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National Indian Gaming Commission

To:

NOTICE OF VIOLATION

NOV-05-04

James Crawford, Chairman (Agent for Service of Process)
Sisseton-Wahpeton Oyate of

the Lake Traverse Reservation

Box 509

Agency Village, SD 57262-0509

FAX: (605) 698-7907

Verlyn Beaudreau, Chairperson
Gaming Commission
Sisseton-Wahpeton Oyate of
the Lake Traverse Reservation
P.O. Box 249

Sisseton, SD 57262

FAX: (605) 698-3614

Greg Paulson, Tribal Attorney
Bluedog, Olson & Small .
Southgate Office Plaza, Suite 500
5001 West 80th Street
Minneapolis, MN 55437

FAX (952) 893-0650

Notification of Violation

irman of the National Indian Gaming Commission (NIGC) hereby gives notice that
ton-Wahpeton Oyate of the Lake Traverse Reservation (Respondent or Tribe),
-\gency Village, South Dakota, is in violation of NIGC regulations for failure to
seotit umely quarterly fee statements and fee pay mexiis.

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Authority

Under regulations of the National Indian Gaming Commission, the Chairman of the NIGC
(Chairman) may issue a Notice of Violation (NOV) to any person for violation of any

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provision of the Indian Gaming Regulatory Act (IGRA), NIGC regulations, or any provision
of a tribal gaming ordinance or resolution approved by the Chairman. 25 C.F.R. § 573.3.

3. Applicable Federal and Tribal Laws

A.

25 U.S.C. § 2717(a) — IGRA mandates that the Commission shall establish a
schedule of annual fees to be paid to the Commission annually by each Indian
gaming operation that conducts class II or class II] gaming, and that such fees
shall be payable to the Commission on a quatterly basis. Failure to pay the
scheduled fees may be grounds for revocation of the approval of the Chairman
of any license, ordinance, or resolution required for the operation of gaming.

25 CER. §§ 514.1(c) and 514.1(0)(2)-(4) — NIGC regulations require that each
gaming operation on Indian lands compute quarterly statements determining the
amount of fees owed to the Commission. The quarterly statements are due on
March 31, June 30, September 30, and December 31 of each calendar year the
gaming operation is subject to the jurisdiction of the NIGC. The quarterly
statements shall be transmitted to the Commission to arrive no later than the due
date.

25 C.F.R. § 514.1(c)(5) requires each gaming operation to remit to the
Commission the fees due each quarter with the quarterly statement.

4. Role of Quarterly Fees and Quarterly Statements

5.

The annual fees collected by the NIGC in order to fund the agency’s work are based upon
the quarterly worksheets submitted by Indian gaming operations. NIGC must set a fee rate
sufficient to fund its annual budget, yet may not exceed the fee cap set by Congress.

Thus, it is imperative that the NIGC receive worksheets from the gaming operations in a
timely manner so that the NIGC is able to set accurate preliminary and final fee rates.

Circumstances of the Violation

A.

Respondent is a federally recognized Indian Tribe with tribal headquarters in
Agency Village, South Dakota.

Respondent operated its gaming facility, Dakota Connection Casino & Bingo,
during all or part of the following year: 2003 & 2004.

ed an unum

quarter ending December 31, 2004. The quarterly statemen
were received by the NIGC on January 18, 2005.

Pursuant to NIGC regulations, the final quarterly statement and fee payment
for 2004 were due on December 31, 2004. 25 C.F.R. § 514.1(c)(2). Quarterly
statements and fee payments must arrive at the NIGC on or before the

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quarter ending date. 25 C.F.R. § 514.1(¢)(4). Respondent is therefore in
violation of these regulations for failure to submit a timely quarterly
statement and fee payment.

6. Measures Required to Correct these Violations

Thete is no way to rectify the late submission of the December 31, 2004 quarterly statement
and fee payment. The regulations require that the quarterly statement and fee payment be
transmitted to the Commission to arrive no later than the due date.

7. Appeal

Within 30 (thirty) days after service of this Notice of Violation, Respondent may appeal to
the full Commission under 25 C.F.R. Part 577 by submitting a notice of appeal and, if
desired, request for hearing to the National Indian Gaming Commission, 1441 L Street, NW,
Ninth Floor, Washington, DC 20005. Respondent has a right to assistance of counsel in
such an appeal. A notice of appeal must reference this Notice of Violation.

Within ten (10) days after filing a notice of appeal, Respondent must file with the
Commission a supplemental statement that states with particularity the relief desired and the
gtounds therefore and that includes, when available, supporting evidence in the form of
affidavits. If Respondent wishes to present oral testimony or witnesses at the hearing,
Respondent must include a request to do so with the supplemental statement. The request
to present oral testimony or witnesses must specify the names of proposed witnesses and the
general nature of their expected testimony, whether a closed hearing is requested and why.
Respondent may waive its right to an oral hearing and instead elect to have the matter
determined by the Commission solely on the basis of written submissions.

8. Fine--Submission of Information

The violation cited above may result in the assessment of a civil fine against Respondent in
an amount not to exceed $25,000 per violation per day. Under 25 C.F.R. § 575.5(a),
Respondent it written information about the violation to the Chairman within 15
is notice of violation (or such longer period as the Chairman of the
int for good cause). The Chairman shall consider any information
ining the facts surrounding the violation and the amount of the civil

fine, if any.
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PHIRIPN. HOGEN

Chairman
National Indian Gaming Commission