QYTH CONGRESS R~W r 

2d Session 1 HOUSE OF REPRESENThTlY ES I :fi)~$$ 

ESTABIzISHING FZDERAI, STAhDt\ilI?S AND REGlrhiTIOXS FOR THE COXDUCT OF CAMIYG P\CTI\'ITIES ON INDIAN RFSERYATIOSS a\XD i.AXIS. 

r\XD FOR OTHER PURPOSES 

~~ARCI~ 10. I!lSli --ClOmntiltcd to I hc Committee or !he \VRule iiupnsc orr klrf State 

the Union nnd orderd to be printed 

Mr. UDAI,~., front the Committee on Interior and I~rsulnr ARairs* 

sribnlitted the following 

REPORT 

together with 

SUPPLEhIENTAL, AND DISSENTING VIEWS 

(To ncwmpnny H.R. 19'&j 

{lr~cluding wt cstirnntc of flte Congrc48ional tlttllg~t QBYLiccl! 

The Co~nmittcc on Interior ttntl Insulnr c\fiirs, to ivilom ivns re 

ferred the bill (H.R. 1920) to establish F"cdernl skandnrds nntl rcguIations for the conduct of gnnling nctivitiw an itulinrr roaorvnlions 

and lands, and for other pttrlmefi, ttnving consitiored tho aame. 

report favorably thereon with nit nir~cndntcnt nnd recor~~inanci lhut 

the bill as anic~~ded dopaas. 

The amendniont is as follows: 

Page 1, line 3, striko all rrfYcr ttlu crrncting clnuso c~nd insert I!'tc 

folloiving in lieu thereof: 

Tlmt this r\ct n~ay be cited ~n lltc 3ndinn Clornirsr: llcgulrlory Act'". 

Sec. 2. tn) T)I@ Conarms find!? f)uN-- 

(I1 nunlorsun lndinn tribf:~ haw hmc engarbccl in ar l~rrv~ lt~tsacrl gibrnbrrg 

activi[icdi on lndinn 1nnd.s cn.~ n mcnna ul genorntlng tribal gouarnmcnnsol pww. 

nuc; 

(21 Indian irilws irnuc ISW ~xclusllrc rkhl to rry~uln!@ gnmEng nsaivEly nn 

Indian in~ttf* whkh is not apdfically itrcrttibil~i by Pwfuldrnl lnw nd whbcl~ b 

cnn~lucfetl wilhin n Slnla which clm not. RB n mmllcr of crirninnl lnw nnd 1rubrEc 

policy. proibibil inuck gaming ncliuily. 

($1 them ore no cxiuting stntutctt which qulru npprwi~l ol mnma~nwnt son. 

tmcinr dealing rrilh lndinn mmlng; 

141 exisling k'cdornl lnw tXocir nal provide clcnr ~lnndntdn or t~~t~lallslknm nuomsnr tu innurs the ordcrly canduct orgarn!n ns#lwEti~-t un tnrlhr~ inr$tla, 

4 d ) 11 principal goml of Fodornl lnclitrn (rot f ey kb 80 prumolsr iribl et~nsmk 30. 

volopmcnl, lrilhd lau)f~mufficiffney, nlrd r!rurtg islhmI ~orert~clteni; ad 
(6) tribal operation and licensinn - of gaming - activities is a legitimate means of - generating revenues. 

tbl The Congress dcclarcs that the establishment of Federal standards for gaming nctivitv on Indian lands and a National Indian Gamine Commission are necessary 

to me& the concerns regarding gnming activities and ti protect such activities as h 

means of generating tribal revenue. 

SEC. 3. (a) Except as provided in subsection (h), Class 11 and Ill gaming regulated by this Act shall be unlawful on nny lands acquired by the Secretary, under any 

existing authority, in trust for the benefit of any Indian tribe after December 4, 

1985, if such lands are located outside the boundaries of such tribe's reservation. 

(b) Subsectiotl (a) shall not apply if the Indian tribe requesting the acquisition of 

such lands in trust obtains the concurrence of the Goverrior of the State, the State 

lenislnture. and the governing - - bodies of the countv and municipality in which such 

Inids are located. 

SEC. 4. Provisions of the Internal Revenue Code of 1954, as amended, concerning 

the taxation and the reporting and withholding of taxes pursuant to the operation 

of a gambling or wagering operation shall apply to the operations in accord with the 

Indian Gaming Regulatory Act the same as they apply to State operations. 

SEC. 5. (a) There is established within the Department of the Interior an independent commission to be known as the National Indian Gaming Commission. 

(bH1) The Commission shall be composed of eight members as follows: 

(A) a Chairman who shall serve full-time and who shall be appointed by. and 

serve at the pleasure of, the Secretary; 

(B) a member to be selected bv - the Attornev General - and aowinted . . bv the 

Secretary; 

(C) five members, at least three of whom shall be enrolled members of Federally recognized tribes, to be appointed by the Secretary from a list of not less 

than ten nor more than twenty candidates submitted and approved by a majority of the tribes then engaged in or regulating gaming activities; and 

(Dl one member appointed by the Secretary after consultation with appropriate organizations or entities, who shall rapresent the interest of the States. 

(2) Not more than four members of the Commission shall be of the same political 

party. 

(3XA) Except for the Chairman and except ns otherwise provided in this paragraph, members shall be appointed for terms of three years. 

(B) Of the members first appointedti) the member appointed pursuant to paragraph (1NB) and two of the members appointed pursuant to paragraph (1KC) shall be appointed for a term of two 

years; and 

(ii) the remaining members appointed pursuant to paragraph (1KC) and (1KD) 

shall be appointed for a term of three years. 

(4) Anv individual who- 

(A) has been convicted of a feiony or gaming offense; 

(B) has any management responsibility in any gaming activity regulated pursuant to this Act; or 

(C) has a financial interest in, or management responsibility for, any management contract approved pursuant to section 12 of this Act 

shall not be eligible for appointment to, or to continue service on, the Commission. 

(5) Except for the Chairman, a member of the Commission may be removed for 

good cause by a majority vote of the remaining members subject to the approval of 

the Secretary or, in the case of a member appointed pursuant to paragraph (lXB), 

the Attorney General. 

(cX1) Vacancies occurring on the Commission as a result of the expiration of the 

terms of appointment shall be filled in the same manner as the original appointment. A member may serve after the expiration of his term until his successor has 

been appointed. (2) Other vacancies occurring on the Commission shall be filled by a majority vote 

of - - the - -. -Commission - - - - and members so aowinted shall serve the remainder of the 

terms for which his predecessor was apfiinted. (d) Five members of the Commission shall constitute a quorum. (e) The Commission shall select, by majority vote, one of the members to serve as 

Vice-Chairman who shall serve as Chairman during meetings of the Commission in 

the absence of the Chairman. 

(1) The Commission shall meet at the call of the Chairman or a majority of its 

members. 

(gX1) The Chairman of the Commission may be paid at a rate equal to that of 

Level V of the Executive Schedule (5 U.S.C. 5316). 
(2) Except us provided in pi~ragr~rph 13). the other members of the Comniission 

may cach be paid at n rate equal to the daily equivalent of the maximum annual 

rnte of basic pay in effect for grade CS-18 of the General Schedule (5 U.S.C. 5332) 

for each day, including travel time, during which they nre engaged in the actual 

performance of duties vested in the Commission. 

(3) Members of the Commission who are full-time officers or employees of the 

United States shali receive no additional pay by reason of their service on the CA~- 

mission. 

('1) All members may be reimbursed for travel, subsistence, and other necessary 

expenses incurred by them in the performance of their duties. 

SEC. 6. (a) The Chairman of the Comn~ission shall have the exclusive power- 

(1) to approve tribal ordinances or resolutions regulatii~g Class I1 gaming as 

provided in sectiori 1 ltb); 

12) to approve mnnngement contracts for Class I1 and 111 gaming as provided 

in section 12; and 

(3) to select, appoint, and supervise the staff of the Commission as provided in 

section 8. 

(b) The Chairmnn shall have power, subject to the approval of the Commission- 

(1 ) to appoint a General Counsel of the Comn~ission; 

(2) to promulgate regulatory schemes for Class 111 gaming as provided in seclion 1 l(c); and 

(3) to issue orders of temporary closure of gaming activities as provided in section l4(b). 

(cl The Chairman shall have power, subject to an appeal to the Cornrnission- 

(1) to approve or disapprove tribal ordinances or resolutions and licenses for 

Class III gaming as provided in section ll(c); and 

(2) to lev;! and collect civil fines as provided in section 14(a). 

td) The Chairman shall have such other powers as may be delegated by the Commission. 

SEC. 7. (a) The Commission shall have specific power, not subject to delegation- 

(1) upon the recommendation of the Chairman, to approve the annual budget 

of the Commissio~~ asprovided in section 17; 

(2) to adopt regulations for the assessment and collection of civil fines as provided in section 14(a~; 

(3) by a vote of not less than five members. to adopt the annual assessment as 

provided in section 17; 

(4) by n vote of not less than five members, to authorize the Chairman to 

issue subpoenas as provided in section 15; and 

(5) by a vote of not less than five members and after a full hearing, to make 

permanent a temporary order of the Chairman closing a gaming activity as provided in section 14(b). 

tb) The Commission shall have power- 

(1) to monitor Indian gaming activities on a continuing basis; 

(2) to inspect and examine all premises where Indian gaming is conducted; 

(3) to conduct or cause to be conducted such background investigations as may 

be necessary; 

(4) to demand access to and inspect, examine, photocopy, and audit all papers, 

books, and records respecting gross income of a gaming activity and all other 

matters necessary to the enforcement of this Act; 

(5) to use the United States mails in the same manner and under the same 

conditions as cther departments and agencies of the United States; 

(6) to procure supplies, services, and property by contract in accordance with 

applicable Federal laws and regulations; 

(7) to enter into contracts with Federal, State, tribal and private entities for 

activities necessary to the discharge of the duties of the Commission; 

(8) to hold such hearings, sit and act at such times and places, take such testimony, and receive such evidence as the Cammission deems appropriate; 

(9) to administer oaths or affirmations to witnesses appearing - - - before the Commission; and 

(10) to establish and implement such other standards, guidelines, and regula- tions as it deenis appropriate not inconsistent with this Act and other applicable law. 

SEC. 8. (a) The Chairman, with the epproval of the Commission, shall appoint a 

General Counsel to the Commission who shall have a background in Indian affairs. 

The General Counsel may be paid at the annual rate of basic pay payable for GS-18 

of the General Schedule (5 U.S.C. 5332). 
tbr The Chairman shall c~ppoint other staff of the Cornmission without regard to 

the provisions of title 5, United Stntes Code, governing appointments in the corn&- 

tive service. Such staff nnlay be aid without regard to the provisions of chapter 51 

iind subchupter I11 of chapter 5' f of such title relating to classification and Cienernl 

Schedule pay rntes, except that no individual so appointed ma receive y,ay in 

under section 5332 of that title. 

excess of the nnnuul rate of basic pay payable for GS-17 of the 6 eneral Sc edulc 

(c) The Commission may procure tom rnry and intermittent services under section 3109tb) of title 5, United States Co B" e, but at rates for individuals not to exceed 

the daily equivalent of the maxitnum annual rate of bnsic pay payable for GS-18 of 

the General Schedule. 

td) Upon the request of the Chairman, the head of any Federal ngency is autharized to detail any of the personnel of such agency to the Commission to assist the 

Commission in cnrrying out its duties under this Act, unles3 otherwise prohibited by - - law. 

(el The Secretar or Administrator of General Services shall provide to the Comnlission on a reim i urseable bnsis such adrninistrative support ~. services as the Commission ma request. 

SEC. 9. T !A e Commission may secure directly from any department or agency of 

the United States informntion necessary to enable it to carry out this Act. Upon the 

request of the Chairman the head of such department or agency shall furnish such 

information to the Commission, unless othenvisc prohibited by law. 

SEC. 10. The Secretnrv shall vrom~tlv aaooint the members of the Commission, as 

provided in section 5 01 this ~ct, ahdshiil provide staff and support assistance to 

enable the Commission to meet and organize as soon as practicable thereafter. 

SEC. 11. (aH1) Class I gaming shall be within the exclusive jurisdiction of the 

Indian tribes and shnll not be sub'ect to ti e provisions of this Act. 

(2XA) Except as provided in su k paragraph (B) and (C), Indian tribes may engage 

in, or license and regulate, Class I1 or Clnss 111 gaming activity on Indian lands if 

the governing body of the Indian tribe adopts an ordinance or resolution to that 

effect which is approved by the Commission pursuant to subsection (b) or (c) of this 

section. Licenses are required for each place, facility, or location of Class 11 or Class 

111 gaming activities. 

tB) Subparagraph (A) shnll not apply with respect to an Indian tribe if- 

(i) a gaming activity is specifically prohibited on Indian lands by Federal law; nr -- 

(ii) such gaming activity is prohibited by the State within which such tribe is 

located as a matter of State public policy and criminal law. 

(C) Subparagraph (A) shnll not apply to gaming on Indian lands located within the 

State of Nevada. 

(bX1) An Indian tribe may engage in, or license and regulate, Class I1 gaming activity on the Indian lands of such tribe if the governing body of the tribe adopts an 

ordinance or resolution which is approved by the Chairman. 

(2) The Chairman shall approve any tribal ordinance or resolution concerning the 

conduct, licensing, or regulation of Class 11 gaming activity on the Indian lands of 

such tribe if such ordinance or resolution provides that- 

(A) except as provided in paragraph (31, the Indian tribe itself shall have the 

sole proprietary interest and responsibility for the conduct of any gaming activity; (B) net revenues from any tribal gaming activity are not to be used for purposes other than- 

(i) to fund tribal government operations or programs; 

(ii) to provide for the general welfare of the Indian tribe and :ts members; 

(iii) to promote tribal economic development; (iv) to donate to charitable organizations; or 

(v) to help fund operations of local government agencies; Provided, That, if such net revenues are directly or indirectly used for per 

capita payments to tribal members, those payments are subject to Federal tax. 

(C) annual outside independent audits of the gaming actinty will be obtained 

by the Indian tribe and made available to the Commission; 

(D) all contracts for su plies, services, or concessions for a contract amount in 

excess of $25,000 annual P y, except contracts for rofessional legal or accounting 

services, relating to such gaming activity shall fx subject to such independent 

audits; and 

(E) the construction and maintenance of the gaming facility, and the opration of that gaming activity, is conducted in a manner which adequately protects the environment and the public health and safety. 
(9) A tribnl ordiniince or r.csolution may provide for the licensing or regulation of 

Clnss 11 gnming activities owned by individuals or entities other thnn the Indinn 

tribe, except thnt the tribal licensing requirements shnll IN! nt least us restrictive as 

those estnblished by Statc liiw governing similnr gnming within the jurisdiction of 

the Stnte within which such tribe is locnted. No individual or entity, other thnn the 

tribe, slinll be eligible to receive n tribnl license to own a Clnss I1 gnming activity 

within the tribe's jurisdiction if such individunl or entity would not be eligible to 

receive a Stiite license to conduct the same activity within the jurisdiction of the 

Stntc. 

(4) Not later than oine hundred and sixty dnys after the submisvioll of any tribal 

gnming ordinnnce or resolution, the Chairman shall ilpprovc such ordinance or resolution if it nlcets the requirements of this subsection. Any such ordinance or resolution not nctcd upon at the end of thnt one hundred and sixty day period shnll be 

deerncd to hnve been npproved by the Cliairmnn. 

(CHI) An Indian tribe rniiy engage in, or license and regulnte, Class I11 gnming nctivity on the Indinn lands of such tribe if the governing body of the tribe adopts nn 

ordinnnce or resolution which meets the requirements of this subsection and which 

is npproved by the Chairman. 

(21 The Commission shall adopt comprehensive gaming regulations for Class 111 

gnming. Such regulations shnll be identical to that provided for the same or similar 

gaming nctivity by the Stnte within which such Indian gaming activity is to be conducted. 

(3) Where any Stnte law or regulation adopted by the Commission pursuant to 

paragraph (2) involve criminal penalties for violation thereof, such criminal penalties shall be enforceable by- 

(-41 the Stnte where such Stnte has the requisite criminal jurisdiction over 

Indinn reservations pursuant to Public Law 83-280, or 

(B) by the United Stntes Dursunnt to the Assimilative Crimes Act (18 U.S.C. 

13). 

as if such criminal pennlties were part of the criminnl/prohibitory laws of such 

State. 

(41 The Chnirmnn shall npprove a tribal ordinance or resolution relating to the 

conduct of Clnss 111 gaming activity and shall issue a license to engnge in such nctivity if the ordinance or resolution meets the requirements of subsection (bJ (21 and (3) 

of this section and conforms to the regulations adopted by the Commission pursuant 

to parngrnph ('2) of this subsection. 

(5) Prior to npproving a license pursunnt to this subsection, the Chairman shall 

prepare and take into consideration an analysis of the prospects for the proposed 

gnming activity to operate in a profitable aqd economically sound manner. The 

annlysis shall, as n minimum, include: 

(A) a summary of the capital outlnys needed to begin operations and the longterm financing requirements; (B) the financing method and proof of availability of financing; 

(C) the impact of granting a license on both the tribnl and nearby non-Indian 

communities; nnd 

(D) the ability of the licensee to monitor and insure that gaming operations 

are conducted in a fair and safe manner. 

SEC. 12. (a) Subject to the approval of the Chairman, an Indinn tribe may enter 

into a mnnagement contrzct for the operation and management of a Class I1 or 111 

gaming nctivity, except that, tefore approving such contract, the Chairman shall require and obtain the following information: 

(1) The name, address, and other additional pertinent background information 

on each person or entity (including individuals comprising such entity) having a 

financial interest in, or management responsibility for, such contract, or, in the 

case of a corporation, those individuals who serve on the Board of Directors of 

such corporation and ench of its stockholders who hold (directly or indirectly) 

ten percent or more of its issued and outstanding stock; 

(2) a description of any previous experience which each person listed pursuant 

to paragraph (1) has had with other gaming contracts with Indian tribes or with 

the gaming industry generally, including specifically the name and address of 

any licensing or regulatory agency with which such person has had contact relating to gaming; and 

(3) a complete financial statement of ench person listed pursuant to paragraph (1). 

(b) Any management contract entered into pursuant to this section shall specifically provide- 
(1) that ndequete accounting procedures are maintnined nnd that verifiable 

linnncinl reports nre prepnred by or providcd to the tribnl governing body on a 

monthly basis; 

(2) thnt npproprinte tribnl officinls shall hnve reasonnble access to the daily operntions of the gaming nctivity nnd sl~nll have the right to verify the daily income mnde from nny such tribnl gaming nctivity; 

(3) for a minimum guaranteed pnyment to the lndinn tribe that has preference over the retirenient of development and construction costs; 

(4) for nn ngreed - ceiling for the repavnient of development nnd construction .. . - 

costs; 

(5) thnt the tern1 of the contract shnll not exceed five years; and 

(6) for grounds and mechanisms for terminnting such contract; Provrded. That 

contrnct tern~inntion shall not require the npproval of the Commission. 

(c) The Chnirninn may npprove n management contract providing for a fee bused 

upon a pcrcentnge of the net revenues of a tribal gaming activity if he determines 

thnt such percentage fee is reasonable in light of surrounding circumstances. but in 

no event shnll such fee exceed forty percent of the net revenues. 

td) Not Inter than one hundred and twenty days after the submission of a contrnct, the Chairman shnll npprove or disapprove such contrnct on its merits. Any 

such contract not ncted upon at the end of such time sliall be deemed to have been 

approved by the Chnirnlan. 

(e) Thc Chairmnn shnll not npprove any contrnct where he determines that: 

(1) an person listed pursuant to parngrnph (aM1) of this section- 

(,[) is nn elected member of the governing body of the Indian tribe which 

is the party to the mnnagement contrnct; (B) has been or subse uently is convicted of any felony or gaming offense; 

(C) has knowingly an 3 willfully provided materially important false state 

ment or information to the Commission or the tribe pursuant to this Act; or 

(D) has been determined to be n person whose prior activities, criminal 

record if any, or reputation, habits and associations pose a threat to the 

public interest or to the effective regulation and control of gaming, or 

create or enhance the dnngers of unsuitable, unfair or illegal practices, 

methods and activities in the conduct of gaming or the carrying on of the 

business and financial arrangements incide~~tal thereto; 

(2) the management contractor has, or has attempted to, unduly interfere or 

influence for its gain or advantage any decision or process of tribal government 

relating to the gaming activity; 

(3) the management contractor has deliberately or substantially failed to 

comply with the terms of the management contract or the tribal gaming ordinance or resolution adopted and approved pursuant to this Act, or 

(41 a trustee exercising the skill and diligence that a trustee is commonly held 

to would not approve the contract. 

(fl The Chairman, after notice and hearing, shall have the authority to require 

npproprinte contract modifications or may void any contract if he subsequently de 

terrnines that any of the provisions of this section have been violated. 

(g) No mnnagement contract for the operation and management of a Class I1 and 

I11 gamin activity shall transfer or, in any other manner, convey any interest in 

land or ot a er leal property unless clearly specified in writing in said contract. 

SEC. 13. (a) As soon as practicable after the organization of the Commission, the 

Chnirmnn shall notify each Indian tribe or management contractor who, prior to 

the enactment of this Act, adopted an ordinance or resolution authorizing Class I1 

or 111 gaming or entered into a management contract, that such ordinance, resolution, or contract must be submitted for his review within sixty days of such notification. 

@XI) Within ninety days after the submission of an ordinance or resolution authorizing Class I1 gaming pursuant to subsection (a), thp Chairman shall review 

such ordinance to determine if it conforms to the requirement of section ll(b) of this 

Act. 

(2) If he determines that such ordinance or resolution conforms to section ll(b1, he 

shall approve it. (3) If he determines that such ordinance or resolution does not conform to the requirements of section ll@), he shall provide written notification of necessary moditications to the Indian tribe which shall have not morc than one hundred and twenty 

days to come into compliance. 

(CHI) Within ninety days after the adoption by the Commission of a Class 111 regclatory scheme governing the type of gaming involved in a Class 111 ordinance or resolution submitted pursuant to subsection (a), the Chairman shall review such ordi- 
nnncc or resolution to dcter~riine if it conforlns to uucli rcguli~tory scheme and the 

appropriate requirements of section 1 ltb) of this Act. 

(2) If he deterniines that such ordinance or resolution conforms to such reguliltory schen~e nnd to tllc requirements of section lltb), he s11i1ll approve it and issue any 

necessary license. 

(9) If he determines that such ordinance or resolution docs not conform to such 

~.egulntory scheme clnd to the requirements of section Iltbr. he shall provide written 

riotificntion of necessary ~nodificatio~~ to the Indian tribe which sllnll have not more 

than one liut~dred and twc~lty dnys to come into compliance. 

(dH1) Within one hundred and eighty dnys lifter the submission of n management 

contract pursui~nt to subsection (a). the Chairman shall subject such contract to the 

requirements and process of section 12 of this Act. 

(21 If lie determines, ut tlie end of such riod, that such contr;~ct and the manngen~ent contractor n~ect the requiren~ents o IP" section 12, he shall approve it. 

131 If he determines, :it the end of such period. that such contract and the rnanagemerit contractor (lo not nieet tlie requirements of section 12, he shall provide written notification to tlie parties to such contract of modifications necessary to come 

into coniplinnce and the pnrties shall have not rnore than one hundred and twenty 

dnys to come into compliance. 

(4) Where :I management contract submitted pursuant to subsection (a) has been 

previously npproved by the Secretary or his representative. said contract shall be 

deemed in complinnce hereof and no further action shall be required. 

SEC. 14. (nX1) The Commission shall have authority to authorize the Chairman to 

levy and collect appropriate civil fines, not to exceed $10,000 per violation, against 

an Indian gaming nctivit or a management contractor engaged in gaming activities 

regulated by this Act or L y regulations adopted by the Comtnission pursuant to this 

Act. 

(2) The Conimission shall. by regulation, provide an opportunity for an appeal and 

hearing before the Commission on fines levied and collected by the Chairman. 

(bH11 The Chairman shall have power to order temporary closure of Indian 

ganiing activities for substantial violation of the provisions of this Act or regulations adopted by the Coni~~lission pursuant to this Act. 

(2) Not later than thirty days after the issuance by the Chairman of an order of 

temporary closure, the Indian tribe or management contractor involved shall have a 

right to a hearing before the Commission to determine whether such order should 

be made pern~nnent or dissolved. The Commission may, by a vote of not less than 

five of its members, order a permanent closure of the gaming operation after such 

hearing. 

(cl A decision of the Comn~ission to give final approval of a fine levied by the 

Chairnian or to order a permanent closure pursuant to this section shall be appealable to the appropriate Federal District Court pursuant to the Administrative Pr* 

cedures Act. title 5, United States Code. 

SEC. 15. taH1) The Conunission may authorize the Chairman to issue subpoenas requiring the attendance and testimony of witnesses and the production of any evidence that relates to any n~atter which the Commission is empowered to investigate I by this Act. 

(2) Such attendance of witnesses and the production of such evidence may be re- 1 quired from any lace within the United States at any designated place of hearing 

within the unitelstates. 

I (3) If a person issued a subpoena under paragraph (1) refuses to obey such subpoena or is guilty of contumacy, any court of the United States within the judicial disI trict within which the hearing is conducted or within the judicial district within 

which such person is found or resides or transacts business may, upon application of 

the Commission, order such person to appear before the Commission to produce evidence or to give testimony relating to the matter under investigation. Any failure to 

obey such order of the court may be punished by such court as a contempt thereof. 

(4) The subpoenas of the Com~nission shall be served in the manner provided for subpoenas issued by a United States district court under the Federal Rules of Civil 

Procedure for the United States district courts. 

(5) All process of any court to which application may be made under this section 

may be served in the judicial district in which the person required to be served resides or may be found. 

(b) No person shall be excused from attending and testifying or from producing 

books, records, correspondence, documents, or other evidence in obedience to a subpoena, on the ground that the testimony or evidence required of him may tend to 

incriminate him or subject him to a penalty or forfeiture; but no individual shall be 

prosecuted or subjected to any penalty or forfeiture by reason of any transaction, 
matter, or tl~irifi concerning which lie is cornpclled, after having claimed his privilege ngninst self-incrin~inntion. to testify or l~roduce evidence, except that such indi. 

vidunl so testifyinr! shnll not cxcmnt from ~roeecution and ~unishmcnt for .-- perjury conimittcd in so t&tifying. 

SIX. 16. (a) Except as provided it1 subsection tbl. the Commission shr~ll prescrvc? 

any and all infornintion received pursuant to this Act m confidential pursuant to 

the -. provisions of pnrngrnphs 1.1) c~nd (7) of section 552tb) of title 5, United States 

Code. 

tb) The Caniniission may, when such information indicates a violation of Federal. 

State, or tribal criminal statutes or ordinnnccs, provide such information to the np 

propriate law enforcement officinls. 

lc) The Attorney General of the United States is authori7A to investigate activi. 

ties nsswinted with gnming authorized by this Act which may be a violation of Fcdern1 lnw, including but not limited to the Major Crimes Act 118 U.S.C. 1153). the 

Assi~nilative Crimes Act (18 U.S.C. I:]), nnd 18 U.S.C. 1163. The Attorn9y General is 

nuthorized to enforce such laws, or assist in the enforcement of such laws, upon evidence of violation as a matter of Federal law, or upon the referral of information by 

the Comnlission pursuant to section 1G(b) of this Act. 

SEC. 17. (nH1) Not less than threequarters of the annual budget of the Commission shall be derived from an assessment of not to exceed two and onchalf percent 

of the gross revenues from ench Indian gnming activity regulated pursuant to this . Art 

(2) The Commission, by n vote of not less than five of its members. shall annually 

adopt the rate of assessment authorized b this section which shall be uniformly 

applied to all gaming activities and which s i all be payable on a quarterly bnsis. 

(3) Failure to pay the assessment shall, subject to the regulations of the Commission, be grounds for revocation of any approval or license of the Commission required under this Act for the operation of tribal gaming. 

(4) To the extent that funds derived from such assessments are not expended or 

committed at the end of the budget year, such surplus funds shall be credited to 

ench gaming activity on a pro rain bnsis against the assessment for the succeeding 

year. 

(5) For purposes of this section, gross revenues shall constitute the total wagered 

monies less nny amounts paid out as prizes or paid for prizes awarded. 

(bH1) The Cominission, in coordination with the Secretary and in conjunction with 

the fiscal cycle of the United States, shall adopt an annual budget for the expenses 

and operation of the Commission. 

(2) The budget of the Conlmission may include a request for appropriations, as authorized by section 18, in an amount not to exceed one-third the amount of funds 

derived from assessments authorized by subsection (a) for the fiscal year preceding 

the fiscal year for which the appropriation request is made. 

(3) The request for appropriations pursuant to section 16 shnll be subject to the 

approval of the Secretary and shall be included as a part of the budget reqctest of 

the Department of the Interior. 

SEC. 18. (a) Subject to the provisions of the section 17, there is hereby authorized 

to be appropriated such sums as may be necessary for the operation of the Commission. 

(b) Notwithstanding the provisions of section 17, there is hereby authorized to be 

appropriated not to exceed $2,000,000 to fund the operation of the Commission for 

the firsl fiscal year after the date of enactment of this Act. 

SEC. 19. For the purposes of this Act- 

(I) "Attorney General" means the Attorney General of the IJnited States; 

(2) "Commission" means the National Indian Gaming Commission established 

pursuant to section 5 of this Act; 

(3) "Indian lands" means- 

(i) all lands within the limits of any Indian reservation; and 

(ii) an lands title to which is either held in trust by the United States 

for the i( enefit of any Indian tribe or individual or which is held b any Indian tribe or individual subject to a restriction by the United itales 

against alienstion over which an Indian tribe exercises governmental 

power; 

(4) "Indian tribe" means any Indian tribe, band, nation, or other organized 

group or community of Indians which is recognized as eligible by the Secretary 

for the special programs and services provided by the United States to Indians 

because of their status as Indians and is recognized as possessir.g powers of selfgovernment; 
4.5) "r:rttllir)g" nlcnnfi 11) rlr.i~l. ~,f*.rntt*. cnrryon. cor~duct. or init~~~tnin for ftlil. any 

nny reprc3~br~t~rlivc, value, ilnd filli~ll consist orbiinking or ~w?rccntnl:r ~~IIII~. (11 ~~IIIICC' OIIIYLY~ for money. Irrolx4rty. cri b! 11. or 

(A) "(:IIIS~ I gnriling" which rihnll include social gnrncj wlely for prirm of 

~ninin~nl vnluc: or tnrditionnl fcjrrtis of lndirrn gnrr~ing cn~dged in t~y individ. 

uuls m 11 pnrt of or in connection wit11 tril,;rl rrremonies or celebrations; 

(1st "(:IILE~ II gnming" which t;l~rrll include tl~c. Rome of chance comrnonly 

known rw bingo or lotto rind which is pln crl for i~riirs. including monetnry 

prim, with cads knring nurnl~m or ot 1; c.r dc*ignntionn. the l~oldcr coverIR such nunihem or dn;il:nntio~is RR obji~u. ~imilnrly numbred or dtsignrttml, nrc drawn or clcctronic;illy detvrmincd fmn~ u nurptical and the 

grrmc king won b the pcmn first covering n previousl designated rrrrnnjicnient of num i~ m or drsignntions or such cnrd, nnd s ia II nlm include 

pull-tnbs, punch hrdr, and otlrrr (:nmc8 similnr to bingo; and 

(C) "Clr~sm I11 gnn~ing" which shlrll include all other forms of gaming not 

dcfincd in subpnrngrripl~ (A) nnd (111 of this pnrngraph. 

(6) "net rcvenucs" mcnns [cross revenues of nn lnd~nn gaming nctivity leas 

nniounbs pnid out nn, or pnid for, prim nnd totnl opcr;rting expenses including 

~nruingcmcni fm; nnd 

(7) "&rrctc~ry" rnenns the Secrtli~ry of thc. interior. 

SEC. 20. C~n~istcnt with the rcquirenients uf thh Act, 18 U.S.C. SLY. l:W7 shall 

np Is to any jinn~ing activity conducted by n Tribe pursuant to this Ad. 

&c. 21. In the cveni Lhnt any section or provision of this act is held invalid. it is 

t11~ intc'rit of Conm thnt the remnining sections or provisions of this Act shall 

continue in full form and effect. 

PURPOSE 

The purpose of H.R. 1920, by Mr. Udall and others, is to establish 

Federal standards and rcgulations for the conduct of gan~ing activities on Indian reservations. 

BACKGROUND 

Although Indian tribes have engaged in the operation of gaming activities on their reservations for some time and although some 

tribes have conducted bingo operations on a regular basis since at 

least 1974, it is not until recently that such gaming operations have begun to proliferate at a rapid pace. Recent information indicates that at least 80 such operations are currently in existence. 

Tribal involvement in the conduct of gaming activities started to 

increase after the seminal case of Seminole v. Butteriuorth. 658 F 

2d. 310 (1982). 

In this case, the 5th Circuit upheld a ruling of the Federal District Court that the Seminole Tribe of Florida could engage in 

bingo gambling within the reservation free of State licensing and 

State regulation. While the court found that the State of Florida 

has criminal and civil jurisdiction over the Seminole reservation 

pursuant to Public Law 83-280, it found that, pursuant to the Supreme Court's Decision in Bryan v. ltasca count.^, 426 U.S. 373 

(1976). P.L. 83-280 did not confer general regulatory power over 

Indian tribes. 

Therefore, the question of whether or not Florida had the right 

to license and tegblate bingo operations on the Seminole Reseriation turned on whether t.he State law regulating bingo operat~ons 

was criminal/prohibitory in nature or civil/'regulatory. Finding that 

the operation of bingo games in Florida was not prohibited by the 

State law as against public policy, but merely regulated, the Court 

held that the State law was civil/regulatory in nature and, therefore, was not applicable to bingo operations on the Indian ;eserva- 
tion. Si~nilnr decisions wcrc handed down in the casc! of Onci(1a 7tibc of Indians v. IYrsw,isin, 518 F. Su )p. 712 (1981) nnd fi~ro~ia 

G~IIJ> of the Capitan Grondc ilo~nrl of hion Indiane v. Ilt~f/r, (9th Circuit; l!)H%). 

br 

Wliolher o ccr~ilin activit in aguinet the public policy of the 

St~lte llr~s nlm determined w 1; ctllcr such gambling nctivity is legal 

\?ndcr the Organid Crime Control Act of 1'370. This Act prohibits gnmbling busitre~ws whiclr arc itr violation of tho laws of the State 

in which they ilre located. Thc E'cdcrnl courts have concluded thnt 

gambling nctivities which are regulated rather than prohibited by State law tire not agriinst the public policy of the State and therefore not violative of the 0r~aniut-J Crime Control Act. Sec: U.S. v. 

Firrris, (24 F. 2nd 890 (9th Cir. 1980). 

Bcsides the favorable court dcci~ions, it is clear that in thesc 

tin~es of Fcdernl budget reductions many tribe8 which have traditionally relied an Federal fundit~g to conduct their tribal government operations, have found the revenues generated from tribal 

gnming operntions on the reservations to be a welcome source of 

funds to replace dwindling Federal funds. As the Department of 

the Interior stated during its testimony on the bill: 

Indian reservation gambling provides economic benefit 

to many of the tribes involved, especially those with no 

valuable natural resources or other significant sources of 

income. Tribes have used their bingo income for a variety of purposes relating to the welfare of their members including ' ' ' payment of medical expenm for tribal members " ' fire depnrtment equipnlent and operation, road 

repairs, and flood control repair. 

The proliferation of tribal gaming operations was also encouraged by President Reagan's Indian Policy Statement which encouraged the tribes to reduce their dependence on Federal funds by pro- viding a greater percentage of the cost of their self-government and 

which pledged to assist tribal governments by removing impediments to tribal self-government. This policy also encouraged provnte sector involvement and innovative approaches to overcome the 

legislative and regulatory impediments to econo~nic progress. To 

comply with this policy and Federal law, the Department of the Interior has approved tribal ordinances and laws providing for tribal 

regulations of gaming activities on Indian lands and testified 

during the Committee hearings that, "We wish to permit continuation of Indian bingo as a matter of Federal policy, but recognize 

that it had to be regulated effectively to avoid the pot.- 8t:ql law enforcement problems." 

It is precisely such potential law enforcement concerns and expe- cially allegations of criminal infiltration by organized crime which 

first interested the Committee in the issues facing gaming on 

Indian lands. On the issue of organized crime, the Committee has 

not found any conclusive evidence that such infiltration has occurred. The Justice Department, in its testimony on the bill stated 

that, while it did not claim that Indian gambling operations were 

presently "mobbed-up", there was still a potential for such infiltration by organized crime especially after such operations have 
becon~e succesvful and have established their credentinlu and legitimacy. 

The conclusior~ that org,runixd crirnc? hns not infiltrated Indian 

gaming operations is also rellcctcd in the findings of the 9th Circuit Court of Appeals decision in Cat)(rton Bcrnrl o Mission Indians 

and Mororcgo Band v. Riverside (February 26, 1 B 86) which stated 

that, in spite of the State's concerns about intrusion by organized 

crime in Cnlifor~~in, "There is no evidence whatmcver that orga- nized crime exists on these reservations." 

In this recent 1986 Opinion, the State of California had argued that the recent decision of Rice v. Rehner, 463 U.S. 713 (1983) demu~idcd a rcoxnnlination of the civil/rcgulntory-criminal/prohibitory distinction because the Supreme court had rejected what it 

terms a "substantive-regulatory" distinction in interpreting the 

intent of a Federal statute which exempted from Indian Country 

thc i~pplication of certain Federal laws regulating alcohol. The SUprelne Court in Rice held that such statute did give the States concurrent iurisdiction with the tribes over liquor - regulations in - 

Iridian country. 

The 9th Circuit, however, in its 1986 decision, held that the Supreme Court's decision in Rice v. Rehner did not change the legal doctrines governing the legality of Indian gambling on Indian 

lands. Since P.L. 280 only vested the States with full criminal juris- diction, and not with civil regulatory power in Indian Country, the 

question to be decided was still whether the State regulations concerning such gambling operations were criminal/prohibitory or 

civil/regulatory in nature. The Court held that since these gambling operations were not prohibited by the State public polic , 

cnb f e in Indian Country. 

the were only civillregulatory in nature and therefore not app r iThe Supreme Court, in Rice v. Rehner, was not adopting a new 

doctrine by which to measure the extent of State power in Indian 

Country and was not espousing a new theory on Indian sovereignty. The Court instead was following a long line of legal precedents in attempting to measure the backdrop of Indian sovereignty in a 

preemption analysis. In the course of such analysis, the Court 

stated that, "The role of tribal sovereignty in preemption analysis varies with the particular notions of sovereignty developed from 

historical traditions of tribal independence." The Court included 

that, when it comes to liquor regulations, Indian sovereignty was 

not important because the Federal Government had divested the 

tribes from the power to regulate liquor on the reservation since 

colonial times. As a matter of fact, the Court concluded that there 

was an historical tradition of concurrent Federal and State juris- diction over the use and distribution of alcohol on the reservation 

since some of the States were required to enact laws prohibiting 

the sale of liquor in Indian Country as a condition of entry into the 

United States. 

There are vast historical differences in the manner that the 

United States has treated alcohol and gaming activities in Indian 

Country. Except for a prohibition against the operation of mechanical devices such as slot machines, the Federal government has 

never attempted to prohibit or regulate gambling activity within 

Indian country. In like manner, there is no specific or general Fed- 

era1 lal~ conferring authority on States to regulate gaming activity 

within Indian Country. 

While there has been a history of tribal gaming activity or 

gaming regulation f~r a number of years, it has only been in recent 

years that tribes have begun to develop gaming as an economic er,- 

terprise to generate tribal governmental revenue. These tribal 

gaming activities have brought the Indian and non-Indian comnunities into conflict. 

While Indian tribes have vigorously protested proposed actions to 

limit or infringe upon their rights to generate revenue to support 

tribal government and tribal programs, they have recognized that 

there may be a need to enact Federal legislation to protect these 

revenue-generating activities from over-reaching on the part of outside interests and from the attentions of criminal elements. 

States and non-Indian parties interested in, or affected by, Indian 

gaming activity have felt threatened by these activities ar~d have 

sought means to prohibit or restrict these activities. In some cases, 

they have sought to advance solutions which would subject the 

tribal activities to the laws of the State. 

H.R. 1920, as amended, is an attempt to meet the concerns of all 

parties while preserving the integrity and rights of tribes to be governed by their own laws and protecting the right of tribes to generate necessary revenue to support tribal government and programs. 

COMMITTEE AMENDMENT AND SECTION-BY-SECTION ANALYSIS 

The Committee considered an amendment in the nature of a substitute for purposes of committee markup. This Substitute, after 

further amendment, was adopted by the Committee as an amendment to H.R. 1920. The major provisions of the Substitute and its 

differences from H.R. 1920, as introduced, are discussed in the Explanation section of this report. A section-by-section analysis of the 

amended bill and a more detailed explanation of its provisions follows: 

Section I 

Section 1 cites the Act as the "Indian Gaming Regulatory Act". 

Section 2 

Subsection (a) contains various congressional findings relating to 

the conduct of gaming activities on Indian reservations. Paragraph 

(1) notes that a number of tribes have engaged in gaming as a 

means of generating tribal revenues. The record developed by the 

Committee shows that many tribes, faced with severe cuts in Federal program aid supporting tribal government and tribal programs, and lacking a tax base or other source of governmental revenue, have turned to gaming as a source of such revenue. In this 

respect, they are not unlike many State governments who have 

turned to State lotteries or other forms of gaming to supplement 

their tax revenue. 

Paragraph (2) finds that, under existing law, Indian tribes may 

engage in, or license and regulate, gaming activities on Indian 

lands where that activity is not prohibited by some specific Federal 
lriw nnd where it is conducted in a State which does not rohibit 

the gami~ig activity ruj n matter of the criminal laws of suc t State. 

I'arc~graph (3) notes that there is no existing Federal law that requires Federal approval of management contracts relating to tribal 

griming nctivities. Depending upon the provisions of such contract, 

it might be subjcct to ap roval by the Secretary of the Interior 

eitber under authority of 83 U.S.C. 81 or, if it involves the lease or 

encumbrance of Indinn Innds, under 25 U.S.C. 177 or some relevant 

provision of chapter 12 of 25 U.S.C. This bill would not affect those 

requirettrents, but would be supple~nental thereto. Fedcral court decisions to this effect are Wisconsin Winnebngo v. Koberstein, 762 

F.2d 613, and U.S. ex rel. Shakopee v. Pan American, NO. 4-85-880. 

Paragraph (4) states that existing Federal law does not provide clcnr standards or regulations for the orderly conduct of gaming activities on Indian Innds. 

I'ciragraph (5) finds that a principal goal of Federal Indian policy is to promote strong tribal government and tribal self-sufficiency c~nd economic development. 

Paragraph (6) finds that revenue derived by a tribe from gaming 

operations is a legitimate source of funds for tribal government ad programs. 

Subsection (b) finds that the establishment of Federal standards 

and a National Indian Gaming Commission is necessary to meet 

the concerns regarding Indian gaming and to protect gaming activities as a source of tribal revenue. 

Section 3 

Subsection (a) provides that Class I1 and 111 gaming regulated by this Act shall be unlawful on any lands acquired by the Secretary 

in trust for an Indian tribe after December 4, 1985, if such lands 

are outside the boundaries of such tribe's reservation. 

Subsection (b) provides that subsection (a) shall not be applicable 

if the tribe involved obtains the consent of certain State and local 

governing bodies. 

Section 4 

Section 4 provides that relevant provisions of the Internal Revenue Code, such as section 3402(q) and chapter 35, 26 U.S.C., concerning taxation and the reporting and withholding of taxes relating to the operation of gaming activities shall apply to tribal 

gaming activities as they apply to State operated gaming activites. 

Section 5 

Subsection (a) provides for the establishment of a National 

Indian Gaming Commission as an independent entity within the 

Department of the Interior. 

Subsection (b), paragraph (1) provides that the Commission shall 

be composed of eight members with one appointed by the Secretary 

to serve as chairman, one to be selected by the Attorney General, 

five to be appointed by t.he Secretary from a list provided by Indian 

tribes engaged in gaming activities, and one to be appointed by the 

Secretary to represent State interests. 

Paragraph (2) provides that not more than four of the members 

may be from the same pditical party. 
Pnrngri~pl~ (3) provides for the terms of office of the Commissionom, cxccl)t for the Chnirmnn wt~o will serve at the pleasure of the 

Sucrotnry, nnd provide6 for stnggercd terms for the first panel of 

memhra. 

, Pnrngrnph (4) prohibits any pcmn who has been colrvicted of a 

f~lony or gnn~ing offense, has any management responsibility for a 

I gntning nctivity rcgulntcd under the Act, or has n financial or 

otlrcr interest in a ~nnnagement contrnct from king appointed to, 

or corrti~ri~e sol-vice on, the Con~mission. 

I I'nrogrnplr (5) nuthorims ren~oval of niembers of the Commission, 

except for the Chairmnn, by a majority vote of the rest of the members for good cause subject to the approval of the Secretary or, in 

the cnsc of the member selected by the Attorney General, his ap provnl. 

Subsctction (c) provides for the filling of vacancies on the Commission. 

Subsection (d) provides that five members of the Commission 

shall corrstitute u quorum. Subsection (el provides for the selection of a Vice-Chairman by the Coinn~ission. 

Subsectiorr (0 provides that the Commission shall meet at the 

call of the Chnirmnn or a mnjority of the members of the Commission. 

Subsection (g) provides for the payment of the members of the 

Commission and reimbursement for travel, subsistence and other 

necessary expenses incurred in the performance of their duties. 

Section 6 

Subsection (a) gives the Chairman exclusive power to approve tribnl ardinnnces relating to Class I1 gaming, approve management 

contracts for Class I1 and 111 gaming, and to select, appoint, and 

su .wise Commission stnff. 

Ebsection @) gives the Chnirman power, subject to the approval of the Commission, to appoint a General Counsel, promulgate regu- latory schemes for Class I11 gaming, and to issue orders of temporary closures of gaming activ~ties. 

Subsection (c) gives the Chairman power, subject to appeal to the 

Commission, to approve or disapprove Class 111 ordinances, resolutions or licenses and to lew - and collect civil fines as provided - by - the Commission. 

Subsection (dl provides that the Chairman shall have such other 

powers as may be delegated by the Commission. 

.Section 7 

Subsection (a) provides that the Commission shall have the 

power, not subject to delegation, to approve the annual budget of . the Commission, to adopt regulations for assessment and collection 

of civil fines, to adopt the annual assessments as pravided in section 17 upon an affirmative vote of not less than five members, to 

authorize the Chairman to issue subpoenas by an aff~rmative vote 

of not less than five members, and by an affirmative vote of not 

less than five members and after a full hearing, to make permanent a temporary order of the Chairman for clcsure of a regulated 

gaming nctivity. It is the intent of the Committe2 that tribes or op 
erators of tribal gaming activities subject to a permanent order of 

closure, in addition to any appeal rights, shall have the opportunity to reestablish their gamir g activity after meeting all compliance requirements of the commission. 

Subsection (b) sets out numerous general powers of the Commission necessary for the implementation of the Act and its responsibilities. 

Section 8 

Subsection (a) authorizes the Chairman, with the hpproval of the 

Commission, to appoint a General Counsel with a background in 

Indian affairs and establishes a maximum rate of pay far such position. 

Subsection (b) provides that the Chairman may appoint other authorized staff of the Commission without regard to laws governing 

appointments in the competitive service and without regard to the 

pay provisions of title 5, U.S.C., except that no one so appointed 

could be paid in excess of the rate of pay established for a GS-17. 

Subsection (c) authorizes the Commission to procure temporary 

and intermittent services as provided in section 3109(b) of title 5, 

U.S.C. 

Subsection (d) authorizes, at the request of the Chairman, other 

Federal agencies to detail personnel to the Con~mission unless otherwise prohibited by law. 

Subsection (el provides that the Secretary or the Administrator 

of GSA shall provide administrative support services to the Commission on a reimbursable basis. 

Section 9 

Section 9 authorizes the Commission to request, and heads of 

Federal agencies or departments to provide, information necessary 

to enable it to carry out this act, if not otherwise prohibited by law. 

Section 10 

Section 10 directs the Secretary to appoint the members of the 

Commission as soon as practicable and to provide interim staff and 

support assistance to the Commission. 

Section I1 - 

Subsection (a), paragraph (1) provides that class I gaming, defined in section 19 as social and traditional Indian gaming, shall 

remain in the exclusive jurisdiction of lndian tribes and shall not 

be subject to this Act. As with most cultures, most Indian tribes 

engaged in traditional gambling activites. The "stick" or "bone" 

game, with variations, was and is played among many Indian 

tribes, usually in conjunction with tribal ceremonies or feasts. Wagering on horse races or athletic contests, such as Lacrosse, was a 

common occurrence. Also, Indians engage in social, non-commercial 

gaming like poker in common with the rest of the Nation. It is 

these kind of activities which would not be covered under this legislation. 

Paragraph (2XA) provides that, except as limited in subparagraphs (B) and (C), Indian tribes may engage in, or license and regulate, Class I1 and I11 gaming on Indian lands if a tribal ordinance 
or resolution to that effect is approved pursuant to subsection (b) or 

(c) of this section. The subparagraph further provides that any licenses required under the Act would be required for each place, facility, or location. It is the intent of the subparagraph that a tribal 

ordinance not be approved which provides a general, blanket authorization of a gaming activity. 

Subparagraph (B) provides that gaming under subparagraph (A) 

would not be legal if (1) the gaming activity is specifically prohibited by Federal law or (2) it is prohibited by the Stok involved as a 

matter of public policy and criminal law. The only existing specific 

Federal law prohibiting gaming activity on Indian lands is found in 

section 1175 of title 15, United States Code, prohibiting gambling device within Indian country. It is not the Committee's intent that 

general Federal laws limiting gaming activity be applicable to 

tribal gaming activity meeting the test of the second criterion of - - 

subparagraph 6). 

The second limitation contained in subparagraph (b) is a recogni- tion of existing law on gaming on Indian reservations as articulated in the cases of Seminole Tribe of Florida v. Butterworth, 658 

F.2d 310 (5th Cir. 1981) and Barona Group of Capitan Grande 

Band, etc. v. Duffy, 694 F.2d 1185 (9th Cir. 1982). The Barona case 

was reconfirmed by the 9th Circuit Court of Appeals in its February 25, 1986, decision in Cabazon Band of Mksfon Indians v. 

County of Riverside et al., No. 84-6635. These cases, and several 

lower court cases, have held that where a State permits the oper- ation of, and general public participation in, gaming activities, a 

tribe within that State may, as a matter of tribal and Federal law, 

engage in that activity free of State licensing and regulatory laws. 

Subparagraph (C) provides that subparagraph (A) shall not apply 

to gaming on Indian lands within the State of Nevada. The effect 

of this provision is to leave the State of Nevada and the tribes 

where existing laws finds them. It is the intent that the provisions of H.R. 1920 not affect, in any way, what the existing law may be. 

Subsection (b), paragraph (1) provides that an Indian tribe may 

engage in, or license and regulate, Class I1 gaming (defined in section 19 as including bingo and related games) if a tribal ordinance 

or resolution is approved by the Chairman of the Commission. 

Paragraph (2) provides that the Chairman must approve such ordinance if it meets the minimum standards set out in the para- graph. Subparagraph (A) provides that the tribe, except as provided in paragraph (31, must have the sole proprietary interest and responsibility for conduct of the gaming activity. This is not meant to 

preclude the employment, by contract or otherwise, of non-tribal 

persons or entities to manage or operate the tribal enterprise. 

Subparagraph (B) provides that net tribal revenues from the 

gaming activity may only be used to fund tribal government oper- ations or programs; provide for the general, welfare of its members; 

promote tribal economic development; denote to charitable organi- zations; or to help fund local government agencies. It further states 

that, if the funds are used to make per capita payments to tribal 

members, such payments will be subject to Federal taxation. It is 

not intended that this be the case if any of such revenue is taken 

in trust by the United States, in which case the provisions of the 

Act of August 2, 1983 (97 Stat. 365) would be applicable. 
Subparagraph (C) requires that outside, independent audits be 

conducted annually on the gaming activity and be made available 

to the Cornmission. 

Subparagraph (D) provides that all contracts for supplies, services, or concessions in excess of $25,000, except for legal or accounting services, be subject to such audits if related to the gaming activity. This language is to insure that ancillary services related to a 

gaming activity are subject to open audits as the Committee is advised that criminal elements often target these activities for infiltration. 

Subparagraph (E) provides that the tribal drdinance shall pro- vide that the gaming activity will be conducted in a way which 

would protect the environment and the public health and safety. It 

is not intended by this provision that the tribal gaming activity be 

subject to general Federal laws relating to the environment unless 

it would be so subject under existing law. 

Paragraph (3) provides that a tribal ordinance or resolution may provide for the licensing and regulation of individuals and entities 

other than the tribe on the reservation. However, the effect of the 

ordinance must be that any person or entity eligible for a tribal license would be eligible for a State license if they applied under 

State law and State jurisdiction. In addition, the ordinance must 

establish a tribal regulatory scheme for such non-tribal gaming activities which is no less stringent than that established by the 

State for gaming operations within its jurisdiction. 

Paragraph (4) provides that the Chairman shall approve, within 

160 days of submission, the tribal ordinance if it meets the minimum requirements of the subsection and, if he has not acted 

within such time, the ordinance shall be deemed approved. 

Subsection (c) provides for the regulation of tribal Class 111 

gaming (defined in section 19 as all forms of gaming other than 

Class I and 11). Paragraph (1) provides that tribes may engage in, or 

license and regulate, Class I11 gaming if authorized by a tribal ordinance meeting the requirements of this subsection and approved by the Chairman. 

Paragraph (2) provides that the Commission shall adopt compre- hensive gaming regulations for Class I11 gaming which are to be 

identical to those provided for the same or similar gaming activity by the State in which the gaming is to be conducted. It is not the 

Committee's intent that all State law relating to gaming activit be 

incorporated into the Commission's regulatory scheme, only t i ose 

which deal with the regulation of the conduct of ongoing games. Paragraph (3) provides that, where there are criminal penalties 

attached to the civil/regulatory scheme, violations of those penal provisons can be enforced by the State, where the State has the 

necessary criminal jurisdiction under Public Law 83-280, or by the 

United States under the Assimilative Crimes Act (18 U.S.C. 131, as 

if such criminal penalties were a part of the criminal/prohibitory laws of the State. 

As noted by the Supreme Court in the case of McClanahan v. Arizona State Tax Commission, 1111 U.S. 164 (1973). "State laws generally are not applicable to tribal Indians on an Indian reservation 

except where Congress has expressly provided that State laws shall 

apply". By P.L. 82-280, Congress specifically transferred certain 
criminal and civil jurisdiction over Indians in Indian country to 

certain named States and authorized other States, under certain 

circumstances, to assume such jurisdiction. It is clear that States 

having beeen conferred or having assumed jurisdiction under P.L. 

283 have full criminal jurisdiction over Indians within Indian country. However, any State civil jurisdiction deriving from P.L. 280 

has been narrowly construed by the decision of the Supreme Court 

in the Case of Bryan v. Itasca County. 426 U.S. 3'73 (1976). The 

Court noted that the primary intent of the civil law provision of 

P.L. 280 was to grant State jurisdiction over private civil litigation 

involving Indians in State courts and not the full panoply of State 

civil/regulatory law. The court stated: 

* * + nothing in (P.L. 280's) legislative history remotely 

suggests that Congress meant the Act's extension of civil 

jurisdiction to the States should result in the undermining 

or destruction of such tribal governments as did exist and 

a conversion of the affected tribes into little more than 

"private, voluntary organizations," United States v. Mazurie, 419 U.S. 544 (1975)-a possible result if tribal governments and reservation Indians were subordinated to 

the full panoply of civil regulatory powers, including taxation, of State and local governments. 

In upholding the power of Indian tribes, as a matter of tribal and 

Federal law, to engage in or license and regulate gaming on Indian 

lands, the Federal courts have based their holdings on the Court's 

decision in the Bryan case. Seminole Tribe v. Bulterworth; Barona 

v. Duffy; Cabaron v. Riverside, supra. The court's have held that, 

where a State permits the conduct of, and general public participation in, a gaming activity as a matter of State civil/regulatory law, 

Indian tribes within such State have a right go engage in, or license and regulat,e, such gaming activity on Indian lands free of 

State licening and regulatory law. This is true even where criminal 

penalties m y be attached to the regulatory laws. As noted in the 

Seminole ca I e: 

Although inclusion of penal sanctions makes it tempting 

at first glance to classify the statute as prohibitory, the 

statute cannot be automatically classified as such. A simplistic rule depending on whether the statute includes 

penal sanctions could result in the conversion of every regulatory statute into a prohibitory one. * * * The classification of the statute is more complex, and requires a consideration of the public policy of the staie on the issue of 

bingo and the intent of the legislature in enacting the 

bingo statute. 

The same limiting rationale would be true in non-P.1,. 280 States 

where the United States would attempt to enforce State law within 

Indian country under the Assimilative Crimes Act or other general 

Federal statute. Paragraph (2) requires the Commission to adopt 

and apply to tribal Class 111 gaming the regulatory aspects of the 

State laws on gaming. Concerns were expressed to the Committee 

about the enforceability of any penal sanctions attached to those 

regulatory provisions. Paragraph (3) would permit the States or the 
United States, as appropriate, to enforce those criminal sanctions 

as if they were part of the criminal/prohibitory laws of the State. 

Paragraph (4) provides that the Chairman shall approve an ordinance or resolution on Class I11 gaming and shall issue a license if 

the ordinance or resolution meets the minimum standards imposed 

on Class I1 gaming in subsection (b) and conforms to the regulations adopted by the Co~nmission pursuant to paragraph (2). 

Paragraph (5) provides that, prior to approving a Class I11 license, the Chairman shall make an analysis of the prospects for 

the proposed gaming activity as a sound economic enterprise. Included in such analysis would be a consideration of the financial 

foundation of the proposal, the impact of granting the license on 

tribal and near-by non-Indian communities, and the ability of the 

licensee to operate in a fair and safe manner. It is not the Committee's intent that this analysis be a cause for denial of a license, but 

a means of assisting the tribes in developing and implementing a 

profitable, safe source of tribal revenue. 

' Section 12 

Subsection (a) provides that, subject to the Chairman's approval, 

an Indian tribe may enter into a management contract for the operation of a Class I1 or I11 gaming actiqity. It requires that, before 

approving such contract, the Chairman require and obtain detailed 

background and financial data on persons or entities associated 

with the management contractor. 

Subsection (b) provides that any management contract entered 

into shall make specific provision that (1) adequate accounting pro- cedures be maintained and verifiable financial reports be prepared 

by or submitted to the tribal governing body on a monthly basis; (2) 

appropriate tribal officials be guaranteed reasonable access to the 

daily operations of the gaming activity and have the right to verify 

daily income; (3) a minimum guaranteed payment to the trible has 

preference over retirement of development and construction costs; 

(4) an agreed ceiling for the repayment of such cosk, (5) a maximum contract term of five years; and (6) grounds and mechanisms 

for terminating the contract, such termination not to require the 

approval of the Chairman. 

Subsection (c) permits the Chairman to approve a contract with a 

fee based upon a percentage of the net revenues, but such percentage fee may not exceed forty percent. Subsection (dl provides that the Chairman must approve or disapprove the contract on its merits within 120 days or, at the end of 

such period, the contract will be deemed approved. Subsection (el provides that the Chairman shall disapprove a contract where he determines that (1) a person listed in paragraph (a)(l) is an elected member of the tribal governing body, has been 

or subsequently is convicted or" a felony or gaming offense, has 

knowingly provided materially false information to the Commission 

or tribes, or is of a general disreputable character; (2) the management contractor has or attempts to interfere or influence tribal 

government; (3) the management contractor has deliberately or 

substantially failed to comply with the contract terms or the tribal 

ordinance; or (4) a trustee exercising normal skill and diligence 

would not approve such contract. 
Subsection (0 permits the Chairman, after notice and hearing, to 

require appropriate contract modification or to void such contract 

if he determines that violations of this section have occurred. 

Subsection (g) provides that no management contract shall transfer or, in any manner, convey any interest in land or other real 

~roperty unless specifically provided in the contract. It is not the 

Committee's intent to authorize or permit the conveyance or encumbrance of trust or restricted Indian property through such contract without compliance with any existing Federal law regulating 

such property. I, 

Section 13 

Subsection (a) provides that, as soon as possible after organization of the Commission, the Chairman shall notify any tribe or 

management contractor who, prior to enactment of this legislation, 

adopted a tribal ordinance or entered into a contract on Class I1 or 

I11 gaming that such ordinance or contract must be submitted for 

his review within 60 days. 

Subsection (b) provides that the Chairman, within 90 days after 

submission of a Class 11 ordinance under subsection (a), shall approve it if it conforms to section ll(b). If he determines that it does 

not, he shall advise the tribe of necessary modification and the 

tribe will have 120 days to come into compliance by making the 

necessary modifications. 

Subsection (c) provides that the Chairman, within 90 days after 

adopting a Class I11 regulatory scheme by the Commission governing the gaming activity involved in a Class I11 ordinance submitted 

pursuant to subsection (a), shall review the ordinance to determine 

if it conforrns to such regulatory scheme and meets the requirements of section ll(b). If he does, he shall approve the ordinance 

and issue the necessary license. If he determiries it does not, he 

shall advise the tribe of necessary modification and the tribe shall 

have 120 days to come into compliance. Subsection (d) provides that the Chairman, within 120 days after 

submission of a management contract pursuant to subsection (a), 

shall subject such contract to the requirements and process of section 12. If he determines that the contract and the management 

contractor meet the requirements of section 12, he shall approve 

the contract. If he determines that they do not, he shall provide 

notice to the tribe and to the contractor of necessary modifications 

and they shall have 120 days to come into compliance. The subsection also provides that, where the Secretary of the Interior or his 

representative has previously approved a contract submitted pursuant to subsection (a), such contract shall be deemed in compliance 

with the provisions of the Act and no further action shall be required. While the Committee intends that contracts previously approved by the Secretary shall be deemed in compliance with this 

Act, it is not intended that this would work to cure any legal insufficiency in such contract or approval under any other applicable 

tribal or Federal law. 

Section 13 is a recognition by the Committee that there are numerous legal Indian gaming operations now being conducted on 

Indian lands and that those operations should be brought into compliance with the provisions of this law in a deliberate manner. It is 
not intended that those operations be affected by the provisions of 

this Act prior to the implementation of section 13. 

Section 14 

Subsection (a) provides that the Commission shall have authority 

to authorize the Chairman to levy and collect civil fines, not exceeding $10,000 per violation, against Indian gaming activities or 

management contractors for violations ,of the provisions of this Act 

or regulations adopted pursuant to the Act. It also provides that 

parties against whom the Chairman levies a fine shall have an opportunity for an appeal and hearing before the Commission. 

Subsection (b) provides that the Chairman shall have power to 

temporarily close a gaming activity covered by this Act for substantial violation of the Act or regulations adopted by the Commission. 

The Indian tribe or contractor involved shall have a right to a 

hearing, within 30 days after an order of temporary closure, before 

the Commission to determine if the order should be made permanent. The Commission may order permanent closure after such 

hearing only upon an affirmative vote of not less than five of its 

members. 

Subsection (c) provides that final decisions of the Commission 

under subsection (a) and (b) shall be appealable to the appropriate 

Federal district court under the Administrative Procedures Act of 

title 5, United States Code. 

Section 15 

Subsection (a), paragraph (1) provides that the Commission may 

authorize the Chairman to issue subpoenas to compel the attendance of witnesses and the production of evidence that relates to 

matters which the Commission is empowered. to investigate. 

Paragraph (2) provides that witnesses and evidence may be required from any place in the United States to any place of hearing. 

Paragraph (3) provides that, upon application by the Commission, 

appropriate Federal courts may enforce subpoenas of the Commission by holding defaulting parties in contempt of court. 

Paragraph (4) provides that Commission subpoenas shall be 

served in the same manner as provided in the Federal Rules of 

Civil Procedures for Federal district courts. 

Paragraph (5) provides that all process of any court to which ap 

plication is made under this section may be served in the judicial 

district where the person required to be served resides or is found. 

Subsection (b) provides that no person may refuse to comply with 

a subpoena on the grounds that any testimony given or evidence 

produced might tend to incriminate him, but no such person shall 

be subject to prosecution or any penalty or forfeiture by reason of 

being compelled to testify or produce evidence. However, the 

person would not be immune from prosecution and punishment for 

perjury in so testifying. 

Section 16 ' 

Subsection (a) provides that, except as provided in subsection (b), 

the Commission shall keep confidential information received pursuant to this Act pursuant to section 552(b)(4) and (7) of title 5, U.S.C. 
Subsection (b) provides that information covered by subsection (a) 

may be provided by the Commission to appropriate law enforcement officials when it indicates a violation of Federal, State or 

tribal criminal statutes or ordinances. 

Subsection (c) provides that the Attorney General is authorized 

to investigate activities associated with garning under this Act 

which might be a violation of Federal laws. The Attorney General 

is authorized to enforce or assist in the enforcement of such laws 

upon evidence of a violation as a matter of Federal law or upon 

referral of information from the Commission under subsection (b). 

This subsection is meant merely as a reaffirmation of the existing 

responsibility of the Attorney General to investigate and prosecute 

crimes within Indian country under existing Federal law. 

Section 17 

Subsection (a), paragraph (1) provides that not less than threequarters of the Commission's annual budget shall be derived from 

assessments of Indian gaming activity of not to exceed two and onehalf percent of gross revenues. 

Paragraph (2) provides that the Commission, by an affirmative 

vote of not less than five of its members, shall annually adopt the 

rate of assessment which shall be uniformly applied to all gaming 

activities and payable on a quarterly basis. 

Paragraph (3) provides that failure to pay the assessment shall 

be grounds for revocation of any approval or license of the Commission required for the operation of a gaming activity. 

Paragraph (4) provides that funds assessed in one year and not, 

expended shall be carried over and credited on a pro rate basis 

against assessments for the succeeding year. 

Paragraph (5) defines gross revenue, for purposes of this section, 

as total wagered monies less amountF paid out as prizes. 

Subsection (b), paragraph (a) provides that the Commission, in coordination with the Secretary of the Interior and in conjunction 

with the Federal fiscal cycle, shall annually adopt the budget for 

the Commission. 

Paragraph (2) provides that the Commission may request Federal 

appropriations, as provided in section 18, which not exceed more 

than one-third of the total assessment authorized and collected in 

the preceeding fiscal year. 

Paragraph (3) provides that the Commission's appropriation request shall be subject to the Secretary's approval and included in 

the budget request of the Department of the Interior. 

Section 18 

Subsection (a) provides that, subject to section 17, there is authorized to be appropriated for the expenses of the Commission 

such sums as may be necessary. Subsection (b) provides that, notwithstanding section 17, there is 

authorized to be appropriated not to exceed $2,000,000 to fund the 

Commission in the first fiscal year after enactment. 

Paragraph (3) provides that failure to pay the assessment shall 

be grounds for revocation of any approval or license of the Commission required for the operation of a gaming activity. 
23 

Section 18 

Subsection (a) provides that, subject to section 17, there is authorized to be appropriated for the expenses of the Commission 

such sums as may be necessary. 

Subsection (b) provides that, notwithstanding section 17, there is 

authorized to be appropiated not to exceed $2,000,000 to hnd the 

Commission in the first fiscal year after enactment. 

Section 19 

Section 19 contains definitions of various terms used in the Act. 

Section 20 

Section 20 provides that, consistent with the provisions of the 

Act, section 1307 of title 18, United States Code, shall apply to 

tribal gaming activities. It is intended that gaming activities of an 

Indian tribe, whether operated directly by the tribe or under any 

management contract, would be treated the same as a State-owned 

gaming activity. 

Section 21 

Section 21 contains a severance clause providing that the invalidation of any provision of the Act shall not operate to ixvalidate 

the remaining provisions. 

EXPLANATION 

As introduced, H.R. 1920 established minimum Federal standards for the conduct of gaming activities on Indian lands. The bill 

provided that a tribunal ordinance or resolution, meeting those 

minimum standards, was subject to the approval of the Secretary 

of the Interior. In addition, the bill required that management contracts entered into by Indian tribes for the operation of tribal 

gaming activities would be subject to Secretarial approval under 

stringent criteria governing elements of such contract and the contracting entity. . 

Indian tribes initially opposed the legislation as an unwarranted 

intrusion upon tribal governmental sovereignty and an impairmeiit 

of legal rights confirmed through extensive litigation in the Federal courts. Tribal support did develop on the legislation, primarily *" ! 

- 3 because of Indian concern about growing over-reaching by outside . - 

management contractors and because of concerns being expressed ; 

about the possibility of infiltration of the games by elements or or2 

ganized crime. 

On the other side, opposition to the bill was advanced by some 

State governmental representatives and certain private interest 

groups because of their concern about the impact of Indian gaming 

activity not being subject to the regulatory and enforcement laws 

of the States. This opposition was grounded in the belief that 

gaming activities of Indian tribal governments operated for the 

purpose of generating tribal governmental revenue. 

After full Committee hearings on the legislation and the receipt 

of extensive correspondence from concerned parties, the Committee 

concluded that many of the concerns expressed on both sides of the 

issue had merit and warranted consideration in the amendatory 
process. At the direction of the Chairman, an amendment in the 

nature of a substitute was developed for Committee mark-up purposes. The Substitute sought to strike a middle ground between the 

opposing viewpoints. This Substitute, after further amendments, 

was ordered reported favorably by the Committee. 

The Substitute made basic changes in the bill as introduced. The 

Substitute provides for the establishment of a National Indian 

Gaming Commission as an independent entity within the Department of the Interior and this commission is vested with the implementation of the Act instead of the Secretary of the Interior. Funding for the Commission will come primarily from assessments of 

tribal gaming activities. 

The Substitute divides gaming activities into three classes: Class 

I including traditional Indian gaming and social gaming; Class I including bingo and related gaming; and Class I11 including all other 

forms of gaming. 

Each class is treated differently in the Substitute. Class I is left 

to the exclusive jurisdiction of the tribes. Class I1 is generally left 

to the regulatory authority of the tribes, but with the requirement 

that a tribunal ordinance or resolution be approved by the Chairman of the Commission if it meets the minimum standards set out 

in the bill. In order to meet the concerns of the States and other 

non-Indian parties, Class 111 gaming, while required to meet the 

same minimum standi,rds of Class 111, would also be subject to detailed regulation by the commission which is required to adopt a 

regulatory scheme identical to that of the State in which such activity is conducted. 

Finally, the substitute retains the requirements that management contracts be reviewed and approved, but the approval is 

vested in the Chairman of the Commission. The approval criteria 

for such contracts have been refined and tightened. 

A more detailed explanation of the bill's provisions, as amended 

is contained in the section-by-section analysis of this report. 

LEGISLATIVE HISTORY AND OVERSIGHT STATEMENT 

H.R. 1920, introduced on April 2, 1985, by Representative Udall 

for himself and Representatives McCain, Richardson, Bates, Snowe, 

Seiberling, and McKernan, is similar to H.R. 4566 introduced by 

Mr. Udall in the 98th Ccngress. The Committee held hearings in 

the 98th Congress on H.R. 4566 on June 13, 1984. 

In the 99th Congress, the Committee held three days of hearings 

on H.R. 1920 and related bills, H.R. 2420, H.R. 3130, H.R. 3745, and 

H.R. 3752. Hearings were held in Washington, D.C., on June 25, 

1985; in San Diego, California, on September 13, 1985; and in Washington, D.C., on November 14, 1985. During these hearings, the 

Committee took oral testimony from the Departments of the Interior and Justice and from forty Indian and non-Indian public witnesses. In addition, the Committee received numerous statements 

submitted for the record and extensive correspondence on the subject of the legislation. 

The Committee marked up H.R. 1920 on December 4 and 11, 

1985. After extensive debate and amendments, the Committee or- 
dered the bill reported on December 11, 1985, with an amendment 

in the nature of a substitute. 

Similar legislation, S. 902, is pending before the Senate Select 

Committee on Indian Affairs. 

COMMITTEE RECOMMENDATIONS 

The Committee on Interior and Insular Affairs, by voice vote on 

December 11, 1985, ordered H.R. 1920 favorably reported to the 

House with an amendment. 

COST AND BUDGET ACT COMPLIANCE 

The enactment of H.R. 1920 could result in a cost to the United 

States of up to $2,000,000 in the first fiscal year after enactment. 

Thereafter, the cost to the United States would be an indeterminate amount based upon a cost-sharing formula in the bill with 

Indian tribes with the tribes bearing 75% of the cost. The analysis 

of the Congressional Budget Office follows: 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE 

1. Bill number: H.R. 1920. 

2. Bill title: Indian Gaming Regulatory Act. 

3. Bill status: As amended and ordered reported by the House 

Committee on Interior and Insular Affairs on December 11, 1985. 

4. Bill purpose: This bill establishes the National Indian Gaming 

commission and the criteria by which it is to regulate Indian 

gaming. It also delineates the composition, compensation, and 

duties of th* commission. 

5. Estimated cost to the Federal Government: 

[By liml years, in millims a: dollars] 

. . Eslimaled aulhonzal~on level ................................................................................ 0.5 0.5 0.5 0.5 0.5 

Estimated oullays ..................................................................................................... .5 .5 .5 .5 .5 

The costs of this bill fall within budget function 450. 

Basis of estimate: The bill specifies that the commission shall receive at least 75 percent of its funding through assessments on 

gross gaming revenues, with the remaining funling to be appropriated. Gross gaming revenues are defined as the difference between 

total revenues and payouts. The assessment is limited to no more 

than 2.5 percent of gross revenues. The Bureau of Indian Affairs 

currently estimates annual gross revenues to be about $60 million. 

This implies annual assessments of up to $1.5 million and a maximum annual commission budget of $2 million, up to $0.5 million of 

which may be appropriated. The estimate of the costs of H.R. 1920 is based upon these figures, which assume that gross revenues remain constant over time. 

Any change in gross revenues would be reflected in the annual 

funding of the commission, which would increase or decrease accordingly, with the limitation that, in the first fiscal year following 
the enactment of this bill, total appropriations shall not; exceed $2 

million. CBO estimates that gross revenues would have to increase 

tenfold in order for the commission to reach the $10 million to $15 

million annual funding for gaming commissions in Nevada and 

7. Estimate comparison: None. 

8. Previous CBO est.imate: None. 

9. Estimate prepared by: Paul M. DiNardo. 

10. Estimat~ approved by: James L. Blum, Assistant Director for 

Budget Analysis. 

INFLATIONARY IMPACT STATEMENT 

Enactment of H.R. 1920 would have only a minimal inflationary 

DEPARTMENTAL REPORT 

Reports were requested from the Department of the Interior and 

the Department of Justice on H.R. 1920 on October 15, 1985. TO 

date, no report has been received by the Committee from either Department. 
SUPPLEMENTAL VIEWS OF MR. UDALL 

I feel compelled to respond to the dissenting views filed on this 

legislation. I feel compelled to do so as Chairman of the Committee 

which has jurisdiction over most Indian matters and as a member 

of Congress who nas long fought and worked to better the condition 

of our Indian citizens and to - protect their rights against - - an overwhelming majority. 

The Constitution or" the United States establishes the relations of 

this Nation with the Indian tribes. Under the Constitution, Congress has plenary power over Indian affairs and this responsibility 

has been vested by the House with this Committee. 

In carrying out its plenary power over Indian affairs, the second 

act of the 1st Congress was to reenact the Northwest Ordinance of 

1787 which provided in Article 3: 

* * a The utmost good faith shall always be observed towards the Indians; their land and property shall never be 

taken from them without their consent; and in their property, rights, and liberty, they shall never be invaded or disturbed, unless in just and lawful wars authorized by Congress; but laws founded in justice and humanity shall from 

time to time be made, for preventing wrongs being done to 

them, and for preserving peace and friendship with them. 

High sounding words, indeed! A cursory review of our treatment of 

Indian tribes will reveal most readily that the promise and commitment has been observed more in the breach than in the fulfillment. 

The "utmost good faith" has not been obsemed. 

The Northwest Ordinance statute has not been repealed and it 

remains the law of this Land. I will do my utmost to honor the 

commitment and promise that it makes to the Indian tribes and 

our Indian citizens. 

It may seem strange that I would raise a point of National honor 

and commitment in the context of legislation dealing with gambling. Gambling has always had overtones of immorality. I, personally, do not view gaming activities as an appropriate method of 

generating governmental revenues. That is not the issue here, however. Gambling, in one form or another, is now legal in almost all 

of the States. More and more States are turning, directly or indirectly, to gambling as a revenue source to supplement tax revenue. 

That is understandable in an era of high Federal budget deficits 

and Gramm-Rudman. 

It. is even more understandable that Indian tribes would turn to 

that source of revenue. They have little, if any, tax base. They are 

almost solely reliant upon Federal funds and programs to provide 

even the most basic needs. Reservation Indians receive little support form State governments. As noted in the Supreme Court deci- 

(27) 
sion of US. v. Kagama, the Indians, "* * * owe no allegiance to 

the States, and receive from them no protection * * *" 

NO segment of our population has been more devastated by reductions in Federal programs. Gramm-Rudman. for the tribes, is 

not a matter of cutting the fat or even losing a little flesh. For 

them, it is literally a matter of life and death. It is little wonder 

that they have so desperately turned to gaming for revenue. It is 

hard to understand those who would denv them this small source 

of hope. 

" 

The Federal courts, interpreting existing Federal-Indian law, 

have held that Indian tribes may engage in gaming activities free 

of State law where the States permits gaming as a matter of its 

civil laws. The dissent suggests that this is unfair and notes the 

intent to offer ar? amendment to subject tribal government to State 

jurisdiction, an infringement upon existing Indian rights. They 

assert that this is necessary because, "We need a level playing field * * *)! 

I, too, have been seeking a level playing field-a level playing field for the Indian tribes and their members: 

a level playing field in economic conditions, when nearly 

40% of Indian families are below the iricome poverty line. 

a level playing field in housing, when nearly 50% of Indian 

housing is substandard. 

a level playing field in employment opportunities, when 50% 

of Indians 16 years and older are unemployed. 

a level playing field in health, when the per ca ita expenditure for Indians in 1985 was $660 compared with 1,200 for the 

rest of the Nation. 

d-' 

The truth is that, in every circumstance, Indian tribes and people have been playing in the bottom of a pit in the most affiuent 

nation in the world. 

1 can have little sympathy for the plea of the dissent that their 

States and their affluent non-Indian constituents be given a level 

playing field in gaming activities when these kinds of conditions 

exist among our Indian citizens. The Indians, desperate for some 

source of revenue in the face of our budget-cutting mania, have 

found a small source of relief in gaming. Even this is to be taken 

from them. 

In an attempt to protect the rights of Indian tribes, as is my duty under the Northwest Ordinance and, et, to deal with the-many 1egitimate concerns of States and non- f ndian parties, I bring to the 

floor of the House a compromise bill. The compromises that I have 

made to deal with the concerns of the dissenters and others are not 

willing supported by the Indian tribes. Many tribes feel that these 

compromises of their rights unduly and unnecessarily ir:trude upon 

their right of self-government. Most, very reluctantly, accept the 

compromises in order to achieve the protections of the legislation and only in the context of the Federal-Indian relationship. In good faith to the Indians, I can offer no more compromise nor 

accept any further abrogation of the righis they have bargained for 

in hundreds of treaties ceding lands to this Nation. If an amendment is adopted to subject Indian tribes and their governments to 

State jurisdiction, I can no longer support this legislation and 

would feel compelled to oppose its enactment. 
From my perspective as Chairman of the Comn~ittee to whom 

the House has entrusted its Constitutional responsibility for Indian 

tribes, the difference that T have with the dissent transcends the 

rather narrow and secondary issue of Indian gambling. It ipes to 

the whole nature of our obligations and commitnlents to the Indian 

tribes and, ultimately, to the foundation of our form of government 

in which the rights of the minority are to be protected from the 

converiiensc of the majority. Felix S. Cohen, the author of the 

Handkook of Federal Indian Laav and an early civil libertarian 

stated: 

Like the miner's canary, the Indian marks the shifts 

from fresh air to poiwn gas in our political ntmosphere; 

and out treatment of Indians, even wore than our treatment of other minorities, reflects the rise and fall in our 

dcniocratic faith " " 

In a "Dear Colleague" letter to members of tny Committee before 

Committee markup, I cited another part of the Suprenie Court de 

ciaion in U.S v. Kugnma: "Because sf local ill-feeling, the people of 

the States where (Irrdinns) arc found are often their deadliest en. 

err%ics." Conferring State jurisdiction over tribal govarnnlents nnd 

their gaming activities would not insure ra "level playing field", but 

would guarantee that Indinn tribes could not jinn~ble at all. 

1 urge the members of my Committee and tile menlbcra of tho 

Houac to reject the position and amendment proposed by the die 

scnt. 

MORRIS K. UDALL 
DISSENTING VIEWS 

We have serious concerns about the method proposed by the 

Committee for regulating Class I11 gambling on Indian lands. It 

makes little sense to have the National Indian Gaming Commission 

regulate Class I11 gaming activity when the states already have in 

place the appropriate rules and enforcement mechanisms for doing 

so. We do not believe that the National Commission will have the 

appropriate funding or manpower to adopt and enforce regulations 

for all forms of Class I11 gambling that would take place on Indian 

lands. 

Even though the Commission would be required to adopt identical state regulations, the committee makes it clear that it does not 

intend "that all state laws relating to gaming activity be incorporated into the Commission's regulatory scheme * + *J Thus, gambling on Indian lands would not be subject tc the same rules as 

gambling on non-Indian lands. There is no justification for treating gaming activity on Indian lands more favorably than the same activity taking place off Indian land. We need a level playing field, and providing two sets of rules for gambling within a state is clearly unfair. 

The problems faced by the Commission in adopting and enforcing 

identical state regulations would be enormous. Potentially, the 

Commission would have under its responsibility 50 different sets of 

regulations for each type of gaming activity. The task of monitoring each set of rules, for each type of gambling, in each state, is 

tremendous. It is extremely doubtful that any commission would be 

able to adequately enforce these regulations. While the Committee has agreed to permit the states to have 

some jurisdiction over gambling on Indian lands in the few states 

covered by P.L. 280, this jurisdiction is extremely limited. As the 

report notes, while the states have full criminal jurisdZ-t' Ion over 

Indians within Indian country under P.L. 280, any state civil jurisdiction in these states has been narrowly construed by the courts. 

At a time when we are continuing to face large budget deficits and we are seeing a number of worthwhile federal programs cut to 

the bone, it is incredible that we would consider vesting this National Indian Gaming Commission with such a large task as regulating all Class 111 gambling on Indian lands. We do not have the 

money available to fully fund the activities the Commission would 

be required to undertake in this legislation. We also would be duplicating work that is currently being done by the states in this 

same area. 

The states are well-versed in all the methods that can be used to 

evade regulations and corrupt gambling. They know how animals 

can be drugged, games rigged, machinery tampered with, and 

crimes committed. They have the staff, regulatory apparatus, and 

expertise to prevent such abuses from creeping Into Indian gam- 

(30) 
bling. They also have experience in regulating on Indian lands as 

the states and tribes have had concurrent jurisdiction over alcohol 

sales on Indian lands since 1953. 

To insure that the states will be able to continue their role in 

regulating gambling activities, an amendment will be offered on 

the House floor to place Class I11 gambling on Indian lands under 

state jurisdiction. By doing this, we will guarantee that the states 

have the responsibility for regulating all gambling within their 

borders, whether it takes place on Indian land, or off Indian land. 

TONY CGELHO. 

JIM MOODY. 

BEVERLY B. BYRON. 

RICHARD H. LEHNAN. 

MANUEL LUJAN, Jr. 
DISSENTING VIEWS 

H.R. 1920 is unacceptable for three major reasons. 

First, the primary reason for conducting gambling on Indian reservations is to generate revenue from non-Indians. The governing 

of certain types of social activities or businesses hzs been usually 

!eft ectirely to the states. The management or the rules under 

which they operate for the sale of liquor, operation of bars and taverns, or even in rare cases, legalized prostitution has been traditionally left to the states and in our opinion that is where it should 

remain. The Federal Government should not be in the business of 

establishing and operating a National Indian Gambling Commission. The powers to control Class I11 Gambling should remain with 

the States. 

The second reason for opposing this bill is of major importance. 

Who will monitor gambling operations such as horse racing, dog 

racing, poker tables, slot machines, Jai-Lai games, etc.? These 

games must be operated in a fair manner and on a continuous 

basis. Also, if animals are involved, assurances must be made to 

insure that all safety and health rules and regulations are fully enforced. In our opinion, the Bureau of Indian Affairs, Department of 

the Interior does not have the personnel, the training, or the funding to insure the careful monitoring and control of Indian gaming 

operations. The type of control requires highly trained investiga- tive personnel and a sophisticated law enforcement organization to 

back them up. Organized crime has repeatedly sought areas where 

large amounts of cash are involved. To insure basic protections against any intrustion of organized crime requires much more than 

the BIA has or could provide in the near future. 

The third and final major problem associated with Indian gambling is the cost and operation of a National Indian Gambling Commissioa. How many trained agents, how many law enforcement 

personnel will be needed to oversee Indian gambling in potentially 

over half the States in America? That will be no small chore. Presently, the Bureau of Indian Affairs and Tribal law enforcement on 

reservations is almost without exception woefully inadequate. Crime on the reservation has been a problem of staggering proportions without the addition of gambling to monitor. Without an adequate Indian law enforcement organization in place, the charge 

should be left to the States which, in most cases where gambling is 

permitted, have trained and effective law enforcement personnel. 

Without allowing the States to have an active voice and role in 

gambling within their borders makes H.R. 1920 as it stands unacceptable. We understand that gambling can take place under current court decisions as they now stand. One should not react with a 

law that confirms these decisions in a way that is nck good or acceptable to the vast majority of individuals who may wish to take 

part in Indian gambling activities. 

RON MARLENEE. 

LARRY E. CRAIG. 

JAMES V. HANSEN. 

DICK CHENEY.