Chairwoman Tracie Stevens
RE: NIGC Regulatory Review
February 10, 2011

Page 5

repetitive as to what is required to submit in other sections of
the regulations. For example, list of current gaming division
heads, history of gaming operations, list of current regulators,
revenue allocation plans. In addition, the NIGC review appears to
be repetitive, since the tribal MICS and annual audits contain most
of the information requested. Additionally, some requirements
listed are beyond what is minimally required in IGRA.

Second, there doesn’t appear to be any real self-regulation
considering all the other requirements set forth in IGRA, such as
licensing, notifications, approval of gaming ordinances and
amendments thereto and enforcement. These are inherently part of
self-regulation. In the spirit of self-regulation, the only
requirement for submission should be an annual report.

The Nation. would also like to take this opportunity to
recommend that self-regulation of Class be explored. This would be
more economically feasible for tribes.

This would be a high priority for the Nation.

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

The Nation would support eliminating this Part. However, we
would recommend to provide in clarification for submission of
amendments to the tribal gaming ordinance.

This is a low priority. Clarification on submission of
amendments to the tribal gaming ordinance, however, would be a high
priority for the Nation. We would recommend this could be a new
section in Part 522.

E. Management Contracts

These Parts are a low priority for a tribe, provided that the
definition of Management Contract remains consistent with IGRA.

(1) Part 531 - Collateral Agreements

We support including collateral agreements as being approved
with management. contracts provided that such collateral agreements
meet the definition of “management contract”. If those collateral
agreements do not meet the definition of “management contract,”



Chairwoman Tracie Stevens
RE: NIGC Regulatory Review
February 10, 2011

Page 10

If other tribes feel this is necessary, then the Nation would
recommend this be established as a policy. We feel it does not
vise to the level of a regulation.

D. Buy Indian Act Regulation

This is a federal act. Our response is the NIGC is a federal
agency and required to comply with its federal laws, including the
Buy Indian Act. The Nation does not feel it is appropriate to
create a regulation.

VI. Other Regulation

No comment.

In closing, I would like to thank again this Commission for
this opportunity to provide comments. We look forward to continue
working together on these important changes.

Sincerely,

THE NAVAJO NATION

Bén Shelly, Presjdent

xc: Carleen Chino, Executive Director
Navajo Gaming Regulatory Office



Chairwoman Tracie Stevens
RE: NIGC Regulatory Review
February 10, 2011

Page 7

The Navajo Nation is concerned with potential revisions to
this area. The issue is whether the NIGC should be concentrating
its regulatory activities upon Class II or acting outside. of. its
statutory powers and stepping into the Class III regulatory regime.
As the NIGC is aware, the IGRA provides that tribal gaming agencies
are the primary regulators for all gaming on tribal lands. The
NIGC is given limited regulatory oversight over Class II gaming and
the tribal-state compact process provides a mechanism whereby an
individual Indian tribe and a. state can. develop an: agreed upon
regulatory scheme or tribal gaming taking place pursiiant to a Class
III tribal-state gaming compact. These principles are clearly
stated within the IGRA, and confirmed within the CRIT decision. We
quote hére from the final sentence of the opinion of the~ United
States Court of Appeals for the District of Columbia Circuit:
“This leads us back to the opening question - what is. the statutory
basis .empowering the Commission to regulate class. III gaming
operations? Finding none, we affirm.” Colorado River Indian
Tribes v. National Indian Gaming Commission, 466 F.3d.134, 140
(D.C. Cir. 2006).

With that said, the Nation would not support rescinding this
Part. The Nation's compacts adopt the MICS, as do. many other
tribes. There are many unforeseen scenarios that arise, such as
renegotiations of the compacts. Thus, the Nation would strongly
oppose recision of the MICS.

This would be a low priority for the Nation.
(2) Part 543 - Class II Minimum Internal Control Standards
‘and Part 547 - Minimum Technical Standards for Gaming
Equipment Used with the Play of Class II Games
Our comments for both these Parts are the same. The Nation
would support amendments to’ the Class II MICS. -We would recommend
that impacted tribal gaming regulators have an opportunity to
comment or assist in the revisions of these two Parts, prior to
public meetings.
This would be a high priority for the Nation.

H. Backgrounds and Licensing

(1) Part 556 - Background Investigations for Licensing



Chairwoman Tracie Stevens
RE: NIGC Regulatory Review
February 10, 2011

Page 6

then it does not appear that the NIGC has clear approval authority
based in statute.

(2) Part 533 - Approval of Management Contracts

Assuming that the NIGC is seriously considering an expansion
of the definition of the term management: contract, we would
encourage the NIGC to engage in additional government to government
consultations with individual Indian tribes to develop coherent
policy and- regulations that are consistent with | settled
expectations and case law on the issue.

(3) Part 537 - Backgrounds on Management Contracts

No comment.
F. Proceedings before the Commission

+ Comprehensive and Detailed Procedural Rules

This would certainly assist in providing direction’ for the
tribes in the appeal process. The idea. or recommendation is
supported by the Nation. However, the Nation will certainly want
an opportunity to further comment on any proposed rules the NIGC
may propose. These appeal revisions are considered a low priority.

+ Part 519 - Service of Process

The Nation would recommend instead of surface mail, certified
mail with return receipt and hand delivery. with certification of
receipt. The other delivery options suggested within 25 C.F.R.
§ 519 are uncertain and can be easily subject to challenge in any
administrative of judicial forum. The Nation would recommend those
provision be stricken.

+ Computation of Time

The current time periods, we feel is sufficient. These are
decisions that must be made quickly.

G. MICS & Technical Standards

(1) Part 542 - Class III Minimum Internal Control. Standards



Chairwoman Tracie Stevens
RE: NIGC Regulatory Review
February 10, 2011

Page 9

should be lifted. If a repeated offense, a time penalty could. be
added to the compliance date, such as one (1) year. So, upon
compliance the NOV be lifted would then be an automatic occurrence,
it would not be at the discretion of ‘NIGC.

We suggest that this issue should be addressed when the
Commission is addressing “interim remedies,” discussed above. This
would be a medium priority.

v. Potential New Regulations
A. Tribal Advisory Committee

The Nation opposes creating a regulation for Tribal Advisory
Committee(s). These are important issues and the Nation would like
to ensure its involvement in these processes. We understand the
practical aspect of this recommendation. However, we found it
beneficial to hear the positions of all tribes whether we agree
with them or not, each one is helpful and has their own unique
experience and insight. We feel it is important for everyone to
participate.

B. Sole Proprietary Interest Regulations

The Nation opposes a regulation for Sole Proprietary Interest.
A tribe's ability and right to make business decisions and enter
into contracts are part of each tribe’s right of- self-
determination. Any regulations that would potentially infringe on
tribal sovereignty should be avoided at all cost.

If the NIGC has specific concerns about the concept of Sole
Proprietary Interest, we encourage the NIGC .to reach. out to
individual Indian tribes on a government to government basis to
explore this issue further.

Cc. Communication policy or regulations identifying when and
how the NIGC communicates with Tribes

The Nation feels establishing a policy or regulations for
communication between NIGC and the Tribes is unnecessary. The
Nation has an internal policy on communication with the Federal
Government. We feel this is strictly an internal issue.



"THE NAVAJO NATION

Post Office Box 7440

‘Window Rock, Arizona 86515.
928-871-6352/6353/7000
Telefax: 928-871-4025

BEN SHELLY. . -REX.LEEJIM:.¢s
_ President Vice President

February .10, 2011

Chairwoman. Tracie Stevens
National Indian Gaming Commission
1441:°L,Street N.W., Suite 9100
Washington,- D.C. 20005

RE: National Indian Gaming Commission Regulatory Review ;
Dear: Chairwoman Stevens:

Thank you for the opportunity to allow the. Navajo..Nation: -
(“Nation”) to provide comments. on possible amendments to. the
Commission gaming regulations. I am very pleased with the: efforts
to involve other Indian tribes in the process of revising .and
considering the promulgation of National Indian Gaming Commission
("NIGC’) regulations.

I am also pleased with the recent Training and Téchnical.
Assistance survey distributed. We are a new gaming tribe with both
Class -II and Class III gaming and technical training is. critical.’
We have in fact already submitted our response to the NIGC Training:

and Technical Assistance survey to assist you. in prioritizing ‘the!’ :

type of training and technical assistance. We. suggest that’ the:
> NIGC’also:consider the location of assistance. - As ‘you. know,” tiany.
of the training occur in locales which are distant from Window
Rock, Arizona. We encourage the NIGC to provide additional’ on-sit
training so we do not bear the financial burden of. travel, and mor
importantly, to allow more of our personnel to take advantagé of:
the offerings.

After review of the issues raised in the Notice. of. Inquiry
“(“NOI”), the Nation recommends that the issues “raised below «be
made through the negotiated rule-making process.° When drafting: our’
comments, -the premise i8 for the NIGC to.avoid imposing. further?
unnecessary regulations on tribes, and instead. take this: |
opportunity to provide more clarification on those subject matters).
that’ the .-NIGC. has statutory authority to both promulgate: and:
“regulate.



Chairwoman Tracie Stevens
RE: NIGC Regulatory Review
February 10, 2011

Page 8

The Nation would support converting the pilot program into a
regulation. This is a low priority.

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

The Nation would not oppose adopting regulations for tribes to
submit fingerprint cards for vendors, consultants and other non-
employees that have access to the. gaming operations on a daily
vending basis. However, the Nation would insist this remain at the
option of the tribes.

This is a low priority.

I. Part 559 - Facility License Notifications,. Renewals, ahd
Submissions

The NIGC’s Gaming Facility regulations are not consistent
with the NIGC’s statutory authority. In light of the CRIT Decision,
we encourage the NIGC to review this regulation in detail for
compliance with the IGRA and the NIGC’s very limited regulatory
responsibilities related to Class III gaming.

More specifically, the Environmental, Public Health and Safety
(“EPHS”). certification is beyond NIGC’s authority. The IGRA makes
absolutely no reference to EPHS regulation or certification. In
Williams v. Lee, tribes are granted with the inherent right to make
its own laws and be governed by them. It is the Nation’s position
that EPHS certification is in direct conflict to tribal sovereignty
and overreaches NIGC’s statutory authority.

We strongly recommend striking Part 559.5 and those sections
that are in excess of the NIGC’s regulatory authority. This would
be a high priority for the Nation.

J. Sections 571.1 - 571.7 - Inspection and Access
No Comment .
K. Part 573 - Enforcement
The Nation would fully support the NIGC to establish a process

to withdraw a Notice of Violation (“NOV”). Our recommendation
would be that once a Tribe is found to be in compliance the NOV



Chairwoman Tracie Stevens
RE: NIGC Regulatory Review
February 10, 2011

Page 4

The Nation would support this change. However, this goes to
the Nation’s concern explained above on the ability of NIGC to
properly amend this term. We feel this should be a low priority,
compared to other issues.

+ Late payment system in lieu of a Notice of. Violation
("NOV") for submitting fees late

The Nation fully supports a late payment system, for
submitting late fees. Our recommendation would be a development of
an “interim remedies” process that the NIGC and individual Indian
tribes will work through prior to the issuance of a NOV. The NOV
process should be used for substantial violations of IGRA, such as
operating a gaming facility without a license. An. “interim
remedies” would be a more efficient use of resources for both the
NIGC and affected Indian tribes/tribal gaming operations.

Our recommendation for an “interim remedies” process would be
an issuance of a warning notice provided to the tribe, followed by
a meet and confer process, if the outstanding issue has not been
resolved. If not corrected within a reasonable grace period, a fee
would be assessed against the tribe. Certainly, if the non-payment
is a repeated occurrence or found to be intentional, then a NOV
could be considered. However, we recommend that before initiating
the NOV process, consultation with the Tribe occur. In other
words, the NOV should be issued, if clear the tribe will ‘not
comply, as a last resort.

Additionally, the NOI inquired where fines should be directed.
We would support the direction of those monies for education and
other avenues that met the policy objectives of the IGRA identified
in 25 U.S.C. § 2702.

The Nation’s position is this is a high priority.
Cc. Part 518 - Self-Regulation of Class II

We strongly encourage the NIGC to revisit 25 C.F.R. § 518
regulations. Although we are new to gaming, the self-regulation of

Class II is something the Nation would be interested in pursuing,
in the near future.

However, we question why there are only two (2) tribes with a
certificate of self-regulation. First of all, the requirements are



Chairwoman Tracie Stevens
RE: NIGC Regulatory Review
February 10, 2011

Page 3

expanding the definition of “management contract” to include any
contract that pays a fee based on a percentage of gaming revenues.
In response, we encourage the NIGC to review 25 °U.S.C.
§§ 2710(d) (9) and 2711(a) which provide the general framework for
the definition of ‘management contract. These sections state that
“{s]ubject to the approval of the Chairman” Indian tribes may enter
into management contracts for the “operation of a Class III gaming
activity” 25 U.S.C. §§ 2710(d) (9), 2711(a). The IGRA does not
refer to payment of a percentage of gaming revenues as. a
prerequisite to meeting the requirements of the term management
control. The operative condition for determining «whether
“management” is occurring is whether third party control over all
or part of a gaming operation. If the NIGC determines that it is
necessary to revisit this term and definition, we suggest that the
definition of “management contract” must be consistent with the
IGRA and existing case law interpreting the same.

As.a practical matter, if the term “management contract” is
expanded, there will be a direct negative economic. impact on tribal
gaming operations. If history is any guide, significant additional
time will elapse before contracts such as slot lease agreements
(assuming they fall within a new definition of. management contract)
will become effective, potentially resulting in a loss. of
significant revenues for a tribal gaming operation and the Nation.
Additionally, it is the position of the Nation that the National
Environmental Policy Act (“NEPA”) will be triggered each time an
Indian tribe requests that the NIGC approve a management contract,
additional cost: and time would be incurred by an Indian. tribe
during the time the NEPA process is undertaken. If anything we
suggest that as a general matter that the NIGC should be:.working
with Indian Country to develop a more. efficient regulatory
structure, rather than additional red tape.

This is a low priority.

B. Part 514 - Fees
+ Revisions to base fees on the gaming operation’s fiscal
year

The .Nation’s “gaming. operation” operates on a calendar year,
so this is not an issue. Therefore, this is a low priority.

+ Defining “gross gaming revenue” consistent with GAAP



Chairwoman Tracie Stevens

RE: NIGC’ Regulatory Review

February 10, 2011

Page 2

A. Part 502. - Definition of this Chapter

(1) Net Revenue

Net Revenue is defined in the Indian Gaming Regulatory Act

(“IGRA”) at 25 U.S.C. § 2703(9). The Nation's first concern or
question, is whether the Commission has the authority to change
this definition. The NOI provides for two new terms. and
definitions for the existing term “Net Revenues”. Such a

definitional change seems problematic as the term “net revenues” is

already defined with the IGRA at 25 U.S.C. § 2703(9). We suggest:

that any revision to the term and definition must be consistent
with the terms of the IGRA.

This is an issue that the Nation believes should be a low
priority.

(a) Net Revenues - Management’ Fee

Aside from the above concern, the Navajo Nation would support
a definition consistent with the generally accepted. accounting
principles (GAAP). This would certainly provide uniformity and be
good. business practice.

(b) Net Revenue - Allowable Uses

The Nation does not support the new proposed definition “Cash
flow equals Net. Income. plus depreciation minus principal loan
payments and reserve funding.” The accounting and budgeting by
tribes are inherent sovereign. rights. This proposed definition
violates our tribal. sovereignty.

Additionally, we cannot support a change in the definition
that could be used by future Commissions to take action in excess
of that granted.to NIGC within the IGRA. We are concerned that

future Commissions. would seek to use a “Net Revenues - Allowable:

Uses” definition’as an illegitimate justification to audit tribal
government expenditures. It is the Nation’s position that* the
current definition provided for in IGRA is adequate.

(2) Management. Contract

The Nation does not support the expanded definition identified
within the NOI. The NOI inquires whether the NIGC should consider