Ho-Chunk Nation Gaming Commission 

P.O. Box 667, Black River Falls, WI 54615 • (715) 284-7474 • (800) 814-8050 • FAX (715) 284-7550 

February 11, 2011 

Ms. Tracie Stevens, Chairwoman 

National Indian Gaming Commission 

1441 L Street, N.W., Suite 9100 

Washington, D.C. 20005 

Via Email to: reg.review@nigc.gov

Re: Notice of Inquiry and Request for Information on regulations to implement the IGRA 

Dear Chairwoman Stevens: 

On behalf of the Ho-Chunk Nation (“Nation”), the Ho-Chunk Nation Gaming Commission (“Commission”) 

is submitting the following comments in response to the Notice of Inquiry published in the Federal Register 

on November 18, 2010 as 75 Fed. Reg. 70680. We understand that the National Indian Gaming 

Commission’s (“NIGC”) Notice of Inquiry seeks comments and information that will assist the NIGC in 

understanding the need to revise any or all of the regulations within the jurisdiction of the NIGC and which 

implement the Indian Gaming Regulatory Act (“IGRA”). 

Consistent with the format of the NIGC’s Notice of Inquiry, the Commission offers the following comments: 

Regulations Which May Require Amendment or Revision 

A. 25 CFR Part 502 – Definitions of this Chapter 

 (1) Net Revenues 

 The Nation reiterates its prior assertion that the NIGC should identify difficulties associated with the 

current definition, as well as tangible benefits that would be derived from implementing a bifurcated 

definition tailored to “management fees” or “allowable uses.” Moreover, any definition should be careful not 

to borrow from commonly used terminology that states or corporate participants in the gaming industry use, 

as opposed to tribes – for the restrictions on the uses of net revenues are unique to tribes. 

 In addition, to the extent the NIGC seeks to define by regulation a term that is already defined by 

statute, in 25 U.S.C. §2703(9), there is a risk of overstepping the NIGC’s authority. Perhaps tribes have 

expressed a need for clarification and the sort of direction that a refined definition may provide. But a 

regulation that attempts to define the appropriate uses of net revenues may, in fact, go beyond the scope of 

what the IGRA provides at §2710(b)(2)(B). Accordingly, the Ho-Chunk Nation Gaming Commission does 

not offer specific comment on the “management fees” or “allowable uses” aspect of this proposal. 

 In terms of priority, this is low on the list for the Ho-Chunk Nation. But it will rise up the list of the 

NIGC takes steps to define “net revenues” in a way that limits tribes’ allowable uses. 

 (2) Management Contract 
 Here, the NIGC appears to suggest a broadening of the definition of “management contract” under the 

IGRA. Of course, if this definition expands, then so too does the category of such tribal agreements that the 

NIGC gains authority over which to approve. This appears to increase the degree and extent of NIGC 

regulation over tribal contracting and business decisions. Certainly, the NIGC is placed in the position of a 

“trustee” when it comes to reviewing such contracts for tribes (see 25 U.S.C. §2711(e)(4)); but expanding the 

scope of the NIGC’s jurisdiction in this area may run contrary to the spirit of the IGRA – to promote “tribal 

economic development, self-sufficiency, and strong tribal governments.” See 25 U.S.C. §2702(1). 

 This is not a high priority matter for the Ho-Chunk Nation, in terms of necessary change. 

B. 25 CFR Part 514 – Fees 

 The NIGC’s imposition of a fee should acknowledge the various ways in which tribal business 

operations and budget cycles are established. For purposes of the Ho-Chunk Nation’s interests, an annual fee 

that was consistent our fiscal year would be acceptable (June to July of each year). However, whatever 

proposal the NIGC implements should provide tribes maximum flexibility and advance notice of any effective 

date, in order to accommodate tribal practices. 

 The highest priority aspect of this category is the need to move away from the NIGC’s current 

practice of issuing a Notice of Violation (NOV) to tribes. The NIGC should provide some form of warning or 

advance notice prior to the imposition of any fine or penalty. 

C. 25 CFR Part 518 – Self Regulation of Class II 

 This regulation should certainly be revised. It is burdensome, as the NIGC suggests in its Notice of 

Inquiry. Moreover, it is inconsistent with the IGRA. Section 2706(b)(1)-(4) of the IGRA describes the power 

and authority of the NIGC with respect to tribal Class II gaming. Tribes are the primary regulators of Class 

II. However, the Part 518 regulations go beyond these limitations. As such, they should be revised through 

notice and comment opportunity. 

D. 25 CFR Part 523 – Review and Approval of Existing Ordinances or Resolutions 

 Not a high priority item for the Ho-Chunk Nation, but if there is no need for this regulation, then it 

should be eliminated. 

G. MICS & Technical Standards 

 (1) Part 542 – Class III Minimum Internal Control Standards (“MICS”) 

 As the NIGC is well aware, a U.S. District Court held that the Class III minimum internal control 

standards are beyond the statutory authority of the Commission. That decision was upheld on appeal on 

October 20, 2006 by the U.S. Court of Appeals for the District of Columbia. The Court of Appeals found that 

Congress has never amended the IGRA to confer express power on the Commission to regulate Class III 

gaming. See Colorado River Indian Tribes v. National Indian Gaming Comm., 2006 WL 2987912 at *3 (C.A. 

D.C., 2006). 

 Regardless of the CRIT ruling, the Ho-Chunk Nation has operated with Class III MICS for several 

years. The Nation’s Gaming Commission has adopted tribal Class III MICS that are just as stringent as the 

NIGC Class III MICS. The Ho-Chunk Nation operates Class III gaming pursuant to its gaming compact with 

the State of Wisconsin, which refers to NIGC Class III MICS. However, it states that the tribe follow all 

areas subject to the MICS established by the NIGC. In light of the CRIT ruling, the NIGC’s Class III MICS 

arguably do not apply in the Ho-Chunk Nation’s situation. 

 Regardless, the Nation realizes the importance of MICS and how critical they are to protect tribal 
gaming revenues, to ensure that gaming is conducted fairly and honestly, and that tribes are the primary 

beneficiaries of the operations. Also, the Nation’s Commission appreciates that tribal circumstances differ in 

various states. 

 

 The Nation would consider this a higher priority item for the NIGC to address. Perhaps a National 

Tribal Advisory Committee or Regional Tribal Advisory Committees should be gathered in order to advise 

the NIGC and provide recommendations, while the NIGC stays any enforcement of the Class III MICS. 

 (2) Part 543 – Class II Minimum Internal Control Standards 

 The current Class II MICS in Part 543 should be revised. The NIGC should withdraw the current 

regulations and establish national or regional tribal advisory committees and/or work with the Tribal Gaming 

Working Group on revising such standards. 

 The Ho-Chunk Nation has established its own Class II MICS, which is consistent with the manner in 

which tribes are meant to be the primary regulators of Class II gaming under IGRA. For example, the NIGC 

was given certain powers related to Class II gaming, such as reviewing and approving management contracts, 

review of background investigations of certain gaming employees and management entities, establishing fees, 

issuing notices of violation and assessing civil fines, and granting certificates of self-regulation. The NIGC is 

also given the authority to “monitor class II gaming conducted on Indians lands.” See 25 U.S.C. 2706(b)(1). 

Coupled with the NIGC’s authority to monitor is the NIGC’s authority, under 25 U.S.C. 2706(b)(10), to 

“promulgate such regulations and guidelines as it deems appropriate to implement the provisions of the 

[IGRA].” 

 It can be said that the NIGC has some regulatory role with respect to Class II gaming, but the 

legislative history of the IGRA makes clear that this role does not extend to developing and imposing detailed 

regulations for Indian gaming in place of tribal government decisions on necessary regulations. If the NIGC 

is asserting regulatory jurisdiction with the proposed regulations under the authority of §2706(b)(10), any 

such regulations cannot go beyond monitoring. Instead, the NIGC’s role is limited to overseeing the tribes’ 

own regulatory efforts and approving Class II tribal gaming ordinances. 

 Other than debates in the U.S. Senate and House, Senate Report 555 is the only formal legislative 

history on IGRA. Very early in S. 555, the primacy of the tribal role in Class II gaming is stated: “S. 555 

recognizes the primary tribal jurisdiction over bingo and card parlor operations although oversight and 

certain other powers are vested in a federally established National Indian Gaming Commission.” Senate 

Report at 3. The language here sets out clearly the congressional intent that tribes would retain their inherent 

rights to regulate Class II gaming. The Commission’s role was to be primarily one of oversight to see that the 

tribe implemented the minimum Federal standards set out in its gaming ordinance under § 2710(b)(2). The 

Commission was given certain other powers in relation to Class II gaming, such as management contract 

review and approval, establishment of fees and assessment of fines, and granting certificates of selfregulation. Yet, Congress drew a line and emphasized the primary role for tribes: “Class II continues to be 

within tribal jurisdiction but will be subject to oversight regulation by the National Indian Gaming 

Commission.” Senate report at 7. Viewed in this light, the NIGC should bear in mind that any proposed 

regulations should not intrude upon tribal sovereignty by usurping the role of tribal governments as the 

primary regulators of tribal gaming under the IGRA (25 U.S.C. 2710(b)(1)). 

 Statements by congressional leaders at the time of IGRA’s enactment also confirm the intention that 

tribes retained the sovereign right to regulate Class II gaming. Senate Indian Affairs Committee Chairman 

Inouye, who managed the bill on the Senate floor, clarified the congressional intent with respect to the 

NIGC’s limited regulatory role. He stated: “[T]he committee has attempted to balance the need for sound 

enforcement of gaming laws and regulations, with the strong Federal interest in preserving the sovereign 

rights of tribal governments to regulate activities and enforce laws on Indian lands.” Congressional Record, 

September 15, 1988, p. S24022. (emphasis supplied.) 

 The Vice-Chairman of the Indian Affairs Committee, Senator Daniel Evans, also evidenced his 
understanding of the limited scope of the NIGC’s role. In discussing the amendment to the Federal criminal 

code made by Section 23 of S. 555, he noted 

 It is my understanding that this language (Section 23 of the IGRA) would, for purposes of 

 Federal law, make applicable to Indian Country all State laws pertaining to licensing, regulation, or 

 prohibition of gambling except class I and II gambling which will be regulated by a tribe and class III 

 gambling which will be regulated by a tribal-state compact. 

Congressional Record, September 15, 1988, p. S 24025. 

Before enactment of the IGRA, no agency of the federal government had clear statutory power to 

impose its regulations on conduct of otherwise legal gaming activities by Indian tribes in Indian country. 

Rather, tribal governments retained this inherent sovereign right. If IGRA had conferred that authority on the 

NIGC, it would have abrogated that right. However, Congress made clear its understanding that tribal rights 

not expressly abrogated were not intended to be affected by the legislation. As Senator Evans said, “If tribal 

rights are not explicitly abrogated in the language of this bill, no such restriction should be construed” and 

“this law should be considered within the line of developed case law extending over a century and a half by 

the Supreme Court, including the basic principles set forth in the Cabazon decision.” Congressional Record, 

September 15, 1988, p. S24027. Indeed, Chairman Udall repeated 

the same understanding when he said: 

Mr. Speaker, while this legislation does impose new restrictions on tribes and their members, it is 

 legislation enacted basically for their benefit. I would expect that the Federal courts, in any litigation 

 arising out of this legislation, would apply the time-honored rule of construction that ambiguities in 

 legislation enacted for the benefit of Indians will be construed in their favor. 

Congressional Record, September 26, 1988, p. H 25377. 

 (3) Part 547 – Minimum Technical Standards for Gaming Equipment Used with the Play of 

 Class II Games 

 The Ho-Chunk Nation previously commented on the NIGC’s proposed Technical Standards for Class 

II gaming set forth in Part 547. To provide context, the Nation resubmits those comments herewith (and to 

the extent aspects of Part 547 were adopted at the objection of the Nation, the tribe re-asserts its position): 

Section 547.4 -- How do I comply with this part? 

 The NIGC sought to improperly add a new requirement that the testing laboratory test to new 

minimum probability standards of Proposed 547.5(c), which as discussed below, the Nation asserted they 

were either not necessary or feasible. Accordingly, the Nation did not support this new requirement. 

 The NIGC had also improperly added a new requirement not in the Tribal Advisory Committees’ 

draft that the testing laboratory must test to "applicable provisions of Commission regulations governing the 

classification of games... ." To the extent this provision referred to the existing Class II regulations, it was 

inappropriate for the NIGC to grant the authority to determine whether a game meets the legal definition of 

Class II or Class III to a testing laboratory. First, Tribal Gaming Regulatory Authorities are the primary 

regulators of Class II gaming under the IGRA, and it is inconsistent with the IGRA for the NIGC to transfer 

the authority to make that determination to a testing laboratory. Second, the testing laboratories are expert 

only in technical matters and do not have the requisite legal expertise to determine whether a game meets the 

definition of Class II or Class III under the IGRA. When a game is submitted to a laboratory, it can only 

determine whether a game is technically played in a manner consistent with technical standards. Laboratories 

simply do not have the capacity to take the next step and render any conclusion as to whether or not a game 

meets a legal standard. That determination must be left to the Tribal Gaming Regulatory Authorities in the 

first instance. 
 The NIGC also proposed changing a requirement regarding the independence of testing laboratories 

that was patronizing and unwarranted. The Tribal Advisory Committees’ draft standard would have required 

that testing laboratories be independent from the tribe or tribal gaming regulatory authority. This requirement 

would ensure there would be no way for a tribe to improperly influence the result of a test lab. The NIGC had 

taken this requirement a step further and mandated that the tribe could not own or operate a testing lab. This 

would effectively preclude a tribe from using its own testing lab even if that lab were independent from the 

tribe. This was a patronizing requirement that appeared to assume that tribal governments are incapable of 

ensuring the independence of a tribally owned enterprise. This was inappropriate and unwarranted, and failed 

to consider situations where tribes already have their own test labs up and running that produce quality results 

and employ tribal members. 

 The suitability determinations proposed by the NIGC also rendered it more difficult for tribal 

laboratories to certify games. The NIGC added provisions requiring tribes to conduct the same kind of 

background investigations applicable to management contracts for all testing laboratories that have not been 

determined to be suitable by any other gaming jurisdiction in the United States. This improperly gave nontribal test laboratories a leg up on tribal testing laboratories, as non-tribal test laboratories already have 

suitability determinations from other jurisdictions that have nothing to do with tribal gaming. 

 One of the most significant changes the NIGC proposed in this section was to remove a permanent 

exemption for existing player interface hardware. The Tribal Advisory Committees’ standards contained a 

provision permanently exempting existing hardware player station "boxes" from compliance with the rules, 

reasoning that the cost of replacing existing boxes would be prohibitively high, and that in any event, market 

forces would require their eventual replacement. This permanent exemption for existing boxes would not have 

had any effect on game play, as the Class II box is a dumb terminal that cannot play the game without being 

connected to the system. Accordingly, exempting existing hardware would not delay compliance with the 

most critical aspects of the new standards. It had been suggested by the manufacturers that failing to include 

this exemption would have imposed enormous costs that could not be justified by the benefits of the proposal 

regarding hardware. The player station box is the most expensive part of existing systems, yet the standards 

that apply to hardware provide the least protection to tribal assets. Further, even hardware for games 

previously approved by the courts would be rendered unlawful. Accordingly, it appears that providing a 

permanent exemption is warranted. 

Section §547.5 -- What are the rules of interpretation and of general 

application of this part? 

 As mentioned above, the NIGC proposed a new minimum probability requirement to the Tribal 

Advisory Committees’ draft that would for the first time establish minimum probability odds for prizes. The 

new requirement would set minimum probability odds of 50,000,000-to-1 for all progressive prizes, and 

25,000,000-to-1 for all other prizes. 

 

 These requirements were unnecessary, arbitrary, and placed tribes at a competitive disadvantage with 

states. There is nothing in the IGRA that calls for setting minimum odds for winning Class II games, and the 

NIGC failed to articulate a reason for including such a provision in the proposed regulations. Even if such a 

requirement were warranted, the levels chosen by the NIGC were completely arbitrary. Note that state-run 

lotteries generally have odds of at least 250,000,000-to-1, which in some states compete directly with tribes. 

There was no basis for the NIGC to impose a comparative disadvantage on tribes through higher probability 

odds. Consistent with the IGRA framework, this is an issue to be determined by tribal regulators and not the 

NIGC. 

Section 547.7 -- What are the minimum technical hardware standards applicable to 

Class II gaming systems? 

 The only material change made in this section by the NIGC is that it deleted language in the standards 

for financial instrument storage components to apply to components that are operated under the direct control 

of gaming employees or agents rather than to components that are designed to be operated in such a manner. 
The deletion of the "designed to be" language changes this provision from a technical standard that requires 

equipment designed for a certain purpose to meet certain requirements, to an operational control (i.e., a 

MICS) that requires equipment used in a certain manner to meet certain requirements. In order to fit more 

appropriately in the technical standards, the "designed to be language" should be reinserted. 

Section 547.8 -- What are the minimum technical software standards applicable to 

Class II gaming systems? 

 The NIGC changed the requirements for bingo games to also cover "games similar to bingo." These 

Technical Standards were designed with bingo games in mind, and the MICS which complements these 

technical standards was specifically drafted only to cover bingo games. The new requirements make little 

sense as they were intended to cover bingo games. For example, Proposed 547.8(d)(4)(vi)(B) would require 

games similar to bingo to display "The identifier of the bingo game played." It is difficult to see how this 

would be accomplished in the case of a game similar to bingo. This section should be revised to clarify that it 

only applies to games of bingo. 

 The last game recall provisions were altered by the NIGC to require not only that a gaming system be 

able to recall last game information, but also that it must be able to recall any alternative video display the 

system provides. This requirement will cause many more problems than it is designed to solve. The 

alternative display is not legally relevant to the outcome of a game of bingo, and in fact cannot have any 

relevance to the outcome of a game and still be Class II. Although the NIGC appears to believe that requiring 

the display of such information will actually help resolve patron disputes, the opposite is true. Often, a 

malfunction will occur in the alternative display itself, and even if such a malfunctioning display can be 

recalled, a faulty display will only further confuse the patron and/or unnecessarily motivate them to continue 

to pursue a challenge. Requiring those legally immaterial results to be displayed in a federal regulations will 

only grant them the appearance of relevance they lack, and make it all the more difficult for tribes to explain 

that it is the result of the bingo game that counts, and not the alternative display. Granting the imprimatur of 

relevance to the alternative display will only blur the line between Class II and Class III gaming and erode the 

integrity of the bingo game. Ho-Chunk argued for the deletion of this requirement. 

 The Nation also opposed the new requirements for pull-tabs, which effectively imposed classification 

requirements on pull-tabs. The new provisions would have required that pull-tabs use tangible pull-tabs. 

There is no requirement that pull-tabs be tangible. Although certain courts have held that to be the case for 

pull-tabs, the rationale in those decisions has been overturned by more recent decisions allowing the use of 

electronic cards for bingo. 

Section 547.17 -- How does a gaming operation apply for a variance from 

these standards? 

 The NIGC deleted a critical provision from the variance provisions in the Tribal Advisory 

Committees’ draft standards. In order to avoid undue delay and ensure that the denial of a variance could be 

challenged in court, the Tribal Advisory Committees’ draft provided that the Commission would have thirty 

days to consider the appeal of a denial or the IGRA's decision would be upheld. The NIGC deleted this 

provision, and effectively granted itself an indefinite time period in which to consider an appeal. The 

Commission should not be able to review an appeal indefinitely and avoid finality of its action. 

J. 25 CFR Parts 571.1 to 571.7 – Inspection and Access 

 Although the Nation may generally have a degree of reluctance in supporting measures which may be 

viewed as expanding NIGC regulatory authority, especially when such measures may involve an “extraterritorial” aspect, it is also recognized that the Commission’s role in the prevention and detection of wanton 

behavior and undesirable activity should not be unduly limited or be subject to outright obstruction by the 

transfer of relevant documents to an off-site and “off-limits” location. 
 In terms of priority, this is low on the list for the Ho-Chunk Nation. 

K. 25 CFR Part 573 – Enforcement 

 

 The Nation supports the concept of a permitted withdrawal of a NOV in the current regulatory 

environment. However, should the process by which the NOVs are issued, at least for instances which do not 

involve gross negligence or egregious activity, be suitably modified to include a “ticket” or notification 

system, then the need to promulgate an additional regulation concerning the withdrawal of a NOV might be 

eliminated. . 

 As the Nation believes that potential changes in regulations concerning NOVs should primarily focus 

on the prevention of the issuance of such NOVs which might later be subject to a prospective withdrawal, in 

terms of priority, this is low on the list for the Ho-Chunk Nation. 

Potential New Regulations 

 A. Tribal Advisory Committees 

 The Nation supports the use of Tribal Advisory Committees (“TAC”) to assist and provide a method 

by which tribal officials and tribal management can influence NIGC policy. However, the previous methods 

by which the NIGC utilized TACs were cumbersome and inflexible – to the detriment of tribes, the NIGC and 

the tribal gaming industry. The NIGC should consider adopting new regulations to further refine how TACs 

can operate to the benefit of tribes and NIGC. 

B. Sole Proprietary Interest Regulation 

 The Nation suggests that the NIGC consider a regulation that provides clarification and definition in 

this area. However, the Nation is concerned that the NIGC not go too far in taking on a role of overseeing the 

economic and financial decisions of tribes, to the detriment of their sovereignty. If the NIGC expands the 

definition of “management contract” and expands its role in making sole proprietary interest determination, 

the Nation suspects the NIGC may not be equipped to take on such a role (to say nothing of the problem with 

increased regulation of tribal financial decisions). 

C. Communication Policy with Tribes 

 We appreciate the NIGC’s interest in expanding communication with tribes and tribal officials. The 

Nation does not believe that a regulation is needed in order to formalize the manner in which communication 

will take place. This would truly be difficult to define and encompass the wide variety of tribal points of 

contact. For instance, with the Ho-Chunk Nation, we are organized as a Legislative Branch, Executive 

Branch, Judicial Branch and General Council Branch. The Legislature is the governing body of the tribe. 

The President oversees the Executive Branch. The Nation’s Gaming Commission lies within the Legislative 

Branch and assumes the role of tribal gaming regulatory authority. From our vantage point, the NIGC should 

communicate with the Nation’s Gaming Commission, President and Legislature. But not every tribe is 

organized the same. Thus, it seems unworkable to regulate such a varied situation. 

 The Nation suggests that the NIGC focus on improving the mechanisms for communication to tribes 

and make information available for tribes as widely as possible. To the extent technology can be used to 

expand tribal participation, without requiring tribal officials to travel great distances, we encourage such 

action. The use of teleconferencing and webcasting might assist. 
CONCLUSION 

 Thank you for the opportunity to comment and provide suggestions to the NIGC. We are encouraged 

by the NIGC’s new leadership and approach to direct consultation with tribes. We also appreciate the manner 

in which the NIGC Commissioners and staff conducted the recent meetings with tribes and leaders. 

Respectfully, 

/s/ 

Daniel R. Blumer 

Commissioner, Ho-Chunk Nation Gaming Commission 

File: FEB012