II

103D CONGRESS

2D SESSION S. 2230

To amend the Indian Gaming Regulatory Act.

IN THE SENATE OF THE UNITED STATES

JUNE 23 (legislative day, JUNE 7), 1994

Mr. INOUYE (for himself and Mr. MCCAIN) 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.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Indian Gaming Regu5 latory Act Amendments Act of 1994’’.

6 SEC. 2. AMENDMENTS.

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

8 et seq.) is amended as follows:

9 (1) Section 2 of the Act (25 U.S.C. 2701) is

10 amended to read as follows:

11 ‘‘SEC. 2. FINDINGS REGARDING INDIAN GAMING.

12 ‘‘The Congress finds that—
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1 ‘‘(1) Indian tribal governments are engaged in

2 the operation of gaming activities on Indian lands as

3 a means of generating tribal governmental revenue

4 and are licensing such activities;

5 ‘‘(2) clear Federal standards and regulations

6 for the conduct of gaming on Indian lands will assist

7 tribal governments in assuring the integrity of gam8 ing activities conducted on Indian lands;

9 ‘‘(3) a principal goal of the United States’ Fed10 eral-Indian policy is to promote tribal economic de11 velopment, tribal self-sufficiency, and strong tribal

12 government;

13 ‘‘(4) while Indian tribal governments have the

14 right to regulate the operation of gaming activities

15 on Indian lands if such gaming activities are not

16 specifically prohibited by Federal law and are con17 ducted within a State which does not prohibit such

18 activities as a matter of criminal law and public pol19 icy, the Congress has the authority to regulate the

20 privilege of doing business in Indian country;

21 ‘‘(5) systems for the regulation of gaming ac22 tivities on Indian lands should conform to federally23 established minimum regulatory requirements;

24 ‘‘(6) the operation of gaming activities on In25 dian lands has had a significant impact on com-
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1 merce with foreign nations, among the several States

2 and with the Indian tribes; and

3 ‘‘(7) the United States Constitution vests the

4 Congress with the powers to ‘* * * regulate Com5 merce with foreign Nations, and among the several

6 States, and with the Indian tribes * * *’ and this

7 Act is enacted in the exercise of those powers.’’.

8 (2) Section 3 of the Act (25 U.S.C. 2702) is

9 amended as follows:

10 ‘‘SEC. 3. DECLARATION OF POLICY REGARDING INDIAN

11 GAMING.

12 ‘‘The purpose of this Act is—

13 ‘‘(1) to provide a statutory basis for the con14 duct of gaming activities on Indian lands as a means

15 of promoting tribal economic development, self-suffi16 ciency, and strong tribal governments;

17 ‘‘(2) to provide a statutory basis for the regula18 tion of gaming activities on Indian lands by an In19 dian tribal government adequate to shield such ac20 tivities from organized crime and other corrupting

21 influences, to ensure that an Indian tribal govern22 ment is the primary beneficiary of the operation of

23 gaming activities, and to ensure that gaming is con24 ducted fairly and honestly by both the operator and

25 players; and
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1 ‘‘(3) to declare that the establishment of inde2 pendent Federal regulatory authority for the conduct

3 of gaming activities on Indian lands, the establish4 ment of Federal standards for the conduct of gam5 ing activities on Indian lands, and the establishment

6 of a National Indian Gaming Commission are nec7 essary to address congressional concerns regarding

8 the conduct of gaming activities on Indian lands and

9 to protect such gaming as a means of generating

10 tribal revenue.’’.

11 (3) Section 4 of the Act (25 U.S.C. 2703) is

12 amended as follows:

13 ‘‘SEC. 4. DEFINITIONS.

14 ‘‘For purposes of this Act:

15 ‘‘(1) The term ‘Attorney General’ means the

16 Attorney General of the United States.

17 ‘‘(2) The term ‘banking game’ means any game

18 of chance that is played with the house as a partici19 pant in the game, where the house takes on all play20 ers, collects from all losers, and pays all winners,

21 and the house can win.

22 ‘‘(3) The term ‘Chairman’ means the Chairman

23 of the National Indian Gaming Commission.

24 ‘‘(4) The term ‘Class I gaming’ means social

25 games played solely for prizes of minimal value or
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1 traditional forms of Indian gaming engaged in by in2 dividuals as a part of, or in connection with, tribal

3 ceremonies or celebrations.

4 ‘‘(5)(A) The term ‘Class II gaming’ means—

5 ‘‘(i) the game of chance commonly known

6 as bingo or lotto (whether or not electronic,

7 computer, of other technologic aids are used in

8 connection therewith)—

9 ‘‘(I) which is played for prizes, includ10 ing monetary prizes,

11 ‘‘(II) in which the holder of the card

12 covers such numbers or designations when

13 objects, similarly numbered or designated,

14 are drawn or electronically determined, and

15 ‘‘(III) in which the game is won by

16 the first person covering a previously des17 ignated arrangement of numbers or des18 ignations on such cards,

19 including, if played in the same location, pull20 tabs, punch boards, tip jars, instant bingo, and

21 other games similar to bingo, and

22 ‘‘(ii) card games that—

23 ‘‘(I) are explicitly authorized by the

24 laws of the State, or
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1 ‘‘(II) are not prohibited as a matter of

2 State criminal law and are legally played

3 at any location in the State, but only if

4 such card games are played in conformity

5 with those laws and regulations (if any) of

6 the State regarding hours or periods of op7 eration of such card games or limitations

8 on wagers or pot sizes in such card games.

9 ‘‘(B) The term ‘Class II gaming’ does not in10 clude—

11 ‘‘(i) any banking card games, including

12 baccarat, chemin de fer, or blackjack (21) or

13 ‘‘(ii) gambling devices as defined in section

14 1(a)(2) or section 1(a)(3) of the Act of January

15 2, 1951 (15 U.S.C. 1171(a) (2) or (3)), or slot

16 machines of any kind.

17 ‘‘(6) The term ‘Class III gaming’ means all

18 forms of gaming that are not class I gaming or class

19 II gaming.

20 ‘‘(7) The term ‘Commission’ means the Na21 tional Indian Gaming Commission established pursu22 ant to section 5 of this Act.

23 ‘‘(8) The term ‘compact’ means the regulatory

24 regime for operating class III gaming entered into

25 either by a tribe and the Secretary, or a tribe and
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1 a State, published pursuant to section 10 of this

2 Act, and includes procedures in lieu of a compact

3 published by the Secretary prior to the effective date

4 of the Indian Gaming Regulatory Act Amendments

5 Act of 1994.

6 ‘‘(9) The term ‘electronic, computer, or other

7 technologic aid’ means a device, such as a computer,

8 telephone, cable, television, satellite, or bingo blower,

9 which, when used—

10 ‘‘(A) is not a game of chance, a gambling

11 device, or a slot machine;

12 ‘‘(B) merely assists a player or the playing

13 of a game; and

14 ‘‘(C) is operated according to applicable

15 Federal communications law.

16 ‘‘(10) The term ‘electronic or electromechanical

17 facsimile’ means any gambling device as defined in

18 section 1(a)(2) or section 1(a)(3) of the Act of Jan19 uary 2, 1951 (15 U.S.C. 1171(a) (2) or (3)).

20 ‘‘(11) The term ‘gambling device’ means any

21 gambling device as defined in section 1(a)(2) or sec22 tion 1(a)(3) of the Act of January 2, 1951 (15

23 U.S.C. 1171(a) (2) or (3)), including any electronic

24 or electromechanical facsimile.
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1 ‘‘(12) The term ‘gaming activity’ means a game

2 of chance, whether electronic, electromechanical or

3 otherwise, that is distinguished from another game

4 of chance by its principal characteristics.

5 ‘‘(13) The term ‘gaming-related contract’

6 means any agreement under which an Indian tribe

7 or its agent procures gaming materials, supplies,

8 equipment or services which are used in the conduct

9 of a class II or class III gaming activity, or financ10 ing contracts or agreements for any facility in which

11 a gaming activity is to be conducted.

12 ‘‘(14) The term ‘gaming-related contractor’

13 means any person, corporation, partnership or other

14 entity entering into a gaming-related contract with

15 an Indian tribe or its agent, including any person,

16 corporation, partnership or other entity among

17 which there is common ownership.

18 ‘‘(15) The term ‘gaming service industry’

19 means any form of enterprise which provides goods

20 or services which are used in conjunction with any

21 class II or class III gaming activity, including, with22 out limitation, travel services, security, gaming

23 schools, manufacturers, distributors and servicers of

24 gaming devices, garbage haulers, linen suppliers,

25 maintenance and cleaning services, food and non-al-
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1 cohol beverage purveyors and construction compa2 nies.

3 ‘‘(16) The term, ‘key employee’ means any nat4 ural person employed in a gaming operation licensed

5 pursuant to this Act in a supervisory capacity or em6 powered to make any discretionary decision with re7 gard to the gaming operation, including, without

8 limitation, pit bosses, shift bosses, credit executives,

9 cashier supervisors, gaming facility managers and

10 assistant managers, and managers or supervisors of

11 security employees.

12 ‘‘(17) The term ‘lottery game’ means a scheme

13 for the distribution of a prize by chance where mul14 tiple players pay for the opportunity to win the prize

15 and select a chance either (A) from a finite number

16 of chances where the winning combinations are pre17 determined but concealed prior to purchase and the

18 selection of each choice depletes the number of

19 chances remaining, or (B) where the winner or win20 ners are determined by random selection after all en21 tries are completed, including where a time limit for

22 entry has passed, when a predetermined number of

23 players have entered, or when a predetermined sum

24 of money has been wagered.
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1 ‘‘(18) The term ‘net revenues’ means gross rev2 enues of an Indian gaming activity less amounts

3 paid out as, or paid for, prizes and total operating

4 expenses, excluding management fees.

5 ‘‘(19) The term ‘notify’ means the act of send6 ing a notice in writing, delivered by certified mail,

7 with receipt requested, to the chief executive officer,

8 and the chief legal officer of a State or of an Indian

9 tribe; and, for purposes of this Act, the date of noti10 fication shall be the actual date of receipt as evi11 denced by the return receipt.

12 ‘‘(20) The term ‘other games of chance’ means

13 any class III gaming activity which is not a gam14 bling device, a lottery game, a banking game, or par15 imutuel wagering.

16 ‘‘(21) The term ‘parimutuel wagering’ means a

17 system of betting on contests involving humans or

18 animals in which bets are pooled and the winners

19 are paid according to odds determined by the volume

20 of betting on the entries, with or without a deduc21 tion for the operator.

22 ‘‘(22) The term ‘person’ means an Indian tribe,

23 individual, firm, corporation, association, partner24 ship, trust, consortium, joint venture, or commercial

25 entity.
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1 ‘‘(23) The term ‘principal characteristics’

2 means the pace of play, complexity or type of choices

3 for the player, appearance of the activity, nature of

4 the interaction with the operator, other players or

5 machine, and other attributes of a gaming activity

6 which would be perceived by and be significant to a

7 player familiar with games of chance.

8 ‘‘(24) The term ‘prohibited as a matter of State

9 criminal law’ means an activity in a State which,

10 under the law of that State, is subject to prosecution

11 and a criminal sanction.

12 ‘‘(25) The term ‘Secretary’ means the Secretary

13 of the Interior.

14 ‘‘(26) the term ‘slot machine’ means any player

15 activated gaming device involving mechanical, elec16 tronic, electromechanical, or computer technology, or

17 any combination thereof which—

18 ‘‘(A) accepts anything of monetary value,

19 whether coin, currency or tokens, to initiate the

20 operation of the gaming device;

21 ‘‘(B) has as an integral part, a system of

22 generating infinite random numbers or com23 binations thereof, which determine the success24 ful operation of the device;
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1 ‘‘(C) rewards the successful operation of

2 the device with anything of monetary value; and

3 ‘‘(D) rewards the successful operation of

4 the device solely on the basis of chance.

5 ‘‘(27) The term ‘social gaming activity’ means

6 a gaming activity which is not—

7 ‘‘(A) a commercial, governmental, chari8 table or systematic gaming enterprise;

9 ‘‘(B) where no person, organization or en10 tity other than the participants obtains or re11 ceives money or something of more than mini12 mal value from the gaming activity, whether by

13 taking a percentage of wagers or winnings or by

14 banking the game;

15 ‘‘(C) where no person, organization or en16 tity charges admission or other fees to partici17 pate in the game; and

18 ‘‘(D) where such gaming activity is not

19 conducted in places ordinarily and regularly

20 used for gaming and is only played for nominal

21 value.’’.

22 (4) Section 5 of the Act (25 U.S.C. 2704) is

23 amended to read as follows:
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1 ‘‘SEC. 5. ESTABLISHMENT OF THE NATIONAL INDIAN GAM2 ING COMMISSION.

3 ‘‘(a) There is established as an independent agency

4 of the United States a Commission to be known as the

5 National Indian Gaming Commission.

6 ‘‘(b)(1) COMPOSITION OF THE COMMISSION.—The

7 Commission shall be composed of five full-time members

8 who shall be appointed by the President with the advice

9 and consent of the Senate.

10 ‘‘(2) Each member of the Commission shall be a citi11 zen of the United States.

12 ‘‘(3) Each member of the Commission shall devote

13 his entire time and attention to the business of the Com14 mission and shall not—

15 ‘‘(A) pursue any other business or occupation

16 or hold any other office;

17 ‘‘(B) be actively engaged in or have any direct

18 pecuniary interest in gaming activities;

19 ‘‘(C) have any pecuniary interest in any busi20 ness or organization holding a gaming license under

21 this Act or doing business with any person or orga22 nization licensed under this Act.

23 ‘‘(D) have been convicted of a felony or gaming

24 offense; or
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1 ‘‘(E) have any financial interest in, or manage2 ment responsibility for, any gaming-related contract

3 or any other contract approved pursuant to this Act.

4 ‘‘(4) Not more than three of such members of the

5 Commission shall be members of the same political party

6 and in making appointments, members of different politi7 cal parties shall be appointed alternatively as nearly as

8 may be practicable.

9 ‘‘(5) At least two members of the Commission shall

10 be enrolled members of any Indian tribe.

11 ‘‘(6) The Commission shall be composed of the most

12 qualified persons available, provided—

13 ‘‘(A) one member of the Commission must be a

14 certified public accountant with at least 5 years of

15 progressively responsible experience in accounting

16 and auditing, and a comprehensive knowledge of the

17 principles and practices of corporate finance; and

18 ‘‘(B) one member of the Commission must be

19 selected with special reference to his training and ex20 perience in the fields of investigation or law enforce21 ment.

22 ‘‘(7) The Attorney General of the Untied States shall

23 conduct a background investigation on any person consid24 ered for appointment to the Commission, with particular

25 regard to the nominee’s financial stability, integrity, and
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1 responsibility and his reputation for good character, hon2 esty, and integrity.

3 ‘‘(c) TERMS OF OFFICE.—(1) Each member of the

4 Commission shall hold office of a term of five years.

5 ‘‘(2) Initial appointments to the Commission shall be

6 for terms as follows—

7 ‘‘(A) the Chairman for 5 years;

8 ‘‘(B) one member for 4 years;

9 ‘‘(C) one member of 3 years; and

10 ‘‘(D) and the remaining members for terms of

11 2 years each.

12 ‘‘(3) After the initial appointments, all members shall

13 be appointed for terms of 5 years; provided that no mem14 ber shall serve more than two terms of 5 years each.

15 ‘‘(d) VACANCIES.—(1) The persons appointed by the

16 President to serve as Chairman and members of the Com17 mission shall serve in such capacities throughout their en18 tire terms and until their successors shall have been duly

19 appointed and qualified, unless the Chairman or a member

20 of the Commission has been removed for cause under

21 paragraph (2) of this subsection.

22 ‘‘(2) The Chairman or any member of the Commis23 sion may only be removed from office before the expiration

24 of their term of office by the President for neglect of duty,

25 or malfeasance in office, or for other good cause shown.
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1 ‘‘(3) Appointments to fill vacancies on the Commis2 sion shall be for the unexpired term of the member to be

3 replaced.

4 ‘‘(e) QUORUM.—Three members of the Commission,

5 at least one of which is the Chairman or Vice Chairman,

6 shall constitute a quorum.

7 ‘‘(f) CHAIRMAN.—The President shall designate one

8 of the five members of the Commission to serve as Chair9 man of the Commission.

10 ‘‘(g) VICE CHAIRMAN.—The Commission shall select,

11 by majority vote, one of the members of the Commission

12 to serve as Vice Chairman. The Vice Chairman shall serve

13 as Chairman of the Commission in the Chairman’s ab14 sence and shall exercise such other powers as may be dele15 gated by the Chairman.

16 ‘‘(h) MEETINGS.—(1) The Commission shall meet at

17 the call of the Chairman or a majority of its members.

18 ‘‘(2) A majority of the members of the Commission

19 shall determine any action of the Commission.

20 ‘‘(i) COMPENSATION.—(1) The Chairman of the

21 Commission shall be paid at a rate equal to that of level

22 III of the Executive Schedule under section 5316 of title

23 5, United States Code.

24 ‘‘(2) The members of the Commission shall each be

25 paid at a rate equal to that of level IV of the Executive
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1 Schedule under section 5316 of title 5, United States

2 Code.

3 ‘‘(3) All members of the Commission shall be reim4 bursed in accordance with title 5, United States Code, for

5 travel, subsistence, and other necessary expenses incurred

6 by them in the performance of their duties.’’.

7 (5) Section 6 of the Act (25 U.S.C. 2705) is amended

8 to read as follows:

9 ‘‘SEC. 6. POWERS OF THE CHAIRMAN.

10 ‘‘(a) The Chairman shall serve as the chief executive

11 officer of the Commission.

12 ‘‘(b) Subject to the provisions of subsection (c) of this

13 section, the Chairman shall—

14 ‘‘(1) employ and supervise such personnel as is

15 deemed necessary to carry out the functions of the

16 Commission, and assign work among such personnel;

17 ‘‘(2) use and expend Federal funds and funds

18 collected pursuant to section 15 of this Act; and

19 ‘‘(3) contract for the services of other profes20 sional, technical and operational personnel and con21 sultants as may be necessary to the performance of

22 the Commission’s responsibilities under this Act.

23 ‘‘(c) In carrying out any of the functions pursuant

24 to this section, the Chairman shall be governed by the gen25 eral policies of the Commission and by such regulatory de-
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1 cisions, findings and determinations as the Commission

2 may by law be authorized to make.’’.

3 (6) Section 7 of the Act (25 U.S.C. 2706) is amended

4 to read as follows:

5 ‘‘SEC. 7. POWERS AND AUTHORITY OF THE COMMISSION.

6 ‘‘(a) GENERAL POWERS.—The Commission shall

7 have the power to—

8 ‘‘(1) approve the annual budget of the Commis9 sion;

10 ‘‘(2) adopt regulations to carry out the provi11 sions of this Act;

12 ‘‘(3) exercise the law enforcement powers nec13 essary to fulfill the purposes of this Act and the reg14 ulations promulgated thereunder;

15 ‘‘(4) establish a rate of fees and assessments as

16 provided in section 15 of this Act;

17 ‘‘(5) conduct investigations;

18 ‘‘(6) issue a temporary order closing the oper19 ation of gaming activities;

20 ‘‘(7) after a hearing, make permanent a tem21 porary order closing the operation of gaming activi22 ties as provided in section 13 of this Act;

23 ‘‘(8) grant, deny, limit, condition, restrict, re24 voke or suspend any license issued pursuant to this
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1 Act or fine any person licensed pursuant to this Act

2 for any cause deemed reasonable by the Commission;

3 ‘‘(9) inspect and examine all premises located

4 on Indian lands on which class II or class III gam5 ing is conducted;

6 ‘‘(10) demand access to and inspect, examine,

7 photocopy, and audit all papers, books, and records

8 of Class II and Class III gaming activities conducted

9 on Indian lands and any other matters necessary to

10 carry out the duties of the Commission under this

11 Act;

12 ‘‘(11) use the United States mail in the same

13 manner and under the same conditions as any de14 partment or agency of the United States;

15 ‘‘(12) procure supplies, services, and property

16 by contract in accordance with applicable Federal

17 laws and regulations;

18 ‘‘(13) enter into contracts with Federal, State,

19 tribal, and private entities for activities necessary to

20 the discharge of the duties of the Commission;

21 ‘‘(14) serve or cause to be served its process or

22 notices in a manner provided for by the Commission

23 or in a manner provided for the service of process

24 and notice in civil actions in accordance with the

25 rules of a tribal, State or Federal court;
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1 ‘‘(15) propound written interrogatories and ap2 point hearing examiners, to whom may be delegated

3 the power and authority to administer oaths, issue

4 subpoenas, propound written interrogatories, and re5 quire testimony under oath;

6 ‘‘(16) conduct all hearings pertaining to civil

7 violations of this Act or regulations promulgated

8 thereunder;

9 ‘‘(17) collect all fees and assessments imposed

10 by this Act and the regulations promulgated there11 under;

12 ‘‘(18) assess penalties for the violation of provi13 sions of this Act and the regulations promulgated

14 thereunder;

15 ‘‘(19) provide training and technical assistance

16 to Indian tribal governments in all aspects of the

17 conduct and regulation of gaming activities; and

18 ‘‘(20)(A) in addition to its existing authority,

19 the Commission shall have the authority to delegate,

20 by published order or rule, any of its functions to a

21 division of the Commission, an individual member of

22 the Commission, an administrative law judge, or an

23 employee, including functions with respect to hear24 ing, determining, ordering, certifying, reporting, or

25 otherwise acting as to any work, business, or matter;
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1 ‘‘(B) nothing in this section shall be deemed to

2 authorize the delegation of the function of rule-mak3 ing as defined in subchapter II of chapter 5 of title

4 5 of the United States Code, with reference to gen5 eral rules as distinguished from rules of particular

6 applicability, or the making of any rule;

7 ‘‘(C) with respect to the delegation of any of its

8 functions, the Commission shall retain a discre9 tionary right to review the action of any division of

10 the Commission, individual member of the Commis11 sion, administrative law judge, or employee, upon its

12 own initiative;

13 ‘‘(D) the vote of one member of the Commis14 sion shall be sufficient to bring any such action be15 fore the Commission for review; and

16 ‘‘(E) if the right to exercise such review is de17 clined, or if no such review is sought within the time

18 stated in the rules promulgated by the Commission,

19 then the action of any such division of the Commis20 sion, individual member of the Commission, adminis21 trative law judge, or employee, shall, for all pur22 poses, including appeal or review thereof, be deemed

23 the action of the Commission.’’

24 ‘‘(b) REGULATORY AUTHORITY.—The Commission

25 shall—
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1 ‘‘(1) approve all gaming-related contracts;

2 ‘‘(2) establish minimum regulatory require3 ments for background investigations, licensing of

4 persons and licensing of gaming operations associ5 ated with the conduct of class II and class III gam6 ing on Indian lands by tribal governments;

7 ‘‘(3) establish minimum internal control re8 quirements for the operation of class II and class III

9 gaming activities on Indian lands, including but not

10 limited to—

11 ‘‘(A) surveillance and security personnel

12 and systems capable of monitoring all gaming

13 activities including the conduct of games, cash14 iers’ cages, change booths, count rooms, move15 ments of cash and chips, entrances and exits to

16 gaming facilities and other critical areas of any

17 gaming facility;

18 ‘‘(B) the rules for the play of games and

19 controls related to such rules;

20 ‘‘(C) credit and debit collection controls;

21 ‘‘(D) controls over gambling devices and

22 equipment; and

23 ‘‘(E) accounting and auditing;
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1 ‘‘(4) inspect and examine all premises located

2 on Indian lands on which class II or class III gam3 ing is conducted;

4 ‘‘(5)(A) monitor and regulate the background

5 investigations conducted by tribal governments of

6 persons involved in a class II gaming operation, in7 cluding but not limited to key employees of any li8 censed gaming operation, gaming-related contrac9 tors, and any persons who have a material involve10 ment, either directly or indirectly, with a licensed

11 gaming operation, to assure that background inves12 tigations are consistent with the minimum regu13 latory requirements for background investigations

14 established by the Commission.

15 ‘‘(B) monitor and regulate the licensing by trib16 al governments of persons involved in a class II

17 gaming operation, including but not limited to key

18 employees of any licensed gaming operation, gaming19 related contractors, gaming service industries, and

20 any persons having a material involvement, either di21 rectly or indirectly, with a licensed gaming oper22 ation, gaming related contractor or gaming service

23 industry, to assure that such licensing is consistent

24 with the minimum regulatory requirements for the

25 licensing of persons established by the Commission;
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1 ‘‘(C) monitor and regulate the licensing by trib2 al governments of class II gaming operations to as3 sure that such licensing is consistent with the mini4 mum regulatory requirements for the licensing of

5 gaming operations established by the Commission;

6 ‘‘(D) except that where a tribal government’s

7 system for the conduct of background investigations,

8 the licensing of persons or the licensing of gaming

9 operations fails to meet the minimum regulatory

10 background investigation or licensing requirements

11 established by the Commission, the Commission’s

12 authority to conduct background investigations, to li13 cense and directly regulate Class II gaming activities

14 conducted on Indian lands shall be exclusive until

15 such time as the Commission determines that the

16 regulation of Class II gaming activities on Indian

17 lands by a tribal government meets the established

18 minimum regulatory requirements;

19 ‘‘(6)(A) monitor and regulate a tribal gaming

20 operation and the tribal government’s system for in21 ternal controls to assure that such system is consist22 ent with the minimum regulatory requirements for

23 internal controls established by the Commission;

24 ‘‘(B) except that where a tribal government’s

25 system for internal controls fails to meet the mini-
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1 mum internal control requirements established by

2 the Commission, the Commission’s authority to di3 rectly establish and regulate internal control systems

4 associated with Class II gaming activities shall be

5 exclusive until such time as the Commission deter6 mines that the regulation of Class II gaming activi7 ties on Indian lands by a tribal government meets

8 the minimum internal control requirements estab9 lished by the Commission;

10 ‘‘(7) monitor and regulate Class III gaming ac11 tivities conducted on Indian lands, and have the ex12 clusive authority to—

13 ‘‘(A) license—

14 ‘‘(i) Class III gaming operations con15 ducted on Indian lands;

16 ‘‘(ii) key employees of all licensed

17 Class III gaming operations conducted on

18 Indian lands;

19 ‘‘(iii) any persons having a material

20 involvement, either directly or indirectly,

21 with a licensed Class III gaming operations

22 conducted on Indian lands;

23 ‘‘(iv) gaming-related contractors, in24 cluding but not limited to any vendor or

25 supplier of gaming equipment or gambling
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1 devices associated with a licensed class III

2 gaming operation;

3 ‘‘(v) gaming service industries pursu4 ant to which an Indian tribal government

5 or its agent enters into an agreement in

6 excess of $10,000 for the procurement of

7 materials, supplies, equipment or services

8 which are used in association with a li9 censed Class III gaming operation, or fi10 nancing contracts or agreements with a

11 gaming service industry in excess of

12 $10,000 associated with any facility which

13 is used in association with a licensed Class

14 III gaming activity; and

15 ‘‘(vi) any other person or company or

16 other entity for which the Commission may

17 require licensure;

18 ‘‘(B) conduct background investigations

19 on—

20 ‘‘(i) key employees of any licensed

21 class III gaming operation conducted on

22 Indian lands;

23 ‘‘(ii) principal investors having a ma24 terial involvement, either directly or indi-
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1 rectly, with a licensed class III gaming op2 eration;

3 ‘‘(iii) principal gaming-related con4 tractors; and

5 ‘‘(iv) any other person or company or

6 other entity for which the Commission may

7 require a background investigation;

8 ‘‘(C) the Commission shall make a deter9 mination as to principal investors and principal

10 gaming-related contractors;

11 ‘‘(8)(A) in the context of a compact entered

12 into by a tribal government with a state government,

13 monitor and regulate the conduct of background in14 vestigations of (i) non-principal investors having a

15 material involvement, either directly or indirectly,

16 with a licensed Class III gaming operation; (ii) non17 principal gaming-related contractors, including but

18 not limited to vendors or suppliers of gaming equip19 ment or gambling devices associated with a licensed

20 Class III gaming operation, and (iii) non-principal

21 key employees of any licensed Class III gaming oper22 ation; either in conjunction with Indian tribal gov23 ernments or state governments, or both;

24 ‘‘(B) except that where the regulatory system of

25 a tribal government or a state government, or both,
28

S 2230 IS

1 for the conduct of background investigations fails to

2 meet minimum regulatory requirements established

3 by the Commission for the conduct of background

4 investigations, the Commission shall have the exclu5 sive authority to conduct background investigations

6 until such time as the regulatory system of a tribal

7 government or a state government, or both, meet the

8 minimum regulatory requirements established by the

9 Commission for the conduct of background inves10 tigations;

11 ‘‘(9)(A) in the context of a compact entered

12 into by a tribal government with the Secretary of the

13 Interior, monitor and regulate the conduct of back14 ground investigations of (i) non-principal investors

15 having a material involvement, either directly or in16 directly, with a licensed Class III gaming operation;

17 (ii) non-principal gaming-related contractors, includ18 ing but not limited to vendors or suppliers of gaming

19 equipment or gambling devices associated with a li20 censed Class III gaming operation, and (iii) non21 principal key employees of any licensed Class III

22 gaming operation; in conjunction with an Indian

23 tribal government to assure that the tribal govern24 ment’s system for the conduct of background inves25 tigations is consistent with the minimum regulatory
29

S 2230 IS

1 requirements for backgrounds investigations estab2 lished by the Commission;

3 ‘‘(B) except that where the regulatory system of

4 a tribal government for the conduct of background

5 investigations fails to meet minimum regulatory re6 quirements established by the Commission for the

7 conduct of background investigations, the Commis8 sion shall have the exclusive authority to conduct

9 background investigations until such time as the

10 regulatory system of a tribal government meets the

11 minimum regulatory requirements established by the

12 Commission for the conduct of background inves13 tigations;

14 ‘‘(10)(A) monitor and regulate the internal con15 trol systems associated with a licensed class III gam16 ing operation to assure that such systems are con17 sistent with the minimum regulatory requirements

18 for internal controls established by the Commission;

19 ‘‘(B) except that where the internal control sys20 tems fail to meet the minimum internal control re21 quirements established by the Commission, the Com22 mission’s authority to directly establish and regulate

23 internal control systems associated with a licensed

24 class III gaming operation shall be exclusive until

25 such time as the Commission determines that the in-
30

S 2230 IS

1 ternal control systems meet the minimum internal

2 control requirements established by the Commission;

3 ‘‘(c) LICENSING.—(1) A license approved by the

4 Commission shall be required of—

5 ‘‘(A) any person having a material involvement,

6 either directly or indirectly, with a licensed gaming

7 operation;

8 ‘‘(B) any person having a material involvement,

9 either directly or indirectly, with a gaming-related

10 contract;

11 ‘‘(C) any gaming-related contractor, including

12 but not limited to any vendor or supplier of gaming

13 equipment or gambling devices associated with a li14 censed gaming operation;

15 ‘‘(D) any gaming service industry for which the

16 Commission may require licensure;

17 ‘‘(E) any gaming operation, including the man18 agement of any gaming operation; and

19 ‘‘(F) any other person or company or other en20 tity for which the Commission may require licensure.

21 ‘‘(2)(A) The Commission may issue a statement of

22 compliance to an applicant for any license or for qualifica23 tion status under this Act at any time the Commission

24 is satisfied that one or more particular eligibility criteria

25 have been satisfied by an applicant.
31

S 2230 IS

1 ‘‘(B) Such statement shall specify the eligibility cri2 terion satisfied, the date of such satisfaction and a res3 ervation to the Commission to revoke the statement of

4 compliance at any time based upon a change of cir5 cumstances affecting such compliance.

6 ‘‘(3)(A) No gaming operation shall operate unless all

7 necessary licenses and approvals therefor have been ob8 tained in accordance with this Act.

9 ‘‘(B)(i) Prior to the operation of any gaming facility

10 or activity, every agreement for the management of the

11 gaming operation shall be in writing and filed with the

12 Commission pursuant to section 11 of this Act.

13 ‘‘(ii) No such agreement shall be effective unless ex14 pressly approved by the Commission.

15 ‘‘(iii) The Commission may require that any such

16 agreement include within its terms any provisions reason17 ably necessary to best accomplish the policies of this Act.

18 ‘‘(iv) The Commission may determine that any appli19 cant who does not have the ability to exercise any signifi20 cant control over a licensed gaming operation shall not be

21 eligible to hold or required to hold a license.

22 ‘‘(4)(A) The Commission shall deny a license for the

23 management of a gaming operation to any applicant who

24 is disqualified on the basis of any of the following cri25 teria—
32

S 2230 IS

1 ‘‘(i) failure of the applicant to prove by clear

2 and convincing evidence that the applicant is quali3 fied in accordance with the provisions of this Act;

4 ‘‘(ii) failure of the applicant to provide informa5 tion, documentation and assurances required by the

6 Act or requested by the Commission, or failure of

7 the applicant to reveal any fact material to qualifica8 tion, or the supplying of information which is untrue

9 or misleading as to a material fact pertaining to the

10 qualification criteria; and

11 ‘‘(iii) the conviction of the applicant, or of any

12 person required to be qualified under this Act as a

13 condition of a license for the management of a gam14 ing operation, of any offense in any jurisdiction

15 which is deemed by the Commission to disqualify the

16 applicant: Provided, That—

17 ‘‘(B) the automatic disqualification provisions of this

18 subsection shall not apply with regard to any conviction

19 which did not occur within the 10-year period immediately

20 preceding application for licensure and which the appli21 cant demonstrates by clear and convincing evidence does

22 not justify automatic disqualification pursuant to this sub23 section and any conviction which has been the subject of

24 a judicial order of expungement.
33

S 2230 IS

1 ‘‘(5)(A) Upon the filing of an application for a license

2 for the management of a gaming operation and such sup3 plemental information as the Commission may require, the

4 Commission shall conduct an investigation into the quali5 fications of the applicant, and the Commission shall con6 duct a hearing thereon concerning the qualifications of the

7 of the applicant in accordance with its regulations.

8 ‘‘(B) After such investigation and hearing, the Com9 mission may either deny the application or grant a gaming

10 operation license to an applicant whom it determines to

11 be qualified to hold such license.

12 ‘‘(C)(i) The Commission shall have the authority to

13 deny any application pursuant to the provisions of this

14 Act.

15 ‘‘(ii) When an application is denied, the Commission

16 shall prepare and file an order denying such application

17 with the general reasons therefor, and if requested by the

18 applicant, shall further prepare and file a statement of the

19 reasons for the denial, including the specific findings of

20 facts.

21 ‘‘(iii) After an application is submitted to the Com22 mission, final action of the Commission shall be taken

23 within 90 days after completion of all hearings and inves24 tigations and the receipt of all information required by the

25 Commission.
34

S 2230 IS

1 ‘‘(D) If satisfied that an applicant is qualified to re2 ceive a license for the management of a gaming operation,

3 and upon tender of all license fees and assessments as re4 quired by this Act and regulations of the Commission, and

5 such bonds as the Commission may require for the faithful

6 performance of all requirements imposed by this Act or

7 regulations promulgated thereunder, the Commission shall

8 issue a license for the management of a gaming operation

9 for the term of 1 year.

10 ‘‘(E)(i) The Commission shall fix the amount of the

11 bond or bonds to be required under this section in such

12 amounts as it may deem appropriate, by rules of uniform

13 application.

14 ‘‘(ii) The bonds so furnished may be applied by the

15 Commission to the payment of any unpaid liability of the

16 licensee under this Act.

17 ‘‘(iii) The bond shall be furnished in cash or nego18 tiable securities, by a surety bond guaranteed by a satis19 factory guarantor, or by an irrevocable letter of credit is20 sued by a banking institution of any state acceptable to

21 the Commission.

22 ‘‘(iv) If furnished in cash or negotiable securities, the

23 principal shall be placed without restriction at the disposal

24 of the Commission, but any income shall inure to the bene25 fit of the licensee.
35

S 2230 IS

1 ‘‘(6)(A)(i) Subject to the power of the Commission

2 to deny, revoke, or suspend licenses, any license for the

3 management of a gaming operation in force shall be re4 newed by the Commission for the next succeeding license

5 period upon proper application for renewal and payment

6 of license fees and assessments as required by law and

7 the regulations of the Commission.

8 ‘‘(ii) The license period for a renewed license for the

9 management of a gaming operation shall be up to one year

10 for each of the first two renewal periods succeeding the

11 initial issuance of a license for the management of a gam12 ing operation pursuant to subsection (5) of this section.

13 ‘‘(iii) Thereafter, a license for the management of a

14 gaming operation may be renewed for a period of up to

15 two years, but the Commission may reopen licensing hear16 ings at any time.

17 ‘‘(B)(i) Notwithstanding the other provisions of this

18 subsection, the Commission may, for the purpose of

19 faciliating its administration of this Act, renew the license

20 for the management of a gaming operation of the holders

21 of licenses initially opening after the date of enactment

22 of this Act for a period of one year, provided the renewal

23 period for those particular licenses for the management

24 of a gaming operation may not be adjusted more than once

25 pursuant to this provision.
36

S 2230 IS

1 ‘‘(ii) The Commission shall act upon any such appli2 cation prior to the date of expiration of the current license.

3 ‘‘(C) Application for renewal shall be filed with the

4 Commission no later than 90 days prior to the expiration

5 of the current license, and all license fees and assessments

6 as required by law shall be paid to the Commission on

7 or before the date of expiration of the current license.

8 ‘‘(D) Upon renewal of any license the Commission

9 shall issue an appropriate renewal certificate or validating

10 device or sticker which shall be attached to each license

11 for the management of a gaming operation.

12 ‘‘(7) Subject to the power of the Commission to deny,

13 revoke or suspend any license, any license other than a

14 license for the management of a gaming operation may

15 be renewed upon proper application for renewal and the

16 payment of fees in accordance with the rules of the Com17 mission, but in no event later than the date of expiration

18 of the current license.

19 ‘‘(d) HEARINGS.—The Commission shall establish

20 procedures for the conduct of hearings associated with—

21 ‘‘(A) licensing of gaming operations and the

22 management of a gaming operation, including the

23 denial, limiting, conditioning, restriction, revocation,

24 or suspension of any such license;

25 ‘‘(B) licensing of—
37

S 2230 IS

1 ‘‘(i) key employees of gaming operations;

2 ‘‘(ii) any person having a material involve3 ment, either directly or indirectly, with a li4 censed gaming operation;

5 ‘‘(iii) gaming-related contractors, including

6 but not limited to any vendor or supplier of

7 gaming equipment or gambling devices associ8 ated with a licensed gaming operation;

9 ‘‘(iv) gaming service industries pursuant to

10 which an Indian tribal government or its agent

11 enters into an agreement in excess of $10,000

12 for the procurement of materials, supplies,

13 equipment or services which are used in asso14 ciation with a gaming operation, or financing

15 contracts or agreements with a gaming service

16 industry in excess of $10,000 associated with

17 any facility which is used in association with a

18 gaming operation; and

19 ‘‘(v) any other person or company or other

20 entity for which the Commission may require li21 censure;

22 including the denial, limiting, conditioning, restric23 tion, revocation, or suspension of any such license.

24 ‘‘(2) Following a hearing for any of the purposes au25 thorized in this section, the Commission shall render its
38

S 2230 IS

1 decision and issue an order, and serve such decision and

2 order upon the affected parties.

3 ‘‘(3)(A) The Commission may, upon motion made

4 within 10 days after the service of a decision and order,

5 order a rehearing before the Commission upon such terms

6 and conditions as it may deem just and proper when the

7 Commission finds cause to believe that the decision and

8 order should be reconsidered in view of the legal, policy

9 or factual matters advanced by the moving party or raised

10 by the Commission on its own motion.

11 ‘‘(B) Following a rehearing, the Commission shall

12 render its decision and issue an order, and serve such deci13 sion and order upon the affected parties.

14 ‘‘(C) The Commission’s decision and order under sub15 section (2) of this section when no motion for a rehearing

16 is made, or the Commission’s decision and order upon re17 hearing shall constitute final agency action for purposes

18 of judicial review under the Administrative Procedure Act.

19 ‘‘(4) The District of Columbia Circuit Court of Ap20 peals shall have jurisdiction to review the Commission’s

21 licensing decisions and orders.

22 ‘‘(e) COMMISSION STAFFING.—(1) The Chairman

23 shall appoint a General Counsel to the Commission who

24 shall be paid at the annual rate of basic pay payable for
39

S 2230 IS

1 ES–6 of the Senior Executive Service Schedule under sec2 tion 5382 of title 5 of the United States Code.

3 ‘‘(2) The Chairman shall appoint and supervise other

4 staff of the Commission without regard to the provisions

5 of title 5, United States Code, governing appointments in

6 the competitive service. Such staff shall be paid without

7 regard to the provisions of chapter 51 and subchapters

8 III and VIII of chapter 53 of such title relating to classi9 fication and General and Senior Executive Service Sched10 ule pay rates, except that no individual so appointed may

11 receive pay in excess of the annual rate of basic pay pay12 able for ES–5 of the Senior Executive Service Schedule

13 under section 5382 of that title.

14 ‘‘(3) The Chairman may procure temporary and

15 intermittent services under section 3109(b) of title 5,

16 United States Code, but at rates for individuals not to

17 exceed the daily equivalent of the maximum annual rate

18 of basic pay payable for ES–6 of the Senior Executive

19 Service Schedule.

20 ‘‘(4) Upon the request of the Chairman, the head of

21 any federal agency is authorized to detail any of the per22 sonnel of such agency to the Commission to assist the

23 Commission in carrying out its duties under this Act, un24 less otherwise prohibited by law.
40

S 2230 IS

1 ‘‘(5) The Administrator of General Services shall pro2 vide to the Commission on a reimbursable basis such ad3 ministrative support services as the Commission may re4 quest.

5 ‘‘(f) COMMISSION ACCESS TO INFORMATION.—(1)

6 The Commission may secure from any department or

7 agency of the United States information necessary to en8 able it to carry out this Act. Upon request of the Chair9 man, the head of such department or agency shall furnish

10 such information to the Commission, unless otherwise pro11 hibited by law.

12 ‘‘(2) The Commission may secure from any law en13 forcement agency of any State or Indian tribal government

14 information necessary to enable it to carry out this Act.

15 Upon request of the Chairman, the head of any State or

16 tribal law enforcement agency shall furnish such informa17 tion to the Commission, unless otherwise prohibited by

18 law.

19 ‘‘(g) INVESTIGATIONS AND ACTIONS.—(1)(A) The

20 Commission may, in its discretion, conduct such investiga21 tions as it deems necessary to determine whether any per22 son has violated, is violating, or is about to violate any

23 provision of this Act or the rules and regulations promul24 gated thereunder and may require or permit any person

25 to file with it a statement in writing, under oath, or other-
41

S 2230 IS

1 wise as the Commission shall determine, as to all the facts

2 and circumstances concerning the matter to be inves3 tigated.

4 ‘‘(B) The Commission is authorized, in its discretion,

5 to investigate any facts, conditions, practices, or matters

6 which it may deem necessary or proper to aid in the en7 forcement of such provisions, in the prescribing of rules

8 and regulations under this Act, or in securing information

9 to serve as a basis for recommending further legislation

10 concerning the matters to which this Act relates.

11 ‘‘(2)(A) For the purpose of any investigation or any

12 other proceeding under this Act, any member of the Com13 mission or any officer designated by the Commission is

14 empowered to administer oaths and affirmations, sub15 poena witnesses, compel their attendance, take evidence,

16 and require the production of any books, papers, cor17 respondence, memoranda, or other records which the Com18 mission deems relevant or material to the inquiry. Such

19 attendance of witnesses and the production of any such

20 records may be required from any place in the United

21 States or any State at any designated place of hearing.

22 ‘‘(B) In case of contumacy by or refusal to obey any

23 subpoena issued to any person, the Commission may in24 voke the jurisdiction of any court of the United States

25 within the jurisdiction of which an investigation or pro-
42

S 2230 IS

1 ceeding is carried on, or where such person resides or car2 ries on business, in requiring the attendance and testi3 mony of witnesses and the production of books, papers,

4 correspondence, memoranda, and other records.

5 ‘‘(C) Any such court may issue an order requiring

6 such person to appear before the Commission or member

7 of the Commission or officer designated by the Commis8 sion, there to produce records, if so ordered, or to give

9 testimony touching the matter under investigation or in

10 question; and any failure to obey such order of the court

11 may be punished by such court as a contempt thereof.

12 ‘‘(3) Whenever it shall appear to the Commission that

13 any person is engaged or about to engage in acts or prac14 tices constituting a violation of any provision of this Act

15 or rules or regulations thereunder, the Commission may—

16 ‘‘(A) in its discretion, bring an action in the

17 proper district court of the United States or the

18 United States District Court for the District of Co19 lumbia, to enjoin such acts or practices, and upon a

20 proper showing, a permanent or temporary injunc21 tion or restraining order shall be granted without

22 bond; or

23 ‘‘(B) transmit such evidence as may be avail24 able concerning such acts or practices as may con25 stitute a violation of any criminal laws of the United
43

S 2230 IS

1 States to the Attorney General, who may institute

2 the necessary criminal proceedings.

3 ‘‘(4) Upon application of the Commission, the district

4 courts of the United States shall have jurisdiction to issue

5 writs of mandamus, injunctions, and orders commanding

6 any person to comply with the provisions of this Act and

7 the rules and regulations thereunder.’’.

8 (7) Section 8 of the Act (25 U.S.C. 2707) is amended

9 to read as follows:

10 ‘‘SEC. 8. REQUIREMENTS AND PROCEDURES FOR APPLI11 CANTS AND LICENSEES.

12 ‘‘(a) REQUIREMENTS OF APPLICANTS AND LICENS13 EES.—(1)(A) It shall be the affirmative responsibility of

14 each applicant for a license and each licensee to establish

15 by clear and convincing evidence their individual qualifica16 tions, and for an applicant for a license for the manage17 ment of a gaming operation, the qualifications of each per18 son or entity that is required to be qualified under this

19 Act.

20 ‘‘(B) For purposes of this section, the terms ‘appli21 cant’ and ‘licensee’ shall include any person, any entity,

22 and corporation, any company or any other organization

23 for whom the Commission requires an approved license

24 pursuant to section 7(c) of this Act as a condition of doing

25 business in Indian country.
44

S 2230 IS

1 ‘‘(2)(A) Any applicant or licensee shall provide all in2 formation required by this Act and satisfy all requests for

3 information pertaining to qualifications and in the form

4 specified by the Commission.

5 ‘‘(B) All applicants and licensees shall waive the li6 ability of the Commission and its members, employees and

7 agents, for any damages resulting from any disclosure or

8 publication in any manner, other than a willfully unlawful

9 disclosure or publication, of any material or information

10 acquired during inquiries, investigations or hearings.

11 ‘‘(3) All applicants and licensees shall consent to in12 spections, searches and seizures and the supplying of

13 handwriting exemplars as authorized by this Act and regu14 lations promulgated thereunder.

15 ‘‘(4)(A) All applicants and licensees shall have the

16 continuing duty to provide any assistance or information

17 required by the Commission, and to cooperate in any in18 quiry or investigation conducted by the Commission and

19 any inquiry, investigation, or hearing conducted by the

20 Commission.

21 ‘‘(B) If, upon issuance of a formal request to answer

22 or produce information, evidence or testimony, any appli23 cant or licensee refuses to comply, the application or li24 cense of such person may be denied or revoked by the

25 Commission.
45

S 2230 IS

1 ‘‘(5) No applicant or licensee shall give or provide,

2 offer to give or provide, directly or indirectly, any com3 pensation or reward or any percentage or share of the

4 money or property played or received through gaming ac5 tivities, except as authorized by this Act, in consideration

6 for obtaining any license, authorization, permission or

7 privilege to participate in any way in the operation of gam8 ing activities.

9 ‘‘(6) Each applicant or licensee shall be photographed

10 and fingerprinted for identification and investigation pur11 poses in accordance with procedures established by the

12 Commission.

13 ‘‘(7)(A) All applicants and licensees, and all persons

14 employed by a gaming service industry licensed pursuant

15 to this Act, shall have a duty to inform the Commission

16 of any action which they believe would constitute a viola17 tion of this Act.

18 ‘‘(B) No person who so informs the Commission shall

19 be discriminated against by an applicant or licensee be20 cause of the supplying of such information.

21 ‘‘(8)(A) Any person who must be qualified pursuant

22 to this Act in order to hold the securities of a licensee

23 or any holding or intermediary company of a licensee may

24 apply for qualification status prior to the acquisition of

25 any such securities.
46

S 2230 IS

1 ‘‘(B) The Commission may determine to accept such

2 an application upon a finding that there is a reasonable

3 likelihood that, if qualified, the applicant will obtain and

4 hold securities of a licensee sufficient to require qualifica5 tion.

6 ‘‘(C) Such an applicant shall be subject to the provi7 sions of this section and shall pay for the costs of all inves8 tigations and proceedings in relation to the application un9 less the applicant provides to the Commission an agree10 ment with one or more licensees which states that the li11 censee or licensees will pay those costs.

12 ‘‘(b) LICENSE FOR THE MANAGEMENT OF A GAMING

13 OPERATION—APPLICANT ELIGIBILITY.—

14 ‘‘(1) No corporation shall be eligible to apply

15 for a license for the management of a gaming oper16 ation unless—

17 ‘‘(A) the corporation shall be incorporated

18 in one of the fifty states or by an Indian tribe,

19 although such corporation may be a wholly or

20 partially owned subsidiary of a corporation

21 which is incorporated in one of the fifty states

22 or of a foreign country;

23 ‘‘(B) the corporation shall maintain an of24 fice of the corporation on the premises licensed

25 or to be licensed;
47

S 2230 IS

1 ‘‘(C) the corporation shall comply with all

2 of the requirements of the laws of the state or

3 Indian tribe pertaining to corporations in which

4 the corporation is incorporated;

5 ‘‘(D) the corporation shall maintain a ledg6 er in the principal office of the corporation

7 which shall at all times reflect the current own8 ership of every class of security issued by the

9 corporation and shall be available for inspection

10 by the Commission and authorized agents of

11 the Commission at all reasonable times without

12 notice;

13 ‘‘(E) the corporation shall maintain all op14 erating accounts required by the Commission

15 and shall notify the Commission of the financial

16 institution in which such operating accounts are

17 located;

18 ‘‘(F) the corporation shall include among

19 the purposes stated in its certificate of incorpo20 ration the conduct of gaming operations and

21 provide that the certificate of incorporation in22 cludes all provisions required by this Act;

23 ‘‘(G)(1) if the corporation is not a publicly24 traded corporation, the corporation shall file

25 with the Commission such adopted corporate
48

S 2230 IS

1 charter provisions as may be necessary to estab2 lish the right of prior approval by the Commis3 sion with regard to transfers of securities,

4 shares, and other interests in the applicant cor5 poration; and

6 ‘‘(2) if the corporation is a publicly-traded

7 corporation, provide in its corporate charter

8 that any securities of such corporation are held

9 subject to the condition that if a holder thereof

10 is found to be disqualified by the Commission

11 pursuant to the provisions of this Act, such

12 holder shall dispose of his interest in the cor13 poration, provided that nothing herein shall be

14 deemed to require that any security of such cor15 poration bear any legend to this effect;

16 (H) if the corporation is not a publicly17 traded corporation, the corporation shall estab18 lish to the satisfaction of the Commission that

19 appropriate charter provisions create the abso20 lute right of such non-publicly-traded corpora21 tions and companies to repurchase at the mar22 ket price or the purchase price, whichever is the

23 lesser, any security, share or other interest in

24 the corporation in the event that the Commis-
49

S 2230 IS

1 sion disapproves a transfer in accordance with

2 the provisions of this Act;

3 ‘‘(I) any publicly-traded holding,

4 intermediary, or subsidiary company of the cor5 poration, whether the corporation is publicly

6 traded or not, shall contain in its corporate

7 charter the same provisions required under

8 paragraph (H) for a publicly-traded corporation

9 to be eligible to apply for a license for the man10 agement of a gaming operation;

11 ‘‘(J) any non-publicly-traded holding,

12 intermediary or subsidiary company of the cor13 poration, whether the corporation is publicly14 traded or not, shall establish to the satisfaction

15 of the Commission that its charter provisions

16 are the same as those required under para17 graphs (H) and (I) for a non-publicly-traded

18 corporation to be eligible to apply for a license

19 for the management of a gaming operation; and

20 ‘‘(K) the provisions of this subsection shall

21 apply with the same force and effect with re22 gard to applicants for a license and licensees for

23 the management of a gaming operation which

24 have a legal existence that is other than cor25 porate to the extent which is appropriate.
50

S 2230 IS

1 ‘‘(c) LICENSE FOR THE MANAGEMENT OF A GAMING

2 OPERATION—APPLICANT REQUIREMENTS.—

3 ‘‘(1) Any applicant for a license for the man4 agement of a gaming operation must produce infor5 mation, documentation and assurances concerning

6 the following qualification criteria:

7 ‘‘(A) Each applicant shall produce such in8 formation, documentation and assurances con9 cerning financial background and resources as

10 may be required to establish by clear and con11 vincing evidence the financial stability, integrity

12 and responsibility of the applicant, including

13 but not limited to bank references, business and

14 personal income and disbursement schedules,

15 tax returns and other reports filed with govern16 mental agencies, and business and personal ac17 counting and check records and ledgers.

18 ‘‘(B) Each applicant shall, in writing, au19 thorize the examination of all bank accounts

20 and records as may be deemed necessary by the

21 Commission.

22 ‘‘(C)(i) Each applicant shall produce such

23 information, documentation and assurances as

24 may be necessary to establish by clear and con25 vincing evidence the integrity of all financial
51

S 2230 IS

1 backers, investors, mortgagees, bond holders,

2 and holders of indentures, notes or other evi3 dences of indebtedness, either in effect or pro4 posed, which bears any relation to the proposal

5 for the management of a gaming operation sub6 mitted by the applicant or applicants, provided

7 that this section shall not apply to banking or

8 other licensed lending institutions and institu9 tional investors.

10 ‘‘(ii) Any such banking or licensed lending

11 institution or institutional investor shall, how12 ever, produce for the Commission upon request

13 any document or information which bears any

14 relation to the proposal for the management of

15 a gaming operation submitted by the applicant

16 or applicants.

17 ‘‘(iii) The integrity of financial sources

18 shall be judged upon the same standards as the

19 applicant.

20 ‘‘(iv) In addition, each applicant shall

21 produce whatever information, documentation

22 or assurances as may be required to establish

23 by clear and convincing evidence the adequacy

24 of financial resources as to the completion of
52

S 2230 IS

1 the proposal for the management of the gaming

2 operation.

3 ‘‘(D)(i) Each applicant shall produce such

4 information, documentation and assurances as

5 may be required to establish by clear and con6 vincing evidence the applicant’s good character,

7 honesty and integrity.

8 ‘‘(ii) Such information shall include, with9 out limitation, information pertaining to family,

10 habits, character, reputation, criminal and ar11 rest record, business activities, financial affairs,

12 and business, professional and personal associ13 ates, covering at least the 10-year period imme14 diately preceding the filing of the application;

15 ‘‘(iii) Each applicant shall notify the Com16 mission of any civil judgments obtained against

17 any such applicant pertaining to antitrust or se18 curity regulation laws of the United States, or

19 of any state, jurisdiction, province or country.

20 ‘‘(iv) In addition, each applicant shall

21 produce letters of reference from law enforce22 ment agencies having jurisdiction in the appli23 cant’s place of residence and principal place of

24 business, which letters of reference shall indi25 cate that such law enforcement agencies do not
53

S 2230 IS

1 have any pertinent information concerning the

2 applicant, or if such law enforcement agency

3 does have information pertaining to the appli4 cant, shall specify what the information is.

5 ‘‘(v) If the applicant has managed gaming

6 operations in a jurisdiction which permits such

7 activity, the applicant shall produce letters of

8 reference from the gaming or casino enforce9 ment or control agency which shall specify the

10 experiences of such agency with the applicant,

11 his associates, and the gaming operation, pro12 vided that if no such letters are received within

13 60 days of request therefor, the applicant may

14 submit a statement under oath that he is or

15 was during the period such activities were con16 duct in good standing with such gaming or ca17 sino enforcement of control agency.

18 ‘‘(E)(i) Each applicant shall produce such

19 information, documentation and assurances as

20 may be required to establish by clear and con21 vincing evidence that the applicant has suffi22 cient business ability and gaming management

23 experience as to establish the likelihood of cre24 ation and maintenance of a successful, efficient

25 gaming operation;
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S 2230 IS

1 ‘‘(ii) The applicant shall produce the

2 names of all proposed key employees of the pro3 posed gaming operation as they become known

4 and a description of their respective or proposed

5 responsibilities, and a full description of secu6 rity systems and management controls proposed

7 for the gaming operation and related facilities.

8 ‘‘(F) Each applicant shall produce such in9 formation, documentation and assurances to en10 able the Commission to comply with the Na11 tional Environmental Policy Act, the National

12 Historic Preservation Act, and the Endangered

13 Species Act.

14 ‘‘(d) ADDITIONAL REQUIREMENTS.—

15 ‘‘(1) In addition to other information required

16 by this Act, a corporation applying for a license for

17 the management of a gaming operation shall provide

18 the following information—

19 ‘‘(A) the organization, financial structure

20 and nature of all businesses operated by the

21 corporation;

22 ‘‘(B) the names and personal employment

23 and criminal histories of all officers, directors

24 and principal employees of the corporation;
55

S 2230 IS

1 ‘‘(C) the names of all holding, intermediary

2 and subsidiary companies of the corporation;

3 ‘‘(D) the organization, financial structure

4 and nature of all businesses operated by such of

5 its holding, intermediary such subsidiary com6 panies as the Commission may require, includ7 ing names and personal employment and crimi8 nal histories of such officers, directors and prin9 cipal employee of such corporations and compa10 nies as the Commission may require;

11 ‘‘(E) the rights and privileges acquired by

12 the holders of different classes of authorized se13 curities of such corporations and companies as

14 the Commission may require, including the

15 names, addresses and amounts held by all hold16 ers of such securities;

17 ‘‘(F) the terms upon which securities have

18 been or are to be offered;

19 ‘‘(G) the terms and conditions of all out20 standing loans, mortgages, trust deeds, pledges

21 or any other indebtedness of security devices

22 utilized by the corporation;

23 ‘‘(H) the extent of the equity security hold24 ing in the corporation of all officers, directors
56

S 2230 IS

1 and underwriters and their remuneration in the

2 form of salary, wages, fees or otherwise;

3 ‘‘(I) names of persons other than directors

4 and officers who occupy positions specified by

5 the Commission or whose compensation exceeds

6 an amount determined by the Commission, and

7 the amount of their compensation;

8 ‘‘(J) a description of all bonus and profit9 sharing arrangements;

10 ‘‘(K) copies of all management and service

11 contacts; and

12 ‘‘(L) a listing of stock options existing or

13 to be credited.

14 ‘‘(2) If a corporation applying for a license for

15 the management of a gaming operation is, or if a

16 corporation holding a license for the management of

17 a gaming operation is to become, a subsidiary, each

18 holding company and each intermediary company

19 with respect thereto must, as a condition of the said

20 subsidiary acquiring or retaining such license, as the

21 case may be—

22 ‘‘(A) qualify to do business in one of the

23 fifty states or with a Federally-recognized In24 dian tribe; and
57

S 2230 IS

1 ‘‘(B) if it is a corporation, register with

2 the Commission and furnish the Commission

3 with all the information required of a corporate

4 licensee as specified in subsections (A) through

5 (F) of this section an such other information as

6 the Commission may require; or

7 ‘‘(C) if it is not a corporation, register with

8 the Commission and furnish the Commission

9 with such information as the Commission may

10 prescribe.

11 ‘‘(3) No corporation shall be eligible to hold a

12 license for the management of a gaming operation

13 unless each officer; each director; each person who

14 directly or indirectly holds any beneficial interest or

15 ownership of the securities issued by the corporation;

16 any person who in the opinion of the Commission

17 has the ability to control the corporation or elect a

18 majority of the board of directors of that corpora19 tion, other than a banking or other licensed lending

20 institution which makes a loan or holds a mortgage

21 of other lien acquired in the ordinary course of busi22 ness; each principal employee; and any lender, un23 derwriter, agent, employee of the corporation, or

24 other person whom the Commission may consider

25 appropriate for approval or qualification would, but
58

S 2230 IS

1 for residence, individually be qualified for approval

2 as a gaming operation key employee pursuant to the

3 provisions of this Act.

4 ‘‘(4) No corporation which is a subsidiary shall

5 be eligible to receive or hold a licensing for the man6 agement of a gaming operation unless each holding

7 and intermediary company with respect thereto—

8 ‘‘(A) if it is a corporation, shall comply

9 with the provisions of this section as if said

10 holding or intermediary company were itself ap11 plying for a license for the management of a

12 gaming operation, provided that the Commis13 sion may waive compliance with the provisions

14 of this section on the part of a publicly-traded

15 corporation which is a holding company as to

16 any officer, director, lender, underwriter, agent

17 or employee thereof, or person directly or indi18 rectly holding a beneficial interest or ownership

19 of the securities of such corporation, where the

20 Commission is satisfied that such officer, direc21 tor, lender, underwriter, agent or employee in

22 not significantly involved in the activities of the

23 corporate licensee, and in the case of security

24 holders, does not have the ability to control the
59

S 2230 IS

1 publicly-traded corporation or elect one or more

2 directors thereof; or

3 ‘‘(B) if it is not a corporation, shall comply

4 with the provisions of this section as if said

5 company were itself applying for a license for

6 the management of a gaming operation.

7 ‘‘(5)(A) Any noncorporate applicant for a li8 cense for the management of a gaming operation

9 shall provide the information required of this section

10 in such form as may be required by the Commission.

11 ‘‘(B) No such applicant shall be eligible to hold

12 a license for the management of a gaming operation

13 unless each person who directly or indirectly holds

14 any beneficial interest or ownership in the applicant,

15 or who in the opinion of the Commission has the

16 ability to control the applicant, or whom the Com17 mission may consider appropriate for approval or

18 qualification, would individually be qualified for ap19 proval as a key employee pursuant to the provisions

20 of this Act.

21 ‘‘(6) Notwithstanding the provisions of this sec22 tion, and in the absence of a prima facie showing

23 that there is any cause to believe that the institu24 tional investor may be found unqualified, an institu25 tional investor holding either—
60

S 2230 IS

1 ‘‘(A) under 10 percent of the equity securi2 ties of a holding or intermediary companies of

3 a licensee for the management of a gaming op4 eration, or

5 ‘‘(B) debt securities of a holding or

6 intermediary companies, or another subsidiary

7 company of a holding or intermediary compa8 nies which is related in any way to the financ9 ing of the licensee for the management of a

10 gaming operation, where the securities rep11 resent a percentage of the outstanding debt of

12 the company not exceeding 20 percent or a per13 centage of any issue of the outstanding debt of

14 the company not exceeding 50 percent shall be

15 granted a waiver of qualification if such securi16 ties are those of a publicly traded corporation

17 and its holdings of such securities were pur18 chased for investment purposes only and upon

19 request by the Commission, it files with the

20 Commission a certified statement to the effect

21 that it has no intention of influencing or affect22 ing the affairs of the issuer, the licensee for the

23 management of a gaming operation or its hold24 ing or intermediary companies, provided that it
61

S 2230 IS

1 shall be permitted to vote on matters put to the

2 vote of the outstanding security holders;

3 ‘‘(C) the Commission may grant a waiver

4 of qualification to an institutional investor hold5 ing a higher percentage of such securities upon

6 a showing of good cause and if the conditions

7 specified in this subsection are met;

8 ‘‘(D) any institutional investor granted a

9 waiver under this subsection which subsequently

10 determines to influence or affect the affairs of

11 the issuer shall provide not less than 30 days

12 notice of such intent and shall file with the

13 Commission an application for qualification be14 fore taking any action that may influence or af15 fect the affairs of the issuer, provided that it

16 shall be permitted to vote on matters put to the

17 vote of the outstanding security holders;

18 ‘‘(E) if an institutional investor changes its

19 investment intent, or if the Commission finds

20 reasonable cause to believe that the institutional

21 investor may be found unqualified, no action

22 other than divestiture shall be taken by such in23 vestor with respect to its security holdings until

24 there has been compliance with the provisions
62

S 2230 IS

1 of this Act including the execution of a trust

2 agreement; or

3 ‘‘(F) the licensee for the management of a

4 gaming operation and its relevant holding,

5 intermediary or subsidiary company shall imme6 diately notify the Commission of any informa7 tion about, or actions of, an institutional inves8 tor holding its equity or debt securities where

9 such information or action may have an impact

10 upon the eligibility of such institutional investor

11 for a waiver pursuant to this subsection.

12 ‘‘(7) If at any time the Commission finds that

13 an institutional investor holding any security of a

14 holding or intermediary company of a licensee for

15 the management of a gaming operation, or, where

16 relevant, of another subsidiary company of a holding

17 or intermediary company of a licensee for the man18 agement of a gaming operation which is related in

19 any way to the financing of the licensee for the man20 agement of a gaming operation, fails to comply with

21 the terms of this section, or if at any time the Com22 mission finds that, by reason of the extent or nature

23 of its holdings, an institutional investor is in a posi24 tion to exercise such a substantial impact upon the

25 controlling interests of a licensee that qualification
63

S 2230 IS

1 of the institutional investor is necessary to protect

2 the public interest, the Commission may, in accord3 ance with the provisions of this section of this Act,

4 take any necessary action to protect the public inter5 est, including requiring such an institutional investor

6 to be qualified pursuant to the provisions of this

7 Act.

8 ‘‘(e) LICENSING OF KEY EMPLOYEES OF GAMING

9 OPERATIONS.—

10 ‘‘(1) No person may be employed as a key em11 ployee of a class III gaming operation unless he is

12 the holder of a valid gaming operation key employee

13 license issued by the Commission.

14 ‘‘(2) Each applicant must, prior to the issuance

15 of any gaming operation key employee license,

16 produce information, documentation and assurances

17 concerning the following qualification criteria—

18 ‘‘(A) each applicant for a gaming operation

19 key employee license shall produce such infor20 mation, documentation and assurances as may

21 be required to establish by clear and convincing

22 evidence the financial stability, integrity and re23 sponsibility of the applicant, including but not

24 limited to bank references, business and per25 sonal income and disbursements schedules, tax
64

S 2230 IS

1 returns and other reports filed with govern2 mental agencies, and business and personal ac3 counting and check records and ledgers;

4 ‘‘(B) in addition, each applicant shall, in

5 writing, authorize the examination of all bank

6 accounts and records as may be deemed nec7 essary by the Commission;

8 ‘‘(C) each applicant for a gaming operation

9 key employee license shall produce such infor10 mation, documentation and assurances as may

11 be required to establish by clear and convincing

12 evidence the applicant’s good character, honesty

13 and integrity;

14 ‘‘(D) such information shall include, with15 out limitation, data pertaining to family, habits,

16 character, reputation, criminal and arrest

17 record, business activities, financial affairs, and

18 business, professional and personal associates

19 covering at least the 10-year period immediately

20 preceding the filing of the application;

21 ‘‘(E) each applicant shall notify the Com22 mission of any civil judgments obtained against

23 such applicant pertaining to antitrust or secu24 rity regulation laws of the Untied States or of
65

S 2230 IS

1 any state or of any jurisdiction, province or

2 country;

3 ‘‘(F) in addition, each applicant shall,

4 upon request of the Commission, produce let5 ters of reference from law enforcement agencies

6 having jurisdiction in the applicant’s place of

7 residence and principal place of business, which

8 letters of reference shall indicate that such law

9 enforcement agencies do not have any pertinent

10 information concerning the applicant, or if such

11 law enforcement agency does have information

12 pertaining to the applicant, shall specify what

13 that information is;

14 ‘‘(G) if the applicant has been associated

15 with gaming operations in any capacity, posi16 tion or employment in a jurisdiction which per17 mits such activity, the applicant shall, upon re18 quest of the Commission, produce letters of ref19 erence from the gaming or casino enforcement

20 or control agency, which shall specify the expe21 rience of such agency with the applicant, his as22 sociates and his participation in the gaming op23 erations of that jurisdiction, provided that if no

24 such letters are received from the appropriate

25 laws enforcement agencies within 60 days of the
66

S 2230 IS

1 applicant’s request therefor, the applicant may

2 submit a statement under oath that he is or

3 was during the period such activities were con4 ducted in good standing with such gaming or

5 casino enforcement or control agency; and

6 ‘‘(H) each applicant shall produce such in7 formation, documentation and assurances as

8 may be required to establish by clear and con9 vincing evidence that the applicant has suffi10 cient business ability and gaming operation ex11 perience as to establish the reasonable likeli12 hood of success and efficiency in the particular

13 position involved.

14 ‘‘(3) The Commission shall endorse upon any li15 cense issued hereunder the particular positions as

16 defined by this Act or by regulation which the li17 censee is qualified to hold.

18 ‘‘(4) The Commission shall deny a gaming oper19 ation key employee license to any applicant who is

20 disqualified on the basis of the criteria contained in

21 section 7(c)(4) of this Act.

22 ‘‘(5) For the purposes of this section, gaming

23 operation security employees shall be considered key

24 employees of a gaming operation.
67

S 2230 IS

1 ‘‘(6) Key employees of a gaming operation di2 rectly related to gaming operation shall include, but

3 not be limited to, boxmen, floormen, dealers or crou4 piers, cage personnel, count room personnel, slot and

5 slot booth personnel, credit and collection personnel,

6 gaming operation surveillance personnel, and gaming

7 operation security employees whose employment du8 ties require or authorize access to the gaming oper9 ation facility.

10 ‘‘(f) LICENSING AND REGISTRATION OF GAMING-RE11 LATED CONTRACTORS AND SERVICE INDUSTRIES.—

12 ‘‘(1)(A) All gaming-related contractors and

13 gaming service industries offering goods or services

14 which directly relate to a gaming operation, includ15 ing gaming equipment manufacturers, suppliers and

16 repairers, schools teaching gaming and either play17 ing or dealing techniques, and gaming operation se18 curity services, shall be licensed in accordance with

19 the provisions of this Act prior to conducting any

20 business whatsoever with a gaming operation appli21 cant or licensee, its employees or agents, and in the

22 case of a school, prior to enrollment of any students

23 or offering of any courses to the public whether for

24 compensation or not, provided that upon a showing

25 of good cause by gaming operation applicant or li-
68

S 2230 IS

1 censee for each business transaction, the Commis2 sion may permit an applicant for a gaming-related

3 contractor or gaming service industry license to con4 duct business transactions with such gaming oper5 ation applicant or licensee prior to the licensure of

6 that gaming-related contractor or gaming service in7 dustry applicant under this subsection.

8 ‘‘(B)(i) In addition to the requirements of para9 graph (A) of this subsection, any gaming-related

10 contractor or gaming service industry intending to

11 manufacture, sell, distribute or repair gambling de12 vices, other than antique slot machines, shall be li13 censed in accordance with the provisions of this Act

14 prior to engaging in any such activities: Provided,

15 That—

16 ‘‘(ii) upon a showing of good cause by a gaming

17 operation applicant or licensee for each business

18 transaction, the Commission may permit an appli19 cant for a gaming-related contractor or gaming serv20 ice industry license to conduct business transactions

21 with the gaming operation applicant or licensee prior

22 to the licensure of that contractor or service industry

23 applicant under this subsection: Proivided further,

24 That—
69

S 2230 IS

1 (iii) upon a showing of good cause by an appli2 cant required to be licensed as gaming-related con3 tractor or gaming service industry pursuant to this

4 paragraph, the Commission may permit the contrac5 tor or service industry applicant to initiate the man6 ufacture of gambling devices or engage in the sale,

7 distribution or repair of gambling devices with any

8 person other than a gaming operation applicant or

9 licensee, its employees or agents, prior to the licen10 sure of that contractor or service industry applicant

11 under this subsection.

12 ‘‘(2)(A) Each gaming-related contractor or

13 gaming service industry in subsection (1) of this sec14 tion, as well as its owners, management and super15 visory personnel and other principal employees must

16 qualify under the standards established for qualifica17 tion of a gaming operation key employee under this

18 Act;

19 ‘‘(B) In addition, if the business or enterprise

20 is a school teaching gaming and either playing or

21 dealing techniques, each director, instructor, prin22 cipal employee, and sales representative employed

23 thereby shall be licensed under the standards estab24 lished for qualification of a key gaming operation

25 employee under this Act, provided that nothing in
70

S 2230 IS

1 this subsection shall be deemed to require, in the

2 case of a public school district or a public institution

3 of higher education, the licensure or qualification of

4 any individuals except those instructors and other

5 principal employees responsible for the teaching of

6 playing or dealing techniques;

7 ‘‘(C) The Commission, in its discretion, may

8 issue a temporary license to an applicant for an in9 structor’s license upon a finding that the applicant

10 meets the educational and experiential requirements

11 for such license, that the issuance of a permanent li12 cense will be restricted by necessary investigations,

13 and that temporary licensing is necessary for the op14 eration of a gaming school.

15 ‘‘(3)(A) All gaming-related contractors and

16 gaming service industries not included in subsection

17 (1) of this section shall be licensed in accordance

18 with rules of the Commission prior to commence19 ment or continuation of any business with a gaming

20 operation applicant or licensee or its employees or

21 agents.

22 ‘‘(B) Such gaming-related contractors and gam23 ing service industries, whether or not directly related

24 to gaming operations, shall include any person, en-
71

S 2230 IS

1 tity or enterprise contracting with gaming operation

2 applicants or licensees or their employees or agents.

3 ‘‘(C) The Commission may exempt any person

4 or field of commerce from the licensing requirements

5 of this subsection if the person or field of commerce

6 demonstrates—

7 ‘‘(i) that it is regulated by a public agency

8 or that it will provide goods or services in in9 substantial or insignificant amounts or quan10 tities, and

11 ‘‘(ii) that licensing is not deemed necessary

12 in order to protect the public interest or to ac13 complish the policies established by this Act.

14 ‘‘(D) Upon granting an exemption or at any

15 time thereafter, the Commission may limit or place

16 such restrictions thereupon as it may deem nec17 essary in the public interest, and shall require the

18 exempted person to cooperate with the Commission

19 and, upon request, to provide information in the

20 same manner as required of a gaming-related con21 tractor or gaming service industry licensed pursuant

22 to this subsection, provided that no exemption be

23 granted unless the gaming-related contractor or

24 gaming service industry complies with the require25 ments of this section of this Act.’’.
72

S 2230 IS

1 (8) Section 9 of the Act (25 U.S.C. 2708) is amended

2 to read as follows:

3 ‘‘SEC. 9. REQUIREMENTS FOR THE CONDUCT OF CLASS I

4 AND CLASS II GAMING ON INDIAN LANDS.

5 ‘‘(a) CLASS I GAMING.—Class I gaming on Indian

6 lands is within the exclusive jurisdiction of the Indian

7 tribes and shall not be subject to the provisions of this

8 Act;

9 ‘‘(b) CLASS II GAMING.—(1) Any Class II gaming

10 on Indian lands shall continue to be within the jurisdiction

11 of the Indian tribes, but shall be subject to the provisions

12 of this Act.

13 ‘‘(2) An Indian tribe may engage in, or license and

14 regulate class II gaming on Indian lands within such

15 tribe’s jurisdiction, if—

16 ‘‘(A) such Indian gaming is located within a

17 State that permits such gaming for any purpose by

18 any person, organization or entity;

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

20 prohibited on Indian lands by Federal law; and

21 ‘‘(C) the Class II gaming operation meets the

22 requirements of sections 7 and 9 of this Act.

23 ‘‘(3) The Commission shall insure that any class II

24 gaming operation on Indian lands meets the following re25 quirements—
73

S 2230 IS

1 ‘‘(A) a separate license is issued by the Indian

2 tribe for each place, facility, or location on Indian

3 lands at which Class II gaming is conducted;

4 ‘‘(B) the Indian tribe has or will have the sole

5 proprietary interest and responsibility for the con6 duct of any Class II gaming activity, unless the con7 ditions of subsection (3)(I) of this section apply;

8 ‘‘(C) net revenues from any Class II gaming ac9 tivity are not to be used for purposes other than—

10 ‘‘(i) to fund tribal government operations

11 or programs;

12 ‘‘(ii) to provide for the general welfare of

13 the Indian tribe and its members;

14 ‘‘(iii) to promote tribal economic develop15 ment;

16 ‘‘(iv) to donate to charitable organizations;

17 or

18 ‘‘(v) to help fund operations of local gov19 ernment agencies;

20 ‘‘(D) annual outside audits of the gaming,

21 which may be encompassed within existing independ22 ent tribal audit systems, are provided by the Indian

23 tribal government to the Commission;

24 ‘‘(E) all contracts for supplies, services, or con25 cessions for a contract amount in excess of $10,000
74

S 2230 IS

1 annually, except contracts for professional legal or

2 accounting services, relating to such gaming shall be

3 subject to such independent audits and audit by the

4 Commission;

5 ‘‘(F) the construction and maintenance of a

6 Class II gaming facility, and the operation of Class

7 II gaming is conducted in a manner which ade8 quately protects the environment and the public

9 health and safety; and

10 ‘‘(G) there is an adequate system which—

11 ‘‘(i) ensures that background investigations

12 are conducted on primary management officials,

13 key employees and persons having a material

14 involvement, either directly or indirectly, in a li15 censed Class II gaming operation, and gaming16 related contractors associated with a licensed

17 Class II gaming operation and that oversight of

18 such officials and their management is con19 ducted on an ongoing basis; and

20 ‘‘(ii) includes—

21 ‘‘(I) tribal licenses for persons in22 volved in Class II gaming operations, in23 cluding but not limited to key employees,

24 gaming related contractors, gaming service

25 industries, and any persons having a mate-
75

S 2230 IS

1 rial involvement, either directly or indi2 rectly, with a licensed gaming operation in

3 accordance with section 8 of this Act;

4 ‘‘(II) a standard whereby any person

5 whose prior activities, criminal record, if

6 any, or reputation, habits, and associations

7 pose a threat to the public interest or to

8 the effective regulation of gaming, or cre9 ate or enhance the dangers of unsuitable,

10 unfair, or illegal practices and methods

11 and activities in the conduct of gaming

12 shall not be eligible for employment; and

13 ‘‘(III) notification by the Indian tribal

14 government to the Commission of the re15 sults of such background investigation be16 fore the issuance of any of such licenses;

17 ‘‘(H) net revenues from any Class II gaming

18 activities conducted or licensed by any Indian tribal

19 government may be used to make per capita pay20 ments to members of the Indian tribe only if—

21 ‘‘(i) the Indian tribe has prepared a plan

22 to allocate revenues to uses authorized by para23 graph (3)(C) of this section;

24 ‘‘(ii) the plan is approved by the Secretary

25 as adequate, particularly with respect to uses
76

S 2230 IS

1 described in clause (i) or (iii) of paragraph

2 (3)(C) of this section;

3 ‘‘(iii) the interests of minors and other le4 gally incompetent persons who are entitled to

5 receive any of the per capita payments are pro6 tected and preserved and the per capita pay7 ments are disbursed to the parents or legal

8 guardian of such minors or legal incompetents

9 in such amounts as may be necessary for the

10 health, education, or welfare of the minor or

11 other legally incompetent person under a plan

12 approved by the Secretary and the governing

13 body of the Indian tribe; and

14 ‘‘(iv) the per capita payments are subject

15 to federal taxation and tribes notify members of

16 such tax liability when payments are made;

17 ‘‘(I)(i) a separate license is issued for any Class

18 II gaming operation owned by any person or entity

19 other than the Indian tribal government and con20 ducted on Indian lands, and such license includes

21 the requirements set forth in the subclauses of sub22 paragraph (C)(i) and are at least as restrictive as

23 those established by State law governing similar

24 gaming within the jurisdiction of the State within

25 which such Indian lands are located;
77

S 2230 IS

1 ‘‘(ii) no person or entity, other than the Indian

2 tribal government, shall be eligible to receive a tribal

3 license to own a Class II gaming operation con4 ducted on Indian lands within the jurisdiction of the

5 Indian tribe if such person or entity would not be el6 igible to receive a State license to conduct the same

7 activity within the jurisdiction of the State;

8 ‘‘(iii) the provisions of subparagraph (i) of this

9 paragraph and the provisions of subparagraphs (B)

10 and (C) of subsection (3) shall not bar the continued

11 operation of an individually-owned Class II gaming

12 operation that was operating on September 1, 1986,

13 if—

14 ‘‘(I) such gaming operation is licensed and

15 regulated by an Indian tribal government;

16 ‘‘(II) income to the Indian tribal govern17 ment from such gaming is used only for the

18 purposes described in paragraph (c)(3) of this

19 subsection,

20 ‘‘(III) not less than 60 percent of the net

21 revenues is income to the licensing tribal gov22 ernment, and

23 ‘‘(IV) the owner of such gaming operation

24 pays an appropriate assessment to the Commis-
78

S 2230 IS

1 sion under section 15 for regulation of such

2 gaming;

3 ‘‘(iv) the exemption from application of this

4 subsection provided under this subparagraph may

5 not be transferred to any person or entity and shall

6 remain in effect only so long as the gaming oper7 ation remains within the same nature and scope as

8 operated on October 17, 1988; and

9 ‘‘(v) the Commission shall maintain a list of

10 each individually-owned gaming operation to which

11 clause (iii) applies and shall publish such list in the

12 Federal Register.

13 ‘‘(c) LICENSE REVOCATION.—If, after the issuance

14 of a license by an Indian tribal government, reliable infor15 mation is received from the Commission indicating that

16 any licensee does not meet the standards established under

17 section 8 and the regulations promulgated by the Commis18 sion, the Indian tribal government shall suspend such li19 cense and, after notice and hearing, may revoke such li20 cense.’’.

21 ‘‘(9) Section 10 of the Act (25 U.S.C. 2709) is

22 amended to read as follows:

23 ‘‘SEC. 10. CLASS III GAMING ON INDIAN LANDS.

24 ‘‘(a) REQUIREMENTS FOR THE CONDUCT OF CLASS

25 III GAMING ON INDIAN LANDS.—
79

S 2230 IS

1 ‘‘(1) Class III gaming activities shall be lawful

2 on Indian lands only if such activities are—

3 ‘‘(A) authorized by a compact that—

4 ‘‘(i) is adopted by the governing body

5 of the Indian tribe having jurisdiction over

6 such lands,

7 ‘‘(ii) meets the requirements of sub8 section (b) of this section, and

9 ‘‘(iii) is approved by the Secretary;

10 ‘‘(B) located in a State where the require11 ments of this section of the Act are satisfied,

12 and the gaming activity is determined to be eli13 gible for inclusion in a compact in accordance

14 with the provisions of this section of the Act;

15 ‘‘(C) conducted in conformance with a

16 compact entered into by the Indian tribe under

17 paragraph (3) that is in effect; and

18 ‘‘(D) the Class III gaming operation meets

19 the requirements of Sections 7, 8, 10 and 11 of

20 this Act.

21 ‘‘(2)(A) The governing body of an Indian tribe,

22 in its sole discretion, may adopt an ordinance or res23 olution revoking any prior ordinance or resolution

24 that authorized Class III gaming on the Indian

25 lands of the Indian tribe. Such revocation shall
80

S 2230 IS

1 render Class III gaming illegal on the Indian lands

2 of such Indian tribe.

3 ‘‘(B) The Indian tribe shall submit any revoca4 tion ordinance or resolution described in subpara5 graph (A) to the Chairman. The Chairman shall

6 publish such ordinance or resolution in the Federal

7 Register and the revocation provided by such ordi8 nance or resolution shall take effect on the date of

9 such publication.

10 ‘‘(C) Notwithstanding any other provision of

11 this subsection—

12 ‘‘(i) any person or entity operating a Class

13 III gaming activity pursuant to this paragraph

14 on the date on which an ordinance or resolution

15 described in subparagraph (A) that revokes au16 thorization for such Class III gaming activity is

17 published in the Federal Register may, during

18 the 1-year period beginning on the date on

19 which such revocation ordinance or resolution is

20 published under subparagraph (B), continue to

21 operate such activity in conformance with the

22 compact entered into under paragraph (3) that

23 is in effect; and

24 ‘‘(ii) any civil action that arises before, and

25 any crime that is committed before, the close of
81

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1 such 1-year period shall not be affected by such

2 revocation ordinance or resolution.

3 ‘‘(3)(A)(i) Any Indian tribe having jurisdiction

4 over the lands upon which a Class III gaming activ5 ity is to be conducted may request the Secretary to

6 enter into negotiations for a compact.

7 ‘‘(ii) Such request shall be in writing and shall

8 specify the gaming activity or activities to be in9 cluded in the compact and within 30 days the Sec10 retary shall determine if any such requested activi11 ties should not be included in the compact under the

12 laws of the State in which the Indian tribe is located

13 in conformity with the standards set forth in sub14 paragraphs (C) and (D) of this subsection and shall

15 so notify the Indian tribe.

16 ‘‘(iii) Such negotiations shall be completed with17 in 120 days after the expiration of the 60-day period

18 in subparagraph (B)(iii) of this subsection.

19 ‘‘(iv) Any compact negotiated under this para20 graph shall be effective upon its publication in the

21 Federal Register by the Secretary.

22 ‘‘(v) The Commission, pursuant to section 7,

23 shall monitor, regulate and license Class III gaming

24 with respect to any compact negotiated under this
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1 paragraph and published by the Secretary in the

2 Federal Register.

3 ‘‘(vi) Any compact negotiated under this para4 graph shall be for a fixed term of years, consistent

5 with the purposes of this Act.

6 ‘‘(vii) A tribal request for a change in a com7 pact shall be considered a request for purposes of

8 this subsection.

9 ‘‘(B)(i) When an Indian tribe makes a request

10 pursuant to subparagraph (A), it shall also notify

11 the State within which the gaming activity is to be

12 conducted.

13 ‘‘(ii) Such notice to the State shall include the

14 specific gaming activities which the Indian tribe is

15 requesting that the Secretary include in the com16 pact.

17 ‘‘(iii) Within 60 days from such notification, the

18 State may request the Indian tribe to enter into ne19 gotiations for a compact. The State and Indian tribe

20 by mutual agreement may extend the 60-day period.

21 ‘‘(iv) When a State requests an Indian tribe to

22 negotiate a compact within the designated time pe23 riod, that request shall toll the operation of subpara24 graph (A), and shall be deemed to constitute a vol-
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1 untary waiver of the sovereign immunity of the State

2 for the purposes of this Act.

3 ‘‘(C) Any compact negotiated under subpara4 graph (A) may include provisions relating to—

5 ‘‘(i) the application of the criminal and

6 civil laws and regulations of the Indian tribe or

7 the State that are directly related to, and nec8 essary for, the licensing and regulation of such

9 activity;

10 ‘‘(ii) the allocation of criminal and civil ju11 risdiction between the State and the Indian

12 tribe necessary for the enforcement of such laws

13 and regulations;

14 ‘‘(iii) the assessment by the State of such

15 activities in such amounts as are necessary to

16 defray the costs of regulating such activity;

17 ‘‘(iv) taxation by the Indian tribe of such

18 activity in amounts comparable to amounts as19 sessed by the State for comparable activities;

20 ‘‘(v) remedies for breach of contract;

21 ‘‘(vi) standards for the operation of such

22 activity and maintenance of the gaming facility,

23 including licensing; and

24 ‘‘(vii) any other subjects that are reason25 ably related to the operation of gaming activi-
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1 ties, and the impact on tribal, State, and local

2 governments.

3 ‘‘(4) Except for any assessments for services

4 agreed to by an Indian tribe in compact negotia5 tions, nothing in this section shall be construed as

6 conferring upon a State or any of its political sub7 divisions the authority to impose any tax, fee, charge

8 or other assessment upon an Indian tribe, an Indian

9 gaming operation or the value generated therein, or

10 any person or entity authorized by an Indian tribe

11 to engage in a Class III gaming activity in conform12 ity with the provisions of this Act.

13 ‘‘(5) Nothing in this subsection shall impair the

14 right of an Indian tribe to regulate Class III gaming

15 on its Indian lands concurrently with the State and

16 the Commission, except to the extent that such regu17 lation is inconsistent with, or less stringent than,

18 this Act or the laws and regulations made applicable

19 by any compact entered into by the Indian tribe

20 under paragraph (3) that is in effect.

21 ‘‘(6) The provisions of section 5 of the Act of

22 January 2, 1951 (15 U.S.C. 1175) shall not apply

23 to any gaming activity conducted pursuant to a com24 pact entered into after the effective date of the In25 dian Gaming Regulatory Act Amendments Act, but
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1 in no event shall this paragraph, as amended by

2 such Act, be construed as invalidating any exemp3 tion from section 5 under this Act prior to its enact4 ment by the Indian Gaming Regulatory Act Amend5 ments Act of 1994, or under any compact, or proce6 dure in lieu of a compact, in effect on the date of

7 enactment of the Indian Gaming Regulatory Act

8 Amendments Act.

9 ‘‘(7)(A) The United States district courts shall

10 have jurisdiction over—

11 ‘‘(i) any cause of action for a declaratory

12 judgment brought by an Indian tribe or a State

13 pursuant to subparagraph (C), or the review of

14 any decision by the Secretary with regard to the

15 gaming activities which are subject to inclusion

16 in a compact or to resolve any dispute pursuant

17 to subparagraph (E) or (F);

18 ‘‘(ii) any cause of action initiated by a

19 State or Indian tribe to enjoin a Class III gam20 ing activity located on Indian lands and con21 ducted in violation of any compact entered into

22 under paragraph (3) that is in effect; or

23 ‘‘(iii) any cause of action initiated by the

24 Secretary to enforce any provision of a compact.
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1 ‘‘(B)(i) Where a State elects to negotiate a

2 compact, within 30 days after notice of the election,

3 the State shall notify the tribe if it determines that

4 any gaming activity requested is prohibited as a

5 matter of State criminal law and is not otherwise

6 subject to negotiation under this Act.

7 ‘‘(ii) Following the State’s notification to the

8 tribe of its determination, the parties shall have 30

9 days in which to meet and confer to resolve any dis10 pute regarding the State’s determination.

11 ‘‘(iii) Notwithstanding any declaratory judg12 ment action pending under subparagraph (C), a

13 tribe and State may negotiate and establish proce14 dures for mediating any issue not subject to the de15 claratory judgment action.

16 ‘‘(C) No later than 120 days after the State

17 has notified the tribe of its election to negotiate a

18 compact, or such longer period as may be agreed to

19 in writing by the parties, either party may initiate

20 an action in an appropriate United States district

21 court for a declaration whether the disputed gaming

22 activity is subject to compact negotiation under this

23 Act. In any such declaratory action, the court shall

24 declare that the disputed gaming activity as a mat-
87

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1 ter of Federal law shall be the subject of negotiation

2 if it finds that—

3 ‘‘(i) the disputed gaming activity is not

4 prohibited as a matter of State criminal law, or

5 ‘‘(ii) even if the disputed activity is prohib6 ited as a matter of State criminal law, the gam7 ing activity meets one or more of the following

8 criteria:

9 ‘‘(I) Its principal characteristics are

10 not distinguishable from a gaming activity

11 that is not prohibited by State criminal law

12 and there is no rational basis for differen13 tiating between the disputed gaming activ14 ity and the activity not prohibited by the

15 State.

16 ‘‘(II) State law permits the disputed

17 gaming activity subject to regulation.

18 ‘‘(III) As a matter of State law any

19 person, organization, or entity within the

20 State may engage in the disputed gaming

21 activity for any purpose, except that the

22 permitting of a social gaming activity does

23 not make that activity subject to negotia24 tions pursuant to this section after the

25 date of the enactment of the Indian Gam-
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1 ing Regulatory Act Amendments Act; pro2 vided that this exception shall have no ef3 fect on the continued validity of any com4 pacts or procedures in lieu thereof which

5 are in effect on the date of enactment of

6 the Indian Gaming Regulatory Act Amend7 ments Act.

8 ‘‘(D) In any determination of whether a gaming

9 activity is subject to compact negotiation under this

10 Act, the following categories of gaming activities are

11 distinguishable from each other:

12 ‘‘(i) Gambling device.

13 ‘‘(ii) Lottery game.

14 ‘‘(iii) Banking game.

15 ‘‘(iv) Parimutuel wagering.

16 ‘‘(v) Other games of chance.

17 ‘‘(E) Where the State elects to negotiate a com18 pact under this Act, the negotiation shall be com19 pleted within 120 days after the expiration of the

20 60-day period in paragraph (3)(B)(iii) of this sub21 section, unless the State and Indian tribe by mutual

22 agreement extend the time period.

23 ‘‘(F) The Secretary in consultation with the In24 dian tribes and the States shall develop a panel of

25 independent mediators which shall be periodically
89

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1 updated. If after 120 days from a State’s request for

2 negotiations or a final declaratory judgment not sub3 ject to further review, the State and Indian tribe

4 have not agreed to recommend a compact to the Sec5 retary, the State and Indian tribe shall enter into

6 compulsory mediation, pursuant to the following pro7 cedures:

8 ‘‘(i) The Secretary shall provide the State

9 and Indian tribe with a list of names of 3 medi10 ators randomly selected from the panel of inde11 pendent mediators. The State and Indian tribe

12 each shall remove a different 1 of the 3 from

13 the list, and the remaining mediator shall con14 duct the mediation.

15 ‘‘(ii) The mediator shall attempt to achieve

16 a compact within a 60-day period, which period

17 may be extended at the agreement of the State

18 and Indian tribe.

19 ‘‘(iii) If compulsory mediation fails, the

20 State and Indian tribe shall submit their last

21 best offer to the mediator, who shall evaluate

22 the offers under the terms of the Act and rec23 ommend a compact to the Secretary, except

24 that by mutual agreement the parties may sub25 stitute either compulsory arbitration, or a deci-
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1 sion by the Secretary instead of a mediator’s

2 recommendation.

3 ‘‘(iv) The recommended compact also shall

4 include such provisions which in the opinion of

5 the mediator or arbitrator best meet the objec6 tives of this Act and are consistent with any de7 claratory judgment issued pursuant to subpara8 graph (C).

9 ‘‘(G) If the parties or the mediator or arbitrator

10 pursuant to this paragraph recommend a compact to

11 the Secretary, the Secretary shall approve such com12 pact and shall publish it in the Federal Register; ex13 cept that the compact shall not be approved by the

14 Secretary unless it contains provisions for internal

15 controls which are consistent with this Act and the

16 regulations promulgated by the Commission, includ17 ing, without limitation, provisions relating to cash

18 flow transactions, recordkeeping and reporting, ac19 counting, security, licensing and training of employ20 ees, and related matters. The compact also shall not

21 be approved if it violates—

22 ‘‘(i) any provision of this Act or the regula23 tions promulgated by the Commission;
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1 ‘‘(ii) any other provision of Federal law

2 that does not relate to jurisdiction over gaming

3 on Indian reservations; or

4 ‘‘(iii) the trust obligations of the United

5 States to Indians.

6 ‘‘(H) Except for an appeal under subchapter II

7 of chapter 5, of title 5, United States Code, by an

8 Indian tribe or State on the publication of a com9 pact, publication of a compact pursuant to this sub10 section which permits a form of Class III gaming

11 shall, for the purposes of this Act, be conclusive evi12 dence that such Class III gaming is an activity sub13 ject to negotiations under the laws of the State

14 where the gaming is to be conducted, in any matter

15 under consideration by the Commission or a Federal

16 court.

17 ‘‘(I) If the Secretary does not approve or dis18 approve a compact under this subsection before the

19 date that is 45 days after the date that the compact

20 is submitted to the Secretary for approval, or after

21 the expiration of the 180-day period with respect to

22 the last compact proposal in subparagraph (3), the

23 compact shall be considered approved, but only to

24 the extent that the compact is consistent with the
92

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1 provisions of this Act and any regulations promul2 gated by the Commission.

3 ‘‘(J) The Secretary shall publish in the Federal

4 Register notice of any compact that has been ap5 proved, or considered to have been approved, under

6 this paragraph.

7 ‘‘(8)(A) The Secretary is authorized to approve

8 any compact entered into between an Indian tribe

9 and a State governing gaming on Indian lands of

10 such Indian tribe.

11 ‘‘(B) The Secretary may disapprove a compact

12 described in subparagraph (A) only if such compact

13 violates—

14 ‘‘(i) any provision of this Act or the regula15 tions promulgated by the Commission;

16 ‘‘(ii) any other provision of Federal law

17 that does not relate to jurisdiction over gaming

18 on Indian lands, or

19 ‘‘(iii) the trust obligations of the United

20 States to Indians.

21 ‘‘(C) If the Secretary does not approve or dis22 approve a compact described in subparagraph (A)

23 before the date that is 45 days after the date on

24 which the compact is submitted to the Secretary for

25 approval, the compact shall be considered to have
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1 been approved by the Secretary, but only to the ex2 tent the compact is consistent with the provisions of

3 this Act and the regulations promulgated by the

4 Commission.

5 ‘‘(D) The Secretary shall publish in the Federal

6 Register notice of any compact that is approved, or

7 considered to have been approved, under this para8 graph.

9 ‘‘(b) EFFECT OF AMENDMENTS.—Class III gaming

10 activities that are as a matter of Federal law, lawful in

11 any jurisdiction on the date of enactment of the Indian

12 Gaming Regulatory Act Amendments Act of 1994, shall

13 notwithstanding any provisions of this Act, remain lawful

14 for purposes of section 10.’’.

15 (10) Section 11 of the Act (25 U.S.C. 2710) is

16 amended to read as follows:

17 ‘‘SEC. 11. REVIEW OF CONTRACTS.

18 ‘‘(a) CONTRACTS INCLUDED.—The Commission shall

19 review and approve or disapprove—

20 ‘‘(1) any management contract for the oper21 ation and management of any gaming activity that

22 an Indian tribe may engage in under the Act; and

23 ‘‘(2) gaming-related contracts.

24 ‘‘(b) MANAGEMENT CONTRACT REQUIREMENTS.—

25 The Commission shall approve any management contract
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1 between an Indian tribe and a person or entity licensed

2 by an Indian tribe or the Commission which is entered

3 into pursuant to this Act only if it determines that the

4 contract provides for—

5 ‘‘(1) adequate accounting procedures that are

6 maintained and for verifiable financial reports that

7 are prepared by or for the governing body of the In8 dian tribe on a monthly basis;

9 ‘‘(2) access to the daily gaming operations by

10 appropriate officials of the Indian tribe who shall

11 have the right to verify the daily gross revenues and

12 income derived from any gaming activity;

13 ‘‘(3) a minimum guaranteed payment to the In14 dian tribe that has preference over the retirement of

15 any development and construction costs;

16 ‘‘(4) an agreed upon ceiling for the repayment

17 of any development and construction costs;

18 ‘‘(5) grounds and mechanisms for the termi19 nation of the contract, but any such termination

20 shall not require the approval of the Commission;

21 and

22 ‘‘(6) such other provisions as the Commission

23 deems necessary as provided for in regulations pro24 mulgated by the Commission.
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1 ‘‘(c) MAXIMUM TERMS AND FEES FOR MANAGEMENT

2 CONTRACTS.—The Commission may approve a manage3 ment contract providing for a fee of up to 40 percent of

4 net revenues from an Indian gaming activity determined

5 in accordance with generally accepted accounting prin6 ciples and a term of up to ten years, pursuant to regula7 tions to be promulgated by the Commission. Such regula8 tions shall take into consideration the nature of the man9 agement services being provided, the capital investment

10 being made, the income projections for the particular gam11 ing activity, and any other factors the Commission deems

12 relevant.

13 ‘‘(d) GAMING-RELATED CONTRACT REQUIRE14 MENTS.—The Commission shall approve a gaming related

15 contract between an Indian tribe and a person or entity

16 licensed by the Commission which is entered into pursuant

17 to this Act only if it determines that the contract provides

18 for—

19 ‘‘(1) grounds and mechanisms for termination

20 of the contract, but such termination shall not re21 quire the approval of the Commission; and

22 ‘‘(2) such other provisions as the Commission

23 deems necessary as provided for in regulations pro24 mulgated by the Commission.
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1 ‘‘(e) TIME PERIOD FOR REVIEW.—By no later than

2 the date that is 180 days after the date on which a man3 agement contract or other gaming-related contract is sub4 mitted to the Commission for approval, the Commission

5 shall approve or disapprove such contract on its merits.

6 The Commission may extend the 180 day period by not

7 more than 90 days if the Commission notifies the Indian

8 tribe in writing of the reason for the extension of time.

9 The Indian tribe may bring an action in a Federal district

10 court to compel action by the Commission if a contract

11 has not been approved or disapproved within the period

12 required by this subsection.

13 ‘‘(f) CONTRACT MODIFICATIONS AND VOID CON14 TRACTS.—The Commission, after notice and hearing, shall

15 have the authority to require appropriate contract modi16 fications or may void any contract if it determines that

17 any of the provisions of this Act have been violated.

18 ‘‘(g) INTERESTS IN REAL PROPERTY.—No contract

19 regulated by this Act shall transfer or, in any other man20 ner, convey any interest in land or other real property,

21 unless specific statutory authority exists and such transfer

22 or conveyance is clearly specified in the contract.

23 ‘‘(h) AUTHORITY OF THE SECRETARY.—The author24 ity of the Secretary under section 2103 of the Revised
97

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1 Statutes (25 U.S.C. 81) does not extend to any contracts

2 which are regulated pursuant of this Act.

3 ‘‘(i) DISAPPROVAL OF CONTRACTS.—The Commis4 sion shall not approve any contract if it determines that—

5 ‘‘(1) any person having a direct financial inter6 est in, or management responsibility for, such con7 tract, and, in the case of a corporation, those indi8 viduals who serve on the board of directors of such

9 corporation and each of its stockholders who hold

10 (directly or indirectly) 10 percent or more or its is11 sued and outstanding stock—

12 ‘‘(A) is an elected member of the governing

13 body of the Indian tribe which is the party to

14 the contract;

15 ‘‘(B) has been or subsequently is convicted

16 of any felony or gaming offense;

17 ‘‘(C) has knowingly and willfully provided

18 materially important false statements or infor19 mation to the Commission or the Indian tribe

20 pursuant to this Act or has refused to respond

21 to questions propounded by the Commission; or

22 ‘‘(D) has been determined to be a person

23 whose prior activities, criminal record, if any, or

24 reputation, habits, and associations pose a

25 threat to the public interest or to the effective
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1 regulation and control of gaming, or create or

2 enhance the dangers of unsuitable, unfair, or il3 legal practices, methods, and activities in the

4 conduct of gaming or the carrying on of the

5 business and financial arrangements incidental

6 thereto;

7 ‘‘(2) the contractor has, or has attempted to,

8 unduly interfere or influence for its gain or advan9 tage any decision or process of tribal government re10 lating to the gaming activity;

11 ‘‘(3) the contractor has deliberately or substan12 tially failed to comply with the terms of the contract;

13 or

14 ‘‘(4) a trustee, exercising the skill and diligence

15 that a trustee is commonly held to, would not ap16 prove the contract.’’.

17 (11) Section 12 of the Act (25 U.S.C. 2711) is

18 amended to read as follows:

19 ‘‘SEC. 12. REVIEW OF EXISTING COMPACTS AND CON20 TRACTS; INTERIM AUTHORITY.

21 ‘‘(a) REVIEW OF EXISTING COMPACTS.—(1) At any

22 time after the Commission authorized by the Indian Gam23 ing Regulatory Act Amendments Act has been sworn in

24 and regulations have been promulgated for the implemen25 tation of the Act as amended, the Commission shall notify
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1 each Indian tribe and state which, prior to the enactment

2 of the Indian Gaming Regulatory Act Amendments Act,

3 entered into a compact that was approved by the Sec4 retary, that the compact must be submitted to the Com5 mission for its review within 60 days of such notification.

6 Any such compact shall be valid under this Act and shall

7 remain in full force and effect in accordance with its

8 terms, unless the Commission determines that the regu9 latory and licensing provisions of the compact fail to meet

10 the requirements of this Act and any regulations promul11 gated by the Commission.

12 ‘‘(2) If the Commission should determine that a com13 pact fails to meet the regulatory and licensing require14 ments of this Act and any regulations promulgated by the

15 Commission, then the Commission shall so notify the In16 dian tribe and the State and the Commission shall provide

17 for the direct regulation and licensing of the gaming ac18 tivities authorized by such compact pursuant to this Act

19 until such time as the Indian tribe or the Indian tribe and

20 the State have developed regulations and licenses to gov21 ern the gaming activity which meet or exceed the require22 ments imposed by this Act and any regulations promul23 gated by the Commission.

24 ‘‘(b) REVIEW OF EXISTING CONTRACTS.—(1) At any

25 time after the Commission authorized by the Indian Gam-
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1 ing Regulatory Act Amendments Act is sworn in and pro2 mulgated regulations for the implementation of the Act

3 as amended, the Commission shall notify each Indian tribe

4 and management contractor who, prior to the enactment

5 of the Indian Gaming Regulatory Act Amendments Act,

6 entered into a management contract that was approved

7 by the Secretary, that such contract, including all collat8 eral agreements relating to the gaming activity, must be

9 submitted to the Commission for its review within 60 days

10 of such notification. Any such contract shall be valid under

11 this Act, unless it is disapproved by the Commission under

12 this section.

13 ‘‘(2)(A) Within 180 days after the submission of a

14 management contract, including all collateral agreements,

15 pursuant to this section, the Commission shall subject

16 such contract to the requirements and procedures under

17 section 11 of this Act.

18 ‘‘(B) If the Commission determines that a manage19 ment contract submitted under this section meets the re20 quirements of section 11, and the management contractor

21 obtains all of the required licenses, the Commission shall

22 approve the management contract.

23 ‘‘(C) If the Commission determines that a contract

24 submitted under this section does not meet the require25 ments of section 11, then the Commission shall provide
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1 written notification to the parties to such contract of the

2 necessary modifications and the parties shall have 180

3 days to make the modifications.

4 ‘‘(c) INTERIM AUTHORITY OF THE NATIONAL INDIAN

5 GAMING COMMISSION.—Notwithstanding any other provi6 sion of this Act, the Secretary and the Chairman and the

7 associate members of the National Indian Gaming Com8 mission who are holding office on the date of enactment

9 of the Indian Gaming Regulatory Act Amendments Act

10 shall continue to exercise those authorities vested in them

11 by the Act until such time as the members of the Commis12 sion authorized by the Act as amended are sworn into of13 fice. The Commission authorized by the Act as amended

14 shall exercise all of the authority conferred on it by the

15 Act as amended and shall enforce all of the regulations

16 previously promulgated under the act until the same are

17 revised or superseded by regulations promulgated by the

18 Commission to implement the Act as amended.’’.

19 (12) Section 13 of the Act (25 U.S.C. 2712) is re20 pealed.

21 (13) Section 143 of the Act (25 U.S.C. 2713) is re22 designated as section 13 and is amended to read as fol23 lows:
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1 ‘‘SEC. 13. CIVIL PENALTIES.

2 ‘‘(a) AMOUNT.—Any person who commits any act or

3 causes to be done any act that violates any provision of

4 this Act or the rules or regulations promulgated there5 under, or omits to do any act or causes to be omitted any

6 act that is required by any provision or such rule or regu7 lation shall be subject to a civil penalty not to exceed

8 $50,000 per day for each such violation.

9 ‘‘(b) ASSESSMENT AND COLLECTION.—Any civil pen10 alty under this section shall be assessed by the Commis11 sion and collected in a civil action brought by the Attorney

12 General on behalf of the United States. Before referral

13 of civil penalty claims to the Attorney General, civil pen14 alties may be compromised by the Commission after af15 fording the person charged with a violation of this Act,

16 or the rules or regulations promulgated by the Commission

17 an opportunity to present views and evidence in support

18 thereof to establish that the alleged violation did not

19 occur. In determining the amount of such penalty, the

20 Commission shall take into account the nature, cir21 cumstances, extent, and gravity of the violation committed

22 and, with respect to the person found to have committed

23 such violation, the degree of culpability, any history or

24 prior violations, ability to pay, the effect on ability to con25 tinue to do business, and such other matters as justice

26 may require.
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1 ‘‘(c) TEMPORARY CLOSURES.—(1) The Commission

2 may order the temporary closure of all or part of an In3 dian gaming operation for substantial violations of the

4 provisions of this Act or rules or regulations promulgated

5 by the Commission.

6 ‘‘(2) Not later than 30 days after the issuance of an

7 order of temporary closure, the Indian tribe or the individ8 ual owner of a gaming operation shall have the right to

9 request a hearing before the Commission to determine

10 whether such order should be made permanent or dis11 solved. A hearing shall be conducted within 30 days after

12 the request for a hearing and a final decision shall be ren13 dered 30 days after the completion of the hearing.’’.

14 (14) Section 15 of the Act (25 U.S.C. 2714) is redes15 ignated as section 14 and is amended to read as follows:

16 ‘‘SEC. 14. JUDICIAL REVIEW.

17 ‘‘Decisions made by the Commission pursuant to sec18 tions 7, 8, 9, 10, 11, 12, and 13 shall be final agency

19 decisions for purposes of appeal to the appropriate Federal

20 district court pursuant to chapter 7 of title 5.’’.

21 (15) Section 16 of the Act (25 U.S.C. 2715) is re22 pealed.

23 (16) Section 17 of the Act (25 U.S.C. 2716) is re24 pealed.
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1 (17) Section 18 of the Act (25 U.S.C. 2717) is redes2 ignated as section 15 and is amended to read as follows:

3 ‘‘SEC. 15. COMMISSION FUNDING.

4 ‘‘(a) ANNUAL FEES.—(1) The Commission shall es5 tablish a schedule of fees to be paid to the Commission

6 annually by each Class II and Class III gaming activity

7 that is regulated by this Act.

8 ‘‘(2) The rate of the fees imposed under the schedule

9 established under paragraph (1) shall be no less than 0.5

10 percent nor more than 2 percent of the gross revenues

11 of each gaming operation regulated by this Act.

12 ‘‘(3) The Commission, by a vote of a majority of its

13 members, shall annually adopt the rate of the fees author14 ized by this section which shall be payable to the Commis15 sion on a monthly basis.

16 ‘‘(4) The fees to be paid by a gaming operation may

17 be adjusted downward by the Commission to the extent

18 that regulatory functions are performed by the tribe or

19 the tribe and a state, pursuant to regulations promulgated

20 by the Commission.

21 ‘‘(5) Failure to pay the fees imposed under the sched22 ule established under paragraph (1) shall, subject to the

23 regulations of the Commission, be grounds for revocation

24 of the approval of the Commission of any license required

25 under this Act for the operation of gaming activities.
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1 ‘‘(6) To the extent that revenue derived from fees im2 posed under the schedule established under paragraph (1)

3 are not expended or committed at the close of any fiscal

4 year, such surplus funds shall be credited to each gaming

5 activity on a pro rata basis against such fees imposed for

6 the succeeding year.

7 ‘‘(7) For purposes of this section, gross revenue shall

8 constitute the annual total amount of money wagered, less

9 any amounts paid out as prizes or paid for prizes awarded

10 and less allowance for amortization of capital expenditures

11 for structures.

12 ‘‘(b) REIMBURSEMENT OF COSTS. The Commission

13 is authorized to assess any applicant, except the governing

14 body of an Indian tribe, for any license required pursuant

15 to this Act for the actual costs of conducting all reviews

16 and investigations necessary to determine whether a li17 cense should be granted or denied pursuant to this Act.

18 ‘‘(c)(1) The Commission, in conjunction with the fis19 cal year of the United States, shall adopt an annual budg20 et for the expenses and operation of the Commission.

21 ‘‘(2) The budget of the Commission may include a

22 request for appropriations as authorized by section 16 of

23 this Act.

24 ‘‘(3) A request for appropriations pursuant to para25 graph (2) shall be submitted by the Commission directly
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1 to the Congress beginning in the first full fiscal year after

2 the date of enactment of the Indian Gaming Regulatory

3 Act Amendments Act.’’.

4 (18) Section 19 of the Act (25 U.S.C. 2718) is redes5 ignated as section 16 and is amended to read as follows:

6 ‘‘SEC. 16. AUTHORIZATION OF APPROPRIATIONS.

7 ‘‘Subject to the provisions of section 15 of this Act,

8 there are hereby authorized to be appropriated and to re9 main available until expended, $5,000,000 to provide for

10 the operation of the Commission for fiscal years 1996,

11 1997 and 1998.’’.

12 (19) Section 20 of the Act (25 U.S.C. 2719) is redes13 ignated as section 17 and is amended to read as follows:

14 ‘‘SEC. 17. GAMING ON LANDS ACQUIRED AFTER ENACT15 MENT OF THIS ACT.

16 ‘‘(a) GAMING PROSCRIBED ON LANDS ACQUIRED IN

17 TRUST.—Except as provided in subsection (b), gaming

18 regulated by this Act shall not be conducted on lands ac19 quired by the Secretary in trust for the benefit of an In20 dian tribe after the date of enactment of this Act unless—

21 ‘‘(1) such lands are located within or contig22 uous to the boundaries of the reservation of the In23 dian tribe on the date of enactment of this Act; or

24 ‘‘(2) the Indian tribe has no reservation on the

25 date of enactment of this Act and—
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1 ‘‘(A) such lands are located in Oklahoma

2 and

3 ‘‘(i) are within the boundaries of the

4 Indian tribe’s former reservation, as de5 fined by the Secretary, or

6 ‘‘(ii) are contiguous to other land held

7 in trust or restricted status by the United

8 States for the Indian tribe in Oklahoma; or

9 ‘‘(B) such lands are located in a State

10 other than Oklahoma and are within the Indian

11 tribe’s last recognized reservation within the

12 State or States within which such Indian tribe

13 is presently located.

14 ‘‘(b) EXCEPTIONS.—Subsection (a) will not apply

15 when—

16 ‘‘(1) the Secretary, after consultation with the

17 Indian tribe and a review of the recommendations,

18 if any, of the Governor of the State in which such

19 lands are located, and any other State and local offi20 cials, including officials of other Indian tribes or ad21 jacent States, determines that a gaming establish22 ment would be in the best interest of the Indian

23 tribe and its members, and would not be detrimental

24 to the surrounding community; or

25 ‘‘(2) lands are taken in trust as part of—
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1 ‘‘(A) a settlement of a land claim,

2 ‘‘(B) the initial reservation of an Indian

3 tribe acknowledged by the Secretary under the

4 Federal acknowledgment process, or

5 ‘‘(C) the restoration of lands for an Indian

6 tribe that is restored to Federal recognition.

7 ‘‘(3) Subsection (a) shall not apply to—

8 ‘‘(A) any lands involved in the trust peti9 tion of the St. Croix Chippewa Indians of Wis10 consin that is the subject of the action filed in

11 the Untied States District Court for the Dis12 trict of Columbia entitled St. Croix Chippewa

13 Indians of Wisconsin v. United States, Civ. No.

14 86–2278, or

15 ‘‘(B) the interests of Miccosukee Tribe of

16 Indians of Florida in approximately 25 contig17 uous acres of land, more or less, in Dade Coun18 ty, Florida, located within one mile of the inter19 section of State Road Numbered 27 (also

20 known as Krome Avenue) and the Tamiami

21 Trial.

22 ‘‘(c) AUTHORITY OF THE SECRETARY.—Nothing in

23 this section shall affect or diminish the authority and re24 sponsibility of the Secretary to take land into trust.
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1 ‘‘(d) APPLICATION OF THE INTERNAL REVENUE

2 CODE.—(1) The provisions of the Internal Revenue Code

3 of 1986 (including sections 1441, 3402(q), 6041, and

4 chapter 35 of such Code) concerning the reporting and

5 withholding of taxes with respect to the winnings from

6 gaming or wagering operations shall apply to Indian gam7 ing operations conducted pursuant to this Act, or under

8 a compact entered into under Section 10 of this Act that

9 is in effect, in the same manner as such provisions apply

10 to State gaming and wagering operations, and any exemp11 tions allowed to States from taxation of such gaming or

12 wagering operations shall be allowed to Indian tribes.

13 ‘‘(2) The provisions of section 60501 of the Internal

14 Revenue Code of 1986 shall apply to an Indian gaming

15 establishment not designated by the Secretary of the

16 Treasury as a financial institution pursuant to chapter 53

17 of tile 31, United States Code.

18 ‘‘(3) The provisions of this subsection shall apply not19 withstanding any other provision of law enacted before,

20 on, or after the date of enactment of this Act unless such

21 other provision of law specifically cites this subsection.’’.

22 (20) Section 21 of the Act (25 U.S.C. 2720) is redes23 ignated as section 18.

24 (21) Section 22 of the Act (25 U.S.C. 2721) is redes25 ignated as section 19.
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1 (22) Section 23 of the Act is redesignated as section

2 20.

3 (23) Section 24 of the Act is redesignated as section

4 21.

5 (24) At the end of the Act, add the following new

6 section 22:

7 ‘‘SEC. 22.

8 Section 5312(a)(2) of title 31, Untied States Code,

9 is amended—

10 ‘‘(1) by redesignating subparagraphs (X) and

11 (Y) as subparagraphs (Y) and (Z) respectively; and

12 ‘‘(2) by inserting after subparagraph (W) the

13 following new subparagraph:

14 ‘‘(X) an Indian gaming establishment:’’.

Æ

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