II

103D CONGRESS

1ST SESSION S. 1035

To amend the Indian Gaming Regulatory Act, and for other purposes.

IN THE SENATE OF THE UNITED STATES

MAY 26 (legislative day, APRIL 19), 1993

Mr. REID (for himself, Mr. BRYAN, Mr. GRAHAM, and Mr. SIMPSON) introduced the following bill; which was read twice and referred to the Committee on Indian Affairs

A BILL

To amend the Indian Gaming Regulatory Act, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. FINDINGS AND DECLARATION OF POLICY.

4 (a) FINDINGS.—Section 2(5) of the Indian Gaming

5 Regulatory Act (25 U.S.C. 2701(5)) is amended by insert6 ing ‘‘subject to the provisions of this Act’’ after ‘‘Indian

7 lands’’.

8 (b) POLICY.—Section 3(2) of such Act (25 U.S.C.

9 2702(2)) is amended by striking ‘‘by an Indian tribe’’.
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1 SEC. 2. DEFINITIONS.

2 (a) INDIAN LANDS.—Section 4(4) of the Indian Gam3 ing Regulatory Act (25 U.S.C. 2703(4)) is amended to

4 read as follows:

5 ‘‘(4) The term ‘Indian lands’ means lands over which

6 an Indian tribe exercises governmental power, and which

7 are located—

8 ‘‘(A) within the exterior boundaries of an In9 dian reservation and held in fee by the Indian tribe

10 for which such lands have been reserved;

11 ‘‘(B) within the exterior boundaries of the res12 ervation title to which is either held in trust by the

13 United States for the benefit of an Indian tribe or

14 member of such tribe or held by an Indian tribe or

15 member of such tribe subject to restriction by the

16 United States against alienation; or

17 ‘‘(C) outside the exterior boundaries of a recog18 nized reservation, as such boundaries existed on Oc19 tober 17, 1988, title to which is either held in trust

20 by the United States for the benefit of an Indian

21 tribe or held by an Indian tribe subject to restriction

22 by the United States against alienation.’’.

23 (b) INDIAN TRIBE.—Section 4(5)(A) of such Act (25

24 U.S.C. 2703(5)(A)) is amended by inserting ‘‘before the

25 date of the enactment of this Act’’ after ‘‘recognized’’.
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1 (c) CLASS III GAMING.—Section 4 of such Act (25

2 U.S.C. 2703) is amended—

3 (1) in paragraph (7)(A)(i)—

4 (A) in the matter preceding subclause (I),

5 by inserting after ‘‘therewith)’’ the following:

6 ‘‘except video bingo’’;

7 (B) in subclause (I), by inserting ‘‘(but not

8 limited to’’ after ‘‘including’’; and

9 (C) in the matter following subclause (III),

10 by inserting ‘‘, but not limited to,’’ after ‘‘loca11 tion)’’;

12 (2) in paragraph (7)(A)(ii)(II), by striking ‘‘re13 garding’’ and inserting ‘‘including (but not limited

14 to)’’;

15 (3) in paragraph (7)(B)(i), by inserting ‘‘(but

16 not limited to) house banking card games, pari17 mutuel wagering, casino games played with dice,

18 wheels and similar gaming equipment,’’ after ‘‘in19 cluding’’; and

20 (4) in paragraph (8), by inserting before the pe21 riod at the end the following: ‘‘including (but not

22 limited to) slot machines, electronic or

23 electromechanical facsimiles of any game of chance,

24 and any and all forms of electronic video games or
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1 devices, such as video bingo, video pull-tabs, video

2 keno, and video blackjack’’.

3 (d) SLOT MACHINE.—Section 4 of such Act (25

4 U.S.C. 2703) is amended by adding at the end thereof

5 the following:

6 ‘‘(11) The term ‘slot machine’ means any me7 chanical, electrical, or other device, contrivance, or

8 machine which, upon insertion of a coin, token, or

9 similar object therein, or upon payment of any con10 sideration whatsoever, is available to play or operate,

11 the play or operation of which, whether by reason of

12 the skill of the operator or application of the element

13 of chance, or both, may deliver or entitle the person

14 playing or operating the machine to receive cash or

15 tokens to be exchanged for cash or to receive mer16 chandise or any thing of value whatsoever, whether

17 the payoff is made automatically from the machine

18 or in any other manner whatsoever, including (but

19 not limited to) any and all forms of electronic video

20 games or devices such as video poker, video bingo,

21 video pull-tabs, video keno, and video blackjack.’’.

22 SEC. 3. CLASS II INDIAN GAMING RESTRICTED.

23 (a) REGULATION OF CLASS II GAMING.—Section

24 11(b) of the Indian Gaming Regulatory Act (25 U.S.C.

25 2710(b)) is amended—
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1 (1) in paragraph (1)—

2 (A) in subparagraph (A), by striking all

3 that follows after ‘‘entity’’ and inserting the fol4 lowing: ‘‘which conducts the authorized gaming

5 activity as part of a commercial, for-profit busi6 ness enterprise;’’; and

7 (B) by redesignating subparagraph (B) as

8 subparagraph (D) and inserting the following:

9 ‘‘(B) such gaming is not otherwise specifically

10 prohibited on Indian lands by Federal law;

11 ‘‘(C) permissible gaming is limited to the spe12 cific games and methods of play of gaming activities

13 expressly authorized by the laws of the State; and’’;

14 and

15 (2) in paragraph (2)—

16 (A) in subparagraph (E), by striking

17 ‘‘and’’ at the end;

18 (B) in subparagraph (F)—

19 (i) by amending clause (i) to read as

20 follows:

21 ‘‘(i) ensures that background investigations

22 are conducted on all financial backers, inves23 tors, mortgagees, lenders, security holders, and

24 other such persons or entities as well as on pri25 mary management officials, key employees of
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1 the gaming enterprise, and any other person en2 gaged in the operation of gaming or the ac3 counting of gaming assets and that oversight of

4 such officials, persons, or entities is conducted

5 on an ongoing basis; and’’; and

6 (ii) in clause (ii)—

7 (I) by amending subclause (I) to

8 read as follows:

9 ‘‘(I) tribal licenses for primary man10 agement officials, key employees of the

11 gaming enterprise, and any other person

12 engaged in the operation of gaming or the

13 accounting of gaming assets, with prompt

14 notification to the Commission of the issu15 ance of such licenses;’’; and

16 (II) by striking the period at the

17 end and inserting ‘‘; and’’; and

18 (C) by adding at the end the following:

19 ‘‘(G) all gaming activities shall be con20 ducted in conformity with those laws and regu21 lations (if any) of the State regarding specific

22 games allowed and methods of play, including

23 (but not limited to) periods of operation, limita24 tion on wagers, pot sizes, and losses.’’.
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1 (b) LICENSING.—Section 11(b)(4)(A) of such Act (25

2 U.S.C. 2710(b)(4)(A)) is amended to read as follows:

3 ‘‘(4)(A) A tribal ordinance or resolution may provide

4 for the licensing or regulation of class II gaming activities

5 owned by any person or entity other than the Indian tribe

6 and conducted on Indian lands, only if—

7 ‘‘(i) the regulations require that nontribally

8 owned class II gaming be conducted pursuant to

9 limitations, including (but not limited to) those on

10 hours or periods of operation and wager or pot lim11 its, at least as restrictive as those imposed under

12 State law, and

13 ‘‘(ii) the tribal licensing requirements include

14 the requirements described in the subclauses of sub15 paragraph (B)(i) and are at least as restrictive as

16 those established by State law governing similar

17 gaming within the jurisdiction of the State within

18 which such Indian lands are located. No person or

19 entity, other than the Indian tribe, shall be eligible

20 to receive a tribal license to own a class II gaming

21 activity conducted on Indian lands within the juris22 diction of the Indian tribe if such person or entity

23 would not be eligible to receive a State license to

24 conduct the same activity within the jurisdiction of

25 the State.’’.
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1 SEC. 4. REGULATION OF CLASS III GAMING.

2 (a) STATE-PERMITTED ACTIVITIES.—Section

3 11(d)(1) of the Indian Gaming Regulatory Act (25 U.S.C.

4 2710(d)(1)) is amended—

5 (1) by amending subparagraph (B) to read as

6 follows:

7 ‘‘(B) located in a State that permits the specific

8 games and methods of play of the gaming activities

9 expressly authorized by the laws of the State by any

10 person, organization, or entity which conducts the

11 authorized gaming activity as part of a commercial,

12 for-profit business enterprise,’’; and

13 (2) by redesignating subparagraph (C) as sub14 paragraph (D) and inserting after subparagraph (B)

15 the following new subparagraph:

16 ‘‘(C) limited to the specific games and methods

17 of play of gaming activities expressly authorized by

18 the laws of the State, and’’.

19 (b) STATE’S RIGHT OF FIRST REFUSAL OPTION.—

20 Section 11(d)(3)(A) of such Act (25 U.S.C.

21 2710(d)(3)(A)) is amended to read as follows:

22 ‘‘(3)(A) Any Indian tribe having jurisdiction over the

23 Indian lands upon which a class III gaming activity is to

24 be conducted shall request in writing that the State in

25 which such lands are located enter into negotiations for

26 the purpose of entering into a Tribal-State compact gov-
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1 erning the conduct of gaming activities. Upon receiving

2 such a request, the State may negotiate with the Indian

3 tribe to enter into such a compact, or, subject to para4 graph (7) of this subsection, decline to enter into negotia5 tions with the Indian tribe by informing the tribe in writ6 ing of such decision before the expiration of the 180-day

7 period following such request.’’.

8 (c) TRIBAL-STATE COMPACT STANDARDS.—Section

9 11(d)(3)(C)(vi) of such Act (25 U.S.C. 2710(d)(3)(C)(vi))

10 is amended by inserting ‘‘(but not limited to)’’ after ‘‘in11 cluding’’.

12 (d) JURISDICTION.—Section 11(d)(7) of such Act (25

13 U.S.C. 2710(d)(7)) is amended to read as follows:

14 ‘‘(7)(A) The United States district courts shall have

15 jurisdiction over—

16 ‘‘(i) any cause of action initiated by the United

17 States on behalf of an Indian tribe arising from the

18 failure of a State to conduct negotiations under

19 paragraph (3),

20 ‘‘(ii) any cause of action initiated by a State,

21 the United States or an Indian tribe to enjoin a

22 class III gaming activity located on Indian lands and

23 conducted in violation of this Act or Tribal-State

24 compact entered into under paragraph (3) that is in

25 effect, and
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1 ‘‘(iii) any cause of action initiated by the Sec2 retary to enforce the procedures prescribed under

3 subparagraph (I).

4 ‘‘(B) The United States may initiate a cause of action

5 described in subparagraph (A)(i) only if—

6 ‘‘(i) a 180-day period has passed since the In7 dian tribe requested the State to enter into negotia8 tions under paragraph (3)(A),

9 ‘‘(ii) a Tribal-State compact has not been en10 tered into under paragraph (3) within one year after

11 the date that negotiations between the Indian tribe

12 and the State commenced in good faith, and

13 ‘‘(iii) the specific games and methods of play of

14 class III gaming activity are expressly authorized by

15 the laws of the State.

16 ‘‘(C) In any action described in subparagraph (A)(i),

17 the burden of proof shall be upon the United States to

18 prove that the State has failed to negotiate with the Indian

19 tribe in good faith to conclude a Tribal-State compact gov20 erning the conduct of gaming activities. In determining

21 whether a State has negotiated in good faith, the court—

22 ‘‘(i) may take into account the public interest,

23 public safety, criminality, financial integrity, and ad24 verse economic impacts on existing gaming activities
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1 on either Indian lands or within the State or States

2 concerned, or both,

3 ‘‘(ii) shall consider any demand by the State for

4 direct taxation of the Indian tribe or of any Indian

5 lands as evidence that the State has not negotiated

6 in good faith,

7 ‘‘(iii) shall not consider a State’s refusal to ne8 gotiate on terms which differ from State laws and

9 regulations regarding gaming activities as evidence

10 of failure to negotiate in good faith, and

11 ‘‘(iv) shall not consider reliance upon a legal in12 terpretation, sufficient under Federal Rules of Civil

13 Procedure, rule 11, of the requirements of the In14 dian Gaming Regulatory Act as evidence of failure

15 to negotiate in good faith.

16 ‘‘(D) It shall be a defense to an action brought under

17 paragraph (3) that—

18 ‘‘(i) the tribe has not conducted negotiations

19 with the State on a good-faith basis,

20 ‘‘(ii) the tribe has conducted gaming activities

21 on its lands, or allowed gaming activities to be con22 ducted on its lands, in violation of the provisions of

23 this Act during a 180-day period preceding initiation

24 of such action, or
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1 ‘‘(iii) the specific games and methods of play of

2 the class III gaming activity are not expressly au3 thorized by the laws of the State.

4 ‘‘(E) If, in any action described in subparagraph

5 (A)(i), the court finds that the State has failed to nego6 tiate in good faith with the Indian tribe to conclude a

7 Tribal-State compact governing the conduct of gaming ac8 tivities, the court shall order the State and the Indian

9 tribe to conclude such a compact within a 60-day period.

10 ‘‘(F) If a State and an Indian tribe fail to conclude

11 a Tribal-State compact governing the conduct of gaming

12 activities on the Indian lands subject to the jurisdiction

13 of such Indian tribe within the 60-day period provided in

14 the order of a court issued under subparagraph (E), the

15 Indian tribe and the State shall each submit to a mediator

16 appointed by the court a proposed compact that represents

17 their last best offer for a compact. The mediator shall se18 lect from the two proposed compacts the one which best

19 comports with the terms of this Act and any other applica20 ble Federal law and with the findings and order of the

21 court.

22 ‘‘(G) The mediator appointed by the court under sub23 paragraph (F) shall submit to the State and the Indian

24 tribe the compact selected by the mediator under subpara25 graph (F).
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1 ‘‘(H) If a State consents to a proposed compact dur2 ing the 60-day period beginning on the date on which the

3 proposed compact is submitted by the mediator to the

4 State under subparagraph (G), the proposed compact shall

5 be treated as a Tribal-State compact entered into under

6 paragraph (3).

7 ‘‘(I) If the State does not consent during the 60-day

8 period described in subparagraph (H) to a proposed com9 pact submitted by a mediator under subparagraph (G),

10 the mediator shall notify the Secretary and the Secretary

11 shall prescribe, in consultation with the Indian tribe, pro12 cedures—

13 ‘‘(i) which are consistent with the proposed

14 compact selected by the mediator under subpara15 graph (F), the provisions of this Act, and the rel16 evant provisions of the laws of the State, and

17 ‘‘(ii) under which class III gaming may be con18 ducted on the Indian lands over which the Indian

19 tribe has jurisdiction.

20 ‘‘(J) If the State expressly declines to negotiate for

21 a Tribal-State compact pursuant to paragraph (3)(A), or

22 if the State does not consent during the 60-day period de23 scribed in subparagraph (H) to a proposed compact sub24 mitted by a mediator under subparagraph (G), the tribe,

25 in the former case, may notify the Secretary, or the medi-
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1 ator, in the latter case, shall notify the Secretary and the

2 Secretary shall prescribe upon such notification, in con3 sultation with the Indian tribe, procedures—

4 ‘‘(i) which are consistent with, where applicable,

5 the proposed compact selected by the mediator

6 under subparagraph (F), the provisions of this Act,

7 and the relevant provisions of the laws of the State,

8 and

9 ‘‘(ii) under which class III gaming may be con10 ducted on the Indian lands over which the tribe has

11 jurisdiction.

12 ‘‘(K) For the purposes of this section, failure of the

13 State to expressly decline a tribal request to enter into

14 negotiations for a Tribal-State compact within the 180-

15 day period under paragraph (3)(A) shall be deemed a dec16 lination, whereupon the tribe may notify the Secretary

17 under subparagraph (J) for the prescription of procedures

18 allowing for class III gaming.

19 ‘‘(L) A mediator appointed by the court may not se20 lect a proposed compact within a State that violates an

21 existing law of that State regulating class III gaming, or

22 construe an authorization by a State of one form of class

23 III gaming as an authorization for all forms of class III

24 gaming.’’.
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1 (e) CHANGES IN STATE OR TRIBAL LAW.—Section

2 11(d) of such Act (25 U.S.C. 2710(d)) is amended by add3 ing at the end the following:

4 ‘‘(10) Except as provided by paragraph (2)(D), a

5 State or tribe may request in writing to enter into negotia6 tions based on the enactment or adoption of a State law

7 or tribal ordinance or resolution that amends, repeals, or

8 otherwise affects a Tribal-State compact in effect pursu9 ant to this subsection. A request under this paragraph

10 shall be treated as a request made under paragraph (3),

11 except that the Tribal-State compact shall remain in effect

12 and gaming may be conducted pursuant to such compact

13 during the negotiation process.’’.

14 SEC. 5. NONRESERVATION LANDS; GAMING ON AFTER AC15 QUIRED LANDS.

16 (a) PROHIBITION.—Subsection (a) of section 20 of

17 the Indian Gaming Regulatory Act (25 U.S.C. 2719(a))

18 is amended to read as follows:

19 ‘‘(a) Gaming regulated by this Act shall not be con20 ducted on Indian lands which, on or after October 17,

21 1988, are acquired by any Indian tribe, are taken into

22 trust by the United States, or are first subject to a restric23 tion against alienation by the United States unless—
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1 ‘‘(1) such lands are located in Oklahoma and

2 are within the boundaries of the Indian tribe’s

3 former reservation, as defined by the Secretary, or

4 ‘‘(2) such lands are located in a State other

5 than Oklahoma and are within the Indian tribe’s

6 last recognized reservation within the State or

7 States within which such Indian tribe is presently lo8 cated.’’.

9 (b) REPEAL.—Subsection (b) of section 20 of the In10 dian Gaming Regulatory Act (25 U.S.C. 2719(a)) is re11 pealed and subsections (c) and (d) are redesignated as

12 subsections (b) and (c), respectively.

13 SEC. 6. REPORTING AND BOOKKEEPING.

14 The Indian Gaming Regulatory Act (25 U.S.C. 2701

15 et seq.) is amended by inserting after section 21 the fol16 lowing new section:

17 ‘‘REPORTING AND BOOKKEEPING

18 ‘‘SEC. 21A. (a) Within 90 days after the date of the

19 enactment of this section, the Secretary of the Treasury

20 shall issue such regulations as may be necessary to require

21 gaming establishments authorized pursuant to this Act to

22 be subject to the same reporting and recordkeeping re23 quirements as those which are applicable to a casino or

24 gambling casino referred to in section 103.11(i)(7)(i) of

25 part 103 of title 31 of the Code of Federal Regulations
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1 in order to ensure a high degree of usefulness in criminal,

2 tax, and regulatory matters.

3 ‘‘(b) In the administration of this Act, an authoriza4 tion provided by a State for one form of class III gaming

5 shall not be construed as an authorization of all forms of

6 class III gaming for purposes of negotiations between a

7 State and a tribe.

8 ‘‘(c) In the administration of this Act, the United

9 States district courts shall have sole jurisdiction over con10 tract disputes between tribes and contract operators of In11 dian gaming establishments.’’.

12 SEC. 7. BACKGROUND INVESTIGATIONS.

13 (a) ROLE OF ATTORNEY GENERAL.—The Indian

14 Gaming Regulatory Act (25 U.S.C. 2701 et seq.), as

15 amended by section 5 of this Act, is amended by inserting

16 after section 21A the following new section:

17 ‘‘BACKGROUND INVESTIGATIONS

18 ‘‘SEC. 21B. (a) The Attorney General shall conduct

19 background investigations—

20 ‘‘(1) to determine the suitability of each individ21 ual, person or entity (including individuals compris22 ing such entity, serving on the board of directors of

23 a corporation, and stockholders of a corporation)

24 listed in section 12(a)(1)(A) to be involved in class

25 III gaming activities under this Act;
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1 ‘‘(2) to determine the suitability of any finan2 cial backer, investor, mortgagee, lender, security

3 holder, or other such person or entity to be involved

4 in class III gaming activities under this Act;

5 ‘‘(3) to determine the suitability of any primary

6 management official, or key employee of a class III

7 gaming activity under this Act, or any other person

8 or entity engaged in class III gaming activities, or

9 the accounting of class III gaming assets, under this

10 Act, to continue to engage in such activities;

11 ‘‘(4) to assist the Commission in carrying out

12 sections 7(b) and 12; and

13 ‘‘(5) otherwise necessary with respect to imple14 menting class III gaming activities pursuant to this

15 Act.

16 ‘‘(b) For the purposes of this Act, a background in17 vestigation shall include (but not be limited to)—

18 ‘‘(1) criminal history, especially criminal history

19 with respect to organized crime;

20 ‘‘(2) taxpayer return and return information;

21 ‘‘(3) immigration information;

22 ‘‘(4) records, held by any entity of the Federal

23 Government, which are not described in paragraphs

24 (1), (2), or (3); and

25 ‘‘(5) records held by State entities.
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1 ‘‘(c) For the purposes of subsection (b)—

2 ‘‘(1) the Attorney General is authorized to uti3 lize the system devised under section 242(a)(3)(A)(i)

4 of the Immigration and Nationality Act to determine

5 if an individual is an alien; and

6 ‘‘(2) returns and return information (as such

7 terms are defined in section 6103(b) of the Internal

8 Revenue Code of 1986) shall be open to inspection

9 by, or disclosure to, the Attorney General and other

10 officers and employees of the Department of Justice

11 and the Commission, subject to the procedures and

12 recordkeeping required under subsection (p) of such

13 section 6103(b).’’.

14 (b) CONFORMING AMENDMENTS.—(1) Paragraph (3)

15 of section 7(b) of such Act (25 U.S.C. 2706(b)) is amend16 ed to read as follows:

17 ‘‘(3) in consultation with the Attorney General

18 pursuant to section 21B, shall conduct or cause to

19 be conducted such background investigations as may

20 be necessary to carry out the duties of the Commis21 sion under this Act with respect to class II gam22 ing;’’.

23 (2) Section 12 of such Act (25 U.S.C. 2711), as

24 amended by section 3 of this Act, is amended—
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1 (A) in subsection (a)(1), by striking ‘‘the Com2 mission shall’’ and inserting ‘‘the Commission, in

3 consultation with the Attorney General pursuant to

4 section 21B, shall’’; and

5 (B) in subsection (e), by striking ‘‘the Commis6 sion determines’’ and inserting ‘‘the Commission, in

7 consultation with the Attorney General pursuant to

8 section 21B, determines’’.

9 SEC. 8. CRIMINAL LAWS.

10 Section 1166 of title 18, United States Code, is

11 amended to read as follows:

12 ‘‘§ 1166. Gambling Indian country

13 ‘‘(a) Subject to subsection (c), for purposes of Fed14 eral law, all State laws pertaining to the licensing, regula15 tion, or prohibition of gambling, including (but not limited

16 to) criminal sanctions applicable thereto, shall apply in In17 dian country in the State in the same manner and to the

18 same extent as such laws apply elsewhere in the State.

19 ‘‘(b) Whoever in Indian country is guilty of any act

20 or omission involving gambling, whether or not conducted

21 or sanctioned by an Indian tribe, which, although not

22 made punishable by any enactment of Congress, would be

23 punishable if committed or omitted within the jurisdiction

24 of the State in which the act or omission occurred, under

25 the laws governing the licensing, regulation, or prohibition
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1 of gambling in force at the time of such act or omission,

2 shall be guilty of a like offense and subject to a like pun3 ishment.

4 ‘‘(c) For the purpose of this section, the term ‘gam5 bling’ does not include—

6 ‘‘(1) class I gaming or class II gaming regu7 lated by the Indian Gaming Regulatory Act, or

8 ‘‘(2) class III gaming conducted under a Tribal9 State compact approved by the Secretary of the In10 terior under section 11(d)(8) of the Indian Gaming

11 Regulatory Act that is in effect.

12 ‘‘(d) The United States shall have exclusive jurisdic13 tion over criminal prosecutions of violations of State gam14 bling laws that are made applicable under this section to

15 Indian country, unless—

16 ‘‘(1) an Indian tribe pursuant to a Tribal-State

17 compact approved by the Secretary of the Interior

18 under section 11(d)(8) of the Indian Gaming Regu19 latory Act, or under any other provision of Federal

20 law, has consented to the transfer to the State of

21 criminal jurisdiction with respect to gambling on the

22 lands of the Indian tribe, or

23 ‘‘(2) authority has been granted to a State to

24 enforce the criminal laws of the State on Indian

25 lands within the State pursuant to section 1162 of
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1 this title, or any other provision of Federal law

2 which authorizes exercise of such criminal jurisdic3 tion by a State, which authority shall be concurrent

4 with the United States with respect to violations also

5 made violations of Federal law under subsection (a)

6 of this section.’’.

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