Letter to Peter Carmen, COO Oneida Indian Nation 

Review of Agreement between Turning Stone Resort Casino, LLC and 

Bally Gaming, Inc. 

Page 6 of9 

the meaning oflGRA and requires the Chair's approval.36 Management contracts that have 

not been approved by the Chair are void.37 

Management Analysis: 

On its face, the First Amendment does not permit any management by Bally. The 

scope of services for the sports betting platforms is finite and well-defined. The functions and 

capabilities of the platforms are pre-determined by the schedules and phases.38 Bally will 

receive a percentage of the net gaming revenue from Turning Stone's sports book, but 

Bally's fees are tied to specific work performed. The percentage fee increases and decreases 

based on the selected services and phases. The rates for each additional service are predetermined. 

Regarding any planning, organizing, directing, coordinating, and controlling, the First 

Amendment does not contain any language that generally prohibits management activities. 

However, the First Amendment does not grant Bally the ability to plan, organize, direct, or 

control all or part of Turning Stone's gaming operations. Instead, Bally will construct and 

offer the platform according to pre-determined specifications. Bally has the ability to change 

hardware and software without Turning Stone's consent, but only when (1) required by 

applicable law; or (2) the change does not change the functionality of the platform and does 

not increase costs to Turning Stone. Material changes - those not required by law or that 

change the functionality of the platform - require Turning Stone's written consent.39 Bally 

may provide the RAS and Technology Services, but Turning Stone retains the discretion to 

use or not use the data and services. Turning Stone is not required to implement the data or 

services.40 Turning Stone may adjust the line or suspend betting for a sporting event if it 

disagrees with Baily's data feed or for whatever reason. Accordingly, it is my opinion that 

the First Amendment is not a management agreement and does not need to be submitted to 

the NIGC Chairman for review and approval. 

Sole Proprietary Interest: 

IGRA requires a tribe to possess "the sole proprietary interest and responsibility for 

the conduct of any gaming activity."41 "Proprietary interest" is not defined in IGRA or the 

NIGC's implementing regulations. Black's Law Dictionary defines a "proprietary interest" as 

an "interest held by a property owner together with all appurtenant rights .... ',4

2 An "owner" 

is "one who has the right to possess, use, and convey something."43 "Appurtenant" means 

36 25 u.s.c. § 2711. 

37 25 C.F.R. § 533.7; see also Wells Fargo Bank, Nat'/ Ass'n v. Lake of the Torches Econ. Dev. Corp., 658 

F.3d 684, 688 (7th Cir. 2011).

38 First Amendment, Schedules 1-3.

39 Id. at Schedule 5, subsection 2. 

40 Id. at Schedule 8. 

41 25 U.S.C. § 2710(b)(2)(A); see also 25 C.F.R. § 522.4(b)(l). 

42 BLACK'S LAW DICTIONARY (10th ed. 2014). 

43 Id. 
Letter to Peter Carmen, COO Oneida Indian Nation 

Review of Agreement between Turning Stone Resort Casino, LLC and 

Bally Gaming, Inc. 

Page 7 of9 

"belonging to; accessory or incident to .... "

44 Case law similarly defines "proprietary 

interest" as "one who has an interest in, control of, or present use of certain property." 45

To determine whether an agreement violates the sole proprietary interest requirement, 

the NIGC analyzes three criteria: (1) the term of the relationship; (2) the amount of revenue 

paid to the third party; and (3) a third party's right to exercise control over all or any part of 

the gaming activity.46 Accordingly, if a party, other than the tribe receives a high level of 

compensation, for a long period of time, and possess some aspect of control, an improper 

proprietary interest may exist. 

Sole Proprietary f nterest Analysis: 

Term of the Relationship: 

The First Amendment has a 10-year term. The General Counsel has reviewed other 

agreements with 10-year terms (and longer) and concluded that those agreements did not 

violate IGRA's sole proprietary interest requirement. Further, Turning Stone, not Bally, is 

requesting a 10-year term to obtain the entire benefits of its partnership with Bally. Unlike 

other services from vendors that are sold at fixed rates plus costs, the Bally sports book 

platforms and similar services offered by competitors are only offered on a percentage fee 

basis.47 To avoid fluctuations in fees, Turning Stone desires to lock in the rates for a t 0-year 

term. Also, a relationship with Bally will create a fully integrated back-of-house platform 

across Turning Stone's sports book and non-sports book gaming.48 Accordingly, in this 

instance, the unique circumstances justify the 10-year term for the First Amendment. The 

term does not create a concern for IGRA's sole proprietary interest requirement. 

Amount of Revenue Paid to a Third Party: 

The First Amendment provides a fee structure where baseline and optional services 

have pre-determined percentage rates. Turning Stone is also required to make a minimum 

monthly payment to Bally in the event the percentage fee does not reach the minimum 

threshold. Based on projections provided by Turning Stone, Bally's fee will mostly be 

comprised of minimum fee payments as the sports book becomes an established part of 

Turning Stone's gaming operations. Accordingly, Bally may receive a fee from Turning 

Stone's sports book revenues that is higher than the pre-determined percentage fee simply 

based on monthly minimum payments. Of course, if Turning Stone earns more from its sports 

book, Bally's total fee will also increase but its fee as a percentage of net revenue will 

decrease. 

44 Id. 

45 See Evans v. United States, 349 F.2d 653, 659 (5th Cir. 1965). 

46 See NIGC NOV-11-02, (July 12, 2011); see also City of Duluth v. Fond du Lac Band of Lake Superior 

Chippewa, 830 F. Supp. 2d 712, 723 (D. Minn. 2011), ajf'd in pertinent part, 702 F.3d 1147 (8th Cir. 2013) 

(discussing NIGC adjudication of proprietary interest provision). 

47 See Letter from Peter Carmen, COO Turning Stone, to Michael Hoenig, NIGC General Counsel, p. 4 

(Jan. 7, 2019). 

4s Id.