakopee has also had an impressive charitable giving program. Just over the past four years, the Tribe has donated nearly $128 

million. Of that amount, over $115 million went to other Indian 

Tribes for economic development and community improvements. 

Without the revenue and opportunities that Indian gaming provides, none of this would be possible. Gaming is far from a perfect 

solution. Many Tribes are not able to take advantage of gaming opportunities because of their location, and much more needs to be 

done to diversify the economies of all Tribes. But gaming has provided an opportunity for so many Tribes. It has strengthened Tribal sovereignty and allowed Tribes to take hold of their own future. 

It is a tool that, if used well, can make a huge difference. This is 

something worth protecting. 

Any changes, any changes to current gaming laws must take into 

account the special place that Tribes hold in the gaming industry, 

both to respect Tribal sovereignty and out of economic fairness. If 

Congress considers legislation to legalize Internet gaming, it is vitally important that Tribes be consulted at every step of the process. 

I want to thank you, Chairman Akaka, for continuing to hold 

hearings on this important subject. I would like to thank the Vice 

Chairman as well. I hope we can all work together to make sure 

that the rights of gaming Tribes are protected. Thank you. 

The CHAIRMAN. Thank you very much, Senator Franken. 

As Chairman, it is my goal to ensure that we hear from all, all 

who want to contribute to the discussion. The hearing record is 

open for two weeks from today and I encourage everyone to submit 

your comments through written testimony. 

I want to remind the witnesses to please limit your oral testimony to 5 minutes today. 

So I would like to say Aloha and welcome our first panelists, Ms. 

Tracie Stevens, Chairwoman of the National Indian Gaming Commission. Would you please proceed with your testimony? 

4

STATEMENT OF HON. TRACIE STEVENS, CHAIRWOMAN, 

NATIONAL INDIAN GAMING COMMISSION 

Ms. STEVENS. Thank you, Chairman Akaka, Vice Chairman 

Barrasso, and members of the Committee for inviting me to testify 

today. It is an honor to appear before this Committee as the Chairwoman of the National Indian Gaming Commission. I am a member of the Tulalip Tribes of Washington State. 

With me today are Vice Chair Stephanie Cochran and Commissioner Dan Little. Additionally, I would like to recognize members 

of my own council who are here today, Dawn Hatch and Glen 

Gobin. 

As a Commission, we have established four major priorities: consultation and relationship building, training and technical assistance, regulatory review, and agency operations. Today I will discuss the status of Tribal gaming and provide an update on these 

four priorities. 

Over the past few years, gaming revenue has remained stable, generating approximately $27.2 billion in gross revenue for Tribes. 

In 2011, 237 Tribes engaged in gaming, with 421 gaming operations. 

There are over 6,500 Tribal, State, and Federal regulators working together to maintain the integrity of Indian gaming. NIGC is 

the Federal civil regulatory agency primarily responsible, along 

with Tribal and State regulators, for regulation of Indian gaming 

on Indian lands. Tribal Governments employ approximately 5,900 

gaming regulators and States employ approximately 570 regulators. In addition to working with Tribal and State regulators, at 

the Federal level, NIGC works with Federal agencies such as the 

Federal Bureau of Investigation, the Department of Interior, and 

the Department of Treasury and Justice to promote compliance 

with all Federal laws. 

NIGC has worked to successfully implement a regulatory approach we refer to ACE, assistance, compliance, and enforcement, 

in that order. The approach has effectively reduced the number of 

notices of violation by proactively addressing potential issues and 

proceeding with enforcement action only for issues that could not 

be resolved. 

As I have discussed previously, Class III MICS are essential to 

protect the integrity and security of gaming operations. All Tribes 

engaged in Class III gaming pursuant to a Tribal-State compact 

have systems of internal controls that govern procedures for Class 

III operations. 

Although we do not have independent authority to promulgate or 

enforce Class III MICS, it has always been the practice of the 

NIGC to work with Tribes to strengthen the effectiveness of their 

Class III MICS, and we continue that practice today. 

Meaningful and transparent Tribal consultation is one of our four 

priorities. We transformed our consultation process to make it inclusive, meaningful, and transparent. In the past year, we have 

conducted 19 consultations as part of our regulatory review. Approximately 345 Tribal leaders or their representatives from approximately 179 Tribes attended these consultations. 

The Commission also views training and technical assistance as 

a critical tool in maintaining the integrity of Indian gaming. In 

5

2011, the NIGC provided 83 trainings, totaling 659 training hours. 

In 2011, over 2300 individuals attended training sessions, and so 

far this year 1,069 individuals from 132 Tribes have attended 

trainings. 

We have also worked to improve the internal function of the 

agency by streamlining our internal operations. Tribal revenues 

are the sole funding source for the NIGC, and it is imperative that 

NIGC utilize these revenues efficiently and effectively. This means 

a smarter, better equipped agency that is more responsive and better adapts to its regulatory responsibilities and the needs of the 

Tribal gaming industry. 

Review of our regulations is another critical focus for the agency. 

We are committed to maintaining a regulatory framework that is 

efficient and effective. Over the past year, we have examined 20 

regulations or potential regulations and circulated 13 discussion 

drafts. Since July 2011, we have published 10 proposed rules and 

2 final rules. The Commission is working diligently to complete 

these rulemakings. 

A focus of our rulemaking is on the Class II MICS and technical 

standards. These regulations provide minimum standards designed 

to protect the security and integrity of Class II gaming operations 

and equipment used to play Class II games. Updating the MICS 

and technical standards for Class II gaming are integral to protecting the industry and patrons alike. 

This concludes my testimony, and I hope this summary of activities and initiatives provides the Committee with valuable information regarding the regulatory role and the goals of the NIGC. 

Thank you, Chairman Akaka, Vice Chairman Barrasso, and members of the Committee for your time and attention today. I am 

available to answer any questions that you may have. 

[The prepared statement of Ms. Stevens follows:]

PREPARED STATEMENT OF HON. TRACIE STEVENS, CHAIRWOMAN, NATIONAL INDIAN

GAMING COMMISSION

Thank you, Chairman Akaka, Vice Chairman Barrasso, and members of the Committee for inviting me to testify today. It is an honor to appear before you in my 

capacity as Chairwoman for the National Indian Gaming Commission (NIGC or 

Commission). 

During our tenure with the Commission, the Commissioners have established four 

major priorities: consultation and relationship building; training and technical assistance; regulatory review; and agency operations. We have made significant 

progress on each of these four priorities since I was sworn into office in June 2010. 

Meaningful consultation and relationship building are paramount in maintaining 

strong regulation of the industry by Federal, tribal and state regulators. NIGC-sponsored training opportunities and technical assistance provide early resources to address potential regulatory issues, thereby maintaining the integrity of Indian gaming. Regulatory review improves the industry by establishing clear, effective standards. Finally, review of our internal operations promotes efficient and effective regulation by eliminating redundancies, work silos, and unnecessary processes. 

Each of the four priorities aids NIGC’s administration of its statutory responsibilities as set forth in the Indian Gaming Regulatory Act (IGRA). As I have discussed 

in prior testimony, this Commission has established the ‘‘ACE’’ approach to enforcement consistent with the four priorities: assistance, compliance, and enforcement. 

This approach prevents foreseeable problems through effective communication, 

training and technical assistance, and compliance efforts. When necessary, the Commission takes enforcement action to ensure compliance and protect the integrity of 

Indian gaming. 

Today I will discuss the status of tribal gaming and provide an update on the 

Commission’s progress in achieving its four priorities. 

6

The Current Status of Indian Gaming and Regulatory Oversight 

Gaming revenue provides resources for many tribal services as well as thousands 

of jobs for tribal members and surrounding communities. Currently, gaming operations employ tens of thousands of individuals across the United States, mostly in 

areas that, historically, suffer from high unemployment. Over the past few years, 

gaming revenue has remained roughly stable, collectively generating approximately 

$27.2 billion in gross revenue for tribes. In 2011, 237 tribes engaged in gaming as 

a means of tribal economic development, with 421 active gaming operations. 

There are over 6,500 tribal, state, and Federal regulators working together to 

maintain the integrity of Indian gaming. NIGC is the Federal civil regulatory agency primarily responsible—along with tribal and state regulators—for regulation of 

Indian gaming on Indian lands. Tribal governments employ approximately 5,900 

gaming regulators and states employ approximately 570 regulators. In addition to 

working with tribal and state regulators, at the Federal level, NIGC works with 

Federal agencies such as the Federal Bureau of Investigation, the Department of 

the Interior, the Department of Treasury and the Department of Justice, to promote 

compliance with all Federal laws. 

During the last 12 months, the NIGC has successfully implemented the ACE approach. In addition to providing informal day-to-day technical assistance, our auditors, compliance officers and attorneys work closely with tribes to resolve compliance 

issues in a manner that takes into account unique aspects of a particular gaming 

operation. If compliance steps are unsuccessful, we take enforcement action. ACE 

has effectively reduced the number of notices of violations (NOVs) by proactively addressing potential compliance issues and proceeding with enforcement action only 

for substantial regulatory violations that were not, or could not, be corrected 

through technical assistance and compliance efforts. 

As the Committee is aware, six years ago the D.C. Circuit held that the NIGC 

does not possess authority to promulgate regulations establishing Minimum Internal Controls (MICS) for Class III gaming. As I have discussed in my previous testimony, Class III MICS are essential to protect the integrity and security of gaming 

operations. During my tenure as Chairwoman, we have examined the real world impact of the court’s decision on the regulation of Indian gaming. 

Through research and working with tribes and tribal regulators, we have learned 

that all tribes engaged in Class III gaming pursuant to a tribal-state compact have 

Class III MICS. Of the 24 states that allow Class III gaming, 15 require stringent 

MICS specifically in their compacts, and the other nine states require tribes to develop comprehensive MICS of their own. Therefore, every such tribe has a system 

of internal controls that governs procedures for Class III operations. 

The Commission has never taken an enforcement action for failure to comply with 

MICS. Prior to the decision in Colorado River Indian Tribes v. National Indian 

Gaming Commission, 466 F.3d 134 (D.C. Cir. 2006), (CRIT) if NIGC identified an 

issue with a particular tribe’s Class III MICS, the agency worked with the tribe to 

achieve compliance. Although we do not have independent authority to promulgate 

or enforce Class III MICS, tribes continue to request our assistance and we continue 

to work with them to strengthen the effectiveness of their Class III MICS. 

We have also consulted with tribes regarding how the Commission should address 

the D.C. Circuit’s decision. While there does not appear to be a tribal consensus, 

many tribes support publication of Class III MICS as guidance for their own regulations and compacts. We continue to utilize the MICS to provide technical assistance 

and training, and many tribes utilize NIGC’s Class III MICS as part of their own 

regulatory schemes or as part of their tribal-state compacts. 

Consultation and Relationship Building 

Meaningful and transparent consultation with tribes is integral to the success of 

NIGC’s mission. As the primary Federal civil regulatory agency, the Commission 

conducts government-to-government consultations regarding changes to its regulations. This government-to-government dialogue is crucial in maintaining the integrity of the industry given the tribal, state and federal regulatory roles under IGRA. 

We make every effort to consult throughout Indian country and bring NIGC to 

tribal communities and widely-attended gatherings, in an effort to be mindful of 

both tribal and NIGC resources. In the past 12 months, we have conducted 19 consultations in every region of the United States regarding regulatory review. Tribal 

leaders and representatives from approximately 179 tribes attended, totaling approximately 345 individuals. 

We have also been working collaboratively with Federal, tribal and state officials 

to ensure roles under IGRA are coordinated. This promotes effective inter-governmental communications regarding gaming issues and helps ensure that the appropriate agency has the information and support needed to perform its duties. As 

7

such, the Commission has reached out to the Federal Bureau of Investigation, the 

Department of Justice, Financial Crimes Enforcement Network, and other agencies, 

to develop inter-agency practices and to participate in inter-agency work groups. 

Technical Assistance and Training 

The Commission views training and technical assistance as a critical tool in bolstering industry security and maintaining compliance with regulatory and statutory 

requirements. Therefore, consistent with express mandates contained in IGRA and 

the goals of the Commission, the NIGC offers training and technical assistance to 

tribal governments, tribal regulators and gaming operations personnel. Successful 

regulation depends on a well-trained workforce and well-targeted training to ensure 

compliance with Federal regulations. Our goal is to achieve compliance with IGRA 

before issues arise, which will serve to preserve the integrity of tribal gaming and 

preempt the need for enforcement actions. 

Last year, we conducted a survey of our program, which helped inform our review 

and revisions to our course catalog. As a result, requests for training and technical 

assistance, as well as participation in trainings, have risen. 

In 2011, the NIGC provided 83 training programs, totaling 659 training hours. 

Over 2,300 individuals attended training sessions, representing 209 (87 percent) of 

all gaming tribes. So far this year, 1069 individuals from 132 tribes have attended 

our training programs. The NIGC has offered 51 different types of training. As more 

tribes learn about training opportunities, we expect trainings and attendance to continue to increase. 

Training and technical assistance will be an on-going initiative in our mission to 

achieve full compliance and serve the needs of the industry. 

Internal Agency Operations 

As part of our effort to optimize regulation of tribal gaming, we have removed 

work flow silos, eliminated redundant functions, streamlined and implemented better processes to improve the functioning of the Agency. Further, in accordance with 

requirements of the Government Performance and Results Modernization Act of 

2010, P.L. 111–352, we are in the process of drafting a strategic plan, which will 

outline the NIGC’s priorities over the next several years. The plan also will detail 

processes and methods by which the NIGC will achieve its goals, including performance measurements to assess the success of each initiative. In addition, consistent 

with Executive Order 13589, ‘‘Promoting Efficient Spending,’’ we are continuously 

examining how to promote the cost-effective use of resources, including the hiring 

of staff to build upon NIGC’s capabilities to perform mission-critical functions efficiently. 

To maximize efficiency within the Agency, we have adopted or revised internal 

policies to provide clarity to our employees. We are fully utilizing existing contracts 

with other agencies, which are cost effective. Tribal revenues are the sole funding 

source for the NIGC, and it is imperative that NIGC utilize these revenues efficiently and effectively. This means a smarter, better-equipped Agency that is more 

responsive and better adapts to its regulatory responsibilities and needs of the tribal 

gaming industry. 

In addition to its efforts to increase internal efficiency, the NIGC has continued 

its commitment to transparency by holding public meetings on the state of the 

Agency and important issues. Our most recent public meeting was held on May 23, 

2012 in Prior Lake, Minnesota. These meetings provide tribes, as well as the public, 

an opportunity to learn about Commission business and to address the Commission. 

We will continue to hold public meetings to inform the community of the NIGC’s 

progress toward achievement of its four priorities and other operational issues. 

Regulatory Review 

We embarked on this important initiative in November 2010. Review of our regulations focused on maintaining a regulatory framework that is efficient and effective. Through internal deliberation, tribal consultation, and public comment, we are 

promulgating improvements that streamline processes while maximizing the NIGC’s 

ability to regulate the industry effectively. 

After consulting with tribes and considering public comment in response to a Notice of Intent, the Commission established a Regulatory Review priority list and consultation schedule. This initiative has been conducted in accordance with Executive 

Order 13563, ‘‘Improving Regulations and Regulatory Review,’’ issued on Jan 18, 

2011. Over the past year, we have discussed 20 regulations or potential regulations, 

and circulated 13 discussion drafts to date. Since I appeared before you in 2011, the 

Commission has published 10 Notices of Proposed Rule, two Notices of No Action 

and two Final Rules. Of the 10 Notices of Proposed Rule, the Commission is working 

8

diligently to conclude those rulemakings by issuing final rules in the Federal Register. 

This Commission is dedicated to strong and efficient regulation of Indian gaming. 

Therefore, a large portion of our effort has been focused on reviewing and updating 

the Class II Minimum Internal Control Standards (MICS) and Technical Standards 

for Gaming Equipment Used With the Play of Class II Games, 25 C.F.R. Parts 543 

and 547. These regulations outline minimum standards designed to protect the security and integrity of Class II gaming operations, as well as minimum standards for 

equipment used to play Class II games. Through internal deliberations and consultation with tribes, we are reviewing the current regulations to ensure that they 

provide for advances in technology and continue to be relevant to current state of 

the industry. Updating the MICS and Technical Standards for Class II gaming are 

integral to protecting the industry and patrons alike. 

As part of the review process for Parts 543 and 547, we developed a Tribal Advisory Committee (TAC) to advise and make recommendations to the Commission regarding the Class II MICS and Technical Standards. The TAC is comprised of diverse group of tribal government representatives whose expertise assisted the Commission in its review of Parts 543 and 547, and aided in the development of a discussion draft, which was published on March 16, 2012. 

We consulted with tribes in nearly all regions of the United States and reviewed 

over 50 written public comments to the discussion drafts. Although many tribes expressed opposition to potential changes to current regulations, the Commission’s 

regulatory role is to take a hard look at the issues and make well informed decisions, even if those decisions ultimately are unpopular with the regulated community. The Commission is dedicated to promulgating strong regulations that maintain 

the integrity of Indian gaming. 

The Commission’s proposed rules, which were published on June 1, 2012, are 

based on careful consideration of comments received on discussion drafts. Since the 

proposed rules were published, we have conducted five consultations in various regions of the country and continue to receive written comments. The comment period 

for the proposed rules will close on August 15, 2012, after which we will review all 

public comments, allowing the NIGC to make a well informed and fully considered 

decision regarding final regulations. 

Conclusion 

This concludes my testimony. I hope this summary of activities and initiatives 

provides the Committee with valuable information regarding the regulatory role and 

goals of the NIGC. 

Thank you, Chairman Akaka, Vice-Chairman Barrasso, and members of the Committee for your time and attention today. I am available to answer any questions 

you might have for me.

The CHAIRMAN. Thank you very much. 

Now I would like to, before we ask you any questions, I would 

like to call on Senator Udall for any comments or opening statement he may have. 

STATEMENT OF HON. TOM UDALL,

U.S. SENATOR FROM NEW MEXICO 

Senator UDALL. Let me just be very brief, because I think we are 

at the witness stage and I would like to go directly to the witnesses 

and the questioning here. 

First of all, Chairman Akaka, I want to thank you for holding 

this important hearing on Tribal gaming and for remaining engaged in this issue as the talk of legalized Internet gaming continues. Gaming is an issue with significant impact on Indian Country, and the Committee and Tribal leaders need to be an active 

part of the debate over any possible legislation relating to gaming 

in our Nation, and the Tribes need to have a seat at the table. 

Beyond this hearing, it is my hope that my colleagues in Congress will engage Tribes in development of any legislative proposals 

related to gaming, especially in relation to Internet gaming. As 

9

Tribal Nations grapple to develop strong economies and healthy 

communities, gaming will continue to be a significant factor. 

With that, Chairman Akaka, I would yield back and look forward 

to the questioning period that we are about ready to undergo. 

Thank you. 

The CHAIRMAN. Thank you very much, Senator Udall. 

Ms. Stevens, the NIGC’s current fee structure allows for a total 

budget of $18 million per year. Is that amount sufficient for the 

NIGC to carry out its regulatory function for the 240 Tribes who 

conduct gaming? 

Ms. STEVENS. Thank you, Chairman Akaka, for that question. I 

believe that the current fee structure is sufficient to fund the 

NIGC’s operations at this time. Also, as I said, in our initiatives 

we are working to maximize the resources that we have at the 

agency, and we continue to do so. So based on our current budget 

forecast, I believe the current structure is sufficient. 

The CHAIRMAN. Thank you. 

Ms. Stevens, Tribal gaming revenues for 2011 show an increase 

for the first time since 2008. Given this trend in the industry, do 

you anticipate that jobs in the industry will also increase? 

Ms. STEVENS. Thank you, Chairman. While we don’t have that 

information available to us, I would imagine that higher revenues 

may result in additional jobs either at Tribal gaming operations or 

Tribal Governments and their businesses. 

The CHAIRMAN. Thank you. 

Now let me call on the Vice Chair for any questions he may 

have. Senator Barrasso. 

Senator BARRASSO. Thank you, Mr. Chairman. 

As you know, some States have now begun the process of legalizing some forms of online gaming in their jurisdictions, and the 

role of the Federal Government and Tribal Governments in Internet gaming is being discussed, but it really still remains up in the 

air for now. What regulatory changes should Congress or Tribes 

consider if Tribes were able to engage in Internet gaming? 

Ms. STEVENS. Thank you, Vice Chairman. Without legislation, I 

couldn’t speak directly to what our regulatory role would be. In 

terms of what implications the States might consider, or the Federal Government, regarding the Tribes or the opportunities for the 

Tribes, I would leave that to the Tribes to discuss. As a Federal 

regulator, we are focused on our position with regulating, and we 

would be happy to work with the Committee in the future should 

legislation be dropped. 

Senator BARRASSO. Last year you testified that the Commission 

was examining approaches for ensuring that the minimum internal 

control standards for Tribal gaming would be implemented, and 

your testimony now indicates that every Tribe has a system of internal controls. In 9 of the 24 States allowing gaming, Tribes develop their own standards. The question I would have is how does 

the National Indian Gaming Commission ensure that Tribal minimum internal control standards at all Tribal operations are sufficient to protect the integrity of the games? 

Ms. STEVENS. Thank you, Vice Chairman. Just to get some context, Indian gaming takes place in 28 States. In 24 States Tribes 

participate in Class III gaming pursuant to a Class III gaming 

10

compact, which is the agreement between the Tribes and the 

States, and, as you said, there are 9 that the compact directs the 

Tribe to have comprehensive MICS. 

And what we do, we work with Tribal regulators and operators 

to provide training and technical assistance but, more importantly, 

our staff reviews agreed upon procedures, which are audits that 

are on operations that are performed by independent audit firms, 

and in those States those audits confirm that each of those States 

and those Tribes have comprehensive MICS. So we have what we 

call AUPs, they are called agreed upon procedures. Those are audits by independent firms and they confirm the existence of comprehensive minimal internal control standards. 

Senator BARRASSO. Following up on that, your written testimony 

says that successful regulation depends upon a well trained workforce, and you say several training sessions are offered by your 

agency. Do you have some way to measure the effectiveness of this 

training, and could you please explain how you measure that effectiveness? 

Ms. STEVENS. Thank you, Vice Chairman. Evaluating effectiveness has multiple layers. We get feedback from Tribal employees 

and the regulators and operators. We also, more importantly, get 

feedback from our regional staff. We have seven regional offices 

and three satellite offices. They are on the ground every day, out 

working with Tribes, so we get feedback; they do site visits, they 

also look at these AUPs, and we evaluate compliance reports that 

we get from our staff when they do these site visits. 

As my written testimony says, training is really important; it 

helps keep Tribes in compliance and it prevents violations. So those 

are the ways that we measure effectiveness. And something to 

note, our training requests and the voluntary just general requests 

that we get from Tribes for help has increased substantially since 

we started these initiatives. 

Senator BARRASSO. Last August, the Committee sent several 

questions to you from the July 2011 oversight hearing, and I know 

our Committee clerks’ records show that we haven’t yet received responses to the questions. I understand that perhaps your staff 

hadn’t submitted the questions to you. 

We are likely to submit some more questions to you. I would ask 

that in two weeks or maybe next week, you actually look to see 

that you have received the questions and in a very timely way get 

backto us. I was looking for answers to questions from a year ago 

and we still don’t have those in writing, and there may have been 

some lost in the communication. But I would ask you to actively 

look for the questions because they are going to be coming after 

this hearing, so thank you very much. 

Ms. STEVENS. Vice Chairman, I apologize for that. I recall drafting those answers and authorizing them, and at this time it was 

sort of a surprise to us last night, when we were checking with 

staff, that you had not received them, and I apologize for that. We 

will work to get you a copy of that. 

Senator BARRASSO. Thank you. Thank you very much. 

Thank you, Mr. Chairman 

The CHAIRMAN. Thank you very much, Senator Barrasso. 

Senator Franken, your questions, please. 

11

Senator FRANKEN. Yes, thank you, Mr. Chairman 

Ms. Stevens, you are Chairwoman of the National Indian Gaming Commission. The Commission has almost 25 years of experience regulating Indian gaming. You currently oversee 422 gaming 

facilities in 28 States. 

The legalization of Internet gaming is controversial in and of 

itself for many reasons. Gaming and Indian gaming is something 

that, I imagine, if you are like and my job, you think about a good 

12, 14 hours a day. So I would just like to ask you what do you 

are the issues that we should be thinking about when we are talking about the impact on Indian Tribes, on Indian gaming, when we 

talk about the legalization of Internet gaming? Very general question, obviously. 

Ms. STEVENS. Well, thank you, Senator Franken. You know, as 

a regulatory body, we focus on regulation and what we are currently authorized to regulate, so in the abstract it is difficult to answer that question. I think that, as a Federal regulator, I would 

defer to the Tribes to talk about that. 

Senator FRANKEN. I am not asking necessarily for your opinions 

about what is good, what is the best way to do things, et cetera, 

et cetera. Just delineate if you could, as I said, this is something 

you must think about a lot, you must give thought to. What are 

the issues that we should be thinking about? What are the areas? 

I am asking you because you are Chairwoman of the National Indian Gaming Commission. What aspects of this should we be thinking about in terms of the impacts on Indian gaming, in terms of 

the impact on Indian Tribes? 

Ms. STEVENS. Well, again, I think as a regulator, and not necessarily from the Tribal perspective, and I would be interested in 

what Tribes have to say, but what I do think about is because 

IGRA has a three-tiered, from a regulatory standpoint, three-tiered 

regulatory system, there is NIGC, there are the States, and there 

are the Tribes. In addition to that, because we don’t have criminal 

authority, as I said, we have the Department of Justice, FBI, IRS, 

Treasury, all these other agencies. 

So I would say those are things that I think about. It is sort of 

the who is on first, who is going to do what? And it is hard for me 

to give any recommendation about that, but that is what I am 

thinking about, is the jurisdiction because it is divided up by the 

Act. 

Senator FRANKEN. So what you are thinking most about is the 

regulatory regime. 

Ms. STEVENS. Yes. I wonder what that is going to look like. 

Senator FRANKEN. Okay, so that is what you think about 12 to 

14 hours a day. 

Ms. STEVENS. I am a regulator. 

Senator FRANKEN. Okay. 

Ms. STEVENS. That is what I do. 

Senator FRANKEN. I apologize. That is your job, is regulating, so 

that is what you think about and that is proper. In your testimony 

you state that meaningful consultation and relationship building 

are paramount to maintaining regulation of the industry. Can you 

elaborate on the importance of consultation for effective regulation 

and how do you do that? 

12

Ms. STEVENS. Well, thank you, Senator Franken. Because it is a 

three-tiered system and because Tribes and their regulators are on 

the ground 24 hours a day, 7 days a week, they are the day-to-day 

regulators. In addition to that, and more importantly, as has been 

made clear by the President’s memo in November 2009, we take 

consultation in our government-to-government relationship with 

Tribes very seriously. Because there are so many different roles for 

different agencies, for Tribes, States, and Federal bodies, we have 

to collaborate, and in keeping with the spirit of government-to-government relationship and respecting the spirit of self-determination 

and sovereignty with Tribes, we have to talk to them, especially 

with regard to regulations that they will also be implementing. 

It is not just NIGC who is making sure that we are in compliance; the Tribes are using these regulations. And in talking to 

Tribes in this past 18 months about the regulations that we have 

been reviewing, we have talked to them before we started making 

changes so that we get a better sense from a practical standpoint 

how any changes might affect their ability to regulate, their ability 

to operate. 

So it is very important for us to do that, and it also keeps the 

communication channels open. If a Tribe needs help, if they need 

technical assistance or training, we want them to come to us; we 

don’t want them to be in fear of us. And the only way we get that 

is if we have open communications and we are consulting with 

them. 

Senator FRANKEN. My time is up. I probably will submit some 

questions for you also, so look for those. One is if Internet gaming 

were legalized tomorrow, which regulators would be overseeing 

that, but that will be a written question you can look for. 

Ms. STEVENS. Thank you, Senator. 

Senator FRANKEN. Thank you. 

The CHAIRMAN. Thank you very much, Senator Franken. 

Senator Udall, your questions. 

Senator UDALL. Thank you, Chairman Akaka. 

Ms. Stevens, what do you believe are the biggest issues that are 

facing you as Chairman of the National Indian Gaming Commission? What are the challenges that you are facing in your current 

regulatory capacity, you and the other commissioners? 

Senator UDALL. I am not sure that they are challenges, necessarily, as much as the areas in which we focus, which I explained 

in my testimony. We want to make sure that Tribes are staying 

compliant. I think that is what my primary responsibility is and 

what, as Senator Franken said, I think about 12 to 14 hours a day, 

and sometimes longer and sometimes in the middle of the night, 

keeping Tribes in compliance and how do we do that. 

Following up on what I was saying to Senator Franken, keeping 

those communication lines open, because we do have to work with 

the Tribes. So I wouldn’t say necessarily that it is a challenge, but 

more of a focus of making sure that we are in compliance. 

Senator UDALL. How are we doing on compliance, in your judgment and in the judgment of the Commission and the folks that 

are out there working on compliance? 

Ms. STEVENS. As I said, there are a number of ways that we 

measure the effectiveness of what we do, and I think we are doing 

13

fairly well. Tribes are coming to us when they have issues, when 

they need technical assistance and training. We have audit staff on 

the ground who are always willing to help. We are working with 

Tribes on regulations to make sure that the regulations are relevant for today and to provide Tribal regulators with the tools they 

need to regulate. 

Senator UDALL. What are the measures you use on compliance? 

You mentioned a couple of measures that you look at. 

Ms. STEVENS. Well, as I said, we have what we call AUPs, which 

are the agreed upon procedure audits. Every year the Tribes are 

required to submit their financial statements to us. Those are indicators. We also, like I said, we have site visits, and those site visits 

provide us with compliance reports, and we act accordingly with regard to any issues that come up with those visits. 

Senator UDALL. What percentage of Tribes are out of compliance 

on the AUPs or in the other measures that you use? 

Ms. STEVENS. I would have to check with our staff to see exactly 

what that number is, and we would be happy to report back to you. 

Senator UDALL. That would be great, if you could submit that for 

the record. 

What do you see as the future of Tribal gaming? Do you expect 

an expansion of Tribal gaming or do you expect it to stay about 

where it is right now? 

Ms. STEVENS. Well, again, as a regulator, I concern myself primarily with regulating. However it might expand, whether by more 

facilities or more Tribes partaking in what is currently authorized, 

or if Congress authorizes additional opportunities, we will follow 

through with what Congress enacts. 

Senator UDALL. And then this question goes to that. You know, 

I know this is a big if and you are trying to not get into this, but 

this is something that, as Senator Franken points out, we need to 

think about. If Internet gaming were legalized, would the NIGC 

have the capacity to regulate such gaming through Indian Country? And what would it take to ramp up personnel and technology 

to ensure that NIGC could regulate Tribal Internet gaming? 

Ms. STEVENS. Well, without legislation, it is hard to say, but I 

will say that we are the only Federal agency who is solely dedicated to regulating Indian gaming. We have a well trained staff, 

experienced professionals who are well versed in Indian gaming. In 

the abstract, I couldn’t say how much more money; it would depend 

on what roles or responsibilities are authorized in any piece of legislation or law that is passed by Congress. In the beginning of the 

agency it did take a while because it was a new agency, and we 

are not a new agency, so I imagine it wouldn’t take as long as it 

did when the agency was first developed. But in the abstract I 

couldn’t say; we would have to evaluate what the roles and responsibilities are in any law that is passed and evaluate our resources. 

Senator UDALL. I appreciate very much those answers. As part 

of your report back to the Committee on compliance and how we 

are doing, if you could give me in your answer some kind of historical perspective: where we started out on compliance, how you have 

been doing; are the numbers going up, going down; are we having 

increasing problems. I think that would be really helpful to me, I 

14

know, and it might be helpful to other Committee members. Thank 

you for your testimony today and for your service. Thank you. 

Ms. STEVENS. Thank you, Senator. 

The CHAIRMAN. Thank you very much, Senator Udall, for your 

questions. 

I want to thank Chairwoman Stevens very much for being here 

and for your responses to the Committee. We look forward to continuing to work with you. So thank you very much. 

Ms. STEVENS. Thank you, Chairman Akaka, Vice Chairman 

Barrasso, and members of the Committee. 

Now I would like to invite the second panel to the witness table. 

Serving on our second panel is the Honorable Bruce ‘‘Two Dogs’’ 

Bozsum, Chairman of the Mohegan Tribe in Uncasville, Connecticut; Mr. Glen Gobin, Secretary of the Tulalip Tribes of Washington in Tulalip, Washington. Welcome to our panel and thank 

you very much for being here. 

Chairman Bozsum, would you please proceed with your testimony? 

STATEMENT OF HON. BRUCE ‘‘TWO DOGS’’ BOZSUM, 

CHAIRMAN, THE MOHEGAN TRIBE 

Mr. BOZSUM. Thank you. Good afternoon, Chairman Akaka, 

Ranking Member Barrasso, and members of the Committee. My 

name is Bruce ‘‘Two Dogs’’ Bozsum. I am the Chairman of the Mohegan Tribe and also a ceremonial pipe carrier. It is a great honor 

to once again be here to present testimony to the Committee on the 

important subject of the regulation of Internet gambling. 

Mr. Chairman, as you know, the Mohegan Tribe has been closely 

monitoring developments on the Internet gaming for the past several years. We have testified in both the Senate and the House, 

and engaged lawmakers developing Internet gaming policy. We 

also participated with our fellow Tribes in the National Indian 

Gaming Association and the National Congress of American Indians to develop a position for Indian Country. 

Back home, our Tribe has a tradition of world-class regulation of 

our brick and mortar gaming facilities. We have invested a great 

deal of time to develop regulations for Internet gaming and these 

regulations now stand ready to be implemented and will meet or 

exceed the toughest regulations found anywhere in the world, including the new standards recently established in Nevada. 

Internet gaming is a reality in today’s digital world. Our Tribe 

is doing everything in our power to prepare for it. We also will 

never forget that our sovereignty is not negotiable. As a Tribal 

Chairman, I am informed by the ways of our people to first look 

to our past and traditions in order to see what lessons can be 

learned. 

Applying this approach, it is clear that the current situation 

closely resembles the aftermath of the 1987 Cabazon Supreme 

Court decision. And just as the Cabazon case stopped Tribal opponents from claiming our gaming operations operated in a gray area, 

so has the December 23rd DOJ opinion now removed the uncertainty about whether the Wire Act prohibits Internet gaming, and 

it doesn’t. 

15

However, the DOJ opinion does not settle the details of the issue, 

just as the Cabazon case did not specifically address all of the details on how Indian gaming would actually operate. It fell upon 

Tribal leaders and Federal policymakers to decide how to move forward and fill in those details. Congress decided simply forging 

ahead after the Cabazon decision may have resulted in a patchwork of different systems. Key issues would have been unsettled 

for years and Tribes would have been left vulnerable to ongoing 

litigation. 

Rather than settle for this haphazard patchwork of systems, 

some chose, instead, to establish a single coherent Federal policy 

for Tribal gaming in the Indian Gaming Regulatory Act, and while 

certainly not perfect and initially opposed by some Tribal leaders 

as an attack on sovereignty, IGRA has provided a framework for 

Tribal gaming which has become the biggest Tribal economic success story in our history. 

I believe that in the wake of the game-changing DOJ opinion on 

Internet gaming, Tribal leaders and Federal legislators should 

work together to establish a single coherent Federal policy and I 

believe this to be a far superior approach to allowing a patchwork 

system with no guarantees that Tribal sovereignty and our hardwon gains would be protected. As a father of eight, I understand 

all too well the need for one set of rules. 

Tribes should be extremely hesitant to entrust their economic futures to the 50 States, many of whom are in a financial crisis. Already everyone from commercial gaming interests to State lotteries 

are quickly maneuvering to establish Internet gaming systems in 

their State for their own advantage, and most of them are certain 

to give little, if any, consideration for the existing gaming compacts 

or the sovereign rights of the Tribes and their calculations, not to 

mention the thousands that depend on our Tribes for employment. 

This chaotic approach is also not good for protecting consumers 

or preventing problems or underage gambling, either. We believe 

that the same high standard of consumer protections We have for 

our land-based gaming must be present for Internet gaming. While 

the intentions of those who advocate for a State-by-State approach 

to regulation are good, I simply believe the patchwork system without national standards would let too many minors, problem gamblers, and others fall through the cracks. 

As I have said before, the Internet is national in its very nature. 

A Federal system developed with significant input from Tribes 

would be the most effective way to safeguard Tribal sovereignty 

and ensure that exclusive Tribal gaming rights are not violated. A 

Federal system would provide the best protection for consumers, 

the best safeguards against underage and problem gambling, and 

the strongest law enforcement protections against potential criminal activities. From a Tribal perspective, a good start would be to 

adhere to the principles unanimously adopted by NIGA regarding 

Internet gaming. 

In conclusion, Mr. Chairman, starting with you, and members of 

the House and Senate have worked to explore many complex issues 

surrounding Internet gaming. Numerous hearings have been held, 

legislation has been proposed by you and others, and Tribal input 

has been sought. This good work has created a solid foundation and 

16

an environment where I believe a serious and well-informed effort 

to enact legislation this year can now take place. With a Federal 

system we will have friends such as yourself and the members of 

this Committee to fight to protect our rights. 

We greatly appreciate your interest in this issue and look forward to working with you closely now and in the future. 

[The prepared statement of Mr. Bozsum follows:]

PREPARED STATEMENT OF HON. BRUCE ‘‘TWO DOGS’’ BOZSUM, CHAIRMAN, THE

MOHEGAN TRIBE

Good afternoon Chairman Akaka, Vice Chairman Barrasso, and Members of the 

Committee. My name is Bruce ‘‘Two Dogs’’ Bozsum, and I am the Chairman of the 

Mohegan Tribe and also a Pipe Carrier. It is a great honor to once again be with 

you here today to present testimony on the important subject of Internet gaming 

and its regulation by the federal and tribal governments. 

Mr. Chairman, as you know, the Mohegan Tribe has been closely monitoring developments on Internet gaming for the past several years. We have testified in both 

the Senate and the House, engaged lawmakers developing Internet gaming policy 

and participated with our fellow Tribes in the National Indian Gaming Association 

and the National Congress of American Indians to develop a position for Indian 

Country. 

Back home, our Tribe has a tradition of requiring world-class regulation of our 

brick-and-mortar gaming facilities. We have invested a great deal of time to develop 

regulations for Internet gaming should they be necessary. These regulations now 

stand ready to be implemented, and will meet or exceed the toughest regulations 

found anywhere in the world, including the new standards recently established in 

Nevada. 

Internet gaming is a reality in today’s digital world. Our Tribe is doing everything 

in our power to prepare for it, and to look out for the best interests of Tribal governments and the commerce our Tribal nations depend upon. We will never forget that 

our sovereignty is not negotiable. 

As a Tribal Chairman confronting the situations we face today, I am guided, by 

the ways of our Mohegan people, to first look to our past and traditions in order 

to see what lessons can be learned and applied to the present. 

Applying this Mohegan approach to Internet gaming, it is clear that the current 

situation closely resembles the aftermath of the 1987 decision by the U.S. Supreme 

Court in the Cabazon case, which affirmed our rights as sovereign Tribal governments to authorize and regulate gaming. I believe we can learn much from studying 

this history and using it to guide our decisions today. 

Just as the Cabazon case stopped tribal opponents from claiming our gaming operations operated in a ‘‘gray area’’ of the law, so has the December 23rd DOJ opinion now removed the ‘‘gray area’’ of uncertainty about whether the Wire Act prohibits Internet gaming. It doesn’t. 

However, the DOJ opinion does not settle all the details of the issue, just as the 

Cabazon case did not specifically address all of the details or significant questions 

of how Indian gaming would actually operate. As in the aftermath of Cabazon, it 

now falls upon Tribal leaders and federal policymakers to decide how to move forward and fill in those details. 

After Cabazon, Congress in its wisdom believed that simply allowing the framework for Tribal gaming to evolve over time might result in a patchwork of different 

systems throughout the country. Key issues would have been unsettled for years, 

and Tribes would have been left vulnerable to ongoing litigation and the changing 

whims of political leadership. 

Rather than settle for this haphazard patchwork of systems, federal legislators 

and some Tribal leaders chose instead to establish a single, coherent federal policy 

for Tribal gaming in the wake of the Cabazon decision. This policy is well-known 

to all of us now as the Indian Gaming Regulatory Act (IGRA). While certainly not 

perfect and initially opposed by several Tribal leaders as an attack on sovereignty, 

there is widespread agreement today that IGRA as enacted has provided a predictable and stable framework for Tribal gaming, which has become the biggest Tribal 

economic success story in our history. 

I believe that in the wake of the game-changing DOJ opinion on Internet gaming, 

Tribal leaders and federal legislators should follow the same approach many did 

after Cabazon, and work together to establish a single, coherent federal policy to 

govern, with stability and predictability, what kinds of Internet gaming might be 

17

permitted and how Internet gaming should best be regulated. This would be far better than allowing a patchwork system to develop over the next two decades, stateby-state, lawsuit-by-lawsuit, and with no guarantees that Tribal sovereignty and our 

hard-won gains would be protected. Tribes should be extremely hesitant to entrust 

their economic futures to the tender mercies of the 50 states, many of whom are 

still in financial crises and looking for new sources of revenue. Already, everyone 

from commercial gaming interests to state lotteries is quickly maneuvering to establish Internet gaming systems in their state in order to make them work for their 

own advantage. Most of them are certain to give little, if any consideration for the 

existing gaming compacts or the sovereign rights of Tribes in their calculations. Not 

to mention the tens of thousands of American workers who depend on Tribes for 

employment. 

This chaotic approach is not good for protecting consumers, or for preventing problem or underage gambling. I am proud that the Mohegan Tribe is a global leader 

in regulation to protect our customers and to prevent problem and underage gaming 

at our facilities. We believe that the same high standard of consumer protections 

we have for our land based gaming must control Internet gaming. While the intentions of those who advocate a state-by-state approach to regulation are good, I simply believe a patchwork system without national standards would let too many minors, problem gamblers, and others fall through the cracks. 

The Internet is national in its very nature, and policy questions for gaming on 

the Internet are best addressed on a national level. A federal system, developed 

with consultation and significant input from Tribes, will be the most effective way 

to safeguard Tribal sovereignty and ensure that exclusive Tribal gaming rights are 

not violated by states and commercial gaming operators anxious to cash in on an 

Internet gaming boom. A federal system would provide the best protection for consumers, the best safeguards against underage and problem gambling, and the 

strongest law enforcement protections against potential criminal activities by those 

who choose to try to operate outside of the system that is lawfully established. 

The creation of any federal system must be done in a fair and evenhanded way. 

From a Tribal perspective, a good start would be to adhere to the principles unanimously adopted by NIGA regarding Internet gaming. In addition, the Mohegan 

Tribe believes that any federal legislation must:

• Guarantee to Tribes the ability to accept, on Tribal lands, otherwise legal wagers from persons who are not themselves located on Tribal lands.

• Respect existing Tribal-state gaming compacts, including any rights of exclusivity.

• Recognize the difference between revenue sharing agreements and taxation, and 

ensure that Tribal sovereigns are not subject to taxation.

• Utilize existing Tribal government regulatory structures, which are working 

well and have an outstanding 25-plus year track record.

• Strictly enforce against unlicensed sites in order to protect players and the investment of Tribal and commercial gaming entities in legal, regulated sites.

• Be limited to poker-only.

• Facilitate the formation of Tribal Internet gaming coalitions across the country 

to better enable us to compete against large corporate commercial gaming concerns.

Mr. Chairman, you have been a leader among the many Members of the House 

and Senate who are working diligently to explore the many complex issues surrounding Internet gaming. Numerous hearings have been held, legislation has been 

proposed, and tribal input has been sought. This good work has created a solid foundation for understanding the key issues, and an environment where I believe a serious and well-informed effort to enact legislation this year in Washington can now 

take place. Given the new environment created by the DOJ opinion, I believe it is 

important that this federal action takes place soon. Tribes cannot risk the hazards 

of a patchwork system defined by the best interests of the states, lotteries, and commercial gaming. With a federal system, we will have friends such as yourself and 

the Members of this Committee to fight to protect our Tribal rights throughout the 

process. 

We greatly appreciate your interest on this issue, and look forward to working 

with you closely now and in the future.

The CHAIRMAN. Thank you very much, Chairman, for your testimony. 

18

I would like to call on the Secretary for your testimony. Would 

you please proceed, Mr. Gobin? 

STATEMENT OF GLEN GOBIN, SECRETARY, TULALIP TRIBES 

OF WASHINGTON 

Mr. GOBIN. Good afternoon, Chairman Akaka, Ranking Member 

Barrasso, and Committee members. My name is TE CHUHT, Glen 

Gobin, Secretary on the Tulalip Tribal Council. I would like to 

thank you for this opportunity to testify regarding regulation of 

gaming, from bricks and mortars to the Internet, and working to 

keep this issue at the forefront, recognizing the changes as a result 

of the DOJ opinion and the potential impacts in Indian Country. 

I would like to say on a personal note, Chairman Akaka, I want 

to thank you for your leadership. I want to thank you for your leadership, in particular of this Committee, continuing to always bring 

issues like this that Tribes face in trying to bring resolution and 

understanding through the many years, and I thank you for your 

leadership. 

On November 17, 2011, I testified before this Committee on 

Tulalip Tribe’s position not supporting legalization of Internet gambling. That position was based on the potential negative impacts to 

existing Tribal gaming establishments and local economies, as well 

as the existing DOJ interpretation of the Wire Act prohibiting all 

forms of Internet gambling. 

On December 23rd, 2011, the DOJ released a new interpretation 

of the Wire Act, reversing its long-held opinion, opening the door 

for States to move forward with Internet lottery sales within their 

respective States and with agreement between States and/or foreign nations. This new DOJ opinion clearly provides the opportunity for States to participate in Internet gambling activities within their States if they so choose. Some States have already begun 

to move forward and many more are actively working on setting up 

and establishing online systems. 

Tribes have the ability to participate in the same activity, even 

though some may feel that Tribal participation is not yet fully defined. IGRA anticipated future gaming advancements and recognizes and allows for electronic, computer, and other technological 

aids, although the ability to fully access the Internet gaming market may be subject to interpretation. 

Clarifying legislation will minimize conflict and litigation, which 

often puts Tribes and States at odds. It is for this reason that the 

six principles put forth by NIGA are critical for Indian Country. 

These principles represent core values that respect Tribal sovereignty. 

Once more, we must emphasize that Tribes must be at the table 

to protect and promote these principles in any Federal legislation 

that might come forward. With Indian gaming representing over 40 

percent of the gaming market, generating over $27.2 billion annually to this Nation’s economy, not to mention the jobs and economic 

benefits Indian gaming brings to some of the most impoverished 

areas in the Country, it is inconceivable, given the recent DOJ 

opinion and with such sweeping changes in gaming being contemplated, that Tribes are not being consulted. 

19

There is no pending legislation on Internet gambling at this 

time. However, past proposals created an Office of Internet Poker 

Oversight or designated the Secretary of Commerce with regulatory 

authority and oversight over Internet gaming. Tulalip feels, as do 

other Tribes in Indian Country, that there is only one Federal 

agency that has had any history of regulatory oversight of gaming, 

and that agency is the National Indian Gaming Commission. 

The NIGC has over 20 years of extensive regulatory experience 

in gaming and it is the only Federal agency with that type of experience. The NIGC is an independent agency able to review, amend, 

and can promulgate regulations in an effective and timely manner. 

The NIGC has a long established history with Tribes and has continued to evolve and adapt to the changes within the gaming industry, transitioning from more traditional forms of gaming and mechanical slot machines to highly advanced server-based gaming 

systems, while ensuring compliance with all applicable Tribal, 

State, and Federal gaming standards. 

The NIGC is well suited, more than any other Federal agency, 

to transition into Internet gaming. There is no other Federal agency that has any gaming or gaming-related experience, let alone 

Internet gaming experience. The NIGC understands and respects 

the government-to-government relationship with Tribal leadership 

and Tribal gaming regulators who have primary oversight of the 

day-to-day gaming activities. Creating a new agency will limit 

Tribes’ opportunity and ability to compete, with their lack of understanding of Indian Tribes and Indian gaming. Creating any new 

agency or assigning Internet regulation to any existing agency 

would be burdensome and duplicative. 

At this time, Tribes are still speculating and anticipating legislation that may be considered. However, since the new DOJ opinion, 

there is clearly a path defined for States to participate in Internet 

gaming, if they choose. Tribes must have equal footing to participate. By being inclusive of all affected stakeholders, we can preempt issues that are already foreseen in this arena and bring forward Internet gaming legislation to an open and collaborative process that protects the customer and the integrity of the games, ensuring that Tribes have equal opportunity to participate and compete, while protecting and respecting Tribal sovereignty. 

Again, on behalf of the Tulalip Tribes, I thank the Committee for 

hearing some of the concerns from Tulalip Indian Country on the 

issues surrounding Internet gambling. 

[The prepared statement of Mr. Gobin follows:]

PREPARED STATEMENT OF GLEN GOBIN, SECRETARY, TULALIP TRIBES OF

WASHINGTON

Good afternoon Chairman Akaka, Ranking Member Barrasso and Committee 

Members, my name is, TE CHUHT, Glen Gobin, Secretary on the Tulalip Tribal 

Council. I would like to thank you for this opportunity to testify today regarding 

regulation of gaming, from bricks and mortar to the Internet, and working to keep 

this issue at the forefront, recognizing the changes as a result of the DOJ opinion 

and the potential impacts in Indian Country. 

On November 17, 2011, I testified before this Committee on Tulalip Tribes position not supporting legalization of Internet Gambling. That position was based on 

the potential negative impacts to existing tribal gaming establishments and local 

economies, as well as the existing DOJ interpretation of the WIRE Act prohibiting 

of all forms of Internet gambling. On December 23, 2011, the DOJ released a new 

20

interpretation of the WIRE Act, reversing its long held opinion, opening the door 

for States to move forward with Internet lottery sales within their respective states, 

and with agreement between states and foreign nations. This new DOJ opinion 

clearly provides the opportunity for states to participate in Internet gambling activities within their states, if they choose. Some states have already begun to move forward and many more are actively working on setting up and establishing on-line 

systems. 

Tribes have the ability to participate in this same activity; even though some may 

feel that tribal participation is not yet fully defined. IGRA anticipated future gaming advancements, and recognizes and allows for electronic, computer and other 

technological aids, although, the ability to fully access the Internet gaming market 

may be subject to interpretation. Clarifying legislation will minimize conflict and 

litigation, which often puts Tribes and states at odds. It is for this reason that the 

six principles put forth by NIGA are critical for Indian Country. These principles 

represent core values that respect tribal sovereignty by ensuring an Indian Tribes 

right to operate, regulate, tax, and license Internet gaming and these rights must 

not be subordinate to any non-federal authority; legislation must not open up IGRA 

for amendments; legislation must respect existing Tribal-State Compacts; legislation 

must ensure positive economic benefits to Indian Country; and legislation must ensure that Internet gambling authorized by Indian Tribes is available to customers 

in any locale where Internet gambling is not criminally prohibited. 

Once more we emphasize that Tribes must be at the table to protect and promote 

these principles in any federal legislation that might come forward. With Indian 

gaming representing over 40 percent of the gaming market, generating over $27.2 

billion annually to this nation’s economy, not to mention the jobs and economic benefits Indian gaming brings to some of the most impoverished areas in the Country, 

it is inconceivable, given the recent change in the DOJ opinion, and with such 

sweeping changes in gaming being contemplated, that Tribes are not being consulted. 

There is no pending legislation on Internet gambling at this time; however, past 

proposals created an Office of Internet Poker Oversight or designated the Secretary 

of Commerce with regulatory authority and oversight over Internet gaming. Tulalip 

feels, as do other tribes in Indian country, that there is only one federal agency that 

has any history of regulatory oversight of gaming, that agency is the National Indian Gaming Commission. 

The NIGC has over 20 years of extensive regulatory experience in gaming, and 

it is the only federal agency with that experience. The NIGC is an independent 

agency, able to review, amend, and can promulgate regulations in an effective and 

timely manner. The NIGC has a long established history with Tribes, and has continued to evolve and adapt to the changes within the gaming industry, transitioning 

from more traditional forms of gaming and mechanical slot machines to highly advanced server based gaming systems while ensuring compliance with all applicable 

tribal, state, and federal gaming standards. 

As an example, when IGRA became law in 1988, extensive controversy ensued as 

to whether the National Indian Gaming Commission would be effective in the regulation of Indian gaming. Many were concerned that organized crime and other corrupting influences would infiltrate Indian gaming. The NIGC, working in conjunction with Tribes, has proven to be fully capable of effective regulation of Indian 

gaming, dispelling these perceptions and fears. 

The NIGC is well suited, more so than any other federal agency, to transition into 

Internet gaming. There is no other federal agency that has any gaming or gaming 

related experience, let alone Internet gaming experience. The NIGC understands 

and respects the government-to-government relationship with tribal leadership and 

tribal gaming regulators, who have primary oversight of day-to-day gaming activities. Creating a new agency will limit Tribes’ opportunity and ability to compete, 

with their lack of understanding of Indian Tribes and Indian gaming. Creating any 

new agency or assigning Internet regulation to any existing agency would be burdensome and duplicative. 

At this time, Tribes are still speculating and anticipating legislation that may be 

considered, however, since the new DOJ opinion, there is clearly a path defined for 

states to participate in Internet gaming if they choose. Tribes must have equal footing to participate. By being inclusive of all affected stakeholders we can preempt 

issues that are already foreseen in this arena, and bring forward Internet gaming 

legislation through an open and collaborative process that protects the customer and 

the integrity of the games; ensuring that Tribes have equal opportunity to participate and compete while protecting and respecting tribal sovereignty. 

21

Again, on behalf of the Tulalip Tribes, I thank the committee for hearing some 

of the concerns from Tulalip and Indian Country on the issues surrounding Internet 

gambling.

The CHAIRMAN. Thank you very much, Mr. Secretary. 

Chairman Bozsum, your Tribe, the Mohegan Tribe, has regulations that are more stringent than those established in Nevada. Do 

your regulations envision Tribes engaging in online gaming at the 

same level as other commercial gaming providers? Do you think 

that Tribes have the capacity to both participate in and regulate 

their online gaming operations? 

Mr. BOZSUM. Thank you, Senator, Mr. Chairman. Great question. 

I believe we can. I know we can. I think we do a far better job than 

most commercial businesses out there. We take a lot of pride in our 

businesses and we make sure that the facility is safe, it is running, 

it is compliant. We have so much honor and pride with our own 

facilities that we want people to come there and feel safe, and you 

can’t have that if you have a bad record or you don’t think you can 

comply to the rules and regulations that gaming facilities should 

follow. 

I think Tribes that are looking to get into the business of Internet gaming, there are good models out there right now that they 

could reach out to, as I have done, across the Country, meeting 

with other Tribes and other gaming facilities to get a feel of their 

regulations, their policies, and traveling overseas to meet with all 

of the biggest Internet companies that are out there to compare 

regulations and to talk about policies, and we have taken all that 

and pretty much have written a policy that we have that we are 

getting ready to actually share with you at some point soon. As 

soon as the rest of my board is available to go over it one more 

time with me, we will share that with you. 

The CHAIRMAN. Thank you very much. We will look forward to 

that. Thank you. 

Secretary Gobin, now that the Department of Justice opinion has 

impacted the Tribes’ view on online gaming, what steps has Tulalip 

taken to be able to be ful participants in online gaming? 

Mr. GOBIN. Thank you, Mr. Chairman. Since the last hearing 

that was held, Tulalip has been actively researching our access to 

the Internet, how we might partake in this and how it might be 

utilized not only in the gaming aspect, but how it might become a 

marketing tool or another way to bring customers in to a bricks 

and mortar facility. 

Currently, within Washington State there is an RCW in place 

that prohibits Internet gambling in Washington State, so for us to 

implement the provision of the DOJ opinion, there would have to 

be an RCW change within Washington State. So we are not actively seeking any participation in that right now until that RCW 

changes. 

The CHAIRMAN. Thank you very much. 

Chairman Bozsum, should a Tribal Government’s participation in 

online gaming be dependent on whether the State they reside in 

has opted in or opted out of participation in online gaming? 

Mr. BOZSUM. Well, I will use myself as an example. I am the 

chief elected official for our Tribe in Connecticut, and if the governor decides to opt out, he has to meet with me, as one leader to 

22

another, as the head of the State there, and discuss what we can 

do on our reservation. It is my job as the elected official, and the 

rest of my board, to make those decisions on our reservation to uphold our sovereign rights. 

The CHAIRMAN. Thank you very much for your response. 

Vice Chairman Barrasso, do you have questions? 

Senator BARRASSO. Thank you, Mr. Chairman. I just have one for 

both of the members of this panel. 

Internet gaming is not an activity that can be confined within 

strict borders, and depending on what the future holds for Internet 

gaming, there may be instances where it might even cross Tribal 

boundaries, even if a Tribe doesn’t participate in Internet gaming. 

I am curious if any of the Tribes represented on this panel have 

taken steps in anticipation of the possibility of regulating Internet 

gaming. 

I think, Mr. Chairman, you had mentioned taking steps to prepare, and I am just interested in terms of what each of you are 

doing or have done in the possibility of regulating Internet gaming 

and what steps you have taken. 

Mr. BOZSUM. Thank you. Like I mentioned, we have some great 

standards right now and some minimum control standards, and we 

have met with other Tribes and our goal is to form with the coalition, get Tribes together. Like the Senator mentioned earlier, Senator Franken, about the Tribes that don’t have an opportunity 

right now, because of their location, to participate in any gaming, 

I look at it as an opportunity to bring those Tribes in. It is the 

Internet; you don’t have to build a facility. 

If we create with our coalition a hub, at some point we offer that 

to other Tribes to tap into to create the revenues and the income 

for them through us, with our regulations that we have in place 

right now, and I look at it as an opportunity for everybody in Indian Country to have that opportunity. It gives them the freedom 

to support their health, their education benefits, stand alone and 

take care of those issues on their own, and free up some money 

back in Federal grants, back to other needy issues or other needy 

Tribes, whoever may need that money. It is better to stand up on 

your own feet and take care of your own. 

Senator BARRASSO. Mr. Secretary? 

Mr. GOBIN. Thank you. I think back 24 years, and Tribes started 

24 years with the requirement for gaming to be in place and you 

had Indian gaming, IGRA in place, and it set up a regulatory process. Tribes have developed a very highly effective and highly technical regulatory process through our Tribal gaming agencies, in 

conjunction with the State and in conjunction with the NIGC over 

the last 24 years to protect and ensure and safeguard the games 

that are in place. There was a system established; there were 

games that were developed; there were games that were put in 

place, and every time there was a change, there was a new procedure put in place, a new control that was put in place, and it always had constant oversight from those three agencies. 

I see no difference, as we move forward into the future, for Internet gaming. We are going to evolve as we always have done, and 

we are going to move forward in a positive manner and protect 

those games, because those revenues drive our government services 

23

and fund our governmental operations. It is hard to imagine not 

having those systems in place as we move into Internet gaming. 

But yet that process is not defined. We are not sure as to how that 

is, so my Tribe is not prepared yet with any regulations because 

we are unsure of what the parameters are going to be, how we are 

going to access that market for sure. So to say that we are prepared with full regulatory aspect, we are not, but I have full confidence that we have the capability to do it. 

Senator BARRASSO. Thank you. 

Thank you, Mr. Chairman. 

The CHAIRMAN. Thank you very much, Senator Barrasso. 

Senator Franken? 

Senator FRANKEN. Thank you. I am sorry I had to step out for 

your testimony, but I have a few questions. This is for both witnesses. 

As I said in my opening statement, I have seen firsthand the 

positive impacts of Indian gaming, both in my home State and 

across the Country. Can you each talk about the state of your communities before and after your Tribes started gaming operations? 

Mr. BOZSUM. Thank you, Senator. Our Tribe back in Uncasville, 

Connecticut, we were pretty spread out. Everything was taken 

from us; we were down to half an acre of land with a church on 

it, so we were spread out throughout the community. And when the 

State, when things moved forward and we had the opportunity to 

start gaming in Connecticut, we were able to stop receiving any 

Federal grants or funds to support our Tribal members, so we took 

our funding from the casino or any extra money we had and supported our Tribal members with health and education benefits. 

Those were two of the most important things that we look at in 

our Tribe. The casino may not be there forever, but a great education can go a long way, and the health of our Tribal members 

and our elders, that is where we like to invest the bulk of our finances. I look at doctors, lawyers; we have everything covered that 

you can imagine out there with all of our children and some of our 

adults who went back to school. So our reinvestment is back into 

our Tribal members. 

And then the community that we live in, with our fire department that we have, we help, we respond to all the community 

needs that they have; we support a lot of charities. 

Senator FRANKEN. I am sorry to interrupt. I really wanted a sort 

of, and, Mr. Gobin, you can talk to this, or you can continue, just 

the contrast from before and after. 

Mr. BOZSUM. We are very healthy. I mean healthy like I am living proof of what Indian gaming can do. I was diagnosed with 

something long ago and the Tribe stepped up and took care of me, 

so here is living proof of what Indian gaming can do right here. I 

should have been dead. I am not. 

Senator FRANKEN. You look great. 

Mr. BOZSUM. Thank you. 

[Laughter.] 

Mr. BOZSUM. So do you. 

[Laughter.] 

Senator FRANKEN. Thank you. 

Mr. Gobin, you look great too. 

24

Mr. GOBIN. Thank you. 

[Laughter.] 

Mr. GOBIN. Thank you for the question, as well. 

[Laughter.] 

Mr. GOBIN. I think back in my lifetime. I was born in 1956. And 

the changes from my reservation, my memories go back to growing 

up in the 1960s, there were no jobs, there were no economic activities. Our Tribal Government had a small leasing program where 

we took the prime property around Tulalip Bay, waterfront property, and we leased it to non-Indians to come out, and it drove our 

revenue stream that funded our government. Very small, very 

minimal, but it provided a governmental revenue stream that came 

in. 

As things evolved, our leadership continued to struggle and tried 

to find ways to generate more money, but the day-to-day lives of 

the people were making a living off of fishing or working in the 

woods, logging or cutting shake boards, if that was the case. I remember many meals. We ate deer meat until summertime came, 

and then we ate fish, and that was our cycle. And as gaming came 

on, it created a revenue stream for the Tribes to now start to control their own destiny. As the revenues came in, it was reinvested 

back in funding governmental programs that were short-funded or 

developing new governmental programs, providing services to the 

people. 

I graduated high school in 1975, not with the best GPA, so I was 

not the highest qualified to go to college, but my Tribe had no 

means to do that. Today, all four of my kids have gone to college, 

the last one will graduate this year, and the Tribe has paid for that 

with these gaming revenues through this whole process. They provide for elders, they provide homes, they build infrastructure, we 

help fund I–5 interchange projects, we help fund roads, we do business development all with the revenues that come from gaming; 

they go back into the community, they go back into the surrounding communities, and the prosperity on the reservation has 

changed. But not for all. There are still issues that are out there. 

As every government will know, there is not always enough money 

to go around to meet all the needs of the people. 

Senator FRANKEN. Thank you, gentlemen. 

The CHAIRMAN. Thank you, Senator Franken. Senator Udall? 

Senator UDALL. Thank you, Chairman Akaka. 

I know this hearing isn’t about the draft legislation that was put 

out there. The Chairman has put out a draft piece of legislation on 

online gaming. I believe it has been given to the NIGC; it is on the 

website of this Committee. I believe it is out front and available. 

Any thoughts that you all have on it? 

Mr. BOZSUM. I haven’t had a chance to review it with my staff 

yet, but I am looking forward to it and I would love to comment 

on it as soon as we get that opportunity back home. 

Senator UDALL. And we would love to hear your comments. 

Secretary Gobin? 

Mr. GOBIN. Unfortunately, I didn’t fly in until late last night, 

and I have not had a chance to see it or review it. I did pick up 

a copy here this afternoon, so I will be looking forward to going 

through and providing comment as well. 

25

Senator UDALL. Okay. In case you had anything to say, I just 

wanted to give you an opportunity. 

You know, we have had a little bit of a discussion on the positive 

effects of gaming, and I would say that almost all of the Tribes in 

New Mexico that game feel that it has been very positive for their 

Tribes, and I am reminded of an old time Pueblo leader that had 

seen his Tribe for over 80 years, and he related to me some of the 

things that he thought were very positive. 

He said in all the years up until gaming came, he had 50 percent 

unemployment at the Pueblo, and he said today, after we have 

opened our gaming establishment, we are down to zero. And not 

only have we provided jobs for every able-bodied person, we are 

able to give employment to non-Indians. So he felt very good about 

that. There is always, he said, talk about lack of educational opportunities, just as the Chairman said. Now this Pueblo, he said, is 

able to give college scholarships to every young person that wants 

to go to college, that can get in. Same with health care facilities, 

putting health care facilities as a result of the income; paving 

roads. 

So I think there have been some very positive developments as 

a result of Tribes engaging in gaming, and I don’t blame the Tribes 

for wanting to look at each development that comes along and see 

how that is going to impact their investment in gaming. So that is 

important to meet to hear from Tribes as to what their reaction is 

to this draft legislation and any other things that they see that is 

out there. 

So, with that, Chairman Akaka, I know we have a vote on, and 

I am happy to help out in terms of keeping the hearing going, or 

however you want to do it. Thank you. I am going to yield back 

at this point. 

The CHAIRMAN. Thank you very much, Senator Udall. 

I want to thank this panel very much for your responses and 

your testimony as well. 

I am going to ask for a recess at this moment, and whoever 

comes back first will take the third panel at that time. 

But, again, I want to say thank you for sharing with us what you 

have been doing with your Tribes. It is very, very helpful and it 

is good to know that these gaming programs are really helping the 

Tribes as well. So I thank you very much for being here and at this 

time call for a brief recess. Thank you. 

[Recess.] 

The CHAIRMAN. I want to welcome our third panel here. 

We have Mr. Jamie Hummingbird, who is the Chairperson of the 

National Tribal Gaming Commissioners and Regulators in Tahlequah, Oklahoma; also, Ms. Elizabeth Homer, attorney at Homer 

Law in Washington, D.C.; the Honorable Jon Potter, former Congressman and President of Porter Gordon Silver Communications 

in Las Vegas, Nevada; and Mr. Eugene Johnson, Senior Vice President for Marketing and Online Studies for the Spectrum Gaming 

Group in Linwood, New Jersey. 

I want to welcome all of you here today. 

Mr. Hummingbird, Chairman Hummingbird, would you please 

proceed with your statement and your testimony? 

26

STATEMENT OF JAMIE HUMMINGBIRD, CHAIRMAN,

NATIONAL TRIBAL GAMING COMMISSIONERS/REGULATORS 

ASSOCIATION 

Mr. HUMMINGBIRD. Thank you, Chairman Akaka, members of 

the Committee. My name is Jamie Hummingbird and I am the Director of the Gaming Commission for Cherokee Nation. I also serve 

as the Chairman of the National Tribal Gaming Commissioners 

and Regulators Association. Please accept my most sincere appreciation on behalf of the National Tribal Gaming Commissioners 

and Regulators for allowing testimony before the Committee regarding the state of gaming regulation in Indian Country today 

and how it may change in the future. 

The National Tribal Gaming Commissioners and Regulators is 

an organization devoted to the education and advancement of gaming regulation within Tribal gaming facilities. Comprised of Tribal 

gaming regulators across the Country, the organization serves as 

a center for training of regulatory professionals and the free exchange of regulatory best practices. 

Nearly a quarter century ago, Congress passed the Indian Gaming Regulatory Act, and Tribes and Tribal gaming regulators have 

progressed along with the gaming industry, often setting the pace 

in regulation development. 

IGRA incorporated many of the principles of regulation that 

Tribes followed at the time, which continue to shape the face of 

gaming regulation in Indian Country today. This success was made 

possible by following the core values at the heart of every Tribal 

gaming regulatory authority: protecting Tribal assets, ensuring the 

integrity of the gaming requirement, and requiring accountability 

of the gaming operations. As gaming technology has evolved in 

brick and mortar, these values held firm and will continue to guide 

us as we look to the next phase of evolution in Internet gaming. 

Today there are approximately 85 countries that have legalized 

some form of Internet gaming, whether in the form of Internet 

cafes as part of a brick and mortar facility, or through a mobile device, which represents an estimated $30 billion industry. Jurisdictions such as Alderney and British Columbia have chosen to establish iGaming laws and favor strict regulatory controls that govern 

Internet gaming activities. 

Internet gaming has drawn proponents and opponents from State 

and Tribal Governments, as well as various Federal departments 

and members of Congress. While some States have taken steps toward authorizing Internet gaming, there is an increasing louder 

call for a Federal solution. 

In the years since 2006 and the passage of the Unlawful Internet 

Gaming Enforcement Act, the American Internet gaming landscape 

at the Federal level has undergone a paradigm shift from being 

considered criminal-prohibitory, to being civil-regulatory in nature. 

Members of the Congress who initially opposed iGaming now support Internet gaming under certain conditions. 

Any legislation considered at the Federal level must provide parity to Tribes by providing Tribes and States equal treatment under 

any law that is enacted. 

Tribal gaming regulatory authorities, or TGRAs, jealously protect 

the integrity of any and all gams offered by the Tribal gaming faVerDate 0ct 09 2002 10:12 Feb 04, 2013 Jkt 078446 PO 00000 Frm 00030 Fmt 6633 Sfmt 6601 S:\DOCS\78446.TXT JACK
27

cilities. This would be no less true should Internet gaming become 

a viable option for Tribes. 

Many existing regulations already employed by TGRAs will lend 

themselves to be used in the digital realm. TGRAs can learn from 

jurisdictions where Internet gaming is in operation to develop a set 

of requirements that will fit their unique environment. Game protection and the security of personal and financial information is 

paramount for TGRAs, and the ability of games to be certified legal 

and secure is essential. 

The regulations governing the activity of brick and mortar facilities can be adapted to fit Internet gaming operations, particularly 

the regulations that ensure the financial accountability of the gaming operation and demonstrate the ability of gaming operations to 

meet all financial obligations. 

Under legislation enacted, whether at the State or Federal level, 

TGRAs will be asked to ensure that only those persons within their 

authorized jurisdiction may participate in Tribal gaming sites. 

TGRAs will require the verification of a player’s location through 

the process of geo-location to determine whether or not that person 

is able to legally participate in the Tribe’s Internet gaming site. 

Geo-location will also play an instrumental role in verifying the location of authorized players using mobile devices. 

The societal issues of underage gambling and problem gambling 

are matters that TGRAs will be required to address, much as they 

do in Tribal brick and mortar facilities. These concerns are best addressed by the regulations TGRAs will require in establishing 

Internet gaming accounts and the process by which gaming activity 

will be monitored to identify any potential patterns indicative of 

problem gambling. 

Tribal investments in technology, infrastructure, and operating 

capital must be made. Additionally, investment in human capital 

will also be necessary. The need for qualified and experienced staff 

is of vital importance to the success of any Internet gaming venture. 

The success of any business venture lies in preparation, and in 

the case of Internet gaming, preparation includes formulating the 

proper regulatory model to complement the legislative side of the 

equation. Tribes have been responding to a changing gaming market since the enactment of IGRA, and our Tribal Governments and 

regulators often set the standard for new gaming technologies and 

regulations. We are prepared to do so again should Internet gaming become legalized. 

Indian gaming success is due in part to the presence of strong 

regulatory bodies. Through the years of practical application, 

Tribes have garnered the necessary expertise and experience to 

overcome the challenges that will be presented with the passage of 

Internet gaming legislation. The success we have collectively 

achieved since the passage of IGRA clearly shows that Tribes are 

more than capable of being strong participants and regulators in 

the Internet gaming industry. 

On behalf of the national Tribal Gaming Commissioners and 

Regulators, I thank you for the opportunity to present this testimony and am open to any questions you may have. 

[The prepared statement of Mr. Hummingbird follows:]

28

PREPARED STATEMENT OF JAMIE HUMMINGBIRD, CHAIRMAN, NATIONAL TRIBAL

GAMING COMMISSIONERS/REGULATORS ASSOCIATION

Chairman Akaka, Vice-Chairman Barrasso, members of the Committee, my name 

is Jamie Hummingbird. I am the Director of the Cherokee Nation Gaming Commission. I also serve as Chairman of the National Tribal Gaming Commissioners/Regulators Association. It is in this capacity in which I address you today. 

Please accept my most sincere appreciation on behalf of the National Tribal Gaming Commissioners/Regulators Association for allowing testimony before the Committee regarding the state of gaming regulation in Indian Country today and how 

it may change in the future. 

The National Tribal Gaming Commissioners/Regulators is an organization devoted 

to the education and advancement of gaming regulation within tribal gaming facilities. Comprised of tribal gaming regulators across the country, the organization 

serves as a center for the training of regulatory professionals and the free exchange 

of regulatory best practices. As the gaming industry has evolved, incorporating the 

latest in technology for game play as well as the associated systems that complete 

the gaming experience, so too have tribal gaming regulators grown in their capacity 

to successfully regulate tribal gaming. 

Brief History of Indian Gaming Regulation 

In the late 1970s and early 1980s, Indian tribes across the country began operating bingo facilities as a means of providing funds for tribal assistance programs. 

The success of these facilities quickly drew the attention and ire of local and state 

government officials who sought to enforce state laws on Indian land. 

Tribes, believing their decision to operate gaming facilities was an exercise in tribal sovereignty, resisted state incursions of tribal gaming facilities. The debate regarding the legality of tribes offering gaming on tribal lands culminated in the 1987 

Supreme Court decision in California v. Cabazon Band of Mission Indians wherein 

the Court held that tribes could operate and regulate gaming on tribal lands. 

As a result of this landmark decision, the Congress passed the Indian Gaming 

Regulatory Act (IGRA) in an attempt to balance state and tribal gaming interests. 

In its drafting of IGRA, the Select Committee on Indian Affairs set out to ‘‘preserve 

the right of tribes to self-government’’ by recognizing tribes’ sovereign rights to determine the course of their own affairs, including the means by which they would 

regulate their respective gaming operations. 

IGRA required tribes to adopt gaming ordinances to provide the regulatory structure that would govern tribal gaming facilities. In order to achieve this task, tribes 

and tribal gaming regulatory authorities (TGRA) assessed their particular gaming 

environment and formulated regulations that provided for the licensing of gaming 

facilities, employees and vendors, approval of games, surveillance, security, and auditing of gaming operation financials. In addition, tribes and TGRAs were called 

upon to ensure the protection of the environmental, public health and safety of the 

gaming facility employees and patrons. 

The IGRA incorporated many of the principles of regulation that tribes followed 

at the time, which continue to shape the face of gaming regulation in Indian Country today. Every TGRA, at its heart, contains the core values of protecting tribal 

assets, ensuring the integrity of the gaming environment, and requiring accountability of the gaming operations. 

Over the years, the success of tribal gaming prompted more tribes to engage in 

gaming. Realizing the need for consistency and in an effort to assist those tribes 

that were new to the industry, a task force of tribal regulators within the National 

Indian Gaming Association and the National Congress of American Indians developed a model set of internal controls that provided base operating standards by 

which any gaming operation could be effectively regulated. The choice to adopt these 

standards and the language that would be contained in a tribal set of internal controls was left to each tribe to determine. However, In 1999, these standards were 

adapted by the National Indian Gaming Commission (NIGC) to become the Minimum Internal Control Standards (MICS) that all tribes were required to abide by. 

In addition to the MICS, TGRAs utilize several other methods to ensure compliance of tribal gaming facilities, few of which match the importance of the employment of qualified personnel. Tribes invest heavily in the training of regulatory staff 

and highly value those with experience in law enforcement, accounting, and information technology. 

By remaining at the forefront of innovation in gaming and gaming regulation, 

tribal gaming operations have become as sophisticated as any non-Indian gaming 

jurisdiction, if not more so. It is in this tradition of innovation and regulation that 

tribes will enter the digital realm of Internet gaming. 

29

History of Internet Gaming 

Although the subject of iGaming, also called online gaming or Internet gaming, 

has seen increased debate in numerous circles over the last few years, the industry 

has its origins in the mid-1990s when the government of Antigua and Barbuda 

passed laws allowing online casinos to offer the first gambling games on the Internet. Shortly thereafter, the Kahanawake Gaming Commission in Canada was established, controling and regulating online gaming activity from the Mohawk Territory 

of Kahnawake. 

Today, there are approximately eighty-five (85) countries that have legalized some 

form of iGaming, whether in the form of Internet cafes, as part of a brick-and-mortar facility, or through a mobile device (e.g. smartphone/tablet), representing an estimated $30 billion industry. Jurisdictions such as Malta, the Isle of Man, the U.K., 

Italy, Germany, Alderney, and British Columbia have chosen to establish iGaming 

laws and favor strict regulatory controls to govern iGaming activities. 

Seeing the ‘‘new’’ communication medium called the Internet was going to be used 

not only for commerce but also for gambling, some states enacted anti-gaming laws 

prohibiting iGaming in the late 1990’s and early 2000’s. One state—Nevada—staying true to its gaming roots, enacted legislation legalizing Internet gaming in 2001 

and empowered the Nevada Gaming Control Board to enact regulations to pave the 

way for iGaming commerce to begin. 

In 2003, Antigua lodged a complaint with the World Trade Organization (WTO) 

stating that, although American policy did not prohibit iGaming, the American government refused to allow foreign casinos to accept wagers from U.S. players. In a 

first-of-its-kind ruling, the WTO stated that the United States laws prohibiting 

iGaming violated international trade laws. The Bush Administration condemned the 

ruling over a concern that American social policy would be dictated by foreign powers. Despite this activity, nothing happened on the U.S. iGaming scene until 2006 

when the Unlawful Internet Gaming Enforcement Act (UIGEA) was passed, being 

attached to a must-pass port security act literally at the midnight hour. Although 

the name suggests the act of iGaming was made illegal by this piece of federal legislation, in actuality the practice of allowing financial transactions at iGaming sites 

by financial institutions was the center of the legislation; the legislation also did not 

pertain to intra-state transactions. 

On April 15, 2011, the U.S. Department of Justice (DOJ) seized the Internet domain names of five of the largest online gaming operators, a day that has become 

know as ‘‘Black Friday’’. A month later, on May 23rd, a Maryland grand jury ordered the seizure of approximately a dozen more Internet domain names of other 

companies offering iGaming, a day that has been labeled ‘‘Blue Monday.’’ These actions marked the first significant action taken against iGaming since the passage 

of the UIGEA. 

In spite of the activity earlier in the year, iGaming interests continued to pursue 

avenues to legalize iGaming. A major obstacle in the way of the legalization of 

iGaming was the applicability of the 1961 Wire Act. It was long thought that the 

Wire Act prohibited the transmission of wagers across state lines. However, the 

DOJ changed this mindset with the issuance of a legal opinion on 23 December 2011 

wherein the agency reversed its long-held position stating the Wire Act only applied 

to sports wagering and did not cover iGaming, particularly on-line poker, casino 

games and lotteries. 

Throughout this time, iGaming has drawn proponents and opponents from state 

and tribal governments as well as various federal departments and members of Congress. Some states, besides Nevada, have taken firm steps towards authorizing 

iGaming (some with the active participation of tribal governments) and there is an 

increasingly louder call from all areas of the gaming industry for a federal solution 

to be enacted. 

Federal and State Legislation 

In the years since 2006 and the UIGEA, the American iGaming landscape at the 

federal level has undergone a paradigm shift from iGaming being considered criminal-prohibitory to being civil-regulatory in nature. Members of Congress who initially opposed iGaming now support allowing iGaming under certain conditions. 

At the same time, commercial casinos in New Jersey and Nevada, as well as advocacy groups such as the American Gaming Association, have switched to supporting 

iGaming—again, under certain conditions. 

Various bills have been introduced in the House of Representatives and in the 

Senate that would essentially undo the effects of the UIGEA. Some bills contained 

provisions that provided a basis for tribes to build on while others contained language that either put tribes at a disadvantage to commercial casinos or were outVerDate 0ct 09 2002 10:12 Feb 04, 2013 Jkt 078446 PO 00000 Frm 00033 Fmt 6633 Sfmt 6621 S:\DOCS\78446.TXT JACK
30

right contrary to tribes and tribal sovereignty. In 2010, Representatives Barney 

Frank, John Campbell, and Senator Robert Menendez each offered bills to regulate 

iGaming, which finally provided tribes with a place at the table. 

Any legislation considered at the federal level must provide parity to tribes by 

providing tribes and states equal treatment under any law that is enacted. 

The majority of states are forecasting budget shortfalls in the coming years and 

are looking for ways to add to state coffers. This has led to a trend amongst states 

to consider authorizing iGaming as a means to that end. 

The following are examples of some of the steps taken by the various states:

• Nevada—The State legislature authorized iGaming in 2001; enacted iGaming 

regulations in 2011; began accepting applications for online operator gaming licenses in February 2012 and have begun issuing licenses to iGaming operators.

• New Jersey—The State legislature authorized iGaming in 2010, but the bill was 

vetoed by Governor Christie; a new bill has unanimously passed the state senate Budget and Appropriations Committee with a vote expected in the Fall of 

2012.

• Iowa—A study was conducted and a report issued on the possible regulation of 

iGaming in Iowa, with the recommendation for approval; the Iowa Senate 

passed a bill on 13 March 2012 authorizing iGaming; the Iowa House voted 

against the bill three days later on 16 March 2012.

• California—The current form of California’s iGaming bill (S. 1463), which would 

authorize Internet poker, was referred to committee at the end of March and 

is currently pending.

• Delaware—In June, the Governor has signed House Bill 333 into law allowing 

for all forms of gaming—poker, blackjack, slot machines, and lottery tickets—

to be offered online to Delaware citizens.

Tribes across the country have debated whether the introduction of iGaming into 

tribal jurisdictions will be a detriment to current brick-and-mortar facilities or if it 

is a new segment of the market that, if left untouched, could be a competitive disadvantage and/or result in lost revenue to the tribe. 

At the heart of the controversy—besides the overall issues surrounding tribal sovereignty—is the concern regarding the potential impact any legislation may have on 

tribal exclusivity as contained in tribal-state compacts. Despite this concern—or perhaps because of it—many tribes are carefully assessing their options in the instance 

iGaming is authorized, whether at the state or federal level. 

State operated lotteries are another side of the iGaming issue. Several state lotteries have looked to the Internet to boost sales and have begun offering scratchoff tickets and other lottery tickets online. Seven (7) other states and the District 

of Columbia are also pursuing Internet lottery games. 

Regulation of iGaming 

As stated earlier, TGRAs jealously protect the integrity of any and all games offered by the tribal gaming facilities. This would be no less true should iGaming become a viable option for tribes. 

In order to ensure the integrity of iGaming, TGRAs will be called upon to introduce new regulations over aspects of iGaming beyond those relating to game play. 

Under any legislation that is enacted, whether at the state or federal level, 

TGRAs will be tasked with ensuring that only those persons within their authorized 

jurisdiction are able to conduct gaming transactions in tribal iGaming sites. Depending on the legal parameters defined in the legislation, this may be accomplished 

in one or two ways: residency verification and/or geo-location. Should the legislation 

prescribe a limited coverage area, say a reservation, state borders, or countries in 

which iGaming is not permitted, TGRAs will require a prospective player to attest 

to his/her residence and then, through the process of geo-location, the process of 

verifying a person’s physical location, determine whether or not that person is able 

to legally access the tribe’s iGaming site. Geo-location will also play an instrumental 

role in verifying the location of authorized players utilizing mobile devices such as 

smartphone or tablet computers. 

The societal issues of underage gambling and problem gambling are issues that 

TGRAs will be required to address. These concerns are best addressed by the regulations TGRAs will require to establish iGaming accounts and the process by which 

gaming activity will be monitored to identify any potential patterns indicative of 

problem gambling. TGRAs may require additional information and/or documentation 

from prospective players to verify not only their identity but their ability to legally 

engage in iGaming. 

31

Many other tools that will be needed by TGRAs to effectively regulate iGaming 

currently exist. TGRAs have methods to thoroughly investigate gaming and gaming 

related vendors. However, these methods may require slight modifications depending on the path taken by the tribal gaming operations, particularly if partnerships 

with overseas vendors are pursued. 

The technical standards and game testing requirements employed by TGRAs will 

also lend themselves to being used in the digital arena. Far from having to reinvent 

the wheel, TGRAs can learn from jurisdictions where iGaming is in operation to develop a set of requirements that will fit their unique environment. Game protection 

is paramount to TGRAs and the ability of games to be certified as legal and secure 

is essential. 

These standards will also provide the first line of defense in protecting information obtained from prospective players. The confidentiality of personal and financial 

information provided by prospective players as they establish iGaming accounts cannot be compromised. 

The rules and regulations and internal controls used to govern the activity of the 

brick-and-mortar facilities can be adapted to fit iGaming operations. The regulations 

that ensure the financial accountability of the gaming operation and demonstrate 

the ability of the iGaming operation to meet all financial obligations. 

Each of these aspects will require an investment on behalf of any tribe electing 

to offer iGaming. Investments in technology, infrastructure, and operating capital 

must be made. Yet that is not the extent to which tribes will need to invest; investment in human capital will also be necessary. The need for qualified and experienced staff is of vital importance to the success of an iGaming venture. 

Conclusion 

The success of any business venture lies in preparation. In the case of iGaming, 

preparation includes formulating the proper regulatory model to complement the 

legislative side of the equation. Tribes have been responding to a changing gaming 

market since the enactment of IGRA. Our tribal governments and regulators often 

set the standard for new gaming technologies and regulations. We are prepared to 

do so again should iGaming expansion occur. 

The success of Indian gaming operations is due, in part, to the presence of strong 

regulatory bodies. Through years of practical application, tribes have garnered the 

necessary expertise and experience to overcome the challenges that will be presented with the passage of iGaming legislation. The success we have collectively 

achieved since the passage of IGRA clearly shows that tribes are more than capable 

of being strong participants and regulators in the gaming industry. 

On behalf of the National Tribal Gaming Commissioners and Regulators, I thank 

you for the opportunity to present this testimony, and am open to any questions you 

may have.

The CHAIRMAN. Thank you very much, Chairman Hummingbird, 

for your testimony. 

Ms. Homer, will you please proceed with your testimony? 

STATEMENT OF ELIZABETH LOHAH HOMER, ATTORNEY, 

HOMER LAW 

Ms. HOMER. Thank you for inviting me to testify today about 

these issues. My name is Elizabeth Lohah Homer. I am a member 

of the Osage Nation of Oklahoma and a practicing attorney who 

once served as a special attorney at the Criminal Division of the 

Department of Justice, the Office of American Indian Trust at the 

Interior Department, and, finally, as the Vice Chair of the National 

Indian Gaming Commission. 

For nearly a decade now, I have served Tribal clients in the gaming law arena, with a particular focus on gaming regulatory matters. My clients include Tribal councils, Tribal regulatory agencies, 

Tribal gaming enterprises, and Tribal organizations such as the 

National Indian Gaming Association. 

Although I draw heavily on this experience in my testimony 

today, the views I express today are my own and are not attributable to anybody else. 

32

In much of Indian Country, though not all, the advent of gaming 

has meant the difference between a future of seemingly hopeless 

poverty, depression, and despair, and a future of growth, hope, and 

opportunity. Tribal gaming revenues have translated into increased 

Tribal Governmental capacity, new and expanded Tribal Governmental services, and an enhanced quality of life in many parts of 

Indian Country. 

This Committee deserves credit for making this change possible, 

but I would add that where the success truly lies is in the responsible manner in which Tribal Governments have undertaken their 

gaming activities and the wise choices and investments that they 

have made. 

Today we stand at a crossroads. The technological revolution, the 

advent of the Internet and broad public access to the information 

highway compel us to consider the future of Tribal gaming. As the 

Committee deliberates the ramifications of Internet gaming and 

considers legislation related to it, please bear in mind that while 

the means may be new, may be novel, the Internet, the legal, regulatory, and policy issues underlying Internet gaming are quite familiar. We have been dealing with those same issues for a very 

long time now. 

In IGRA, Congress established a unique system of shared regulatory responsibilities among the Federal Government, the States, 

and Tribal Governments. To carry out the Tribal interests, Tribal 

Governments have established Tribal gaming regulatory agencies. 

To carry out the Federal interest, Congress created the National 

Indian Gaming Commission. Together the NIGC and Tribal gaming 

regulatory agencies provide a two-tiered framework for the regulation of Tribal gaming in a structure that is consistent with core 

principles of Federal Indian policy. 

Any bifurcation of the Federal regulatory oversight responsibilities between the NIGC and another Federal agencies would be imprudent. Under current law, the respective roles of the NIGC and 

Tribal Governments are clearly established and defined. Communication systems are in place, administrative processes and enforcement mechanisms are established, and basically this is a system 

that works. 

Assigning the administration of a statute or statutory provisions 

peculiar to Tribal gaming to multiple Federal agencies will inevitably create a host of problems and uncertainties. It would also increase the potential for interagency conflict and subject Tribal Governments to oversight by Federal agency personnel inexperienced 

not only in relation to Indian affairs, Indian law and policy and the 

Federal-Indian relationship, but in the regulation of gaming. 

The NIGC has nearly two decades of gaming regulatory experience, and its members and staff understand the unique constitutional status of Indian Tribes as sovereigns, as well as the special 

political relationship between Tribal Governments and the United 

States. No other Federal agency possesses comparable experience 

or expertise in the context of Tribal gaming. Unquestionably, the 

NIGC is the ideal Federal agency candidate to administer any Tribal Internet gaming legislation. It is the only Federal agency that 

possesses the regulatory infrastructure to quickly and efficiently 

33

assume a gaming regulatory oversight role in relation to Tribal 

Internet gaming. 

Practically speaking, it takes years, sometimes decades, to establish a functioning Federal agency. A new agency must assemble a 

competent staff, promulgate rules and regulations, meet all regulatory requirements applicable to every Federal agency, and commence operation. For example, it took nearly five years following 

the enactment of IGRA for the NIGC to actually commence operations. A similar delay in staffing a new agency and gearing up 

that agency to begin regulating Tribal Internet gaming could prove 

economically disastrous for Tribal Governments that are intended 

to benefit by such law. The NIGC would not be hindered by a long 

start-up time or the kinds of delays involved in the formation of 

new agencies. 

Finally, and I see that my time is up, if I might just add, a key 

difference between the NIGC and other Federal agencies is the 

NIGC status as an independent regulatory agency of the United 

States. This cloaks the NIGC with the necessary independence and 

flexibility to carry out its Federal oversight functions in a stable 

and consistent manner, not subject to abrupt shifts in leadership, 

policy, resources, and organization. 

Thank you very much. Thank you for your patience. 

[The prepared statement of Ms. Homer follows:]

PREPARED STATEMENT OF ELIZABETH LOHAH HOMER, ATTORNEY, HOMER LAW

Chairman Akaka, Vice-Chairman Barrasso, and Members of the Committee: 

Thank you for inviting me to testify this afternoon with regard to regulatory 

issues that arise in the context of tribal Internet gaming. My name is Elizabeth 

Lohah Homer. I am a member of the Osage Nation and a practicing attorney. I 

founded Homer Law shortly after leaving federal service, where I served as a special 

attorney with the Criminal Division at the U.S. Department of Justice, Director of 

the Office of American Indian Trust with the U.S. Department of the Interior, and 

finally, a three-year term appointment to the National Indian Gaming Commission 

(NIGC), where I served as the Vice-chair from July 1999 to July 2002. 

During my tenure with the NIGC, the Commission undertook several important 

regulatory initiatives, including the revision of regulatory definitions for gaming activities; revision of the minimum internal control standards; and the development 

of an interpretive rule concerning environment, public health, and safety standards 

for tribal gaming operations. We also oversaw the expansion of the NIGC to include 

a field office structure and an increase in the agency’s staffing level. 

For nearly a decade now, I have primarily served tribal clients in the gaming law 

arena, with a particular focus on regulatory matters. My clients include tribal councils, tribal regulatory agencies, tribal gaming enterprises, and tribal organizations 

such as the National Indian Gaming Association. Although I draw heavily on this 

experience in my testimony today, the views I express this afternoon are mine alone 

and should not be attributed in any way to anyone other than me. 

In much of Indian Country, though not all, the advent of gaming has meant the 

difference between a future of seemingly hopeless poverty, depression, and despair 

and one of growth, advancement, and promise. Tribal gaming revenues have provided tribal governments the means to make investments that could hardly be imagined when I graduated from college and began my first job with the Osage Nation 

in 1979. These revenues translate directly into increased tribal governmental capacity and new and expanded tribal governmental programs and services that range 

from law enforcement to fire and emergency services to health care, education, 

roads, clean water, sanitation facilities, and the list goes on and on and on. This 

Committee deserves a lot of credit for what has and continues to happen throughout 

Indian Country, but it is the responsible manner in which the tribal leadership has 

undertaken gaming and the wise investments that have been made with the revenue that has made tribal gaming successful and beneficial. 

Today, we stand at a crossroads similar in many ways to the one confronted in 

the mid-1980s just prior to the enactment of the Indian Gaming Regulatory Act 

34

(IGRA) in 1988, where important decisions must be made and time is of the essence. 

The technological revolution, the advent of the Internet and broad public access to 

the information highway—these things are changing the world. It is an exciting 

time, but it is a challenging one as well. As the Committee deliberates the ramifications of Internet gaming and considers legislation related to it, I urge you to take 

into consideration foremost that although the technology behind Internet gaming is 

relatively new, the legal and policy issues underlying this important discussion are 

familiar ones. The fact is that there is a mature, effective gaming regulatory structure already in place and functioning. It is a structure that is consistent with core 

principles of federal Indian policy and one that recognizes the political status of tribal governments within the Constitutional framework of our Nation. 

In IGRA, Congress established a unique system of shared regulatory responsibilities among the Federal Government, the states, and tribal governments, but designated tribal governments as the primary regulators of tribal gaming on Indian 

lands. To carry out the Federal Government’s responsibilities in this structure, Congress created the NIGC, an independent federal regulatory agency within the Department of the Interior. 

The NIGC’s core mission is to provide federal civil regulatory oversight in order 

to shield Indian tribes from organized crime and other corrupting influences; ensure 

that Indian tribes are the primary beneficiaries of gaming revenue; and assure that 

gaming is conducted fairly and honestly by both operators and players. To that end, 

the NIGC has been vested with specific oversight powers and responsibilities under 

IGRA, including the authority to promulgate regulations and take enforcement actions. 

Under current law, the respective roles of the NIGC and tribal governments are 

thus clearly defined and, as noted, consistent with well-established principles of federal Indian policy. It is a system that works and should be reflected in any new legislation pertaining to Internet gaming by tribal governments. Any legislation that 

would operate to bifurcate federal regulatory oversight responsibilities between the 

NIGC and another federal agency should be avoided as it would create uncertainties; increase the potential for inter-agency conflict; and subject tribal governments 

to oversight by federal agency personnel inexperienced in Indian Affairs, Indian law 

and policy, the federal-Indian relationship, and the regulation of gaming. Having 

two regulatory agencies regulating essentially the same functions would be redundant and problematic. 

The NIGC, on the other hand, has nearly two decades of gaming regulatory experience, and its members and the staff understand the unique constitutional status 

of Indian tribes as sovereigns as well as the responsibilities associated with the special government-to-government relationship between tribal governments and the 

United States. Since the appointment of its first Chairman in 1993, the NIGC has 

grown considerably in size, scope, and sophistication. In October 1993, the NIGC 

had a staff of 27 and was responsible for overseeing 200 gaming operations operated 

by an estimated 175 tribal governments. The NIGC’s staff now consists of over 120 

employees who oversee an industry comprised of approximately 240 tribal governments operating over 420 tribal gaming operations in 28 states. The NIGC currently 

has field investigators operating out of seven regional offices and three satellite offices who work in conjunction with tribal gaming regulatory agencies in rendering 

technical assistance to tribal gaming operators. As a result, no other federal agency 

has achieved a comparable level of understanding in the tribal gaming context or 

possesses such experience. 

There is no question that the NIGC is the ideal federal agency candidate to be 

assigned administrative jurisdiction over and implementation of any new legislation 

related to tribal Internet gaming. Besides its experience and longstanding relationships with tribal governments, particularly tribal gaming regulatory agencies, it is 

the only federal agency that possesses the regulatory infrastructure and tools to 

quickly and efficiently assume a gaming regulatory oversight role in relation to tribal Internet gaming. 

The fact is that it takes years if not decades to establish a well-functioning regulatory agency. A new agency must assemble a capable staff, promulgate rules and 

regulations, meet all legal requirements applicable to all federal agencies, and commence operation. The NIGC’s experiences during the first years of its formation are 

instructive in this regard. From the time the NIGC was first established by IGRA 

in 1988, it took nearly three years to appoint the first Chairman and assemble a 

skeleton staff, and another two years after that for the first set of regulations to 

become effective. Thus, it took nearly five years for the NIGC to actually begin carrying out its regulatory responsibilities. A similar delay in staffing an entire agency 

and ‘‘gearing up’’ the agency to begin regulating could prove disastrous for tribal 

35

governments and place them at a competitive disadvantage relative to non-tribal operators who are forging ahead under new state laws. 

Although the regulation of Internet gaming will inevitably raise new regulatory 

and enforcement concerns, the NIGC possesses the necessary procedures and tools 

for monitoring and enforcing compliance with applicable gaming laws and regulations. The NIGC has already developed the institutional infrastructure for carrying 

out investigations, initiating enforcement actions, conducting hearings, and adjudicating appeals. It would be a relatively simple matter for the NIGC to add the technical expertise required to oversee the implementation of a tribal Internet gaming 

statute. Hence, the NIGC would not be hindered by a long start-up time or the 

kinds of delays involved in the formation of new agencies. 

In addition, a key difference between the NIGC and other federal agencies is the 

NIGC’s status as an independent regulatory agency. Independent regulatory agencies are generally charged with ‘‘independence’’ from other parts of the Executive 

Branch and are designed to enhance balance, provider greater stability, and mitigate the potential for sudden changes or reversals in agency policy likely to produce 

unnecessary or exceptionally severe economic harm to the regulated industry. 

In establishing the NIGC as an independent regulatory agency, Congress intended 

to cloak the NIGC with the necessary independence and flexibility to work closely 

and freely with tribal governments in assuring the proper regulation of tribal gaming. Congress understood that insulation from external political influences would be 

critical to the successful implementation of the NIGC’s regulatory oversight program. Any legislation that assigns regulatory oversight of tribal Internet gaming to 

a federal agency other than the NIGC would deprive tribal governments of the intended benefits of regulatory continuity and stability, and subject tribal governments to oversight by a federal agency that may be particularly vulnerable to abrupt changes in leadership, policy, resources, and organization. 

In closing, I would note that what is most important is ensuring that the successes and investments that tribal governments have made in the gaming arena are 

not compromised. Nor should the Congress enact legislation that would place tribal 

governments at a competitive disadvantage by delaying tribal entry into the Internet gaming market. Sound regulatory institutions are well-established at both the 

federal and tribal levels of government and capable of performing regulatory functions in relation to Internet gaming. It would be neither cost-effective nor practical 

to re-invent new agencies when there are experienced and capable institutions currently in place to carry out important regulatory functions. 

Thank you again for the opportunity to participate in this hearing. I am happy 

to answer any questions that you may have for me.

The CHAIRMAN. Thank you very much, Ms. Homer. 

Mr. Porter, would you please proceed with your statement? 

STATEMENT OF HON. JON C. PORTER, FORMER

CONGRESSMAN; PRESIDENT, PORTER GORDON SILVER

COMMUNICATIONS 

Mr. PORTER. Thank you, Mr. Chairman. It is an honor for me to 

be here today. To you and certainly other Senators, my former colleague, Senator Udall, it is good to see you today. And to all of the 

Tribal leaders that are here today. I think it is an important day 

for America and for all those especially interested in Internet gaming. 

I also want to say thank you to all your friends and family from 

Hawaii that visit Las Vegas. We want to continue that and we certainly do appreciate the customers that help support our economy. 

Quickly, again, my name is Jon Porter. I served as a city councilman, a mayor, a State senator, most recently as an honored member of the U.S. Congress. I also had my own business for years. But 

I also believe that those combined give me a unique perspective to 

speak today. And for full disclosure, I do officially represent the 

Poker Players Alliance, 1.2 million members across the Country, although I am not speaking today on behalf of the PPA. I also repVerDate 0ct 09 2002 10:12 Feb 04, 2013 Jkt 078446 PO 00000 Frm 00039 Fmt 6633 Sfmt 6601 S:\DOCS\78446.TXT JACK
36

resent numerous international gaming companies, not on a Federal 

level, but in a State arena; also a number of Tribal nations as well. 

But today I was invited to speak, and I do appreciate that, and 

I want to applaud you and the Committee for addressing a very 

controversial but very important issue, and very timely. In essence, 

it is a game race played in interactive space, and I think it is critical for your involvement and your leadership. 

I would like to give you a little bit of my Las Vegas political perspective. Many times I say I am from the State of Las Vegas, because sometimes people understand that better than some of the 

smaller communities. But look back at the history of Las Vegas. 

Just go back 50 years. In the early years we had some questionable 

ownership and minimal regulations and rules, and I like to say 

that our success, not unlike the success of the Tribal Nations, have 

been based upon some of the strongest regulatory rules and regulations and enforcement in the world. And I will say that again: some 

of the most difficult and the most strict rules and regulations in 

the world are placed upon gaming institutions, from the Tribal to 

the non-Tribal. 

In fact, this is an exaggeration, but if you were to apply for a 

gaming license, the gaming control board may well go back to your 

grade school. So I suggest, if you are prepared, to make sure that 

you do your homework individually. 

Also, part of Las Vegas’ success is that we have been highly competitive with each other. Now, we certainly don’t always agree in 

Las Vegas, but we are competitors. But we also come together 

when there are key issues, as does the Tribal Nation that impact 

their business. 

So one of our successes has been the ability to work together. 

Now, as you know, we have fought Federal regulation for years 

in the community of Las Vegas, in the early 1990s. We wanted to 

make sure that we could, in fact, use our gaming and regulatory 

body to make sure that our industry was certainly doing the right 

thing at the right time with the right people. 

But my experience shows that I think there is a lot of parallel 

today between the Tribal Nations and the non-Tribal Nations. In 

early 2000, I can remember, in the Nevada State Senate, when we 

passed some of the first Internet gaming legislation, that was the 

beginning. 

But over the next 12 years, and 6 years of that as a member of 

Congress, even the Las Vegas community wasn’t quite sure what 

it wanted to do. I remember days when different gaming institutions would come into my office, and one day they would be for 

Internet gaming and one day they wouldn’t be against it and they 

would be supportive. But I will tell you there has been a chance. 

Certainly not every gaming institution in Nevada supports Internet 

gaming, but we have had denial within our industry; we have had 

resistance; we have had acceptance. In fact, millions have been 

spent over the last 12 years. 

Also, let me note a key issue, and my friend, Ms. Homer mentioned, acceptance of Internet for business is paramount, whether 

you are in the widget business or you are in the gaming business. 

You can use records and newspapers as an example of those that 

did not rush into the arena. 

37

But I think what is paramount today is what one of the real 

issues is, and it is not really non-Tribal and Tribal conflict; I think 

the real question you are going to need to address is lotteries, eventually. Of course, I support poker only because I believe it is a 

game of skill, not a game of chance. But there are other interests 

besides Tribal and non-Tribal, because I believe we are very close 

in understanding, and we have worked together for years. But 

when we look at the lottery interests, many of them want to use 

a scratch card, which enters us into slot machines, and I think that 

debate should be for another day. Also, I believe that that would 

create an unfair competition for the Tribes and the non-Tribal companies. 

So, in essence, I would like to cover, just before I conclude, a few 

constructive suggestions for my friends in the Tribal Nation. 

Not unlike the non-Tribal, as you are moving forward into the 

Internet, and I encourage that companies do that and the Tribes, 

the big companies, the larger Tribes will have the resources to be 

engaged. There are hundreds of gaming institutions, Tribal and 

non-Tribal, around the Country; they are not all going to be able 

to be in the business. I encourage there be partnering in the Tribal 

Nation between non-Tribal Nation, as it is happening today successfully with Las Vegas properties. But also you could, as an industry and as a Nation, create a Tribal consortium dot com where 

a lot of the small groups could get together. It is an invaluable tool 

for economic. 

Mr. Chairman, in closing, I think, number one, paramount, beyond the Tribes, beyond the non-traditional, and the non-Tribes, 

what is paramount is the safety and security of our families and 

kids that have access to the Internet, and I believe that the Tribal 

Nation, I believe that the non-Tribal, and certainly the lotteries 

want to make sure, first and foremost, children and families are 

taken care of. 

We, and I, certainly support strong regulations. But to do nothing I think would be condoning the continuing of an abuse of the 

American people. There are 1,700 to 2,000 Internet sites around 

the world. I believe that the U.S. Senate and the U.S. House of 

Representatives must take action based upon the DOJ ruling that 

now everything appears to be legal except for sports betting. 

So with that I again thank you very much. I know my time has 

expired. I look forward to working with you, your staff, and other 

members of the Senate, and I am indeed honored to be here today. 

Thank you very much. 

[The prepared statement of Mr. Porter follows:]

PREPARED STATEMENT OF HON. JON C. PORTER, FORMER CONGRESSMAN; PRESIDENT, 

PORTER GORDON SILVER COMMUNICATIONS

Chairman Akaka and Members of the Committee, I am pleased to have this opportunity to testify before you today on the topic of regulation of tribal gaming, both 

on the Internet as well as traditional brick-and-mortar casinos. My past experience 

gives me a unique perspective due to my time as a mayor from suburban Las Vegas, 

Nevada State Senator, and as a Member of Congress from Nevada’s 3rd Congressional District. At each level of government, I’ve either voted on gaming regulation 

or helped implemented it. 

Today, I am the President of Porter Gordon Silver Communications, a full-service, 

bi-partisan government affairs and business consulting firm. With offices in Reno, 

Las Vegas, Carson City, Washington, D.C. and Phoenix, we offer advice and repVerDate 0ct 09 2002 10:12 Feb 04, 2013 Jkt 078446 PO 00000 Frm 00041 Fmt 6633 Sfmt 6621 S:\DOCS\78446.TXT JACK
38

resentation for our clients at the federal, state and local levels of government. We 

are also affiliated with Gordon Silver, one of the largest law firms in Nevada with 

a prominent gaming practice. 

My current work is also relevant to today’s discussion. I have numerous clients 

with Internet gaming interests including the Poker Players Alliance, an organization of 1.2 million American poker players, whom I am registered to represent at 

federal level, as well as multiple Nevada casinos and international online gaming 

companies, which doesn’t include federal representation. I also consult on behalf of 

tribal interests outside of the gaming world. However, I would like to state that my 

thoughts today are my own and do not speak on behalf of any clients. 

I’ve often described the Las Vegas of 50 years ago as the Wild West. There was 

little oversight, few regulations or regulatory bodies, and questionable casino ownership. Fast forward to today and you now see Vegas as the gold standard in gaming 

regulation. We have some of the most stringent licensing standards and toughest 

enforcement mechanisms. Right now, Mr. Chairman, if you were to apply for a gaming license in Las Vegas, you would be required to submit detailed personal history 

and financial information and be prepared to deliver five years of bank statements, 

credit card and brokerage statements, copies of contracts, deeds and titles to all assets, a list and summary of any litigation and such other information as contained 

in an application form. Further, gaming investigators will spend from four to six 

months in their review at a cost that ranges anywhere from $40,000 to over $1 million, depending upon history of the applicant and the complexity of the information 

provided, all of which is to be paid by the applicant. Needless to say, there is a strict 

application process. 

This Nevada story parallels how Internet poker operates today. With the lack of 

federal regulation, online poker players are forced to play on their choice of over 

1,700 foreign-based websites with little or no consumer protections and no oversight 

from federal regulators. There is no guarantee that the cards you see are truly random, or that multiple sites aren’t colluding to take advantage of the player, that the 

person ‘‘sitting’’ next to you is actually a person and not a bot designed to win in 

the long run, or even that you’ll have access to your money when you choose to cash 

out. Americans are not going to stop playing poker on the Internet, Mr. Chairman, 

that’s the reality, so we need to view it as our responsibility to provide them a safe 

environment to play. We need to move from the Wild West of Internet gaming to 

current Las Vegas-style oversight. 

It’s clear that any industry which fails to embrace the Internet is doomed to failure. Think of the struggles that newspapers have been going through, or how long 

it took the recording industry to effectively sell digital music. Gaming is no different. It has already become extremely popular as an online activity, yet the Federal Government has refused to keep up with the times. It is my opinion that the 

time is now for the Congress and the Administration to bring laws and regulations 

into the 21st century by licensing and regulating online poker so those Americans 

playing today can know that they won’t be taken advantage of. 

My home state of Nevada is now a great example of how, historically, opposition 

to Internet poker was the knee-jerk reaction, yet the current times make it inevitable to embrace the benefits of online play. It wasn’t long ago when I was taking 

meetings with brick-and-mortar Vegas casinos who would tell me that if I voted to 

regulate and license online poker, commercial casinos as we knew them would go 

bankrupt. Fast-forward a few years to where Nevada now has laws that allow intrastate Internet poker and already issued the first few licenses to accept online wagers, contingent on federal action. My point is that through working together and 

realizing the benefits that the Internet brings, operators and consumers will be 

much better off. 

Now, more to the point of this hearing, how does the regulation of Internet gaming intersect with tribal interests. According to Wikipedia, there are 555 federallyrecognized Indian tribes, and according to the NIGC, there are over 200 tribes engaged in some form of gaming. Moreover, there are roughly 445 non-tribal landbased or riverboat casinos within the US. No one reasonably believes that the U.S. 

market for Internet poker will support hundreds or even dozens of free-standing 

poker sites, and even many existing gaming facilities are unlikely to have the resources to launch their own free-standing Internet poker site. However, as I will discuss in a minute, there are numerous commercial opportunities for tribes and commercial casinos that can help them embrace the Internet to market their casinos 

and have a new channel of distribution to their customers without creating any cannibalization to their brick-and-mortar businesses. The critical ingredient for a successful Internet poker site is liquidity—having the critical mass of players such that 

any player can find the game they want, at the stakes they want, and at the time 

they want. 

39

While no one can say for sure what the market would look like if H.R. 2366 or 

similar legislation is enacted, from the experience in Europe, we can surmise that 

there will be several ways in which tribes could profitably participate in the market 

other than simply as a free-standing licensee. 

Many gaming tribes already have an established regional base of brick-and-mortar players who frequent their casinos. They could launch their own Internet sites 

and market to their brick-and-mortar players. For tribes without brick and mortar 

facilities, they could possibly partner in a consortium relationship with tribes who 

have casinos to increase the market share. Under this scenario, an existing gaming 

tribe could launch a poker site that could be utilized by other tribes where one 

played directly from the site and players would be actually playing on the lead tribal casino’s software in a poker room where they are networked with other players 

who are also playing on the site. Indeed, if all, or a large swath of Indian country 

got together and launched shared sites, it could conceivably dominate the marketplace. Each tribe would have a URL of a site under their name, and market it to 

their players, but all those players would be networked with players from other 

tribes’ sites across the country. Such an operation could dwarf even the large branded Las Vegas companies. 

I feel like there has also been a perception, particularly in 2010 and 2011, that 

this was a fight between commercial gaming and tribal gaming, and, to be sure, 

commercial gaming was far more supportive of poker licensing legislation than Indian Country was. That was before the Department of Justice reversed its position 

on the application of the Wire Act to non-sports betting. 

Since that decision, state lotteries have been increasingly aggressive in trying to 

get onto the Internet, providing traditional drawing tickets, but also providing other 

Internet games, including virtual scratch-off tickets that make computers function 

like slot machines. The vast majority of revenue for tribal gaming comes from slot 

machines, and that is because slot machines are relatively scarce on non-tribal land. 

If, however, you have state lotteries effectively turning every computer in the state 

into a potential slot machine, the competitive effect on tribal gaming is obvious. 

States like Delaware, Maryland, Illinois, Massachusetts and Georgia are already 

taking steps to take their lotteries online, and if they succeed, then others are bound 

to follow. I don’t think tribal or commercial gaming interests would object to state 

lotteries selling their traditional drawing tickets on the Internet, but tribal and commercial gaming interests have been pretty clear that they do not think online slot 

machines are in the interests of commercial gaming, tribal gaming, or gaming consumers, for that matter. Poker is a small part of their brick-and-mortar business 

and does not pose a threat. On the other hand, full scale casinos create many other 

economic and policy issues. 

If states seek to expand their lotteries to provide slot machine play into everyone’s 

homes, the threat to commercial and tribal gaming is obvious. I would expect that 

this outcome would be unacceptable to those concerned about the societal impacts 

of gaming as well. However, in the absence of some federal legislation setting the 

rules of the road for Internet gaming, that outcome is likely in many states. Most 

versions of federal Internet gaming or poker legislation would prevent this; H.R. 

2366 would only allow Internet poker to be played on the Internet, with Internet 

slots and other games clearly illegal under federal law. The emerging fault line isn’t 

commercial vs. tribal gaming, but traditional gaming operations versus lotteries. 

In conclusion, the story of brick-and-mortar casino regulation is not so different 

than what we’re now doing with Internet gaming. The debate we’re having may 

seem arduous and contentious at times, but it is a discussion that needs to be happening. My experience in Nevada gives me great hope and, if history is any indication, I’m confident we will design a strong regulatory structure that protects the 

consumer, respects tribal concerns, and is in the best interests of everyone involved. 

Thank you, Mr. Chairman, for allowing me to share my thoughts with the Committee today and I look forward to answering any questions you may have.

The CHAIRMAN. Thank you. Thank you very much, Mr. Porter, 

for your testimony. 

Mr. Johnson, would you please proceed with your testimony?

40

STATEMENT OF GENE JOHNSON, SENIOR VICE PRESIDENT, 

MARKET RESEARCH AND ONLINE STUDIES, SPECTRUM

GAMING GROUP 

Mr. JOHNSON. The Honorable Mr. Porter is a tough act to follow, 

but thank you, Chairman and members of the Committee. My 

name is Gene Johnson. I am a representative of Spectrum Gaming 

Group, a gaming industry consultant. 

My first involvement with Internet gambling began more than a 

decade ago, when offshore companies were seeking to better understand the U.S. gaming market and little regulation exists. Because 

the question of legality was never settled through clear legislation 

in this Country, the Internet gambling industry developed and 

flourished overseas, in a market where originally the majority of 

players and revenue were American. Today this is a $30 billion industry representing almost 9 percent of all the money spent by 

gamblers worldwide, and it finally appears to be coming back to its 

country of origin. 

The DOJ opinion of December 23rd, 2011, has opened the door 

for State lotteries to pursue online lotto sales, and it is only a matter of time until scratch and social games also appear on the Internet. Online scratch games involving a series of symbols, where the 

win outcome is determined by the last symbol, will be virtually indistinguishable from a slot machine once they are placed on the 

Internet. And now it becomes necessary to examine how online 

gambling should occur and what needs to be done to safeguard 

players and assure that online games are conducted fairly and responsibly. 

Tribal gaming has already developed successful regulatory institutions and processes to administer land-based gambling, but interactive wagering brings a whole new set of challenges. Just as with 

land-based gambling, regulatory authorities will have to put in 

place responsible gaming protections, which include identity and 

age verification, geo-location, and other know your customer, or 

KYC, measures. 

KYC is usually accomplished through a rigorous registration 

process that requires documentation of age, residence, location, 

credit card, and financial institution information. This is supported 

by employment of specific identity verification tools at every logon. 

In addition, Tribal regulators will need to establish anti-fraud procedures to prevent collusion and money laundering or chip dumping taking place on the games. All of this will require significant 

investment in technology. 

Tribal regulators will need to establish effective regulations and 

enforce penalties for non-compliance. They will also need to develop 

testing procedures for the online games, as well as procedures for 

auditing the payment systems. They should be prepared to assess 

online gaming vendors and, if necessary, conduct background 

checks into the company principals. Some of these offshore B2C operators took bets from U.S. citizens after UIGEA was passed in 

2006 and probably should not be allowed to benefit from those actions. 

Most importantly, Tribal regulators and operators will need to 

acquire personnel resources with experience in online gambling opVerDate 0ct 09 2002 10:12 Feb 04, 2013 Jkt 078446 PO 00000 Frm 00044 Fmt 6633 Sfmt 6601 S:\DOCS\78446.TXT JACK
41

1 2011 data set, H2 Gambling Capital. 

erations and educate internal staff to build the knowledge base required to administer and regulate the new online operations. 

Problem gambling will be just as tough an issue as it is with 

land-based gambling today. Increased availability of gambling 

through the Internet opens the potential for greater abuse, although research to date shows similar rates of problem in pathological gambling between the online and the offline channel. 

The good news here is that the Internet offers better tools for 

tracking problem gamblers and even identifying patterns of behavior that lead to problem gambling so that early intervention can 

take place. Because online betting provides a perfect history of each 

player’s gambling transactions, there is ample data available to 

profile normative gambling behavior, as well as abnormal gambling 

behavior. But the lesson to take from Europe is that problem gambling solutions, such as self-exclusion, need to be approached comprehensively on the Internet and not on a site-by-site basis. 

While Internet gambling does present unique challenges, essentially it constitutes simply another channel for delivering the entertainment experience of responsible gaming. European operators 

have already established strong regulatory and KYC procedures 

that can be used as a model for U.S. operators, whether Tribal, 

commercial, or State lottery based. Spectrum believes that Internet 

gambling will develop in the U.S. differently from the European 

model and will be tied more closely to established land-based 

brands which can offer tangible player rewards and amenities. 

Indian gaming is a major part of the land-based gambling industry, generating almost as much revenue as all the U.S. commercial 

casinos, and Tribal authorities will be expected to regulate online 

gambling just as effectively as they do bricks and mortar casinos. 

That concludes my remarks. Thank you, members of the Committee. 

[The prepared statement of Mr. Johnson follows:]

PREPARED STATEMENT OF GENE JOHNSON, SENIOR VICE PRESIDENT, MARKET

RESEARCH AND ONLINE STUDIES, SPECTRUM GAMING GROUP

Thank you for providing this opportunity to address the committee on a subject 

in which I have extensive background. 

My first involvement with Internet gambling was more than a decade ago when 

offshore companies were seeking to better understand the U.S. gaming market. Because the question of legality was never settled through clear legislation in this 

country, the Internet gambling industry developed and flourished overseas in a market where originally the majority of players (and revenue) were American. Today 

this is a $30 billion dollar industry representing almost 9 percent of all the money 

spent by gamblers worldwide last year. 1 Finally it appears that Internet gambling 

may be returning to its country of origin. 

The Department of Justice opinion of December 23, 2011 has opened the door for 

state lotteries to pursue online lotto sales and it is only a matter of time until 

scratch and social games also appear on the Internet. Online scratch games, involving a series of symbols with the win outcome determined by the last symbol, will 

be virtually indistinguishable from a slot machine once placed on the Internet. Now 

that the prospect of legalized Internet gambling returning to the U.S. is has grown 

more probable, it becomes necessary to carefully examine how that should occur and 

what needs to be done to safeguard players and assure that online games are conducted fairly and responsibly—in short, the regulation of online gambling. 

Tribal gaming has already developed successful regulatory institutions and processes to administer land-based gaming but interactive wagering brings a new set 

42

of challenges which must also be addressed. Just as with land-based gaming, regulatory authorities will have to put in place responsible gaming protections which include identity and age verification, geo-location, and other ‘‘know your customer’’ 

(KYC) measures. KYC is usually accomplished through a rigorous registration procedure that requires documentation of age, residence, location, credit card and financial institution information. This is supported by the employment of specific 

identity verification tools at every logon. In addition tribal regulators will need to 

establish anti-fraud procedures to prevent collusion or money laundering (chip 

dumping) taking place on the games. All of this will require significant investment 

in technology. 

Tribal regulators will need to establish effective regulations and enforce penalties 

for non-compliance. They will also need to develop testing procedures for the online 

games, as well as procedures for auditing the payment systems for Internet wagering sites. They should be prepared to assess online gaming vendors and if necessary 

conduct background checks into the company principals. Some of these offshore B2C 

operators took bets from US citizens after UIGEA was passed in 2006 and probably 

should not be allowed to profit from those actions. 

Most importantly, tribal gaming regulators and operators will need to acquire resources with experience in current online gambling operations and educate internal 

staff to build the knowledge base required to administer and regulate the new online operations. 

Problem gambling will be just as tough an issue as it is with land-based gaming. 

Increased availability of gambling through the Internet opens the potential for 

greater abuse, although research to date shows similar rates of problem and pathological gambling between the online and ‘‘offline’’ channels. The good news here is 

that Internet operations offer better tools for tracking problem gamblers, and even 

identifying patterns of behavior that lead to problem gambling so that early intervention can take place. Because online betting provides a perfect history of each 

player’s gambling history, there is ample data available to profile normative gambling as well as abnormal gambling behavior. One lesson to take from Europe is 

that problem gambling solutions such as self-exclusion need to be approached comprehensively on the Internet and not on a site by site basis. 

While Internet gambling does present unique challenges, essentially it constitutes 

simply another channel for delivering the entertainment experience of responsible 

gaming. European operators have already established strong regulatory and KYC 

procedures which can be used as a model for U.S. operations, whether tribal, commercial, or state lottery based. Spectrum believes that Internet gambling will develop in the U.S. differently from the European model and be tied more closely to 

established land-based brands which can offer tangible player rewards and amenities. Indian gaming is a major part of the land-based gambling industry, generating 

almost as much revenue as all U.S. commercial casinos, and tribal authorities will 

be expected to regulate online gaming just as effectively as it does bricks and mortar 

casinos. 

Thank you.

The CHAIRMAN. Thank you. Thank you very much, Mr. Johnson, 

for your testimony. 

Mr. Hummingbird, your organization is made up of Tribal regulators. Has your organization looked at the Internet game issue, or 

have individual members taken any steps to ensure Tribes are 

ready to participate should Federal legislation be enacted? 

Mr. HUMMINGBIRD. Thank you, Mr. Chairman. The National 

Tribal Gaming Commissioners and Regulators have itself looked 

into this possibility on the avenue of providing training and education to Tribes and Tribal regulators, that is to say, getting them 

informed and getting them prepared for any eventuality for Internet gaming. I know that there are Tribes out there across the 

Country that have been proactively researching and drafting and 

looking at ways to take advantage of an opportunity should that 

come their way, but at this point I believe everybody is kind of 

waiting for whatever legislation may come down, because that is 

going to drastically impact the regulations and the ordinances that 

they may draft. 

43

The CHAIRMAN. Ms. Homer, one of the issues that would severely 

limit a Tribe’s ability to participate in or regulate Internet gaming 

centers around jurisdictional issues and how Indian lands would be 

treated. The question is what is your view on how Tribal lands 

should be taken into account in any Federal legislation? 

Ms. HOMER. Well, I think that it is appropriate for there to be 

a strong regulatory presence by the Tribe over any Internet gaming 

that would entail locating the gaming equipment, locating the gaming system on the reservation, and subject to Federal and Tribal 

oversight. With regard to the market, however, I think that it 

would prove a terrible injustice to the Tribes if they were to be limited to Internet gaming that is initiated on the reservation. I think 

that it is only fair to, we are dealing with a borderless situation 

now, to allow Tribes to participate in the marketplace, whether it 

be the U.S. or a larger marketplace. The Tribes should be able to 

do that as long as they have their regulatory controls situated 

where they can actually be in control of it. 

The CHAIRMAN. Congressman Porter, can you elaborate further 

on why you believe online gaming should be limited to poker only? 

Mr. PORTER. Thank you, Mr. Chairman. First, let me highly encourage all the Tribal Nations to engage and be prepared, because 

something will be happening, it has to happen. 

To answer your question, without getting into all the details of 

the difference between different types of gaming, but with poker, 

a poker player plays against another or with another poker player; 

whereas, the house in that case, whether it be a bricks and mortar, 

Tribal, non-Tribal, will normally receive some type of a fee, but 

they are not engaged in playing as a poker player against the 

house. 

The advantage to poker only is, from a regulatory perspective, I 

really believe that it is a game of skill, and I can assure you, since 

I never win, I promise you it is a game of skill that I don’t have; 

whereas, when you play a slot machine or some other form of casino game, you are technically playing against the house and the 

odds of the house, and a lot of times the house wins. 

But I firmly believe that with the poker player, and, again, I 

work with close to a million, that it is certainly a game of skill; 

whereas, other games are a game of chance. And we want to make 

sure it is player-to-player and not player to some unknown site 

somewhere in the world, where we can’t control what is happening 

within that database. 

The CHAIRMAN. Thank you for that response. 

Mr. Johnson, in your testimony you note that Indian gaming is 

a major part of the land-based gambling industry, generating nearly as much revenue as all U.S. commercial gaming. Do you see any 

reason why Tribes should be prohibited from entering the online 

gaming market at the same time as those other gaming interests? 

Mr. JOHNSON. That is a great question. No, I do not see any reason why the Tribes should be prohibited. And in States where there 

are no commercial or Tribal gaming interests, it is very likely that 

the State lottery will seek to acquire a monopoly on online gaming 

activities. But the Tribes have demonstrated the social benefits of 

land-based Tribal gaming and I think it would only help to enhance 

their operations and their charitable operations, what they do to 

44

support their own people and to make themselves independent of 

Federal assistance. So by all means they deserve an equal place at 

the table as commercial gaming and State lotteries would. 

The CHAIRMAN. Thank you very much, Mr. Johnson. 

Mr. Hummingbird and Ms. Homer, this is to both of you. Does 

Congress need to amend IGRA or revise any existing Tribal-State 

compacts for Tribes to participate in online gaming? 

Ms. HOMER. Thank you. 

That is a really good question, Senator, and I think that it would 

be very unwise to undo any Tribal gaming compacts. The nice 

thing about Tribal gaming compacts is that they are a bargain between the States and the Tribes, and they are subject to renegotiation or they are subject to discussion and agreement and accord 

between the parties here. I don’t see that need to reopen the Indian 

Gaming Regulatory Act and to amend the Indian Gaming Regulatory Act, per se. 

I think that it is quite possible to have an independent piece of 

legislation or to create a new title to the larger Internet gaming 

legislation that is, or any larger Internet gaming legislation that is 

being considered that would be specific to Tribal Governments. 

There is no reason why the NIGC couldn’t be assigned administrative jurisdiction over two separate statutes. Federal agencies are 

assigned multiple statutes to administer all the time. So I don’t 

think we would have to disturb IGRA in order to have a viable 

quality Tribal Internet gaming bill. 

The CHAIRMAN. Mr. Hummingbird? 

Mr. HUMMINGBIRD. Thank you, Mr. Chairman. I would echo Elizabeth’s comments in the sense that I do not believe it would be necessary to amend IGRA. I think any Federal legislation that we 

would be looking at would need to either be viewed as diminishing 

its impact on any Tribal-State impacts that are out there, if not 

protecting their contents outright. I think it would be in the best 

interest of Tribes to provide a protection for the existing compacts 

without having to amend IGRA. 

The CHAIRMAN. Thank you. Thank you very much. 

Mr. Porter, Congressman Porter, in your testimony you note the 

historic knee jerk reaction against online gaming. In your view, can 

the benefits that Nevada brick and mortar casinos now foresee in 

online play be shared and replicated by Tribal gaming operators? 

Mr. PORTER. Thank you, Mr. Chairman. I certainly would agree, 

but I also think it is vice versa; I think that we can learn from each 

other. As I mentioned in my testimony, I think one of the bigger 

problems is the bigger picture is extending into a scratch card and 

to slot machines. But I certainly that as we have done as a community with the Tribal Nation for the last 20 years, we have worked 

together and, again, have created some of the toughest regulations 

in the world on ourselves. 

So I certainly think we have a lot to offer, but I also believe that 

the non-Tribal, our industry in Nevada, too, has a lot to offer. But 

that is why your conversations today with the Committee and other 

members gives us an opportunity to share some ideas. But they are 

also working together now, quite effectively, across the Country. So 

I think it is a team effort. We have a lot to give from both sides. 

45

The CHAIRMAN. Mr. Johnson, do you think Tribes should be able 

to form Tribal consortiums to enhance their ability to participate 

in online gaming should Federal legislation be enacted? 

Mr. JOHNSON. Thank you, Mr. Chairman. Again, I would say, 

without question, they should be. If you look at the history of the 

lottery industry, I believe it was 1962, there were no lotteries in 

the United States, and New Hampshire was the first, I believe, and 

it took years of litigation for lotteries to win the rights to have multiple State compacts, to have games that had a jackpot you could 

play across a number of States, specifically games like 

Megamillions and PowerBall. 

When you look at online poker, small States such as Delaware, 

which has legalized Internet gambling, have very small populations 

and very little liquidity. Liquidity is the mass effect of having a 

number of players on the site and the ability to find a game within 

your price point at any time. Without liquidity, small States and 

small Tribes will suffer; it will be very difficult for them to gain 

traction in order to compete with commercial casinos and offshore 

operators. I think interTribal or interstate compacts are going to be 

essential. 

The CHAIRMAN. Thank you very much. I want to tell this panel 

your responses have been helpful, coming from the experiences and 

the areas that you come from, and the parts of the Country that 

you come from really makes a difference, and we are trying to work 

together with the Tribes to bring about some of the what we might 

consider necessary values that can keep the industry successful 

and working well. So I want to thank you very, very much for your 

responses. You may receive some questions from members of the 

Committee that they may have. 

So I want to thank our witnesses for participating in today’s 

hearing. We have heard quite a bit today regarding regulation of 

Tribal gaming as it currently exists. We also have a lot to consider 

should Federal legislation be enacted that expands gaming in the 

United States. 

As always, it is our job on the Committee to make sure Tribes 

achieve parity in any Federal legislation and to bring your voice to 

Congress, so I urge all of you to review the Tribal Online Gaming 

Act, the discussion draft, and provide comments so that you can 

make sure the Tribal voice is heard. 

We will continue the dialogue on this issue and I encourage all 

of you to continue to work with this Committee. Again, thank you 

for being so patient and I want to wish all of you well in your endeavors, and we want to do the best we can to provide the best operation regulations that we can to all of you. 

Before I really call for adjournment, I would ask the panel if they 

have any final comments they would like to make to the Committee. 

Ms. Homer? 

Ms. HOMER. Senator, I just want to thank you for your service 

to Indian Country during your tenure in the Senate. I know that 

you are looking at retiring, and we are going to miss you so very 

much, and your wisdom and your kindness and your compassion. 

So I just want to say thank you. 

The CHAIRMAN. Thank you. 

46

Congressman Porter? 

Mr. PORTER. And I echo the same, Mr. Chairman. We appreciate 

your service. 

But I heard something today quite consistently from some of the 

Tribal Nations, and that is that they are waiting to see what is 

going to happen, and even maybe from the regulatory standpoint. 

I would suggest, as a company that specializes in licensing, Porter 

Gordon Silver, I would highly encourage the Tribal Nations and the 

regulatory bodies get engaged quickly in this debate from creating 

their own regulations and being a part of this. 

One thing that Nevada has done, of course, I am most slightly 

biased, coming from Las Vegas, but one thing Nevada has done in 

anticipating that this may happen soon, we have passed landmark 

legislation to prepare our industry for this global Internet. And I 

know other States have and I, of course, am not here from the 

other States, but a lot of States are moving and preparing. I would 

highly encourage, with your leadership and the Committee, that 

the Tribal Nations be prepared and not wait, because I feel it is 

a responsibility of Congress to do something and the Senate to protect families, and I think they should be prepared or they will miss 

the opportunity. 

So, again, thank you, Mr. Chairman. It is an honor to be here. 

The CHAIRMAN. Thank you. 

Mr. Johnson? 

Mr. JOHNSON. I would just like to expand on the earlier question 

you asked about the interTribal networks. I mentioned the example 

of Delaware being a small State. You can be sure that the States, 

the State lotteries, when they go online, they will ban together in 

multi-State networks, it is only a matter of time; and the Tribes 

should look to do that as well. 

And, once again, thank you, sincere thanks for the invitation to 

speak before the Committee. 

The CHAIRMAN. Thank you very much for being here. 

Mr. Hummingbird. 

Mr. HUMMINGBIRD. Thank you, Mr. Chairman. I too want to express my appreciation for your leadership on this Committee. I 

think you have done an honorable job and have represented Indian 

Country and Native peoples very well. 

I do want to dovetail into something that Mr. Porter had just 

spoken of, and it is a message that I have been advocating every 

chance I can get, and I don’t think there is a better chance I can 

get than this one today, but that is for Tribes to be prepared, to 

be aware, and to be active; and those three simple phrases contain 

a lot of activity that Tribes will be need to be cognizant of. We have 

to be prepared for what eventuality is coming. 

The Tribal Online Gaming Act is something that is going to be 

of much interest to Tribes in the very near future. But we also 

have to be aware of everything surrounding this particular issue, 

and it is something that I have encouraged our Tribal leadership 

and I encourage the elected leadership at the Senate and the 

House side to continue in dialogue such as what we had today, 

bringing those individuals to the table that can provide a more 

round view of the issue at hand, because it is very important to get 

this particular item right the first time out from the gate so that 

47

we can have something that is going to be a viable option and 

hopefully complement the economic success that Tribes have garnered through gaming up to this time. 

So thank you for this hearing. I hope we have the opportunity 

to speak on future occasions and to advance the cause of regulation 

for Indian gaming. Thank you. 

The CHAIRMAN. Thank you very much, all of you on this panel. 

I want to say mahalo, thank you very much. Without question, let’s 

continue to work together on this. 

This hearing is adjourned. 

[Whereupon, at 4:30 p.m., the Committee was adjourned.] 

(49)

APPENDIX

PREPARED STATEMENT OF GRANT W. EVE, CPA, CFE, PARTNER, JOSEPH EVE 

Chairman Akaka and Members of the Committee, for the record my name is 

Grant Eve, CPA, a partner with the regional CPA firm of JOSEPH EVE. I am writing this to be submitted to the records for the United States Senate Committee on 

Indian Affairs Oversight Hearing on Regulation of Tribal Gaming: From Brick and 

Mortar to the Internet that was held on July 26, 2012. This is to add some clarification on the National Indian Gaming Commission (Commission) Minimum Internal 

Control Standards Agreed Upon Procedures (NIGC MICS AUP) that was discussed 

in the question and answer section of NIGC Chairwoman Tracie Stevens and Senator Barrasso, Senator Franken, and Senator Udall. 

NIGC Minimum Internal Control Standards 542.3(f) (1) states that an independent certified public accountant (CPA) shall be engaged to perform ‘‘AgreedUpon-Procedures’’ to verify that the gaming operation is in compliance with the 

minimum internal control standards (MICS) set forth in this part or a Tribally approved variance thereto that has received Commission concurrence. The CPA shall 

report each event and procedure discovered by or brought to the CPA’s attention 

that the CPA believes does not satisfy the minimum standards or Tribally approved 

variance that has received Commission concurrence. The ‘‘Agreed-Upon Procedures’’ 

may be performed in conjunction with the annual audit. The CPA shall report its 

findings to the Tribe, Tribal gaming regulatory authority, and management. The 

Tribe shall submit two copies of the report to the Commission within 120 days of 

the gaming operation’s fiscal year end. This regulation is intended to communicate 

the Commission’s position on the minimum agreed-upon procedures to be performed 

by the CPA. Throughout these regulations, the CPA’s engagement and reporting are 

based on Statements on Standards for Attestation Engagements (SSAEs) in effect 

as of December 31, 2003, specifically SSAE 10 (‘‘Revision and Recodification AgreedUpon Procedures Engagements.’’). If future revisions are made to the SSAEs or new 

SSAEs are adopted that are applicable to this type of engagement, the CPA is to 

comply with any new or revised professional standards in conducting engagements 

pursuant to these regulations and the issuance of the agreed-upon procedures report. 

Our CPA firm, JOSEPH EVE, performs several tribal casino financial statement 

audits and MICS AUP procedures each year. A tribal casino could be subject to as 

many as 15 individual MICS checklists. The gaming machine MICS checklist has 

192 questions. A casino could be out of compliance with a one or two of the 192 

questions and a ‘‘finding’’ is written up for each question where the casino is out 

of compliance. Materiality is not a consideration when performing the NIGC MICS 

AUP procedures as it is in a financial statement audit. It is our professional opinion 

that it is very difficult to state whether a casino that is out of compliance with one 

or two questions subjects either the casino or the customers to an undue risk. 

Senator Udall requested to know what percentages of tribes are out of compliance 

with the NIGC MICS AUP. In our opinion, with the NIGC MICS AUP, it would be 

difficult to measure whether the tribe is in or out of compliance, as a whole. In our 

experience, almost all gaming operations have some non-compliance issues that are 

identified in conjunction with the NIGC MICS AUP procedures. As the NIGC MICS 

are cumbrous, some internal controls are more stringent that others, so therefore, 

it would be very challenging to say after a certain number of findings, a tribe is 

out of compliance as a whole. The CPA firm that is completing AUP procedures 

must complete the CPA NIGC MICS compliance checklists or other comparable testing procedures. The checklists measure compliance on a sampling basis by performing walkthroughs, observations and substantive testing. The CPA completes 

separate checklists for each gaming revenue center, cage and credit, internal audit, 

surveillance, information technology and complimentary services or items. 

In addition to the checklists, the CPA firm must complete one unannounced observation of each of the following: gaming machine coin drop, gaming machine currency 

acceptor drop, table games drop, gaming machine coin count, gaming machine curVerDate 0ct 09 2002 10:12 Feb 04, 2013 Jkt 078446 PO 00000 Frm 00053 Fmt 6601 Sfmt 6621 S:\DOCS\78446.TXT JACK
50

1The analysis of tribal considerations for online gaming when Congress appeared poised to 

legislate in 2011 has been retained in Committee files. See Kathryn R.L. Rand & Steven Andrew 

Light, Indian Gaming on the Internet: How the Indian Gaming Ethic Should Guide Tribes’ Assessment of the Online Gaming Market, 15 GAMING L. REV. 11 (2011): 681–691. 

rency acceptor drop, and table games count. For purposes of these procedures, ‘‘unannounced’’ means that no officers, directors, or employees are given advance information regarding the dates and times of such observations. This unannounced observation is an integral piece of the NIGC MICS AUP procedures. This can difficult 

to complete as a true unannounced observation if the CPA firm does not have tribal 

gaming experience and understand how the casino operates in conjunction with the 

tribal gaming regulatory authority. 

Alternatively, at the discretion of the Tribe, the Tribe may engage an independent 

certified public accountant (CPA) to perform the testing, observations and procedures reflected in paragraphs (f)(1)(i), (ii), and (iii) of 542.3 utilizing the Tribal internal control standards adopted by the Tribal gaming regulatory authority or Tribally 

approved variance that has received Commission concurrence. Accordingly, the CPA 

will verify compliance by the gaming operation with the Tribal internal control 

standards. Should the Tribe elect this alternative, as a prerequisite, the CPA will 

compare the Tribal internal control standards to the MICS to ascertain whether the 

criteria set forth in the MICS or Commission approved variances are adequately addressed. The CPA may utilize personnel of the Tribal gaming regulatory authority 

to cross-reference the Tribal internal control standards to the MICS, provided the 

CPA performs a review of the Tribal gaming regulatory authority personnel’s work 

and assumes complete responsibility for the proper completion of the work product. 

If a tribe decides to utilize these alternative procedures, based on their tribal internal control standards, it may not be comparing ‘‘apples to apples.’’ The tribe may 

have more stringent internal controls as requested by tribal council, the gaming 

commission, or could be required in the state compact. Therefore, it would not be 

possible to state percentages that are in or out of compliance. 

Other factors to consider while analyzing if a tribe is in or out of compliance with 

the NIGC MICS AUP procedures include:

• Whether the CPA firm relied on the internal auditors of the gaming operation

• When the unannounced observations took place

• If the gaming operations year-end is 12/31 and the unannounced observation 

took place on 12/30, it would not be a true unannounced observation as management would be able to tell when the procedures were to take place using 

process of elimination.

• The experience of the CPA firm that conducts the audit and NIGC MICS AUP

• Whether the gaming operation continues to have repeat exceptions year after 

year

In closing, we would be happy to answer any questions the Senate Committee on 

Indian Affairs may have regarding this submission, tribal casino audit procedures, 

or procedures related to the NIGC MIC AUP engagements. 

JOINT PREPARED STATEMENT OF KATHRYN R.L. RAND, J.D. AND STEVEN ANDREW

LIGHT, PH.D., CO-DIRECTORS, INSTITUTE FOR THE STUDY OF TRIBAL GAMING LAW

AND POLICY

We thank Chairman Akaka, Vice Chairman Barrasso, and the members of the 

U.S. Senate Committee on Indian Affairs for this opportunity to comment on the 

Discussion Draft of the Tribal Online Gaming Act (TOGA) of 2012 following the 

Committee’s July 26, 2012 oversight hearing on the regulation of Indian gaming and 

online gaming. 1

We co-direct the Institute for the Study of Tribal Gaming Law and Policy at the 

University of North Dakota, which provides legal and policy analysis and advances 

research and understanding of Indian gaming. Our comments and suggestions here 

are informed by sixteen years of research and interaction with those involved with 

Indian gaming. 

We welcome this opportunity to contribute our views on how best to legislate in 

the area of Tribal Online Gaming in the context of the current Indian Gaming industry and the prospects for federal legalization of online gaming generally. In this 

statement, we focus on one key question—how best to ensure effective federal oversight and regulatory authority of Tribal Online Gaming—and also provide several 

more limited suggestions related to consistency and clarity in the TOGA. 

51

1. Tribal Online Gaming Oversight and Regulatory Authority 

The TOGA calls for the U.S. Secretary of Commerce to oversee and regulate Tribal Online Gaming, with assistance from a new ‘‘Office of Tribal Online Gaming,’’ 

headed by a Director within the Commerce Department. 

We believe that assigning primary regulatory authority over Tribal Online Gaming to the Secretary of Commerce and a new office within the Commerce Department fails to take advantage of existing regulatory expertise and experience—namely the National Indian Gaming Commission (NIGC)—and creates a heightened risk 

of interagency inconsistency and inefficiency, hindering the TOGA’s effectiveness. 

We therefore recommend that the NIGC be delegated primary regulatory authority 

over Tribal Online Gaming through the TOGA. To ensure efficiency and to guard 

against inconsistency among federal agencies charged with regulation of state and 

commercial online gaming, we suggest including a liaison mechanism between the 

NIGC and the Secretary of Commerce. 

a. NIGC as Primary Regulator of Tribal Online Gaming 

Since its establishment under the Indian Gaming Regulatory Act (IGRA) in 1988 

as an independent regulatory agency, the NIGC has developed expertise in effective 

regulation of Indian gaming, including approval of tribal gaming ordinances and 

management contracts, oversight of tribal licensing of key employees and management officials, investigation and enforcement actions, and promulgation of regulations—all duties nearly identical to the regulatory functions set forth in the TOGA. 

When Congress legalizes online gaming, it will require implementing effective regulation as immediately as possible. Given its current regulatory oversight of Indian 

gaming, the NIGC is uniquely situated to provide immediate, effective, and appropriately policy-driven oversight of Tribal Online Gaming. 

The NIGC’s operations have been informed by IGRA’s policy goals of promoting 

tribal economic development, self-sufficiency, and strong tribal governments, alongside effective gaming regulation—exactly what the TOGA sets out in its policy goals. 

These policy goals in turn reflect the Federal Government’s established trust obligation to tribes and the body of federal Indian law and policy. 

The NIGC provides technical assistance to tribes in establishing and implementing effective tribal gaming commissions. For instance, the NIGC has developed 

a Model Tribal Gaming Ordinance, trained tribal regulators, and promulgated Minimum Internal Control Standards—all of which are essential for effective regulation 

and coordinated oversight, as well as facilitating strong tribal governments and tribal self-sufficiency. The NIGC also has worked to develop meaningful governmentto-government relations with tribes and to facilitate effective intergovernmental relations among federal, state, and tribal officials. The NIGC’s experience, expertise, 

and relationships with tribes have been built over more than two decades and reflect the dynamic nature of the Indian gaming industry and the obligations inherent 

in multi-jurisdictional oversight and regulation. 

Primary regulatory authority over Tribal Online Gaming may be delegated to the 

NIGC through the TOGA, without any need to amend IGRA or other existing federal law. The scope of this regulatory authority should be clearly and expressly described in the TOGA to avoid any confusion about the extent of the NIGC’s powers 

or overlap with regulation of Indian gaming under IGRA. See, e.g., Colorado River 

Indian Tribes v. NIGC, 466 F.3d 134 (D.C. Cir. 2006). 

To allow the addition of appropriate regulatory capacity and online gaming expertise, the NIGC should receive appropriate additional funding, perhaps through the 

Tribal Online Gaming licensing process. 

b. Coordination of Regulation of Tribal and Non-Tribal Online Gaming Through

Liaison Mechanism 

If regulation of non-Tribal Online Gaming is delegated to the Secretary of Commerce while the NIGC has primary regulatory authority over Tribal Online Gaming, 

it will be essential to appropriately coordinate regulation of online gaming generally. 

To take full advantage of the NIGC’s existing expertise, coordinate effective federal 

regulation of all online gaming, and avoid interagency inconsistency in interpretation and implementation of the TOGA, we suggest incorporating a liaison mechanism. 

While the TOGA provides for memoranda of agreement among the Secretary of 

Commerce, the NIGC Chair, and the Attorney General to ensure sharing of information, we suggest that more direct coordination is necessary. An example in the context of Indian gaming illustrates the potential pitfalls. 

Inconsistency in the NIGC’s and the Department of Justice’s interpretations of the 

Johnson Act in the context of Class II machines resulted in extensive litigation and 

uncertainty. The NIGC classified certain machines as Class II devices, allowing 

52

tribes to operate them in the absence of a tribal-state compact, IGRA’s requirement 

for Class III gaming. At the same time, the Justice Department threatened tribes 

with criminal prosecution under the Johnson Act for operating those Class II machines without a tribal-state compact. See, e.g., United States v. 103 Electronic Gambling Devices, 223 F.3d 1091 (9th Cir. 2000); Seneca-Cayuga Tribe of Oklahoma v. 

NIGC, 327 F.3d 1019 (10th Cir. 2003); United States v. Santee Sioux Tribe of Nebraska, 324 F.3d 607 (8th Cir. 2003). This interagency conflict resulted in costs both 

to tribes and the Federal Government and undermined effective and efficient regulation of Indian gaming. 

Thus, we suggest a liaison mechanism to ensure effective communication among 

federal agencies and thus effective coordination of federal regulation of online gaming generally. 

Such a liaison mechanism could focus mostly on communication, such as by convening a ‘‘Tribal Online Gaming Working Group,’’ modeled after the Indian Gaming 

Working Group established in 2004 among the NIGC, the Federal Bureau of Investigation, the Department of the Interior Office of the Inspector General, the Internal 

Revenue Service Tribal Government Section, the Bureau of Indian Affairs Law Enforcement Services, the Department of the Treasury Financial Crimes Enforcement 

Network, and the United States Attorneys Subcommittee on Indian Matters. The Indian Gaming Working Group is intended to enhance cooperation between agencies, 

obtain commitment to undertake an active role in effective regulation, pool federal 

resources, coordinate regulatory roles and functions, and develop investigative strategies. A Tribal Online Gaming Working Group might similarly bring together the 

NIGC, the Secretary of Commerce, and the Justice Department. 

Alternatively, a more structured approach that builds coordination into the 

NIGC’s regulatory functions could include the appointment via the TOGA of additional NIGC Commissioners charged solely with participating in regulation of Tribal 

Online Gaming. For example, two Tribal Online Gaming Commissioners could be 

added to the NIGC, perhaps a tribal member with experience in gaming regulation 

(appointed by the Secretary of Commerce in consultation with the Secretary of the 

Interior and the Attorney General), and a member of the Commerce Department 

agency charged with regulation of non-Tribal Online Gaming (appointed in the same 

manner as required for appointment to the Commerce Department agency). The authority of these Tribal Online Gaming Commissioners would be limited to the regulation of Tribal Online Gaming under the TOGA. They would not have regulatory 

authority over Indian gaming under IGRA, and their appointment would not require 

amending IGRA. The NIGC, acting with the additional Tribal Online Gaming Commissioners, should have the regulatory powers set forth in the TOGA. 

This format, with the addition of the Tribal Online Gaming Commissioners coupled with the expertise and experience of the NIGC, should result immediately and 

in the long term in the effective regulation of Tribal Online Gaming that is appropriately coordinated with the regulation of online gaming generally. 

2. Other Suggestions Related to Definitions, Consistency, and Clarity 

a. Definition of Tribal Online Gaming 

The legal term ‘‘Tribal Online Gaming,’’ should be used consistently throughout 

the bill. For instance, Section 4(1) references ‘‘Internet gaming’’ rather than Tribal 

Online Gaming. This type of inconsistency is more than a stylistic or semantic concern. The same way that ‘‘Indian gaming’’ is a legal term of art defined by and incorporated throughout IGRA, and both reflects and shapes the industry’s legal, policy, and regulatory environment, Tribal Online Gaming should be distinct and used 

consistently as defined by the TOGA. The TOGA’s definition of Tribal Online Gaming (Section 3(5)) should mirror the definition of state and commercial online gaming in federal legislation that authorizes such gaming. We also note that Section 

13(b) purports to automatically amend the statutory definition of Tribal Online 

Gaming when and if states are allowed to conduct online gaming beyond poker. We 

suggest that a cleaner way to achieve this might be through a definition that mirrors federal legalization of state online gaming. For instance: ‘‘The term ‘Tribal Online Gaming’ means gaming conducted over the Internet in accordance with this Act 

and extends to the same specific online games that federal law allows states to conduct.’’

b. Indian Lands 

Though not included in the definitions section, the TOGA uses the term ‘‘tribal 

land’’ (see Section 6(g)(2)). The definition of this term is not clear, though we believe 

the intent is to mirror the ‘‘Indian lands’’ defined in IGRA as reservation lands or 

trust and restricted lands over which a tribe exercises governmental authority. As 

IGRA’s definition of ‘‘Indian lands’’ and the Major Crimes Act’s definition of ‘‘Indian 

53

country’’ are the two most prevalent terms of art in federal law, we suggest using 

the term Indian lands with the same definition as appears in IGRA to avoid uncertainty, confusion, and litigation. 

c. Inapplicability of IGRA 

Similarly, to avoid litigation and uncertainty arising from confusion about how 

the TOGA and Tribal Online Gaming relate to Class II and Class III Indian gaming 

as defined by IGRA, we suggest clarifying that IGRA does not apply to Tribal Online Gaming, other than as expressly provided by the TOGA. In Section 12, we suggest adding the clear statement that no tribal-state compact is required for a tribe 

to conduct Tribal Online Gaming in compliance with the TOGA to avoid confusion 

with IGRA’s requirement for Class III gaming. 

d. Tribes as Primary Beneficiaries 

We concur that the TOGA’s policy goals, consistent with those of IGRA, remain 

principal goals of federal Indian policy, and align with the needs of tribal governments and communities. We therefore suggest considering whether tribes should be 

explicitly designated as the primary beneficiaries of Tribal Online Gaming, as required of Indian gaming under IGRA. 

e. Revenue Sharing 

Section 16 of the TOGA requires tribes participating in online gaming to pay one 

percent of gross gaming revenues (presumably, though not expressly, limited to 

Tribal Online Gaming revenues) into a fund that will be disbursed to tribes that 

choose not to conduct online gaming (‘‘Indian tribes that have opted out of participation in tribal online lending [sic] . . .’’). Though termed ‘‘Revenue Sharing,’’ this 

provision is modeled after California’s Revenue Sharing Trust Fund (see Rincon 

Band of Luiseno Mission Indians v. Schwarzenegger, 602 F.3d 1019 (9th Cir. 2010)), 

rather than the more typical revenue-sharing agreements that have sprung from 

IGRA’s tribal-state compact requirement for Class III gaming. We suggest that the 

goals of this provision could be achieved in ways that are more appropriately tailored to the purpose, and that do not cause further confusion about the limitations 

on revenue-sharing provisions in tribal-state compacts under IGRA. 

We thank the Committee for its consideration of this statement at an important 

juncture for Indian gaming as well as for online gaming. We would be happy to answer any questions or elaborate on the suggestions we offer here, and to address 

any other issues related to Tribal Online Gaming that the Committee deems pertinent. 

PREPARED STATEMENT OF HON. ROBERT ODAWI PORTER, PRESIDENT, SENECA NATION

OF INDIANS

Introduction 

Greetings. On behalf of the Seneca Nation of Indians (the ‘‘Nation’’), I submit the 

following preliminary comments to the Committee for its use as it shapes its draft 

legislation on tribal online gaming. 

On-line gaming by off-shore operators is an inevitable and competitive participant 

in the market in which the Nation conducts its gaming activities. Some estimates 

indicate that in 2010, between 10 and 15 million people in the United States bet 

billions of dollars online, even though it was illegal for companies to offer realmoney Internet gambling in the U.S. Americans will continue to bet online as long 

as there are sites they can access, and off-shore operators will always create sites 

Americans can access as long as there are billions of dollars to be made. 

Indian nations, including the Seneca Nation of Indians, have closely monitored 

the growing competitive threat which Internet gambling poses to our brick and mortar casino operations. Yet each tribal nation has been relegated to the sidelines as 

various bills were introduced and considered in this and prior sessions of the Congress. These bills have thus far not been enacted because of the potentially broad 

impact they would have on Internet providers, states and segments of the gaming 

industry. But as proposed, these bills should not be enacted because they would 

breach treaties and other agreements between the United States and Indian nations 

like the Seneca Nation of Indians. Moreover, these bills would limit tribal participation or require unfairly restrictive conditions on tribal involvement. In all instances, 

the bills were developed without Indian tribes. 

Our Nation commends the Committee for attempting to involve Indian nations in 

shaping a legislative alternative that responds to tribal concerns by drafting, and 

seeking tribal comment upon, the draft Tribal Online Gaming Act of 2012. However, 

as described more fully below, the Committee’s draft bill does not adequately ensure 

54

that tribal rights and interests are protected. Perhaps this is due to the unfortunate 

fact that there was a complete lack of tribal consultation and participation in the 

drafting of the Committee’s draft bill. At least for our part, the Nation had absolutely no inkling of what was to be in the Committee’s draft bill until you circulated 

it. In addition, most of the draft bill is very similar, if not identical in several respects, to H.R. 2366, the Internet Gambling Prohibition, Poker Consumer Protection 

and Strengthening UIGEA Act of 2011 introduced during the 112th Congress. 

What follows are a number of issues we have identified preliminarily in the Committee’s draft bill which should be substantially revised. 

Poker Only. We understand the Committee’s apparent effort to constrain the proposed new online authority to the scope of gaming—poker only—currently rumored 

to be under consideration by the U.S. Congress. However, the Committee draft’s definition of ‘‘tribal online gaming’’ is not as expansive as the ‘‘online gaming’’ definition found in H.R. 2366 and other previous bills which proposed to legalize Internet 

gambling facilities presumably to allow those facilities to offer other Class II type 

games in addition to poker. Indeed, many of the Internet gaming sites currently 

available include computer based games that mimic slot machines or video lottery 

games designated as Class II. A broader definition would facilitate a tribal nation’s 

ability to adapt its Internet gambling site quickly to accommodate future online 

gaming that may be legalized for others by the Congress. 

The draft legislation authorizes only online poker initially, but says that ‘‘[i]f subsequent federal law allows states to conduct online gaming in addition to online 

poker games, Indian tribes shall be offered the same right to conduct that online 

gaming.’’ Instead, the bill should authorize an Indian nation to conduct all forms 

of online gaming from day one, rather than just poker, and rather than waiting for 

additional federal legislation. On the basis of the USDOJ’s recent December 2011 

Wire Act opinion, federal law does not appear to prohibit intrastate online gaming 

if authorized by state law. If states do pursue or allow intrastate online gaming and 

such gaming proves to be lucrative, additional federal legislation may never come 

and tribal nation gaming operators could be placed at a significant competitive disadvantage by this initial limitation to only poker. 

As an aside, it should be noted that the draft bill contains one reference to the 

term ‘‘Internet gambling facility’’ (See Section 6 (d) (E) Safeguards Required of Licensee) and for consistency with the balance of the bill should be revised to read 

‘‘tribal online gaming’’ facility, and in the same vein, the draft bill should include 

definitions of ‘‘significant vendor’’, ‘‘remote gaming equipment’’, ‘‘controlling interest’’ 

and ‘‘Bots’’. 

Federal Oversight. The Committee’s draft bill would establish federal guidelines 

to assure that there is consistency in the regulation of Internet gaming (online 

poker) and thereby avoid a patchwork of rules and regulations. The Nation believes 

a single, federal-wide regulatory regime may prove to be beneficial not only for customers but for law enforcement and the regulators, and help ensure fairer competition for tribal nations seeking to engage in online gaming. 

Commerce Department. Designating the U.S. Commerce Department as the federal regulatory oversight agency for tribal online gaming is ill-advised and would 

be a significant mistake. The Commerce Department has only very limited experience working with Indian nations. It has no experience with gaming regulatory or 

enforcement activity or gaming policy. Consequently it would start out far behind 

and never catch up to the dynamic, fast-paced, and technologically-driven, worldwide competitive market. It will need to develop an infrastructure and expertise 

that will be subject to inherent bureaucratic obstacles frequently experienced by federal agencies. All of this federal ‘‘oversight’’ would result in delaying the entry of 

tribal operators into the online gaming market. 

National Indian Gaming Commission. In contrast to the U.S. Commerce Department, the National Indian Gaming Commission (NIGC) with its existing tribal gaming expertise and experience, would provide a more ready and capable regulatory 

structure with which the United States could oversee and regulate tribal online 

gaming. The NIGC already has over twenty years’ experience working with gaming 

tribes, it has already developed a data base of gaming sites and the lands that tribal 

nations govern. And it has a regulatory and training program in place, not just for 

the staff but for tribal leaders and employees. Even more compelling is the fact that 

the NIGC already has a system in place to conduct background investigations of 

gaming companies and principals. It works closely with the Federal Bureau of Investigations (FBI) to assist tribal nations in assessing criminal history information 

for background investigations. As an independent agency, the NIGC is exempt from 

time-consuming personnel policies relating to appointments and restrictive compensation requirements. As such, the NIGC is able to hire within weeks rather than 

the months other federal agencies normally take. Altogether, the NIGC’s experience, 

55

expertise in Indian gaming regulation and established infrastructure make it the 

only federal agency that can step right in and take charge of tribal online gaming 

regulation and oversight. 

Licensure Requirements. The licensing provisions of the draft bill include several 

scenarios in which tribal nations may conduct lawful online gaming, including in 

consortium with non-tribal entities (see below). Otherwise, we find generally acceptable the standards for licensure which are fairly restrictive and include safeguards 

to protect the consumer, to prevent minors from gambling, and to prevent fraud, 

money laundering and financing of terrorism. 

Opt-In/Opt-Out. The time limit for a tribal nation to opt in or opt out should be 

revised to be distinct from the time limit for publication of the list of participating 

tribes. As drafted both events would occur simultaneously. 

Location of Remote Gaming Equipment. The crucial language in the Committee’s 

draft that references the location of remote gaming equipment is unclear (e.g., ‘‘if 

the requirement applies to all significant vendors or other entities’’). 

Tribal Ordinances and Compliance with Other Federal Law. The Committee’s 

draft bill requires a tribal nation seeking to operate an online gaming site to adopt 

a tribal ordinance in accordance with federal standards and in compliance with any 

other federal law. Does this mean the Interstate Wire Act of 1961, the Unlawful 

Internet Gambling Enforcement Act of 2006 (UIGEA) and Internet laws that might 

be passed in the future? The inclusion of these Internet laws could be problematic 

given ongoing disagreements within the U.S. Department of Justice over whether 

and what Internet gaming is legal under the Wire Act and given the ambiguous language within UIGEA. As to future enactments of Internet gaming laws, tribal nations should not be required to comply with changing federal laws without their consent or meaningful involvement in the drafting of these laws. Even more troubling 

is the requirement that each tribal nation ordinance must be accompanied by the 

previous three years of financial records of the tribal nation, information on all organizational and related businesses and affiliates of the tribal nation, and a waiver 

of sovereign immunity even if the tribal nation is not intending to operate the online 

gaming itself. These requirements are much more expansive and intrusive than 

IGRA now requires. 

We must object to the peculiar provision in the Committee’s draft bill that requires federal disapproval of a tribal nation’s ordinance if the Secretary determines 

that the ‘‘tribal governing body was significantly and unduly influenced by any person in the adoption of the ordinance or resolution’’. Setting aside the odd nature of 

this standard, how exactly would the Secretary make such a determination? And in 

making such a determination, how would the Committee propose to guard against 

the Secretary him or herself being significantly and unduly influenced in making 

this determination? This is no specious concern, given the record of significant and 

undue influence upon the Congress itself in its consideration of online gaming legislation. 

State Jurisdiction. Section 9 is objectionable because it permits any State regulatory body that regulates casino gaming to ask the Secretary to designate it as a 

tribal qualified body for purposes of regulating tribal online gaming, including the 

review of applications, the issuance of licenses and carrying out other regulatory 

and enforcement functions. This is completely unacceptable. Under current IGRA 

sanctioned tribal-state compacts very few states provide regulatory and enforcement 

services to tribal nations, and then, only with the express consent of the tribe involved in exchange for other bargained for terms and conditions. In the few states 

where a state does have a role, it is generally limited to a review of tribal decisions 

made by the tribal regulatory agency. This section could embolden some states to 

overreach in negotiations with a tribal nation. 

State Standards. Section 9 also is problematic because it requires tribal regulations on minimum requirements to be substantially equivalent to a state’s regulations. Gaming tribes, including the Seneca Nation, have a very strong history of regulatory administration and compliance. It would be expected that these tribal nations likely would designate their existing tribal regulatory bodies or agencies to 

apply as tribal qualified bodies under the Act. Very few, if any tribes would permit 

a state to be eligible for designation as a qualified tribal regulatory body under the 

Act. Thus this reference to state regulations is both unnecessary and offensive. 

The revenue sharing section is worthwhile topic for discussion but it will require 

further refinement in several respects. It should be clarified whether the revenue 

will be shared with all non-gaming Indian tribes or just those tribes that have opted 

out. It also makes sense that revenue sharing be regionalized to benefit only those 

tribes within proximity of the gaming tribes. There needs to be some flexibility for 

the contributing tribes to decide the specific criteria for the uses set out in section 

7. Consideration must be given to the fact that gaming tribes in a few States alVerDate 0ct 09 2002 10:12 Feb 04, 2013 Jkt 078446 PO 00000 Frm 00059 Fmt 6601 Sfmt 6621 S:\DOCS\78446.TXT JACK
56

ready contribute gaming revenue to a revenue sharing account to avoid duplicative 

requirements. And, some thought should be given to the whether it makes sense to 

limit the revenue sharing to non-gaming, small tribes (population under 3,000) located in remote, isolated areas without any economic development opportunities. 

This issue is not easily resolved and requires the thoughtful input and involvement 

of all the tribes, regardless of whether they offer gaming. 

Gaming tribes already have in place social responsibility protections that include 

self-exclusion, compulsive gambling assistance and responsible gaming notices. Tribal nations with established programs should be allowed to grandfather their existing 

programs. 

Ambiguous Terms. The draft legislation makes imprecise or inconsistent use of 

key terms such as ‘‘gambling,’’ ‘‘gaming,’’ ‘‘Internet gaming,’’ ‘‘Internet poker,’’ ‘‘online gaming,’’ ‘‘tribal online gaming,’’ ‘‘tribal governing body’’ and ‘‘tribal qualified 

body.’’ Many key terms are not defined at all. We would hope that further revisions 

of the bill place greater emphasis on definition of key terms and consistent use of 

such concepts throughout. 

Non-Indian Entities in Consortia. The discussion draft appears to allow unrestricted participation in tribal online gaming by non-Indian entities so long as they 

are a part of a ‘‘consortium’’ that includes a tribal nation. Here, we see a risk of 

non-Indian competitors using affiliations with tribal nations to gain entry into the 

field of online gaming, particularly if there is no other legislative avenue available, 

or if the avenues that are available are more burdensome from a regulatory or financial perspective. We believe this provision should be substantially revised to ensure that the Act cannot be used in a way that would facilitate unfair entry into 

the field of tribal online gaming by non-Indian gaming competitors. 

Sovereign Immunity. Provisions of the Act appear to potentially impair the sovereign immunity of tribal nations, requiring a tribal nation to subject itself to the 

jurisdiction of the applicable courts of the United States and all applicable Federal 

laws relating to the operation of an Internet poker facility and associated activities. 

We object to any statutory abrogation of tribal nation immunity from suit. 

Relation to the Compact and State Involvement. Section 12 of the discussion draft 

provides that ‘‘Nothing in this Act (1) alters, diminishes, or otherwise impacts any 

right or obligation existing under a tribal-State compact approved pursuant to 

IGRA; or (2) requires the renegotiation of a compact . . . .’’ What this means and 

who this is intended to benefit is ambiguous. Most tribal-state compacts limit the 

tribal nation to conducting only those Class III games specifically listed therein. The 

discussion draft provision could be interpreted to place a limitation on a tribal nation’s ability to engage in online gaming, or at a minimum, create a compact dispute. We believe the discussion draft should be clarified to say that ‘‘tribal online 

gaming’’ does not require a compact with, or the consent of, any state. 

Conclusion. For all of the foregoing reasons, the discussion draft must be substantially overhauled and revised, and that can only happen with the active and open 

participation of tribal nations and their representatives. Please let us know how we 

can join with you in rehabilitating this discussion draft.

Æ