National Indian Gaming Commission 

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INTRODUCTION 

This Settlement Agreement (Agreement) is entered into by and between the 

Flandreau Santee Sioux Tribe (Tribe), a federally-rewpizwl.Indian tribe, and the 

Chairwoman ofrhe National Mian Gaming Com~nission (NIGC Chairwonlm), a a 

consequence of Notice of Violation, NOV-11-01. 

RECITALS 

1. Whereas, the Indian Gaming Regulatory Act (IGRA) authorizes tho NIGGC Chair 

to issue c:vil fines for violalions of IGRA, National Indian Gaming C~inmission 

(NTGC) regulations, and tribal regulations, ordinances, or resolutions approved 

by the NIGC Chair under IGRA, 25 U.S.C. $4 2710 and 2712.25 U.S.C. 5 

2713(a)(l). 

2. Whereas, under NIGC regulation, 25 C.P.R. 5 575.3(a), theNIGC Chair may 

issue a notice of violation [nov) to <my person for vioIatio11s of any provision of 

the IGU, NIGC regulati.ons, or any provision of a tribal ganiing ordinance or 

resolution approved by the Chair. 

3. Whereas, under NIGC regulation, 25 C.F.R 4 573.6(a)f7), it is a substantial 

violation of IGRA for a management contractor to n~inige an Indian gaming 

operation without a contract approved by the Chair or under an anapproved 

modification to a management: contract. 

4. Whems, failure to comply with NlGC regulation, 25 C.F.R. $571.13(a), is 

grounds for issuance of anotice of violation. This regutation requires the 

submissian of manage~nent letters prepared by a gaming operation's 

independent auditor within 120 days of the end of the opemtion's fiscal year. 

5. Whereas, failure to comply with IGRA, 25 U.S.C. k: 2710(b)(2)@); NiW 

~cgulation, 25 C..F.R 8 $22.6; 'wd the FIandreau Santee Gaming Ordina~~ce is 

,gounds for issuance of the notice violation, because making paymclrts to a 

management contractor fm~net gaming revenue that exceeds t-hc m3ount set 

fort11 in theapproved management contract violates IGRA's use of net gaming 

revenue mandates, Nl.GC regulations, and the Flandreau Santee Sioux Gaming 

ordinance requirements. 
6. Whereas. on May 19,201 1, the MGC Chairwoman issued NOV-11-01 to the 

Tribe for: allowing Bcttor Racing, Inc. and Mr. J. Randy Gallo to manage its 

gaming operation without an approved management co~~tract from Septenxber 

24,2004 through March 16,2005; operating under two unapproved 

modifications to the management contract from February 15,2007 through 

April 5,201 0; failing to submit management lettcrs with their annuat audits for 

fiscal years 2005 and 2006; and paying net gaming revenues to Bettor Racing, 

Inc. and Mr. J. Randy Gallo over andabove what was allowed under the 

approved manasenlent eontract. 

7. Whereas. the NIGC Chairwoman and the Tribe desire to achieve &i amicable 

resolution of Notice of Violation, NOV-I 1-01. 

8; Tl~crefore, the Chairwoman and the Tribe agree to execute this Agreement and 

to perfonn in accordance with the following covenants and conditions: 

9. 'this Agcement is entered into pursuant to MGC re~ululafion, 25 C.F.R. 

575.G(b), and shall be effective upon the date that it is signed by the last party to 

sign tltis Agrecn~ent (Effective Date). 

10. The Tribe acla~owledges that IGRP, and NIGC regtrlations authorize a tllii-d 

party to manage a gaming operation or a part thereof only under a management 

contract that has been approved by the NIGC Chair. 

11. Tlie Tribe admits that it allowed Betlor Racing Inc. and Mr. J. Randy Callo to 

manage and operate its gaming operatio11 witliout an approved managexncrtt 

contract r"n,m September 24,2004 lhmugh March 16,2005 in violation of 

ICRA and NIGC regulations. 

12. The Tribe acknowledges that IGRA and NIGC regulations required that the iwo 

modifications to its managemerit contract he approved by the NIGC ~hsr pior 

td the parties acting under them. 

13. The %be admits that ii, alang with Bettor Racing and Mr. J. R~n&y Gallo, 

operated undtr two unapproved modifications to their approved management 

contract front February 15,2007 through Aprilj, 2010 in violation of IGRh 

and NIGC reg%lations. 

14. Thc 'Tribe acknowledges that NIGC regulatitnls mandak that a11 managemezit 

letters be submitted with annual audits of the financial statenlents of its gwlu~g 

operdtions tvitliu~. 120 days ofthe gaming operations' fiswl ycars. 
15. The Tribe admits that it did not submit the inanagemen1 letters with its annual 

audits as required by NICC regulations for fiscal years 2005 and 2006 in 

violation oFNIGC ~gulations. 

16. The Tribe acknowledges that IGRA, NIGC regulations, and the Randreau 

Santee Sioux Gaming Ordinance set forth specific categories of permissible 

uses of net gaming revenue. 

17. The Tribe admits that paying Bettor Racing, Inc. and Mr. J. Randy Gallo net 

gaming rehues beyond the amount perm~tted in their approved managc~ncnt 

conwaet violated IGRA, ~~~regt~lations, and the Ftandreau Santee Sioux 

Gntning Ordinance. 

18. For a period of three years beginning on Septenlber 30,101 1, the Tribe agrees 

that the (::hairman of the Flandm Santee Sioux Tribe will p~rrvide a 

certification to the NlGC that Ule amual audit submission is complete. includes 

all managcinent. letters andother documented at~ditor comn~unicatio~~s andlor 

reports issued as a result of the annual audits, and coinpli& with NiGC 

reguIation, 25 C.F.R 9: 571.13. 

19. The Tribe agees that all tribal council. members; the general manager of Royal 

River Casino; the con~pWll.er of Royal River Casino; tlxe tribal gaming 

conmission and its staff; Royal River Casino finance staft and anyone 

authorized to sign checks for the Casulo will attend Wm'thining addressing 

the violations set forth in the N'OV-11-01. T11i.s training will be conducted by 

N'lGC at a facility. on the Tribe's lands. The NIGC and the Tribc will schedule 

mutually :tggxable dates for this training; however, the T~be agrees thaf it will 

provide at least four (4) potential weeksbetwe~~ theeffective date of this 

Agreement and July 1.20 12 when this training may occur. Expenses incurrtxl 

associated vtith thc training, such as travel, meals, and accommodations, will be 

covered. by the'rribe or d~e person attending the training and irxcuning the 

expense. 

20. Ihe Tribe agrees that all lTibal council members; the general manager of :Royal 

River Casino; the comptroller of Royal Kver Casino; the gaming cornmissin~i 

and its staff;. Royal River Casino tinance staff; anyone authorized to sip checks 

for the C:asino; aid any person deemed necessary by the Tribe to ensure ihe 

financial integrity of its gaming operation; will attend NIGC training addressing 

Minimtun Internal Control standards. This training will be conducted by kJC;[C;C 

at a facility on the Tribe's lands. 'he NIGC and the Tribe will schedule 

mutually agreeable dates for tllis training; however, the Tribe a&y-ees that it will 

provide at least Tour (4) potential weeks behveen the effective date of this 

Agree~nenl. and July i, 2012 when this training may occur. Expnses incurrcd 

associated with the training, sucll as travel, meals. and accommodations, will be 
covcred by the Tribe or rhe person attending the training and inculring the 

expcnsc. . . 

2 1. The Tribe age= that it will provide a certi fication to the NtGC that all funds 

received fiom Bettor Racing. Inc. or Mr. J. Randy Gallo as aresult of thc notice 

of violation. wy subsequent enforcement action, or settlcmcmt agrecnialts, were 

providcd to U?e Tribal Government for use in compliance with feclerai and tribal 

Paw. Each certification will detail the date that the hlds were provided to the 

Tribal Government. 

22. For a period of three years beginning on September 30,201 1, the Tribe agrees 

that it will provide the NIGC an annual training. find assessment letter detaililg 

the amount of training fitnds dedicated to training the tribal gaming 

con~mission, internal audit staff, and employees of its gaming operation, 

including the accounting department, identifyingthe amount of funds dedicated 

to each, znd a11 explanation of wkether such funds ate sufficient. Funds 

expended relating to training provided by the SIGC in accordance with this 

agreement sMl not be included in the assessment. If the Tribe does not believe 

that some or all the. funds dedicated to training are sufficient, it will advise the 

NIGC of the additional amounts of fund+it aps to dedicate to training; the 

specific staff to receive such traiiung; and the time period, not to exceed one 

year from the date of the assessment letter, in which it will perforinsuch 

training. 'The Tribe agrees tkat it will provide this training fu~d assessment to 

the NIGC within 3 months of the effective date of this Agreement and thereafier 

annually for the two additional years. irthe NIGC has any concen~s regarding 

the Tribe's training hnd assessment or its.schedu1e of training, it will proside 

tlte Tribe its camems in writing, and the Tribe agrees to uwk it1 good faith with 

the NIGC Lo renlcdy ifs concerns. 

23. The Tribe agrees to submit doc~unmtation to the NIGC den~omtrating the 

expcnditun: of the additional training - funds described in paragraph 22 within 30 

dais of each training24. The Tribe agrees to set aside 5100,000 of all funds received as a result of NOV 

11-01, any. subsequent enforcement action, or any settlement agreement, fio~n 

Bettor Racing, lnc. or Mr. J. Randy Gal10 for training of its tribal gaming 

commission, internal audit staff, and enlployecs of its gaming operation, 

including the acco~nnting department as well as enhancements to the Casino's 

gan~ing com~ission, internal audit dtprttnwt, accountin$ department. anti 

fi~iance departments. Tlie Tribe agees to submit documentatiot~ to the NIGC 

demonstm~ing the proper expenditure of these funds within 24 months of Ll~e 

receipt of the funds. Evidence of these expenditures shall be providcd to the 

NICiC no later than 30 daks afret each. Wining or enhmcement. 
25. The Tribe agrees to submit every contract related to Royal River Casino and any 

new gantiqg operation that.it enters into wit11 a thirdpnrty for which 

compensation is $100,000 or more to theNIGC Offrce of Geilcral Counsel for 

review and a Iegd opinion regarding whether the colttract is a managctnnlt 

contract and wl~ether it violates the sole proprietary interest mandate of IGRA. 

26. If the Tribe breaches any provision of this Agreement, it agrees and conser~ts 

that a civil fine of% 750,000 will become hilly due or payable oil thc date of the 

breach. In such ci.rcuinistaitcc, the NIGC shall issue a writtell notice (also 

known as a demand letter) to the Tribc pursirant to NIGC debt collection 

regulations, 25 C.F.R. part 513. The Tribe agrees that tlie NIGC and/or U.S. 

Deparhnont of Treasury may proceed with debt collection ofthe % 750,000 civil 

fine against the Tribe, and may assess interest, penalties, and administrative 

costs ikoi~i the date of breach ofthis ~~reement, as provided in NIGC 

regulation, 25 C.F.R Ej 513.5. In such circumstance, the Tribe agrces that it 

waives any rights to an oraI hearing nnder 25 C.F.R. F) 513.6, but ,?he NIGC 

shall provide the Tribe with a reasonable oppotmnity to submit written niate'nal 

supporting a request to reconsider the determination that the Tribe is in breach 

of the Agreeme* 

27. The Tribe ayrecs that by executing this Agreement, it waives its right to further 

review of matters addressed in this AgreemmL including all rights to appeal to 

the full Commission as set forth in 25 C.F.R. Part 5?7 and judicial review 

pursuant to 25 U.S.C. 5 2714. 

28. This Agement constitutes the entire agreement betweex) the hTGC 

Chainvoman and the Tribe relating to the enfarcement matter sot'€o~Zh at the 

beginning of this Ayrffin~ent and it supersedes all prior verbal or written 

agreements and understaudings betureen kc partics related to the subject matter 

hereof. Any amendments to this Agreement must be in writing and signed 1)y 

boU~ parties. 

29. The Tribe agrees that this Agreenient shall be deemed to bo ihe.subject of a ftl~ai 

order ofthe NIGC Commission muier 25 C.F.R. $575.4(c)(1) and a final 

agency action pursuant to 25 C.F.R §.577.9(d). 

30. 'ITie NIGC Clrainvoman and the Tribe expressly agree and acknowledge that 

time is of the.essence in: this Agreement. The recitals herein sh'all be binding 

upon the parties, Lheir agents, heirs, pcrsonal representatives, successors, and 

assi&s. 

31. 'Ilhe parties agree that aRer the effective date, this i2green1ent shall be a pnl~lic 

document and may be published or disclosed by either party. 
32. This Agreenient may be executed on ,nne OF more countemarts and each shall 

constitute an original. A signature produced by facsimile'shall be deemed to he 

an original sigtature and shall bc effective and binding for purpose of the 

Agreement. 

Flandreau Santee Sioux Tribe 

Date: 7-7-11 

National tndian Gaming Commission 

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Tracie Stevens Chairwoman