Response to the National Indian Gaming Commission’s Notice of Inquiry and 

Request for Information; Notice of Consultation 

Provided by the Port Gamble S’Klallam Tribal Gaming Agency, Kingston, 

Washington 

January 14, 2011 

A. Part 502 (1) Net Revenues 

(1) Should the Commission consider definitions for the following two terms: Net 

Revenues – management fee; and Net Revenues – allowable uses: 

The Port Gamble S’Klallam Tribal Gaming Agency recommends a new 

definition for Net Revenues – allowable uses. 

(a) Should the language used in the Commission’s definition of Net Revenue be 

revised to be consistent with GAAP, i.e., “Net Income plus Management Fee”? 

In this instance, the General Accepted Accounting Principals (GAAP) is 

recommended by the Port Gamble S’Klallam Tribal Gaming Agency. 

(b) Net Revenues, allowable uses: Should the Commission consider adding a 

new definition for Net Revenues – allowable uses that is based on cash flow? For 

example, should the new definition be “Cash flow” equals “Net Income plus 

depreciation minus principal loan payment and reserve fundings”? 

 

The Port Gamble S’Klallam Tribal Gaming Agency recommends tribal 

parties should consider the overall financial integrity of the gaming 

operation before funding other tribal programs. 

*(2) Management Contract. Should the definition of management contract be 

expanded to include any contract, such as slot lease agreements, that pays a fee 

based on a percentage of the gaming revenues? 

No. The definition for a Management Contract is very vague. The NIGC 

does not define what percentage, and is this a one time fee or will it be 

renewable? This may slow the entire licensing process with the NIGC 

involvement in all contracts. 

B. Part 514 – Fees 

The Commission is interested in receiving comment on whether the Commission should 

consider revising this part to base fees on the gaming operation’s fiscal year. Currently, 

the fee is calculated based on the calendar year. 

No comment on fiscal year vs. calendar year. 

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Should the Commission consider amending this part to define gross gaming revenue

consistent with the GAAP definition of this term? 

The Port Gamble S’Klallam Tribal Gaming Agency believes NIGC form is 

already straightforward. 

Should the Commission consider amending this part to include fingerprint processing 

fees? 

The Port Gamble S’Klallam Tribal Gaming Agency would like further 

clarification on this matter. 

Could the costs to run a Tribal Gaming Agency also be deducted because 

we are a requirement? 

Should the commission consider a late payment system in lieu of a Notice of Violation 

(NOV) for submitting fees late? 

Port Gamble S’Klallam Tribal Gaming believes a late payment system 

would be better due to the serious nature and implication of a NOV. 

Should the Commission consider adding a type of “ticket” system to part 514 so that an 

NOV would only be issued in instances of gross negligence or wanton behavior, or in a 

dollar amount that allowed the tribe to reap an economic benefit from its failure to pay in 

a timely manner? 

The Port Gamble S’Klallam Tribal Gaming Agency looks forward to 

discussion on this matter and its possible implementation. 

C. Part 518 – Self-Regulation of Class II 

The NIGC has heard that this regulation is overly burdensome to tribes seeking to obtain 

certification and that the burden of completing the process significantly outweighs the 

benefits gained from self-regulation. The Commission is seeking comment whether this 

part should be revised. 

The Port Gamble S’Klallam Tribal Gaming Agency prefers the existing 

relationship with the NIGC. 

D. Part 523 – Review and Approval of Existing Ordinances or Resolutions 

Should the Commission consider eliminating part 523 as obsolete? The regulation 

applies only to gaming ordinances enacted by tribes prior to January 22, 1993, and not 

submitted to the Chairwoman. 

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The Port Gamble S’Klallam Tribal Gaming Agency believes this 

regulation should be eliminated. 

E. Management Contracts 

(1) Part 531 Collateral Agreements 

Should the Commission consider whether it has authority to approve collateral 

agreements to a management contract? 

No comment. 

(2) Part 533 - Approval of Management Contracts 

This part outlines the submission requirements for management contracts. While the 

Commission has disapproved management contracts for a variety of reasons including the 

trustee standard, the Commission seeks comment on whether an amendment would 

clarify the trustee standard by adding the following two grounds for possible disapproval 

under § 533.6(b): the management contract was not submitted in accordance with the 

submission requirements of 25 CFR part 533, or the management contract does not 

contain the regulatory requirements for approval pursuant to 25 CFR part 531. 

No comment. 

(3) Part 537 – Background Investigations for Persons or Entities with a Financial 

Interest in, or Having Management Responsibility for, a Management Contract 

This part addresses the background investigation submission requirements for the 

management contractor. Although minor revisions were made in 2009, there appears to 

be some confusion about whether the contractor should be required to submit the Class II 

background information when the contract is only for Class III gaming. IGRA does 

specify approval of Class II and Class III management contract as a power of the 

Chairwoman. 

No comment. 

F. Proceedings before the Commission 

The NIGC is considering amending the regulations that govern appeals of the 

Chairwoman’s actions on ordinances, management contracts, notices of violations, civil 

fine assessments, and closure orders. 25 CFR part 519; 25 CFR part 524; 25 CFR part 

539; 25 CFR part 577. Except for some minor changes in 2009, these parts remain 

unchanged for their original adoption in 1993. 

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Should the Commission consider more comprehensive and detailed procedural rules, 

especially in areas such as motion practice, that are largely unaddressed by the present 

rules? 

No comment. 

 

G. MICS and Technical Standards 

*(1) Part 542 – Class III Minimum Internal Control Standards 

Comment is requested from the tribal gaming community and other interested parties 

regarding whether the NIGC’s Class III MICS have a positive impact on the industry, and 

if changed to a guideline, what, if any, impact that might have on tribal gaming? 

If the regulation is struck, how would such action impact the tribal regulators and 

operators? 

The Port Gamble S’Klallam Tribal Gaming Agency asks what would 

happen to our External Audit since they are audited to the MICS? 

Recommended Guidelines could always be added to our internal MICS, 

and we support having recommended guidelines. 

The Tribe and State co-regulate Class III, with the Tribe being the 

primary regulator, through the Compact. The Tribe is the primary 

regulator for class II using the NIGC MIC’s as the standard. 

However, there is some confusion because of Part 542 and the fact that 

the NIGC fees are based on both Class II and Class III income. This 

discrepancy needs to be clarified. 

It is the opinion of the Port Gamble S’Klallam Tribal Gaming Agency that 

Part 542 should be struck. 

*(2) Part 543 – Class II Minimum Internal Control Standards 

Should tribal gaming regulatory authorities be provided an opportunity to provide 

comment on the proposed rule before public meetings? Should comment be sought from 

accounting practitioners? 

Tribal Gaming regulatory authorities should be provided an opportunity 

to provide comment on the proposed rule before public meetings. 

What is the reason for seeking comments from accounting practitioners? 

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Rather than the standard notice, we would like the TGA Directors to be 

notified by e-mail when comments are desired in a timely manner. This 

would eliminate any need for a Tribal Advisory Committee. 

(3) Part 547 – Minimum Technical Standards for Gaming Equipment Used with the Play 

of Class II Games 

Should NIGC start with the current proposed draft? 

Can you explain why Part 547 needs revision? 

The Port Gamble S’Klallam Tribal Gaming Agency believes the 

Commission should start with current draft if revisions are needed. 

Rather than the standard notice, we would like the TGA Directors to be 

notified by e-mail when comments are desired in a timely manner. This 

would eliminate any need for a Tribal Advisory Committee. 

H. Backgrounds and Licensing 

(1) Part 556 – Background Investigations for Licensing 

The Commission is seeking comment on whether regulations should be promulgated to 

formalize the pilot program. 

The Port Gamble S’Klallam Tribal Gaming Agency agrees the pilot 

program should become a regulation. 

*(2) Fingerprinting for Non-Primary Management Officials or Key Employees 

Should the Commission adopt regulations that would allow tribes, at their option, to 

submit fingerprints cards to the Commission for vendors, consultants, and other nonemployees that have access to the gaming operations? 

Yes, the Port Gamble S’Klallam Tribal Gaming Agency strongly agrees 

that we should have the ability to be able to submit fingerprint cards to the 

NIGC for Class III vendors, consultants, and other non-employees that 

have access to the gaming operations. 

Rather than the standard notice, we would like the TGA Directors to be 

notified by e-mail when comments are desired in a timely manner. This 

would eliminate any need for a Tribal Advisory Committee. 

We don’t believe a suitability Report submission would be necessary in 

this instance. 

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I. Part 559 – Facility License Notifications, Renewals, and Submissions 

The Commission is seeking comment on whether this part should be revised. 

We are comfortable with the current regulation. 

Rather than the standard notice, we would like the TGA Directors to be 

notified by e-mail in a timely manner when comments are desired. This 

would eliminate any need for a Tribal Advisory Committee. 

J. Sections 571.1 - 571.7 

Should the Commission revise its regulations in §§ 571.5 and 571.6 to clarify 

Commission access to records at off-site locations, including at sites maintained or 

owned by third parties? 

We would like more clarification on this matter. 

*K. Part 573 – Enforcement 

Should NIGC promulgate a regulation concerning withdrawal of a Notice of Violation 

(NOV) after it has been issued? 

An NOV is the last step in a process. If you review the matter with the 

tribe prior to issuing and NOV, there should be no reason to revoke. It 

should be the final outcome. 

V. Potential New Regulations 

*A. Tribal Advisory Committee 

The Commission seeks comment on whether it should develop a regulation or policy 

identifying when a Tribal Advisory Committee (TAC) will be formed to provide input 

and advice to the NIGC and, if so, how Committee member should be selected. 

The Port Gamble S’Klallam Tribal Gaming Agency would like the TGA 

Directors to be notified by e-mail in a timely manner when comments are 

desired. This would eliminate any need for a Tribal Advisory Committee. 

B. Sole Proprietary Interest Regulation 

Should the Commission consider a regulation identifying when the sole proprietary 

interest provision is violated and providing a process whereby at the tribe’s request the 

NIGC will review the documents and make a determination? 

No comment. 

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*C. Communication policy or regulation identifying when and how the NIGC 

communicates with Tribes 

Should the NIGC develop a regulation or include as part of a regulation a process for 

determining how it communicates with tribes? 

Communication should be to all parties via e-mail in a timely manner 

when comments are desired. 

The Port Gamble S’Klallam Tribal Gaming Agency would like the TGA 

Directors to be notified by e-mail in a timely manner when comments are 

desired and/or for rule changes. 

We would much prefer this method over “formal communication” with 

regular mail. This would eliminate any need for a Tribal Advisory 

Committee. 

Government to Government communication should be formal. If the NIGC 

is just talking about rule changes or comment requests then e-mail 

notification would be fine. The two forms of communication are totally 

different and must be handled appropriately. 

D. Buy Indian Act 

As an agency with regulatory responsibilities wholly related to tribes, the Commission 

seeks comment on whether it is appropriate to promulgate such a regulation. 

The Port Gamble S’Klallam Tribal Gaming Agency believes that if all 

things are equal (pricing, quality, availability, etc.), and there is no 

possibility of a conflict of interest due to the fact that the NIGC is an 

independent regulatory body, then we would agree with the Buy Indian 

Act. 

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