August 27, 2013 

George Gholson, Chairman 

Timbisha Shoshone Tribe 

621 W. Line St., Suite 109 

Bishop, CA 93514 

Re: Review of development agreement and termination agreements 

Dear Chairman Gholson: 

This letter responds to the Timbisha Shoshone Tribe's (Tribe) request for the 

National Indian Gaming Commission Office of General Counsel ("OGC") to review a 

Development Agreement between the Tribe and CCR Timbisha LLC ("Developer"), and 

a Termination of Contracts Agreement, Confidentiality and Non-Competition Agreement, 

Promissory Installment Note, Promissory Note, and Release of Obligations and Claims 

(collectively "the Transaction Documents") entered into with Global Investment 

Enterprise LLC ("Global"). All of the Transaction Documents were dated August 18, 

2012. Additionally, on July 25, 2013, we received a document titled First Amended and 

Restated Development Agreement, dated, February 18, 2013. Specifically, you have 

asked for our opinion regarding whether the Transaction Documents are a management 

contract requiring the NIGC Chairwoman's review and approval under the Indian 

Gaming Regulatory Act. You also requested an opinion regarding whether the 

Transaction Documents vfolates IGRA 's requirement that the Tribe have the sole 

proprietary interest in its gaming operations. After careful review, it is my opinion that 

the Transaction Documents are not a management contract requiring the review and 

approval of the Chairwoman. Additionally, it is my opinion that the Transaction 

Documents do not grant the Developer or Global an improper proprietary interest in the 

gaming activity. However, since the Tribe and the Developer have submitted a 

management agreement for approval the Development Agreement with CCR is a 

collateral agreement that will be reviewed with the mar agt:ment agreement. Finally, I 

have concerns about from the Developer which may 

effect the approval o any management agreement. 

Management Contracts 

IGRA provides the NIGC with authority to review and approve gaming-related 

contracts and collateral agreements to management contracts to the extent that they 

implicate management. Catskill Development LLC v. Park Place Enterlainment Corp. , 

NATIONAl HEADQUARTERS 1441 L St. NW. Surte 9100. Washington. DC 20005 Tel· 202.632.7003 Fax: 202.632.7066 www.NIGC.GOV 

REGIONAL OFFICES Portland, OR, Sacramento, CA; Phoenix, AZ; St. Paul, MN, Tulsa. OK 
No. 06-5860, 2008 U.S. App. LEXIS 21839 at *38 (2nd Cir. October 21, 2008) ("a 

collateral agreement is subject to agency approval under 25 C.F.R. § 533.7 only if it 

'provides for management of all or part of a gaming operation"'); Macha! Inc. v. Jena 

Band of Choctaw Indians, 387 F. Supp. 2d 659, 666 (W.D. La. 2005) ("collateral 

agreements are subject to approval by the NIGC, but only if that agreement 'relate[s] to 

the gaming activity"'). Accord, Jena Band of Choctaw Indians v. Tri-Millennium Corp., 

387 F. Supp. 2d 671 , 678 (W.D. La. 2005); United States ex rel. St. Regis Mohawk Tribe 

v. President R.C.-St. Regis Management Co., No. 7:02-CV-845, 2005 U.S. Dist. LEXIS 

12456, at *3-*4, *9-* 10 (N.D.N.Y. June 13, 2005), aff'd on other grounds, 451F.3d44 

(2nd Cir. 2006). 

The NIGC has defined the term management contract to mean "any contract, 

subcontract, or collateral agreement between an Indian tribe and a contractor or between 

a contractor and a subcontractor if such contract or agreement provides for the 

management of all or part of a gaming operation." 25 C.F.R. § 502.15. Collateral 

agreement is defined as "any contract, whether or not in writing, that is related either 

directly or indirectly, to a management contract, or any rights, duties or obligations 

created between a tribe (or any of its members, entities, organizations) and a management 

contractor or subcontractor (or any person or entity related to a management contractor or 

subcontractor)." 25 C.F.R. § 502.5. 

Although NIGC regulations do not define management, the agency has explained 

that the term encompasses activities such as planning, organizing, directing, coordinating, 

and controlling. See attached NIGC Bulletin No. 94-5: "Approved Management Contracts 

v. Consulting Agreements (Unapproved Management Contracts are Void)." The 

definition of primary management official is "any person who has the authority to set up 

working policy for the gaming operation." 25 C.F .R. § 502.19(b )(2). Further, 

management employees are "those who formulate and effectuate management policies by 

expressing and making operative the decision of their employer." NL.R.B. v. Bell 

Aerospace Co., 416 U.S. 267, 288 (1974). Whether particular employees are 

"managerial" is not controlled by an employee's job title. Waldo v. MS.P.B., 19 F. 3d 

1395 (Fed. Cir. 1994). Rather, the question must be answered in terms of the employee's 

actual job responsibilities, authority and relationship to management. Id. At 1399. In 

essence, an employee can qualify as management ifthe employee actually has authority 

to take discretionary actions - a de Jure manager - or recommends discretionary actions 

that are implemented by others possessing actual authority to control employer policy - a 

de facto manager. Id. at 1399 citing NL.R.B. v. Yeshiva, 444 U.S. 672, 683 (1980). 

If a contract requires the performance of any management activity with respect to 

all or part of the gaming operation, the contract is a management contract within the 

meaning of 25 U.S.C. § 2711 and requires the NIGC Chairwoman's approval. 

Management contracts not approved by the Chairman are void. 25 C.F.R. § 533.7; Wells 

Fargo Bank, NA. v. Lake of the Torches Economic Dev. Corp., 677 F. Supp.2d 1056 

(W.D. Wisc. 2010), aff'd 658 F.3d 684 (ih Cir. 2011). 

Sole Proprietary Interest 
Among IGRA's requirements is that "the Indian tribe will have the sole 

proprietary interest and responsibility for the conduct of any gaming activity." 25 U.S.C. 

§ 2710(b)(2)(A); see also 25 C.F.R. §§ 522.4(b)(l) and 522.6(c). Proprietary interest is 

not defined in the IGRA or the NIGC's implementing regulations. As discussed in Notice 

of Violation# 11-02, OGC legal opinions concerning the sole proprietary interest 

mandate have focused primarily on three criteria in its analysis of the requirement. The 

legal opinions examine: 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. See also City of Duluth v. Fond du Lac Band of Lake Superior 

Chippewa, 830 F. Supp. 2d 712, 723 (D. Minn. 2011), aff'd in pertinent part, 702 F.3d 

1147 (8th Cir. 2013)(discussing NIGC adjudication of proprietary interest provision). 

Accordingly, final agency actions by NIGC and OGC legal opinions have found an 

improper proprietary interest in agreements under which a party, other than a tribe, 

receives a high level of compensation, for a long period of time, and possesses some 

aspect of control. Id 723-724. 

Analysis 

The Development Agreement grants the Developer the exclusive right to the 

following: 

(i) carry out any and all activities that are necessary in order to 

Develop the Project, including without limitation, assisting the 

Tribe in the negotiation of the terms of the Compact with the State 

of California, and assisting the Tribe in connection with the Taldng 

of the Property into Trust; and (ii) administer and oversee the 

planning, design, development, construction, furnishing, equipping 

and financing of the facilities. 

See Dev~ 2.l(a). The Developer is required to advance the Tribe the 

sum of o be used for tribal government expenses as well as 

expenses related to the casino project. Id. at§ 5.2(e). This advance and any other 

advances made by the Developer are to constitute a loan that will be repaid upon the 

Developer securing senior financing for the project. Id. at 5.2 a . Once senior financing 

is obtained and with the approval of the lenders, a 

d. at§ 5.3(c). In exchange or the services provided the 

Developer will recei e develo ment fee equal to fthe total project costs 

with a maximum of Id. at § 6.1. The Development Agreement does not 

specifically provide the Developer with the right or responsibility to manage the Tribe's 

gaming activity. Since the development fee is tied to a percentage of the project costs and 

not gaming revenue, and is capped at a specific amount, it is my opinion that the 

Development Agreement does not grant the Developer a proprietary interest in nor does it 

deprive the tribe of sole responsibility for the gaming activity. 
(b) (b) (4)

(4)

(b) (4) (b) (4) (b) (4) (b) 

(4)

(b) (4) (b) (4) (b) (4)
compensation to the Tribe or Global and it does not grant any management rights or 

responsibilities to Global. Further, the Release does not appear to grant Global a 

proprietary interest in the gaming activity and does not deprive the Tribe of sole 

responsibility for the gaming activity. 

Conclusion 

The Transaction Documents do not provide the Developer or Global with any 

management rights. Therefore, it is my opinion that the Transaction Documents are not a 

management contract requiring the approval of the Chairwoman. It is also my opinion 

that the Transaction Documents do not violate IGRA's sole proprietary interest 

requirement. However, since the Tribe and the Developer have submitted a management 

agreement for approval the Development Agreement is a collateral agreement that will be 

.. "' I :.. I I . II • I • t .. ~ • •..1 .. • ent. Fmiher, I am concerned by the distribution of 

provided by the Development Agreement. This 

• • • . • ' I . I I I val of a management contract if the Chairwoman 

finds that it constitutes undue influence. See 25 C.F.R. § 533 .6. 

I anticipate that this letter will be the subject of Freedom of Information Act 

(FOIA) requests. Since we believe that some of the information contained herein may fall 

within FOIA Exemption 4, which applies to confidential or privileged financial or 

commercial information, the release of which could cause substantial harm, I ask that you 

provide me with your views regarding release within ten days. 

If you have any questions, please contact NIGC Senior Attorney John Hay at 

(202) 632-7003. 

Eric Shepard 

Acting General Counsel 

cc: Mark A. Levitan, Esq.(mark@levitanlaw.net)