Tribal Council

Anthony Roberts
Chairman

James Kinter
Secretary
Matthew Lowell, Jr.
Treasurer

Mia Durham
Member

Burnam R. Lowell, Sr.
Member

February 28, 2018

Mr. Jonodev Chaudhuri

Chairman

National Indian Gaming Commission
1849 C Street NW, Mail Stop 1621
Washington DC 20240

Sent via email: Vannice Doulou@nigc.gov

RE: Comments on 2018 Consultation Topics

I write on behalf of the Yocha Dehe Wintun Nation, a federally recognized Indian tribal
government in Northern California (“Tribe” or “Yocha Dehe”), which appreciates the
opportunity to comment on the proposed regulatory changes to the management contract
review process and the definitions of “management” and “sole proprietary interest” under
the Indian Gaming Regulatory Act (“IGRA”). Yocha Dehe applauds the National Indian
Gaming Commission’s effort and attention to address these important matters.

Yocha Dehe has significant experience in gaming, having operated a bingo hall well before
IGRA’s enactment, and thereafter having established a successful Class III operation, known
today as the Cache Creek Casino Resort. While the Tribe manages its own casino, it did
have the assistance of outside contractors when operating its bingo hall and expanding that
operation into a casino. Accordingly, the Tribe has a keen interest in the NIGC’s
involvement in contractual oversight, and the Tribe also supports any effort to clarify and
streamline the regulatory process. As explained below, however, Yocha Dehe believes the
proposed regulations go too far when it comes to NIGC involvement, impeding tribal efforts
to maintain ongoing relationships with existing contractors without outside interference. At
the same time, the Tribe supports the regulatory effort to bring meaning to protective
standards governing Indian gaming contracts. However, the Tribe respectfully submits that
one of the two definitional changes — changes that are offered to bring clarity — does not go
far enough.

I. The Management Contract Review Process

Under current NIGC regulations, after the agency has approved a management agreement,
the tribe may amend it by following the streamlined procedures for approval found in
25 C.F.R. Part 535. Under this provision, background investigations relative to the
amendment are required only if the third-party individuals or entities responsible for the
management contract have changed, and no new business plan or updated financial
information is required.
Yocha Dehe Wintun Nation
PO Box 18 Brooks, California 95606 p) 530.796.3400 f) 530.796.2143 www.yochadehe.org


Mr. Jonodey Chaudhuri
February 28, 2018
Page 2

The NIGC now seeks to change that streamlined process. Specifically, the proposed revisions would
restrict the applicability of Part 535 and require that all extensions of an approved management
agreement beyond the term limits permitted by the IGRA (five or seven years) instead be reviewed
under Part 531. This regulatory provision requires extensive background investigations on all
parties to a management contract and a reassessment of the agreement's financial terms. In effect,
the proposed regulatory modification would eliminate amendments to management contracts and
instead treat such amendments as new contracts.

The Tribe is concerned that the new regulations would result in the unnecessary review of
management agreements that had long benefitted both the tribe and the management contractor.
Such a change would mean that, despite a successful history of working together, the contractor
would be subject to NIGC review as if it was a new party to the agreement.

In addition, the proposed provision requires that such parties undergo a lengthy and expensive
background investigation, even if they were previously backgrounded. The present proposal
ignores the unique contractual circumstances that exist throughout Indian gaming and discounts the
importance of ongoing business relationships in favor of increased federal oversight and
interference in tribal self-governance.

Yocha Dehe understands that in the initial days of Indian gaming, the NIGC’s top priorities were
ensuring that predatory companies did not take advantage of tribal governments and that tribes
retained the primary benefits from their gaming operations. Such an approach, however, does not
match the current circumstances most gaming tribes face, and certainly not where a management
agreement already exists and the tribe is simply contemplating extending it. Tribes have more
experience now, and are in the best position to determine whether a management agreement is fair
and reasonable, and in their best interest. They are also in the best position to know whether the
longstanding business relationship should continue. On the other hand, increasing interference with
a tribe’s longstanding business relationships runs the risk of undermining valued relationships. We
see no benefit to tribes from increased federal involvement in our businesses.

IL. Management Contract Regulations

The IGRA provides that a tribal gaming operation may be managed by a management contractor
subject to an agreement approved by the NIGC’s Chairman. To assist tribes in determining whether
an activity constitutes “management,” the agency issued NIGC Bulletin No. 94-5 in 1994, That
guidance explains that the term “management” is broad, encompassing activities such as planning,
organizing, directing, coordinating, and controlling “all or part” of a gaming operation. In addition,
language cited in an NIGC Office of General Counsel opinion expands upon these terms by
providing examples of management activities.

To date, however, the NIGC has never issued a regulation formally defining “management.” The
Commission is now proposing to adopt a regulatory definition of management that tracks past
NIGC interpretations. This change is to be accomplished by amending the NIGC definition
regulations to incorporate previous standards applied by the NIGC when determining whether a
particular activity constitutes “management.”


Mr. Jonodev Chaudhuri
February 28, 2018
Page 3

The Tribe agrees that gaming tribes will benefit from the adoption of regulations that incorporate the
NIGC’s previous determinations as to what constitutes management under the IGRA. We believe
such a change will reduce the uncertainty federal courts have long noted when considering this
issue and provide much needed clarity to tribes in constructing protective agreements relating to the
development, management and/or financing of their gaming operations.

Ill. Sole Proprietary Interest

A principal purpose of the IGRA is to ensure an Indian tribe is the primary beneficiary of its gaming
operation. To that end, the IGRA requires that tribal gaming ordinances provide that tribes have the
sole proprietary interest and responsibility for the conduct of any gaming activity. In determining
whether a third party holds an unlawful proprietary interest, the NIGC has considered multiple
factors, including: the term of the relationship; the amount of revenue paid to the third party; and the
right of control over the gaming activity provided to the third party.

The NIGC now proposes adopting a regulation identifying the factors the Chairman may consider in
determining whether a contractual arrangement gives a particular contractor a proprietary interest
in the gaming operation. The Tribe certainly appreciates the need to clarify the legal standards
defining proprietary interest. We believe, however, that the agency’s proposed regulatory approach
will fail to provide the needed clarity. The NIGC here adopts the same approach that resulted in the
present confusion about the meaning of this term. The proposed regulation merely identifies certain
factors the NIGC Chairman may consider in determining if a contract grants a proprietary interest to
the contractor. The parties, however, are left on their own to speculate as to how the Chairman
might apply these factors in a particular instance, or even if the Chairman will apply them at all.

What is needed is an explicit statement of the standards to define “proprietary interest” under the
IGRA. Such standards will provide needed guidance to tribes, contractors and courts facing this
issue. Under the proposed amendment, proprietary interest remains malleable, construed to mean
whatever a particular NIGC Chairman says it is. This precludes the development of viable legal
precedents because each decision is made using subjective criteria relating to the particular
circumstances of an individual matter. Respectfully, this is the wrong approach. The NIGC needs to
do what it has done in connection with the definition of “management,” and adopt clear and
consistent standard upon which tribes can rely.

Wile bo,

Anthony Robe:
Tribal Chairman