Tracie L. Stevens, Chairwoman
February 11, 2011

Page 5

G.

H.

MICS & Technical Standards
(1) Part 542-Class III MICS

The Commission is seeking comment regarding Class Ill MICS as it has been
suggested that the rule should be struck and replaced by a set of recommended
guidelines. Since some Tribal-State Compacts, especially those in California,
incorporate Section 542 by reference, there is a need to update and maintain Section
542. In light of the Colorado River Indian Tribes decision NIGC should amend
Section 542 to state that its provisions are advisory but Tribes may independently
elect to adopt Sectién 542 in cases where Tribal-State Compacts require the use of
such standards.

(2) Part 543-Class II MICS and (3) Part 547-Minimum Technical Standards for Gaming
Equipment used with the Play of Class II Games.

This is a complex and highly technical area of gaming which requires day-to-day
involvement to provide meaningful comments or recommendations to the NIGC. As
such, we recommend that NIGC give careful consideration and deference to the
recommendations of the Tribal Gaming Working Group (TGWG) that is comprised
of Tribal leaders and regulators as well as Class II operators and manufacturers. The
TGWG has devoted substantial time and energy to the review of Class II MICS and
Technical Standards and their work product to date is comprehensive.

Backgrounds and Licensing

(1) Part 556-Backgrounds and Investigations for Licensing

(2) Fingerprinting for Non-Primary Management Officials or Key Employees
The pilot program should be expanded to streamline the background investigation
process and permit the expedited review of individuals and entities who hold gaming
licenses in other Tribal and state jurisdictions.

Part 559-Facility License Notifications, Renewals and Submissions

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

NIGC should carefully review this section and consider whether it exceeds its express

authority under IGRA. Tribes already have stringent health, safety and building

standards through their own laws in addition to Compact provisions. NIGC at the very

least should consider a longer license term than the three year maximum currently

permitted. Previous facility licenses were allowed to have indefinite or non-expiring
terms and NIGC should reconsider this for the new facility license requirements.


Tracie L. Stevens, Chairwoman
February 11, 2011

Page 4

purposes of IGRA “any reference to the management contract...shall be considered to
include all collateral agreements to such contract that relate to the gaming activity.”
As stated by the Commission it currently only approves the management contract
although it believes that collateral agreements must be submitted. NIGC should not
seek to expand its approval authority to each separate collateral agreement. | Any
guidance from the Commission in this area should provide safe harbor language for
lenders and developers providing financing assistance to Tribes and clarify that such
financial assistance does not violate the sole proprietary interest rule.

(2) Part 533-Approval of Management Contracts

The Commission seeks comment on whether an amendment would clarify the trustee
standard by adding the following two grounds for disapproval under Section
533.6(b): failure to meet submission requirements of 25 CFR 533; or, failure to
contain regulatory requirements of 25 CFR 531.

Such technical grounds should only be used as a basis for denial if the Tribe has been
informed in advance of NIGC’s intention to deny for failure to meet one or more of
those requirements and has failed to remedy the omission in a reasonable timeframe.

NIGC should publish a bulletin explaining its new rules after its standard rulemaking
procedures have been complied with.

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

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

There appears to be some confusion about whether the contractor should be required
to submit the Class IT background information when the contract is only for Class III
Gaming...the Commission is seeking comment on whether this part should be revised.
Since IGRA does confer the authority to approve both Class II and Class III
management contracts to the NIGC chair, this part should be revised to clearly state
what background information is applicable to class III management contractors. This
part and any revisions to Part 556 should streamline the background investigation
process and permit the expedited review of individuals and entities who hold gaming
licenses in other Tribal and state jurisdictions.

F, Proceedings Before the Commission

The Commission should consider more comprehensive and detailed procedural rules for
appeals. NIGC should look to other federal agencies administrative procedures for
guidance especially those agencies with long histories of administrative procedure
practice.


Tracie L. Stevens, Chairwoman
February 11, 2011

Page 6

J.

Sections 571.1-571.7-Inspection and Access

Should the Commission revise its regulations in Sections 571.5 and 571.6 to clarify
commission access to [Class II] records at off-site locations, including at sites
maintained or owned by Third Parties? A plain reading of these sections would seem to
give NIGC the necessary authority to review all Class II records no matter where they are
located. NIGC also has deposition and subpoena authority as set forth in 25 U.S.C. 2715.

. Part 573-Enforcement

Should NIGC promulgate a regulation concerning withdrawal of a Notice of Violation
(NOV) after it has been issued? If such power to withdraw a NOV isn’t already vested in
the chair then it would be advisable to issue a regulation expressly stating the authority to
do so and the guidelines under which it may be done.

A. Potential New Regulations

Should a Tribal Advisory Committee (TAC) be formed to provide input and advice to the
NIGC and, if so, how should Committee members be selected? Should the cost of a TAC
be a factor when considering whether to form a TAC? A TAC can be a useful resource
especially in complex technical areas of gaming regulation. Extensive consideration will
have to be given to how TAC members would be selected in order to fairly represent the
sometimes diverse interests and perspectives of the various tribes. For a TAC system to
work there would need to be a consensus of approval on the member selection process. If
no consensus can be reached the TAC advice will be met with skepticism as we have
seen in the past. Cost should be a minor consideration in the formation of a TAC.

B. Sole Proprietary Interest

Should the Commission consider a regulation identifying when the sole proprietary
interest provision of IGRA is violated and providing a process at the Tribes request in
which NIGC will review the documents and make a determination?

We agree with NIGA’s approach in this area that Tribal governments should have the
right to exercise their own judgment as it relates to the operation of their gaming
facilities. Any guidance from the Commission in this area should provide safe harbor
language for lenders and developers providing financing assistance to Tribes and clarify
that such financial assistance does not violate the sole proprietary interest rule.

C. Communication Policy or Regulator Identifying when and how the NIGC
communicates with the Tribe.


February 11, 2011

Tracie L. Stevens, Chairwoman
National Indian Gaming Commission
1441 L Street NW, Suite 9100
Washington, DC 20005

Re: Comments Pursuant to Notice of Inquiry and Request for Information
Dear Chairwoman Stevens:

On behalf of the Mohegan Tribe of Indians of Connecticut, I want to thank you and the
Commission for the opportunity to comment on the NIGC’s Notice of Inquiry and Request for
Information dated November 12, 2010. While we were not able to attend the regional
consultations in Washington, D.C. or Florida because of the repeated snow storms this season,
we applaud the new NIGC commissioners on their first initiative to schedule these consultations.
These consultations and the critical and comprehensive review of the Commission’s regulations
which they foster reflect the purpose and spirit of Executive Order 13175 as reinforced in
President Obama’s memorandum on tribal consultation in November 2009 and reflect the special
government-to-government relationships between Tribes and the federal government. The
Mohegan Tribe strongly supports the goals of IGRA to protect Indian gaming as a means to
generate revenue for Tribes, ensuring that Indian gaming is conducted fairly and honestly and
ensuring that Tribes are the primary beneficiaries of gaming operations. This can only be
accomplished through a comprehensive regulatory system primarily conducted by the Tribes
with assistance and support from the NIGC. The Mohegan Tribe and its Tribal Gaming
Commission look forward to meeting their ongoing regulatory challenges with the newly
installed commissioners of the NIGC. The Mohegan Tribe and its Gaming Authority have also
responded to a need among Tribes that are new or less successful in gaming for a sharing of the
expertise, talent and experience of Mohegan Sun through management, development and
consulting assistance to other Tribes. We look forward to working'with the Commission and its
staff to foster cooperation through consistent and efficient regulations and application of those
regulations.

As Chairman of the Mohegan Tribe and in consultation with the Mohegan Tribal Gaming
Commission, I offer the following comments:

A. Part 502-Definitions

(1) Should NIGC consider definitions for the following two terms: Net Revenues-
management fee; and Net Revenues -allowable uses? The Mohegan Tribe has
supported past clarification of the term “net revenues” as defined under IGRA ( 25
U.S.C.2703(9)), including the reference to “gross gaming revenues” in Section

THE MOHEGAN TRIB

~_ =~ = =~

5 Crow Hill Road * Uncasville, CT 06382 *_ Telephone (860) 862-6100



Tracie L. Stevens, Chairwoman
February 11, 2011

Page 7

VI.

NIGC should endeavor to set a basic communication policy after receiving input from
Tribes. It is very unlikely that there will be a consensus among the Tribes as there are
numerous government models among them as well as individual political considerations.
A communication system that provides simultaneous notification to Tribal Leadership
and the Tribal Regulatory Agency will suffice in most cases. In rare instances when it
does not, NIGC will have to use its best judgment that will hopefully be based on its
knowledge and understanding of the particular Tribe. Requiring annual communication
resolutions from individual Tribes is a burdensome and unrealistic way of dealing with
this issue.

D. Buy Indian Act Regulation

A regulation that would require the NIGC to give preference to qualified Indian-owned
businesses when purchasing goods or services would be a positive action on NIGC’s part.

Other Regulations

We concur with NIGC that the regulations set forth in subsections A-K of Section VI are not
in need of revision and we therefore do not provide any comments regarding those
subsections.

Thank you for anticipated consideration of these comments. Please contact me if you have
any questions concerning these matters.

cc:

Sincerely,

Chairman, Mohegan Tribal Council

The Mohegan Tribal Council
Helga M. Woods, Attorney General, The Mohegan Tribe
John Meskill, Director of Regulations, The Mohegan Tribe


Tracie L. Stevens, Chairwoman
February 11, 2011
Page 2

502.16 and would support further clarification in this area subject to the statutory
limits of IGRA.

(a) Should the NIGC consider revising the definition for “Net Revenues” used to
calculate management fees to be consistent with GAAP, i.e. “Net income plus
management fee?” Consistency with GAAP is always advisable for accounting
practices and reconciliation of the statutory term to the GAAP standards
developed for the gaming industry may be required for financing or consistent
reporting by management contractors. NIGC should conform its accounting
requirements to GAAP. However, since the term “net revenues” is already
defined by statute at 25 U.S.C.2703(9) NIGC is bound by the statutory definition
until Congress acts to modify it.

(b) Should NIGC consider adding a new definition for “Net Revenues-allowable
uses” that is based on cash flow? Yes, cash flow and available funds to the
gaming facility should be a consideration when decisions are made concerning
distributions to the Tribe and other allowable uses of net revenues, including
payment of management fees. Any change to this definition should be made with
the intention of allowing Tribe’s more discretion to make sound judgments about
the use of its net revenues in ‘accordance with the tenets of Tribal Sovereignty.

(2) (a) 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
gaming revenues? No, NIGC should not seek to expand its authority by requiring
its review of any agreements such as slot lease agreements based on a percentage
of revenue. IGRA does not confer this review authority to NIGC relative to Class
II] gaming and it should, be left to the Tribe to exercise this authority in
compliance with its gaming ordinance and compact. NIGC should continue to
review these agreements only upon the request of a Tribe; it should not be made a
mandatory requirement.

(b) Should [NIGC promulgate] a definition regarding acceptable compensation to a
management contractor? No, especially if NIGC is considering the
reimbursement of expenses as compensation, which would be contrary to GAAP.

B. Part 514-Fees

(1) Should NIGC consider allowing the payment of annual fees based on a Tribal gaming
operations fiscal year? Yes, payment of fees based on a fiscal year is preferable to an
annual calendar year payment calculation, however the current method is not overly
burdensome. Tribes should be given the option of electing which method they prefer.
As a general matter, any changes to this part or the fees assessed by the Commission
should reflect and be sensitive to the duplication of fees paid pursuant to Tribal-State


Tracie L. Stevens, Chairwoman
February 11, 2011
Page 3

Compacts and for the direct regulation of gaming by Tribes, particularly those
primarily engaged in Class III gaming.

(2) How should NIGC implement such a revision? NIGC should provide notice and
sufficient time to Tribes to elect either a calendar or fiscal year basis to calculate its
fee payments. A sufficient implementation period would be 24 to 36 months for a
Tribe to make this determination.

(3) Should the Commission consider amending [Part 514] to define gross revenue
consistent with the GAAP definition of this term? As stated above it is advisable to
make all accounting related definitions consistent with GAAP. Any proposed change
to this definition should be examined in terms of the impact on fee assessments on the
Tribal Gaming Operations. However, since the term “gross revenues” is defined at
25 U.S.2717(a)(6) NIGC is bound by the statutory definition until Congress acts to
modify it.

(4) Should the Commission consider amending this part to include fingerprint processing
fees? Pursuant to Mohegan’s compact with the State of Connecticut fingerprint
processing fees are paid to the State not the NIGC so we do not take a position on this
issue.

(5) [SJhould the Commission consider a late payment system in lieu of a Notice of
Violation (NOV) for submitting fees late? Yes, a NOV should only be used when
NIGC has information that the late payment was intentional or is‘a repeated action on
the part of the gaming operation. A late payment system for isolated excusable
circumstances is preferable.

C. Part 518-Self-Regulation of Class II

A reasonable streamlined process should be considered by NIGC with Tribal input and
should also be available for Class III Gaming.

D. Part 523-Review and Approval of Existing Ordinances
Should the Commission consider eliminating part 523 as obsolete? Since Part 523
applies only to ordinances enacted prior to February 1993 that have not been acted on by
the Commission, it is obsolete and 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? 25 U.S.C.2711(a)(3) states that for the