Testimony of Vice Chairman Jonodev Osceola Chaudhuri

National Indian Gaming Commission

Senate Indian Affairs Oversight Hearing

July 23, 2014

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Thank you Chairman Tester, Vice Chairman Barrasso, and members of the Committee 

for inviting me to testify today. It is an honor to appear before you for the first time in my 

capacity as Vice Chairman of the National Indian Gaming Commission (NIGC or 

Commission). 

Over the past ten months, I have worked closely with Associate Commissioner Dan Little 

and Commission staff to build on the initiatives of the last four years.

Today I will provide you an overview of the status and future of Indian gaming with an 

emphasis on the regulation of the industry. 

The National Indian Gaming Commission - Powers, Duties, and Responsibilities

The National Indian Gaming Commission (NIGC) was established by the Indian 

Gaming Regulatory Act (IGRA) in order to provide Federal civil regulatory oversight of 

Indian gaming. The NIGC is composed of three members—the Chairperson and two associate 

commissioners. The Chairperson is appointed by the President and must be confirmed by the 

Senate. The associate commissioners are appointed by the Secretary of the Interior. Under 

IGRA, at least two of the three commissioners must be enrolled members of federally 

recognized Indian tribes, and no more than two members may be of the same political party. 

Each commissioner serves a three-year term, but a commissioner may serve after the 

expiration of his or her term until a successor has been appointed. 

IGRA establishes three classes of Indian gaming, each of which has a different 

regulatory structure. Class I gaming is defined as traditional and social gaming for minimal 

prizes. Class I gaming is regulated exclusively by tribes. 

Class II gaming is defined as the game of chance commonly known as bingo (whether 

or not electronic, computer, or other technologic aids are used in connection therewith) and, if 

played in the same location as bingo, pull tabs, punch boards, tip jars, instant bingo, or other 

games similar to bingo. Class II also includes non-banking card games, such as poker, if such 

card games: (1) are explicitly authorized by the laws of the State, or (2) are not explicitly 

prohibited by the laws of the State, and are played at any location in the State, but only if such 

card games are played in conformity with those laws and regulations (if any) of the State 

regarding hours or periods of operation of such card games of limitations on wagers or pot 

sizes in such card games.

IGRA also specifies that Class II does not include slot machines or electronic 

facsimiles of any game of chance. A tribe may conduct, license, and regulate Class II gaming 

if the state in which the tribe is located permits such gaming for any purpose and the tribal 

government adopts a gaming ordinance which has been approved by the NIGC Chair. Class II 

gaming is regulated by tribes with oversight by the NIGC. States have no role in the 

regulation of Class II gaming.
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Class III gaming includes all forms of gaming that are not Class I or II, such as black 

jack, slot machines and craps. Class III is generally referred to as full-scale casino style 

gaming. Class III gaming may be lawfully conducted by an Indian tribe if: 1) the state in 

which the tribe is located permits that particular type of Class III gaming for any purpose by 

any person or organization; 2) the tribe and the state have negotiated a compact that has been 

approved by the Secretary of the Interior; and, 3) the tribe has adopted a tribal gaming 

ordinance that has been approved by the NIGC. The Act contemplates that the regulation of 

Class III gaming will be negotiated by the tribes and states in a compact. However, given that 

the NIGC must approve and provide regulatory oversight of items in the tribe’s gaming 

ordinance and Class III management contracts, it too has a role in the regulation of Class III 

gaming.

Under IGRA, the NIGC has several specific responsibilities. First, the NIGC 

Chairman must approve all tribal gaming ordinances before Indian tribes may operate gaming 

on Indian lands. Also, if a tribe wishes to use an outside contractor to manage its gaming 

operation, the NIGC Chairman must first approve the management contract. In conjunction 

with such review, the principals of each management company must pass a detailed

background investigation conducted by NIGC investigators. IGRA also provides authority for 

the NIGC to inspect gaming operations and monitor the tribes’ use of gaming revenue. The 

NIGC Chairman has the authority to bring enforcement actions and assess civil fines against 

tribes or outside managers for any violation of IGRA, the NIGC’s regulations, or an approved 

tribal gaming ordinance. Appeals from the NIGC Chairman’s decisions regarding tribal

gaming ordinances, management contracts, and enforcement actions are heard by the full 

Commission. Regulations and subpoenas are also issued by the full Commission. IGRA also 

contains criminal provisions related to theft from gaming operations on Indian lands. 

However, since the NIGC has no criminal law enforcement authority, IGRA directs the 

agency to report any potential criminal violations to the appropriate law enforcement agency.

These responsibilities enable the agency to fulfill its statutory mission to protect tribes from 

organized crime and other corrupting influences and ensure that tribes are the primary 

beneficiary of the gaming activity.

In addition to the duties assigned to NIGC, IGRA also provides a role for the 

Secretary of the Interior. Interior is charged with approving tribal-state gaming compacts, 

issuing Class III gaming procedures, and approving tribal revenue allocation plans. In many 

instances, the Secretary must take land into trust before a parcel of tribal land can be eligible 

for gaming under IGRA. Typically, Interior will only take land into trust for gaming purposes 

if it first determines that the land would be eligible for gaming. In 2008, Interior promulgated 

regulations establishing procedures for determining whether or not any of IGRA’s exemptions 

for allowing gaming on trust lands acquired after October 17, 1988, would apply. 

Under IGRA and the NIGC regulations, each Indian tribe must license every primary 

management official and key employee in its gaming operations, as NIGC regulations define 

those terms. Before issuing such licenses, the tribes must conduct individual background 

investigations that include a search of the FBI’s criminal history database. One method of 
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accessing such files is through the NIGC. A tribe may enter an agreement with the NIGC 

whereby the tribe sends its fingerprint cards to the NIGC, and the NIGC then forwards all 

cards received to the FBI for criminal history searches. The NIGC and the FBI operate under 

a memorandum of understanding for these purposes.

Indian gaming can only occur on Indian lands, which IGRA defines as: All lands 

within the limits of an Indian reservation; and any lands title to which is either held in trust by 

the United States for the benefit of any Indian tribe or individual subject to restriction by the 

United States against alienation and over which an Indian tribe exercises governmental power.

Under IGRA, gaming is prohibited on lands acquired by the Secretary of the Interior into trust 

for the benefit of an Indian tribe after October 17, 1988, unless the land falls within certain 

exceptions listed in that provision. 

To determine whether lands are Indian lands on which a Tribe may conduct gaming, 

the Department of the Interior and the NIGC entered into a memorandum of understanding 

which establishes a collaborative process for determining whether a Tribe may conduct 

gaming on specific parcels. Generally, Interior will determine whether lands are reservation 

lands and Interior and NIGC will collaborate on whether the Tribe has jurisdiction over those 

lands. If the lands are not within a reservation, then Interior and NIGC will collaborate to 

determine whether the lands meet the second test of trust or restricted lands. If the lands 

qualify as Indian lands under IGRA but are ineligible for gaming, the NIGC or the United 

States Attorney may close the facility. If the lands are not Indian lands, the state and local 

laws apply and jurisdiction over gaming on such lands is vested in the particular state where 

the parcel is located.

IGRA restricts the uses of tribal gaming revenues to primarily governmental purposes. 

However, if gaming revenues can adequately cover such needs, then the tribe also may make 

per capita payments to individual tribal members from the remaining proceeds (taxable as 

personal income), provided such distributions are made pursuant to a revenue allocation plan 

approved by the Secretary of the Interior. Many gaming tribes make no per capita payments at 

all. 

 The NIGC is funded entirely by fees paid from the Indian gaming. The NIGC’s 

headquarters office is located at 90 K Street, NE, in Washington, D.C. The agency has six 

regional offices: Portland, OR; Sacramento, CA; Phoenix, AZ; St. Paul, MN; Tulsa, OK; 

Oklahoma City, OK; and Washington, D.C. The NIGC’s region offices house NIGC staff in 

the Compliance Division, making it possible to have regular contact with tribes at their 

gaming locations.

Over the last five years, the Commission has identified and launched a series of major 

initiatives consistent with its statutory mission. These included consultation and relationship 

building, conducting a comprehensive regulatory review, providing technical assistance and 

training, and improving agency operations. In advancing these initiatives, the agency has 

changed its consultation process to have a dialogue with tribes before regulatory changes are 
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implemented and before the rule-making process is initiated. Further, the Commission revised 

its training program to more closely align with the needs of the regulated community. To that 

end, the Commission reviewed more than 20 regulations or potential regulations, utilizing an 

informal pre-rulemaking process that respected tribal sovereignty by soliciting tribal 

involvement early in the process. Finally, the Commission created better communication 

systems, developed practices and policies that allow employees to better perform their duties, 

and created a line-item-specific budget that allows it to be more fiscally responsible.

The State of the Industry

Currently, Indian gaming is being conducted in 28 states by 243 of the 566, federally 

recognized tribes. Tribes have used gaming revenue both to generate jobs and to provide 

fundamental services to their communities, such as health care, housing, basic infrastructure

and education, to name a few. In addition, tribes both through their compacts and charitable 

outreach regularly contribute to surrounding communities to support infrastructure, 

emergency services, and other community programs such as schools. While tribal gaming 

generates modest to considerable revenues for individual tribes, tribal gaming facilities in 

some regions provide jobs in areas otherwise suffering from high unemployment. 

As the primary day-to-day regulators on the ground 24 hours a day, 7 days a week, tribal 

governments and their regulatory bodies have the greatest interest in safeguarding an industry 

that has greatly contributed to invaluable improvements to their communities. It is a 

testament to the leadership of tribal governments, their citizens, and the work of their 

dedicated employees that the Indian gaming industry has remained protected and stable. In 

2013, tribal facilities generated $28 billion in gross gaming revenue as compared to $27.9

billion in 2012. With continued collaboration, the NIGC will work with tribal governments 

and their employees to ensure the continued protection and success of the industry through 

diligent, professional oversight and enforcement. Accordingly, while collaborative results are 

desirable, the agency is committed to upholding the statutory authority and responsibilities of 

my position to oversee the regulation of Indian gaming, and where appropriate, take 

enforcement action. 

Indian Gaming – The Next 25 years

A fundamental policy of IGRA is “to provide a statutory basis for the operation of 

gaming by Indian tribes as a means of promoting tribal economic development, selfsufficiency, and strong tribal governments,” to ensure the regulatory and statutory compliance 

of all tribal gaming facilities, and to safeguard tribal gaming operations from organized crime 

and corrupting influences. To accomplish these goals the NIGC continues to be proactive in 

several areas including: Consultation and Building Relationships, ongoing Regulatory 

Review, Training and Technical Assistance, and Agency Accountability. 

The NIGC realizes that constant technologic advances are not only changing the face 

of Indian gaming, but also necessitate that the NIGC continue to adapt to meet the regulatory 
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needs of the industry. As tribal gaming evolves, the NIGC wants to continue to play a relevant 

role in tribal gaming and ensure that it can meet the demands of new regulatory issues in a 

timely manner. 

Indian gaming is means by which tribes can achieve greater self-determination and 

self-sufficiency. The NIGC understands how important gaming is to tribal economic 

development and we are committed to maintaining our ability to safeguard the industry so that 

the policy goals of IGRA are fully met.

1. Consultation and Building Relationships

The agency supports the Administration’s commitment to Indian country in terms of 

nation building, honoring tribal sovereignty and self-determination, and engaging in 

meaningful consultation with tribes. The Commission developed a new government-togovernment consultation process in line with President Obama’s November 5, 2009 

Memorandum on Tribal Consultation, which directs federal agencies to comply with 

Executive Order 13175, “Consultation and Coordination with Tribal Governments.”

It is through meaningful government-to-government consultation that the NIGC will be 

able to make well informed, fully considered decisions concerning regulations and policies.

This year the Commission conducted four separate consultations sessions. These sessions 

were attended by representatives of more than 36 tribes.

The NIGC makes a point of attending the meetings and conferences held by national and 

regional tribal associations, such as the Great Plains Indian Gaming Association (GPIGA), the 

Oklahoma Indian Gaming Association (OIGA), the Washington Indian Gaming Association 

(WIGA), the California Nations Indian Gaming Association (CNIGA), the Midwest Alliance 

of Sovereign Tribes (MAST), New Mexico Indian Gaming Association (NMIGA), National 

Indian Gaming Association (NIGA), National Congress of American Indians (NCAI) 

National Tribal Gaming Commissioners/Regulators (NTCG/R) and United South and Eastern 

Tribes (USET).

The Commission is also committed to strengthening relationships and building new ones. 

In addition to working with tribes, we also will work with other regulatory bodies such as the 

Nevada Gaming Control Board and the New Jersey Division of Gaming Enforcement to 

promote the integrity of Indian gaming. 

2. Regulatory Review

In November of 2010, the Commission commenced a full-scale regulatory review to 

examine the effectiveness of our regulations and identify any areas for improvement. Through 

a Notice of Inquiry followed by more than 50 consultations with tribes and numerous 

comments from the public, the Commission considered 20 regulations or potential regulations 

with 17 of those being adopted and implemented and one being repealed. It is our belief that 
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reviews of regulations should be done regularly so that the NIGC is responsive to changes in 

the gaming industry and not serve as a barrier to progress.

3. Training and Technical Assistance

Successful regulation depends upon a properly trained workforce, and the NIGC views

training and technical assistance as a valuable component of the NIGC’s mission. Further, the 

Commission is statutorily required to provide technical assistance to tribes. NIGC recognizes 

that Tribes have a vested interest in their gaming operations. They are an important source of 

funding for government programs and are often the largest employer of tribal citizens and 

their neighbors. We also recognize that in the 25--now 26--years since IGRA was passed, 

Tribes have responded to their new role by creating sophisticated gaming regulatory bodies of 

their own.

 

While the NIGC has an important regulatory role, Tribes are the on-the-ground 

regulators of gaming. With over 5,410 tribal gaming regulatory employees nationwide it is a 

much more efficient use of resources to build their capabilities through training, technical 

assistance, and coordination, than to go it alone.

 

To that end, we have been implementing the A.C.E. approach: Assistance, 

Compliance, and Enforcement. This approach prevents foreseeable problems through 

effective communication, training and technical assistance, and compliance efforts. The first 

step of this initiative is to provide assistance to achieve compliance with IGRA and the NIGC 

regulations. This means staying abreast of industry changes and communicating what they 

mean to gaming operators and regulators through more and better training. Last year, we 

provided 194 training events to 2751 participants. Currently this year we have provided 147

of training events to 2140 participants. . By working with tribal gaming regulators and 

sharing our knowledge, we increase the number of people who can extinguish issues before 

they become blazing problems.

The second prong is Compliance. The Agency communicates with Tribes early in the 

process if there is a potential compliance issue and works with them to resolve any issues 

voluntarily. 

The Agency uses its final tool--enforcement action-- when necessary. 

This three tiered approach ensures that the agency’s statutory responsibilities are 

performed in an efficient manner by respecting the benefit of meaningful collaboration with 

tribes who are the primary regulators of Indian gaming and have a foremost interest in 

safeguarding tribal resources.
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4. Agency Accountability

As you know, the NIGC is funded by fees paid by the tribes engaged in Indian gaming. 

Being a good steward of the fees paid by the tribes has been a top priority of the Commission. 

We are committed to complying with all applicable laws, regulations, rules and executive 

orders so as to give this Committee and the tribes confidence that the NIGC is as concerned 

with how it runs its own operations as we are about how the tribes run their operations. 

Recently, the Commission undertook a comprehensive review of its budget and spending 

priorities. A guiding principle of the review and budgeting decisions was that the NIGC has a 

responsibility to use tribal resources wisely. As such, our agency expenditures need to be 

both fiscally responsible and transparent. We strive, consistent with applicable law, to be

transparent with regard to the expenditures of tribal fees for the accomplishment of the 

NIGC’s statutory responsibilities. The Commission is working to ensure that the agency is 

operating in a manner that uses these tribal resources most efficiently and effectively.

Conclusion

The NIGC is committed to working closely with this Committee and Indian country to 

ensure the integrity of Indian gaming. Thank you again, Chairman Tester, Vice Chairman 

Barrasso and members of the Committee for your time and attention today. I am happy to 

answer any questions that you may have for me.