NOTICE OF PROPOSED CIVIL FINE ASSESSMENT 

Ref: CFA-00-10 

To: Principal Chief 

Seminole Nation of Oklahoma 

P.O. Box 1498 (% mile E of junction 59 & 270) 

Wewoka, OK 74884 

1. Notice. Under the authority of 25 U.S.C. $ 2713 (a), of the Indian Gaming Regulatory 

Act (IGRA), and the regulations of the National Indian Gaming Commission 

(Commission) at 25 C.F.R. 5 575, the Chairman of the Commission hereby provides 

notice of his intent to assess a civil fine against the Seminole Nation of Oklahoma, 

located in Wewoka, Oklahoma (Respondent), for violations of IGRA and regulations of 

the Commission, as set forth in detail in Notice of Violation No. NOV-00- 10 and Closure 

Order No. CO-00-10, issued on September 12,2000, and appealed on October 10,2000. 

W NOV-00-10 and CO-00-10 require that Respondent cease and desist fiom all gaming 

activity in all four of its gaming facilities. The Commission, after considering 

Respondent's appeal, affirmed NOV-00- 10 and ordered CO-00-10 be made permanent in 

its Decision and Order of May 7,2002. 

2. Authority. Pursuant to 25 U.S.C. $2713 (a) and 25 C.F.R. $ 575.4, the Chairman of the 

Commission may assess a civil fine, not to exceed $25,000 per violation, against a tribe, 

management contractor, or individual operating Indian gaming for each violation cited in 

a notice of violation issued under 25 C.F.R. $ 573.3. If noncompliance continues for 

more than one day, the Chairman may treat each daily illegal act or omission as a 

separate violation. 25 C.F.R. $ 575.4 (a)(2). 

3. Submission. The Commission regulations at 25 C.F.R. § 575.5 provide that, within 

fifteen (1 5) days after service of a notice of violation, or such longer period as the 

Chairman may grant for good cause, the respondent may submit written information 

about the violation. The Chairman shall consider any information so submitted in 

determining the facts surrounding the violation and the amount of the civil fine. 

Respondent did not submit any information under 25 C.F.R. $ 575.5 about the violation 

set forth in NOV-00- 10 and CO-00- 10 in the prescribed time period. However, 

Respondent's counsel did submit a letter dated May 3 1,2002, indicating that Respondent 

was no longer offering for play any of the games "specifically named" in NOV-00-10. 

His statement was reiterated in a letter dated June 1 1,2002. These letters have been 

W considered in assessing a civil fine. 
- 4. Circumstances of the Violation. 

A. Respondent is a federally recognized Indian Tribe with tribal headquarters in 

Wewoka, Oklahoma. Respondent engages in gaming operations on tribal lands at several 

locations in Oklahoma, and does not have a compact with the State of Oklahoma that 

would allow Respondent to operate Class ID gambling devices. 

B. During visits to Respondent's gaming operations on March 1,2000, representatives of 

the Commission observed the operation of several "Red Hot Respin" video gambling 

devices at three facilities, including the Wewoka Trading Post, the Rivermist Gaming 

Center, and the Seminole Nation Travel Plaza. The "Red Hot Respin" device is a Class 

III gambling device. 

C. On March 14,2000, representatives of the Commission issued three Potential Notices 

of Violation (PNOV) concerning the operation of these gambling devices and requested 

that play of these gambling devices cease at all facilities. The purpose of a PNOV is to 

make Respondent aware of the violation and to provide an opportunity for voluntary 

compliance. On April 19,2000, Respondent and its attorney met with Commission 

officials to discuss the criteria for Class III gambling devices. The Commission staff 

members provided documentation and a detailed explanation as to why the Commission 

considers "Red Hot Respin" to be a Class III gambling device. 

D. During a visit to Respondent's gaming operations at the Rivermist Gaming Center on 

w May 1 1,2000, representatives of the Commission observed "Red Hot Respin" being 

offered for play. The Chairman issued NOV-00-06 and CO-00-06 on May 30,2000, 

requiring Respondent to cease operating this game and other such gambling devices. In 

June and July 2000, during a series of unannounced site visits to Respondent's gaming 

facilities, a representative of the Commission observed games identical to "Red Hot 

Respin" being offered for play, including Buffalo Nickels, Sovereign Sevens, Lucky 

Break, and Red Hot and Blue. 

E. On August 17,2000, the Chairman issued CFA-00-06 asserting a civil fine against 

Respondent for operation of the aforementioned Class III gaming devices in the absence 

of a compact with the State of Oklahoma. The amount of $400,000 for the civil fine 

assessment was based on the continuing nature of the violation and treated each day in 

the period March 14 through August 17,2000, inclusive, as a separate violation. Further 

treating each subsequent day as a separate violation, the Chairman specified an additional 

fine at the rate of $2,000 for each day that operation of the gaming devices continued 

after August 17,2000. 

F. On August 3 1,2000, a representative of the Commission observed the continuing 

operation of the same thirty-two (32) "Red Hot Respin"-type machines and the same 

twelve (12) "Buffalo Nickels" gambling devices referenced above. In addition, the 

representative of the Commission observed twenty-two (22) of the following types of 

newly-installed Class 111 gambling devices being offered for play in three of 

W Respondent's gaming facilities: "Rainbow Reels," a five-line game; Fantasy Fives," a 
five-line game; "Pot 0 Gold" which offers four games, "Triple Sevens," "Gold Row 

w Bonus," "Spinball Bonus," "Respin Sevens;" and "Lucky Cherries" which offers four 

games, "Pirate's Gold," "Klondike," "Funny Fruit," "Reel Fortune." On September 5, 

2000, a representative of the Commission observed that an additional fourteen (14) 

newly-installed Class 111 gambling devices were being offered for play in one of 

Respondent's gaming facilities. 

G. On September 12,2000, the Chairman issued Notice of Violation No. NOV-00-10 

and Closure Order No. CO-00- 10, appealed by Respondent on October 10,2000. 

NOV-00-10 provides a listing of several gaming devices, including those previously 

listed in NOV-00-06, play of which constituted unlawful Class 111 gaming because 

Respondent did not have a compact with the State of Oklahoma that included operation 

of these gaming devices. CO-00-10 required that Respondent cease and desist fkom all 

gaming activity in all four of its gaming facilities. Respondent did not comply with the 

closure order. 

H. At the request of the Chairman, the United States Attorney for the Eastern District of 

Oklahoma moved for an Injunction to enforce Closure Order 00-06 and Closure Order 

00-10 on January 19,2001. However, in an Order dated February 27,2001, the United 

States District Court (Judge Burrage) denied the motion and dismissed the case, 

concluding in part that the Chairman had exceeded his authority in ordering the closure of 

the entire gaming facility and that the due process rights of the Tribe had not been 

considered in issuing what, in the Court's view, was an overly broad temporary closure 

Ylivr order. (The District Court's decision is now on appeal to the United States Court of 

Appeals for the Tenth Circuit. This appeal is based in part on the Court's 

misunderstanding of the need for a hearing before the Order of Temporary Closure issued 

by the Chairman may be effective.) 

I. Following an administrative appeal process during which Respondent presented 

witness testimony and documentary evidence and raised numerous legal arguments, the 

Commission as a whole, in its Decision and Order of May 7,2002, found play of the 

gaming devices at issue to be class 111 gaming operated in violation of the requirement 

that such gaming be conducted under a tribal-state compact. The Commission thereby 

afirmed NOV-00- 10 and made permanent CO-00- 10 requiring Respondent to cease and 

desist fiom all gaming activity in all of its facilities. 

J. Respondent advised through its counsel in a letter dated May 3 1,2002, that it no 

longer offered for play the gaming devices specifically named in NOV-00-10. However, 

Respondent persists in engaging in gaming activity at all four of its facilities, in violation 

of CO-00-10 and in disregard of the Commission's Decision and Order. 

5. Under 25 C.F.R. $ 575.3, the Chairman shall review each notice of violation and order of 

temporary closure to determine whether a civil fine will be assessed, the amount of the 

fine, and, in the case of continuing violations, whether each daily illegal act or omission 

will be deemed a separate violation for purposes of the total civil fine assessed. The 

Chairman now asserts a civil fine issued against Respondent as a result of the play of 

w additional Class 111 gaming devices that were the subject of NOV-00-10, as a result of the 
additional economic benefit derived fiom the play of the devices listed in NOV-00-10 

through the date Respondent indicates the games listed in NOV-00-10 were no longer 

offered for play, and as a result of conducting gaming activities in violation of CO-00-10. 

In arriving at a proposed civil fine, the Chairman has considered the five factors set forth 

in 25 C.F.R. § 575.4, as follows: 

A. Economic benefit of noncompliance. Respondent has obtained an economic 

benefit fiom the continued operation of the Class 111 gambling devices listed in 

NOV-00-10 in the absence of a compact with the State of Oklahoma. The 

magnitude of the economic benefit is indicated by financial information provided 

to the Commission by Respondent on July 26,2000. This financial information 

described revenues generated by tw-two (32) Class 111 gambling devices for an 

unspecified period. Two months later, the number of Class III gambling devices 

offered by Respondent had increased nearly four-fold to approximately 130 

gambling devices. Commission field investigators subsequently determined that 

one facility alone offered 235 devices. Respondent provided Commission 

investigators with more recent financial information in July 2002 indicating 

greater financial benefits fiom play of the devices than had been previously 

disclosed. This economic benefit to Respondent exceeds the economic benefit 

that was understood as accruing to Respondent at the time CFA-00-06 was issued 

based only on the play of gaming devices listed therein. Because of the 

continuing nature of the violations, each day these devices were played illegally 

will be treated as a separate violation. 

B. Seriousness of the violations. The operation of Class 111 gambling devices 

without a tribal-state compact is a violation of both the civil and criminal 

provisions of the IGRA (25 U.S.C. § 2710 and 18 U.S.C. 5 1166), as well as the 

regulations of the Commission. By virtue of its inclusion as a criminal matter, 

Congress deemed this to be a serious violation. Respondent offers for play in its 

gaming facilities several Class 111 gambling devices that may be operated only 

under a tribal-state compact. Respondent and the State of Oklahoma, however, 

have not entered a compact allowing the operation of these Class 111 gambling 

devices. Moreover, Respondent's actions give Respondent an unfair competitive 

advantage over other tribes that have elected not to operate illegal gambling 

devices in their facilities. Accordingly, the violations are serious. 

C. History of violations. The Chairman has issued prior notices of violation to 

Respondent for operating Class 111 gambling devices in the absence of a tribalstate compact and for failure to conduct background investigations and submit 

required documents to the Commission. The Chairman has issued the following 

Notices of Violation, Closure Orders, and Civil Fines to Respondent: 

1. Notice of Violation No. NOV-98-01 and Order of Temporary Closure No. 

CO-98-01, January 13, 1998, for operating "Reels of Skill," a Class Ill 

gambling device, in the absence of a tribal-state compact. The Chairman 

agreed to defer the closure order to allow Respondent to continue to 

operate the game until the issuance of a final Commission decision. 
Respondent appealed. Following an administrative hearing, the Presiding 

Oficial issued a decision on June 29, 1998, finding that the Chairman 

appropriately issued NOV-98-01 and CO-98-01 and recommending that 

the Commission uphold them. The Commission subsequently issued a 

Notice of Decision and Order on July 24, 1998, finding that "Reels of 

Skill" was a Class III gambling device and that its operation by 

Respondent was a violation of IGRA. 

. . 

11. Notice of Violation No. NOV-99-03, March 2, 1999, for failure to conduct 

background investigations on primary management officials and key 

employees and to submit employee applications, investigative reports, and 

suitability determinations to the Commission. Proposed Civil Fine 

Assessment No. NOV-99-03, in the amount of $4500, was issued on April 

1,1999, for the violations identified in NOV-99-03. On June 3, 1999, the 

Commission issued a final decision upholding the Chairman's civil fine 

but reducing it in light of the good faith efforts of the Nation for actions 

taken to achieve compliance. 

iii. Notice of Violation No. NOV-00-06 and Closure Order No. CO-00-06, 

May 30,2000, for operating "Red Hot Respin," a Class III gambling 

device, in the absence of a tribal-state compact. Following the conclusion 

of an administrative appeal process during\hich ~es~ondent presented 

witness testimony and documentary evidence and raised numerous legal 

arguments, the Commission as a whole, in its Decision and Order of 

May 7,2002, affirmed NOV-00-06 and ordered that CO-00-06 be made 

permanent. (Note: NOV-00-06 was resolved by the same Commission 

decision that addressed the games underlying NOV-00-10.) 

D. Negligence or willfulness. Respondent's violation in this case was willful and 

intentional and not the result of negligence. As noted above, Respondent has 

offered "Red Hot Respin" or "other such gambling devices" in its gaming 

facilities since at least March 1,2000, when a Commission official observed "Red 

Hot Respin" gambling devices in operation at the Wewoka Trading Post, the 

Seminole Nation Rivermist, and the Seminole Nation Travel Plaza. Three 

PNOVs were issued on March 14,2000, concerning the operation of these 

gambling devices and requesting that play of these machines cease at all facilities. 

Representatives of the Commission met with Respondent's attorney and other 

tribal officials on April 19,2000, and reiterated that these machines are Class III 

gambling devices. Nevertheless, Commission representatives observed Class III 

gambling devices being offered for play at the Rivermist facility on May 1 1, 

2000, and Respondent subsequently has continued to offer similar Class III 

gambling devices at all of its facilities and has installed additional Class ZII 

gambling devices, observed as recently as June 2002. That Respondent 

knowingly disregarded these notices and continued to offer these gambling 

devices for play demonstrates that this is a willful violation. The underlying 

notice of violation to this proposed civil fine assessment addresses play of certain 

gaming devices listed therein, and requires compliance by demanding Respondent 
cease "all gaming activity in all four of its facilities." While Respondent may 

claim based on the Order of the U.S. District Court for the Eastern District of 

Oklahoma, issued on February 27,2001, that the Chairman's Temporary Closure 

Order is overbroad as to all of its gaming activities, such claim would not extend 

to the specific gaming devices that were the subject of the notice of violation. 

This proposed civil fine assessment is a financial penalty for the play of the class 

111 gaming devices indicated andlor continued operation of gaming activities after 

the Commission made the Closure Ordet permanent. The District Court Order 

found no difficulty with the issuance of a closure order for the particular games at 

issue. At a minimum, Respondent was required to cease and desist in the play of 

these devices, a point conceded by Respondent in its appellate brief filed in the 

United States' appeal of the Order issued by United States District Court for the 

Eastern District of Oklahoma described above. Reliance on a perceived 

requirement for a hearing before the Chairman's Order of Temporary Closure 

Order could be considered effective would also be incorrect. As the decision on 

appeal of the District Court Order is expected to indicate, the due process 

requirement for a hearing is met when the hearing is held as a part of the 

administrative appeal process to determine whether such a closure order should 

be made permanent, and this hearing need not be held before the order of 

temporary closure can be considered effective. In any event, neither the analysis 

by the District Court nor the decision would support Respondent's disregard of 

the Commission Decision and Order of May 7,2002. 

E. Good faith. Respondent's violation of law has been open and flagrant. Under 

Commission regulations, the Chairman may reduce the amount of civil fine based 

upon the degree of good faith exhibited by Respondent in achieving rapid 

compliance after notice of a violation. However, Respondent has continued to 

offer Class III gambling devices for play despite the issuance of multiple Notices 

of Violation, Closure Orders, and Proposed Civil Fine Assessments. For 

example, Respondent advised the Commission through counsel on May 3 1,2002, 

that it no longer offered for play the games specifically named in NOVICO-00-10, 

but it would comply with the Chairman's order, upheld by the Commission 

and served on counsel for Respondent on May 7,2002, to cease and desist from 

all gaming activity in all of its facilities. While Respondent may no longer offer 

for play the games under the names specifically named in paragraph 4-F above, 

Respondent continues to offer for play either the same games under a different 

name or games that are functionally identical to those games, including the "Skill 

Cherry" games (Magical Jack, Triple Jack, Rose N Jack), the "Infmity" games 

(Sparkling 7's, Treasures, 7's A Winner, Fantasy Fortune), and the "Wildfre" 

games (Wildfire, Wild Nuggets, White Diamonds, American Dream, Buck Wild, 

Native American Gold, Buffalo Bills, Diamond Treasures, Green Backs, Jackpot 

Junction, Liberty Dollars, Hot Tamales, Double Sevens, Volcanic Rocks, Aquatic 

Riches, Tribal Treasure, and Triple Crown). These Class III games differ only 

superficially from the games specifically named in NOVICO-00-10, the 

differences being in the name of the game or in the design of the faceplate and 

cosmetic characteristics. Respondent continues to defy the Commission with its 

actions and cannot be said to have exerted even a modicum of good faith effort to 
achieve compliance with IGRA and the regulations of the Commission 

subsequent to the Commission decision of May 7,2002. 

6. Assessment. WHEREFORE, the Chairman, after reviewing associated financial 

documents and balancing the above factors, has determined that a fine in the amount of 

$6,030,000 is assessed on Respondent for operation of illegal gambling devices for the 

period beginning on September 12,2000, the date NOV-00-10 was issued, and 

continuing through May 7,2002, the date of the Commission Decision affuming the 

Notice of Violation and Closure Order, a total of 603 days. This sum represents an initial 

fine of $10,000 and treats each subsequent day of illegal activity as a separate violation 

for which an additional fine at the rate of $10,000 per day is assessed. Respondent will 

be further assessed a fine in the amount of $20,000, beginning May 8,2002, for each day 

that Respondent continues operation of gaming activities in violation of the 

Commission's Decision of May 7,2002, including gaming activity with devices that are 

fknctionally the same as those identified in NOV-00-10. The fine assessed against 

Respondent for the period beginning May 8,2002, through the current date is $1,960,000. 

The total civil fine assessment for the period beginning September 12,2000, through the 

current date is $7,990,000. Further treating each subsequent day as a separate violation, 

Respondent will be assessed a fine at the rate of $20,000 per day for each day that 

Respondent continues such gaming activities following the current date. 

Appeal Rights. Pursuant to 25 C.F.R. $577.3, within thirty (30) days after service of this 

Notice of Proposed Civil Fine Assessment, Respondent may appeal the proposed fine to 

the full Commission by submitting a notice of appeal to the National Indian Gaming 

Commission, 144 1 L Street, NW, Suite 9 100, Washington, DC 20005. Respondent has a 

right to assistance of counsel in such an appeal. A notice of appeal must identify this 

Notice of Proposed Civil Fine Assessment. Within ten (10) days after filing a notice of 

appeal, Respondent must file with the Commission a supplemental statement that sets 

forth with particularity the relief desired and the grounds 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, and 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. 

fi Dated this day of August 2002. hyJ!ii tzld 

Montie R. Deer 

Chairman 
CERTIFICATE OF SERVICE 

I certifL that this NOTICE OF PROPOSED CIVIL J?INE ASSESSMENT CFA-00-10 

has been sent by facsimile and Fed Ex this 1 3v day of ~u~ust 2002, to: 

Principal Chief 

Seminole Nation of Oklahoma 

P.O. Box 1498 (% mile E of junction 59 & 270) 

Wewoka, OK 74884 

Phone: 405-257-6289 

Telefax 405-257-6205 

A personal copy has been sent by facsimile and Fed Ex to: 

Jerry D. Haney 

Seminole Nation of Oklahoma 

P.O. Box 1498 (% mile E of junction 59 & 270) 

Wewoka, OK 74884 

Phone: 405-257-6289 

Telefax: 405-257-6205 

w Ken Chambers 

Seminole Nation of Oklahoma 

P.O. Box 1498 (% mile E of junction 59 & 270) 

Wewoka, OK 74884 

Phone: 405-257-6289 

Telefax: 405-257-6205 

Gary S. Pitchlynn, Esq. 

Pitchlynn, Morse, Ritter & Morse 

P.O. Box 427 

124 E. Main Street 

Norman, OK 73070 

Phone 405-360-9600 

Telefax: 405-447-42 19 

Paralegal