Bo!Mazzetti SStephanie!Spencer Charlie!Kolb Steve!Stallings Kenneth!Kolb

Chairman Vice,Chairwoman Council!Member Council!Member Council!Member

OFFICIAL PRELIMINARY COMMENTS OF THE RINCON BAND OF LUISENO 

INDIANS TO NIGC REGARDING ITS NOTICE OF INQUIRY (NOI) IN ITS 

COMPREHENSIVE REVIEW OF ALL REGULATIONS PROMULGATED TO 

IMPLEMENT IGRA

PRESENTED AT THE FORMAL CONSULTATION IN SAN DIEGO, 

CALIFORNIA, JANUARY 11, 2011

INTRO:

Thank you for the opportunity to address the NIGC on the important issues 

identified in the published Notice of Inquiry. I am Scott Crowell. I am here today 

on behalf or the Rincon Band, which I have had the privilege and honor of 

representing for the past fifteen years. My comments today are preliminary. I say 

“preliminary” because frankly, the NOI covers such a large swath of issues that

we are not yet prepared to answer many of the specific questions, although our 

remarks today will address several of them. Rincon will observe and listen to the 

consultation sessions such that we will then submit a more detailed written

response at a later date, and perhaps submit additional comments at a later 

consultation session. I will focus my comments today on four priority issues, 

which the Rincon Band hopes that you take into consideration. I will spend most 

of my time, by far, on Priority #1 because it is the overarching concern of the 

Rincon Band as this process moves forward. 

PRIORITY #1: Adhere to the Limits of NIGC’s Statutory Authority as set out 

in IGRA and as articulated by the several court decisions in CRIT vs. NIGC.

Historical Context: The Tribes had their issues with original NIGC 

Chairman Anthony Hope. He was certainly hostile to the Tribes and the present 

opportunity to revisit the definition regulations promulgated by the Hope 

Commission is welcome and overdue, but Anthony Hope got one key principal 

correct, which all subsequent Commissions (except possibly the Monteau 

Commission) got wrong, and which the Hogan Commissions got seriously wrong. 

The regulation of Class III gaming is to be governed by the compact agreements 
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reached between Tribal and State governments at the negotiation table. It is NOT

the province of the NIGC. The Hogan Commissions took a product of the 

NIGA/NCAI Task Force, which was inspired by the Tribes’ self-governing desire 

to pursue the goal of self-regulation and to share resources and information 

amongst tribes, and converted those into NIGC mandatory regulations, with the 

ever-present threat of severe enforcement action in the form of large fines and 

closure orders. Tribes warned Mr. Hogan at the time that he was exceeding his 

statutory authority. He did it anyway. While imploring with tribes to refrain from 

suing over the regulations, he stated that this would be the outer boundaries of 

NIGC’s encroachment into Class III gaming. C.R.I.T. sued the NIGC and Rincon 

weighed in as amicus beginning with the initial decision of the ALJ, along with a 

growing number of Tribes at the District Court and ultimately NIGA weighed in 

before the D.C. Appeals Court. It was my honor to co-author the NIGA amicus 

brief along with Frank Lawrence of the Holland & Knight law firm.

The Hogan Commissions: At every level of the litigation, the ALJ, the 

federal District Court and ultimately the D.C. Court of Appeals concluded that 

IGRA was straightforward in defining the parameters of NIGC authority and that 

did NOT include regulation of Class III gaming. The Hogan Commission was so 

frustrated with the bright line drawn by the Appeals Court, it filed a motion for 

reconsideration, alleging that NIGC could still assume the authority through other 

means, such as approval of gaming ordinances and incorporation into tribal state 

compacts, and possibly other avenues; MOTION FOR RECONSIDERATION 

DENIED. Despite that clear decision, the Hogan Commissions continued an 

illegal agenda of circumventing the decisions and direction of the federal courts. 

This includes the present practice of promulgating Class III MICS anyway albeit 

as a voluntary ‘suggestion’, approving ordinances that fiat regulatory authority to 

NIGC that is not based in the statute, and using tribal fees paid to NIGC for 

unauthorized and improper purposes related to the ‘voluntary’ Class III MICS. 

Hogan promised tribes that his intrusion into Class III regulation would end with 

the MICS, only to take two unsuccessful stabs, and then a third successful 

encroachment with a new regulation that places NIGC in the position to secondguess tribal governmental decisions regarding health, safety and welfare and 

empowering the NIGC to compel tribes to change their laws to meet NIGC’s 

unqualified, paternalistic and arbitrary standards. These regulations go far 

beyond NIGC’s authority under IGRA and far beyond the direction and decisions

of the federal courts.

Former Chairman Hogan dismissed the Tribes’ fears suggesting that, 

except in extreme circumstances, the NIGC would not actually use the selfappointed authority to compel tribes to adopt or amend laws in a long laundry list 

of areas: emergency preparedness (accidents, injuries, and medical 

emergencies, natural and other disasters, fire, and security threats); construction, 

maintenance and operations; drinking water and food; hazardous materials; and 

sanitation and waste disposal. That sounds hauntingly familiar to his statements 

that NIGC would not aggressively enforce the Class III MICS. Such a position is 
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scary in that he was not contemplating the enabling of potential abuses of future 

Commissions. We applaud the appointments of the Obama Administration to this 

Commission – we can lose sleep at night contemplating the would-have-been 

appointments of a McCain Administration. Our fears are well grounded. IGRA 

does allow the NIGC to require facility licenses; but that authority under IGRA 

does not empower the NIGC to impose its paternalistic governance preferences 

upon tribes. 

It is refreshing that the NOI references the CRIT decision in its 

introductory statements. It is disappointing that the environment health and safety 

regulations (framed as a subset of facility licensing regulations) are not included 

in the laundry list of issues to review. The Rincon Band believes these 

regulations not only should be added to the list, but that the issue of establishing 

parameters of NIGC authority into class III games should be placed as the 

highest priority to be addressed by the NIGC first, going forward.

The NOI properly notes that the NIGC Class III MICS have taken on a life 

of their own. NIGC has approved ordinances expressly empowering the NIGC to 

promulgate and enforce them. Several compacts refer to the NIGC MICS as a 

base line for compact standards. I even gave prior testimony suggesting a level 

of tolerance to NIGC continuing down this road so long as it was clear that the 

MICS are purely advisory and that NIGC staff be limited to providing technical 

assistance. In hindsight, I was wrong. In hindsight, it is clear that the Hogan 

Commissions had a deliberate and zealous agenda to circumvent and riddle the 

bright line drawn by IGRA and the federal courts such that the NIGC is the 

overlord of Class III MICS. This Commission should run away from the agenda of 

the Hogan Commissions and stay clearly within the parameters of authority set 

by Congress. Those states and tribes that embraced NIGC Class III MICS in 

compacts and ordinances did so at their own peril. I often hear that NIGC had the 

authority to promulgate the MICS until it lost at the D.C. Circuit. That is pure 

nonsense. The Court ruled correctly: NIGC NEVER had such authority. Every 

tribal regulator and every tribal attorney who followed the issue knew that NIGC’s 

legal position ranged from weak to meritless. Rincon proposes that NIGC 

establish a clear date to withdraw Class III MICS from its body of regulations, 

notices and Bulletins, providing those tribes with defective ordinances or 

compacts sufficient time to take corrective measures.

Rincon poses this question: If the NIGC is to take on the role as chief 

watchdog of the regulation of Class III gaming, then why do tribes need to

negotiate compacts with states? Regulation of the games was intended by 

Congress to be the very crux of compact negotiations. That States have 

embraced the Seminole decision and used that leverage to extract gaming taxes 

and unreasonable encroachment on tribal self-governance, instead of seriously 

negotiating the manner in which class III games should be regulated, created 

their own problems by doing so. The States’ bad behavior does not justify NIGC 

to fill what Commissioner Hogan perceived as a void in the compacts. If this 
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Commission in any way intends to follow its predecessors and go to Congress 

with an agenda of amending IGRA to empower the NIGC to regulate Class III 

games, it should at the same time advocate for removing states from the process 

altogether. Perhaps that is unrealistic or unreasonable, but no more so than 

subjecting Tribes to heavy paternalistic oversight by both the State Compact and 

the NIGC.

As you review the existing regulations, a question to address each and 

every time should be: to identify the express authority in IGRA for the regulation 

in question. The Class III MICS and the paternalistic “back-door” of the facility 

licensing regulations are only the most heinous examples of the over-reaching of 

prior Commissions. Rincon applauds the current NOI and consultation because it 

provides an opportunity to put Pandora back into its box. 

PRIORITY #2: DEFERENCE AND SUPPORT OF TGA’s AS PRIMARY 

REGULATORS

The TGA is the primary regulator of tribal gaming. The tens of millions of 

dollars in authorized Tribal Commission budgets, the shear manpower numbers,

and the common presence of the most experienced regulators in the industry,

quantify this basic fact. The Tribe itself has the highest incentive to ensure that 

the games are fair and honest. In the vast majority of circumstances, any Tribe 

out of compliance has the highest incentive to come in to compliance. Rincon 

encourages the NIGC to embrace a formal policy that ensures that the NIGC will 

take every effort to identify the problem for the TGA and/or Tribal Council, work 

with the Tribe to come in to compliance and only if those steps have been taken 

and have failed, then take action in the form of an NOV with attendant threats of 

fines and closures. I hear rhetoric that this is how the Hogan Commissions 

approached situations, but I know of too many circumstances where the NOV 

came as a surprise to the Tribe and forced the Tribes at issue to panic at the 

possibility of major fines and closure orders. Even though those situations were 

resolved with nominal fines, the heavy-handed threat has no place in proper 

government – to government dialogue. In this vein, Rincon supports the idea 

suggested in the NOI to clarify the NIGC’s authority to withdraw an NOV.

Additionally, Rincon supports the idea suggested in the NOI to replace the 

NOVs and fines associated in certain instances with a more routine late fee. The 

NOI suggests this be used in the context of late fees, but it should also be used 

with late audits. One gets the impression that NIGC in the recent past used the 

ability to smack a tribe for a late audit in order to rack up numbers for 

enforcement actions because they can then submit a scorecard to Congress that 

shows they are out there “regulating” tribes. Many in the news media then use 

those same numbers for sensational headlines that Tribes are doing a poor job in 

regulating tribal gaming. In many of these instances, the audit was only a few 

days or weeks late, and in many, if not most of those, the outside accounting firm 
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poorly managed its own time allocation, which is the fault of the accounting firm, 

and not the Tribe. Replacing the status quo with late fees would clearly place the 

issue of late audits in a more proper context.

PRIORITY #3: MAINTAIN THE VIABILITY OF A CLASS II GAMING INDUSTRY

The Rincon Band encourages the NIGC to maintain a vigorous position 

that ensures viable Class II games are available to tribes. The NIGC cannot look 

at this issue in isolation. Many Tribes, like Jena Choctaw of Louisiana and the 

Kickapoo Tribe of Texas cannot get viable compacts because States hide behind 

11th Amendment immunity per the Seminole decision. Other tribes, including 

Rincon, before it prevailed in extensive litigation with California, are forced to 

accept only a very limited number of Class III machines. For Tribes in many 

states, a viable Class II game is the only real leverage the Tribe has to compel 

the State to negotiate in good faith.

In this regard, Rincon applauds the effort of the “TGWG” or Class II 

Working Group and Rincon looks forward to the Group’s testimony. To date, the 

Group has provided intelligent and thoughtful advice to the NIGC consistent with 

Rincon’s view that Class II devices must be maintained as a viable alternative for 

the many tribes confronted by recalcitrant states hiding behind 11th Amendment 

immunity. Fortunately Rincon and the other California Tribes have the luxury of a 

state statutory waiver in IGRA lawsuits, but most tribes are in states where an 

effective a waiver is not available. In this vein, even if the NIGC does conclude 

that games played by an non-compacted Tribe are not Class II, it should refrain 

from both threatening and taking enforcement action against such tribes. The 

Hogan Commissions made such threats, playing in to the State’s bad faith 

negotiations. Fortunately, the Hogan Commissions did not carry through with 

those threats, but the threats alone play in to the State’s hand at that negotiation 

table. This NIGC should revert back to the sound policy of the Monteau 

Commission where the message was clear that if a state was negotiating in bad 

faith and hiding behind 11th Amendment immunity, such State should not look to 

the NIGC to carry its water. The NIGC’s trust responsibility to tribes in these 

circumstances should be of paramount concern to the NIGC.

PRIORITY # 4: SOLE PROPRIETARY INTEREST

This is a sticky wicket – My initial flippant reaction was take it on if you 

know your going to get it right. We will listen closely to the testimony of the other 

tribes on this issue before formulating a formal response. The body of authority 

on this issue is primarily a series of NIGC opinion letters issued between 2004 

and 2007, and some low level dicta in a few reported court cases. You likely 

know that the Schwarzenegger Administration here in California embraced an 

extortionist agenda for compacts wherein the gaming operations of many of the 
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signatory tribes pay far more to the State as a gaming tax than they pay to the 

Tribe to fund tribal programs and operations. “Sole Proprietary Interests” has 

been discussed in the context of management, development and finance 

agreements, but the issue is germane to assessing the legality of gaming 

compacts and county “MOU’s” as well. All of these collectively or singularly could, 

and quite likely often do violate the “sole proprietary interest” restriction in IGRA. 

Many also likely violate the requirement that the Tribe be the “primary beneficiary” 

of the gaming operation as well. Defining “primary beneficiary” is not in your 

published NOI and it seems that if you are to address one, you should address 

both. 

Our preliminary view is that this issue is best left for the courts to resolve 

and that the circumstances of whether these two rules are violated are going to 

be very very fact specific and circumstantially specific such that generalized

regulations will not be helpful. Our view on this may change as we hear from 

other tribes, but this could get very messy.

Thank you for the opportunity. We hope you will take Rincon’s comments 

today in to serious consideration. We applaud your efforts to take on hard issues 

and look forward to commenting further as this process unfolds.

Respectfully submitted,

/s/

Scott Crowell 

Attorney General

Rincon Band of Luiseno Indians