BIG SANDY RANCHERIA BAND OF WESTERN MONO INDIANS, TESTIMONY AND COMMENT IN REGARD

TO THE NOTICE OF INQUIRY ISSUED BY THE NATIONAL INDIAN GAMING COMMISSION, OFFERED BY

THE HONORABLE, CHAIRPERSON ELISABETH KIPP

Many of the issues that were specified in the Federal Register are of concern to our Tribe, but the

following comments are based upon our Tribe’s experiences and its familiarity with said issues.  

Hopefully our Tribe’s experiences will assist with the formulation of revised and/or amendment to the

NIGC’s Regulations and will encourage an enhanced review of the Regulations from a day to day

regulatory perspective:

REG 502.15 MANAGEMENT CONTRACT   THIS IS NOT A PRIORITY   

(1) Should the definition be expanded to include any contract that pays a fee based on a % of gaming

revenue?

a. NO. This would be an improper and unauthorized expansion of the NIGC’s approval powers.

Further, fees paid, as a % of gaming revenue does not by itself constitute a management

contract. The NIGC should not unilaterally expand its role in this area.

(2) Should the calculation include reimbursement of expenses and development and other nongaming

management fees – “acceptable compensation”?

a. NO. This proposal makes no sense because the reimbursement of expenses would not

qualify as compensation under GAAP and general business principles. The jurisdiction of the

NIGC to approve agreements does not extend to agreements that are not collateral to a

management contract. The NIGC should not arbitrarily change existing business practices.  

SHOULD THIS SECTION BE REVISED ,  RECOMMEND TO BE REVIEWED BY A TRIBAL ADVISORY GROUP

BECAUSE OF NEED FOR MANY TRIBES TO INCLUDE THEIR EXPERIENCES IN DEALING WITH

MANAGEMENT CONTRACTS.

REG. 502.16 NET REVENUES     THIS IS NOT A PRIORITY

(1) Should the definition of “Net Revenues” be revised to be consistent with GAAP?
a. While it might be good practice to the extent consistent with §2703 (9) to conform

calculations to GAAP, the statue defines Net Revenue and the NIGC does not have authority

to change the definition.

(2) Should there be a separate definition for “allowable uses”?

a. There is no statutory authority to expand the definitions under IGRA. The NIGC should not

arbitrarily create a new definition.

b. The existing Bulletin (05‐1) defining Net Revenue should be withdrawn because it is

overreaching and outside the authority of the NIGC.

REG. 514 FEES       THIS IS NOT A PRIORITY

(1) Fiscal vs. Calendar year for fee calculation?

a. Tribes should be allowed to elect either method. Fiscal year calculations should

accommodate Tribal business practices.

(2) Implementation timeframes?

a. An implementation plan should be adopted and documented to all Tribes via a Bulletin. This

ought to include all calculations, explanations of how to make the election, and examples.  

(3) Should the definition of “Gross Gaming Revenues” be revised to be consistent with GAAP?

a. The statue defines Gross Revenue and the NIGC does not have authority to change the

definition.

(4) Fingerprint fees?

a. This is a useful service provided to the Tribes.  It would be good practice to publish all

charges as far in advance as possible.  This would facilitate budgeting by Tribes and also give

adequate time for comments.

b. There is no need to do this by regulation; rather a Bulletin that sets out the process,

procedures, and fees is all that is needed. The Bulletin can be updated and revised as

needed.

(5) Late payment system vs. NOV?

a. A late payment system is preferable over the current practice of issuing an NOV. The NOV

should be retained as a final action if necessary. The late payment system should include a

grace period before assessing late penalties etc. A revised regulation must clearly state with

supporting guidance given via Bulletins.

REG. 518 SELF REGULATION OF CLASS II     THIS IS A PRIORITY

(1) How can this section be made to be less burdensome to comply with and should it be revised?
a. The NIGC should revise these regulations so as to make certain the steps to Self Regulation

as clear as possible and not punitive in nature. The current §518 is not consistent with the

Statute §2710(c)(4).

b. The  factors  should  be  those  contained in  §2710(c)(4) and  be weighted  to  take 

into  consideration  years  of  operating  with  integrity,  honesty,  and  the 

implementation of a comprehensive Tribal regulatory regime. The independent 

audit  conducted  by  the  Tribes  CPA  should  serve  as  the  basis  for  the 

accounting/process  review  and  determination  of  financial  soundness.  Self‐

regulation  is  a  hallmark  of  sovereignty  and  ought  to  be  supported  nd  a

encouraged by this §518 not suppressed.

c. it  is  suggested  that  the  NIGC  adopt  a  negotiated  rule  making  process  for 

amending  these  provisions  so  as  to  give  Tribes  a  full  voice  and  to  create  a 

transparent process and record.

REG.  519 SERVICE     See 539 below  

REG. 523 REVIEW AND APPROVAL OF EXISITNG ORDINANCES OR RESOLUTIONS  

THIS IS NOT A PRIORITY  

(1) Should this section be eliminated because it only applied to ordinances enacted prior to January

1993?

a. If there are no ordinances in force that were approved before 1993, then this should be

eliminated. Otherwise, the NIGC should use a Bulletin to encourage the updating and

resubmission for approval of pre‐1993 ordinances.

PLEASE PLACE IN BULLETIN FORMAT IF IT IS DECIDED A MODEL OF ORDINANCE IS TO BE ADVANCED

REG 524 APPEALS   See 539 BELOW

REG. 531 COLLATERAL AGREEMENTS     THIS IS NOT A PRIORITY

(1) Should the NIGC consider whether or not it has the power to approve collateral agreements to

determine if the cumulative effect of such agreements violates the sole proprietary provisions of

IGRA?

a. The NIGC currently has the authority to require submission and review of all documents that

are collateral agreements to a Management Contract. It is unlikely that a regulatory

definition will anticipate all of the possible circumstances and conditions under which future

management contracts might be negotiated. It may be a better practice to eliminate or
revise current bulletins dealing with topic taking into account the effect of the submissions

already acted upon by the NIGC and the practice and body of law that has developed as a

result.

(2) Sole Proprietary Interest has historically been a lightening rod for both Tribes and non‐tribal

interests when attempting to form business relationships. The Ad Hoc nature of the historical NIGC

approach has not brought clarity, thus leaving the field open and subject to uncertainty. The most

visible result to date is the decision and fallout form the Lac du Flambeau case.  

a. The NIGC has taken on a burden since this case of issuing declination letters specific to each

set of agreements presented. Unfortunately, these decisions are not available to the public,

so guidance is again lacking and the void continues.   

b. Having a definition would in some ways help the market place, but also runs the risk of

shutting the door on many business deals that, given specific risks and other business

factors, will likely not fit into the definition or exceptions. A regulation by its nature must be

definite, even with exceptions, and as such cannot take into account the limitless

permutations business risk and reward can come up with. Therefore, the desire for a

definition comes with a cost, one that Tribes and the market likely will not find acceptable.

c. Given the above the following suggestions may form the basis for a solution that will

address both long and short term needs:

i. Make all declination or rejection letters available to the public (with appropriate

redactions).

ii. Make all declination and rejection letters final Agency Action so that the parties

have recourse and so that a body of jurisprudence may develop.

iii. Begin a process of comprehensive review of the topic, conducted in conjunction

with Tribes. The review would take into account Tribal experience, experts in the

evaluation of risk/reward and economics, business experience, and the NIGC history

of advisory opinions, among other factors. The goal should be to develop guidelines

to be published in a Bulletin.  

d. One last observation  ‐  the development of strict criteria for sole proprietary interests

published, as a regulation would be a continuation of the paternalistic policies of the federal

government toward Tribes. Regardless, if the NIGC wants to pursue this it must be done in

conjunction with Tribes.

REG. 533 APPROVAL OF MANAGEMENT CONTRACTS     THIS IS NOT A PRIORITY

(1) Should this section add standards for the trustee standard as a basis for disapproving management

contracts?

a. The trustee standard within the federal government has proven to be at best a moving

standard cloaked in the sole discretion of the delegated administrator. At worst, the trustee

standard has been used as a shield for misuse, misappropriation, misanthropy, and out and

out thievery toward Tribes. As such, any attempts to codify this standard are fraught with

dangers and may be viewed through a less than welcome perspective.
b. If the desire to give notice to Tribes and the market that a trustee standard will henceforth

be an additional factor in the approval of a management contract, it would be preferable to

do so by issuing a Bulletin.

i. Set forth factors that make up the trustee standard for the NIGC Chair

ii. Give examples of how these factors may be applied

iii. This is necessary for Tribes and business to apply the standard to future

transactions.

c. This would be a continuation of the paternalistic policies of the federal government toward

Tribes

(2) Suggest that 2 grounds for disapproval be added – (a) not submitted in accordance with the

requirements of §533 and (b) submission does not contain requirements of §531.  

a. If the submission does not fully meet the requirements of §533 or §531 then it should be

held and no work be done for a specified period of time, with notice to the submitting

parties.  If the time period expires with no action by the submitters then disapproval can be

the result.  

b. This should be clarified via a Bulletin.

REG. 537   BACKGROUND INVESTIGATIONS FOR PERSONS OR ENTITIES WITH A FINANCIAL INTEREST

IN, OR HAVING MANAGEMENT RESPONSIBILITY FOR A MANAGEMENT CONTRACT.

THIS IS NOT A PRIORITY

(1) Should changes be made to clarify the submission requirements for Class II and Class III background

investigations?

a. Yes.  

Any changes to §537 it should be to make definitions and disclosures as consistent with other agency’s

rules as possible. For example, the SEC and other financial regulatory agencies have disclosure

thresholds and requirements; NIGC should to the extent possible and consistent with IGRA mirror those

other agency requirements.

REG. 539 APPEALS     THIS IS A PRIORITY  

(1) Should the NIGC consider more comprehensive and detailed procedural rules addressing (a) service

of process and computation of time  ‐ §519; (b) intervention by 3rd parties; (c) motion practice and

briefings; and (d) the nature of written submission in enforcement appeals.

a. Yes. It would be good practice to formally adopt procedural rules. The underlying principle

should be the guarantee of due process. The NIGC should adopt process and procedures

that require it to conduct regular periodic meetings where a record is made and final agency

action is taken.

b. The NIGC should also adopt rules and procedures that require a written record be

maintained of all meetings and available to the affected parties. This record would also be

available for formal proceeding and litigation.
c. Experience has shown that Tribes with similar violations in the past are treated differently.  

Need more standardization.

REG. 542 CLASS III MICS       THIS IS A PRIORITY  

(1) Should this section be struck and replaced with recommended guidelines?

a. There is a diversity of opinion on this issue. Some Tribal‐state compacts make reference to

§542 and as such are part of regulatory framework approved in the compact. This is where

the argument has most strongly been made that §542 must be updated.   

b. There is a view that §542 can be updated by  

i. Stating clearly that the provisions are advisory only but that specific Tribes may

choose to adopt the regulations along with NIGC oversight by written agreement.

This would require continual updating and revision of §542.

ii. Another view is that §542 state the above with the addition that the provisions will

be issued as guidelines in a Bulletin. The Bulletin will be regularly updated based on

input from Tribes and other affected parties.

(2) What are the implications?

This process envisioned in (1)(b)(ii) above would more closely resemble the way that Nevada works with

the industry to keep rules current and relevant.

THIS SHOULD BE ISSUED AS A BULLETIN.

REG. 543   CLASS II MICS     THIS IS A PRIORITY  

(1) How should these regulations be reviewed and revised?

a. Yes.

b. A first step in the process should be to withdraw the current §543 regulations and/or

suspend any enforcement of the regulations. The current §543 is in need of total

replacement.   

c. Tribes have formed a working group that is preparing a replacement draft to be adopted by

Tribes and to be recommended to the NIGC.

(2) What is the appropriate starting point for this review (which document/draft should be used)?

a. The Tribal Gaming Working Group has identified the last published NIGC draft used by the

last Tribal Advisory Committee as the starting point.
REG. 547 CLASS II MTS FOR GAMING EQUIPMENT   THIS IS A PRIORITY  

(1) Should these regulations be revised and if so, what process should be used?

a. Yes

b. The current §547 is in need of revisions and clarifications.  

Tribes have formed a working group that is preparing a revised §547 to be adopted by Tribes and to be

recommended to the NIGC.

REG. 556 BACKGROUND INVESTIGATIONS FOR LICENSING     THIS IS NOT A PRIORITY  

(1) Should the pilot program for submission and processing of fingerprints through the NIGC be

formalized with regulations?

a. Yes

b. The pilot program has been a success in Tribal and NIGC cooperation. It is also a necessary

and vital enforcement tool used by Tribal Gaming Regulators.  

The NIGC continued facilitation of fingerprinting resources of the FBI is vital and should be made a part

of the regulatory framework of the NIGC.

NEW   FINGERPRINTING FOR NON‐PRIMARY MANAGEMENT OFFICIALS OR KEY EMPLOYEES  

THIS IS NOT A PRIORITY  

(1) Should the fingerprinting process be expanded to include vendors, consultants, and other non‐

employees that have access to the gaming operations?

a. Yes, if requested by Tribes. This cannot be a mandate from the NIGC; Tribes must request

such fingerprint requests on a case‐by‐case basis and consistent with Tribal regulations.

b. This will require close cooperation between the NIGC and Tribes in order to be certain the

procedural requirements of the FBI are adhered to as well as the NIGC and Tribal

regulations.  

REG. 559   FACILITY LICENSE NOTIFICATIONS, RENEWALS, AND SUBMISSIONS    

THIS IS  A PRIORITY  

(1) Should the section be revised and if so, what process should be utilized?

a. Yes.

b. There is a view that the current §559 is outside the authority of the NIGC and has great

potential to create another CRIT like situation if and when enforcement actions are taken.
c. It is the view of some that §559 should be withdrawn and/or enforcement suspended until

such time as substantial revisions or replacement can be agreed upon with Tribes.

d. Any revisions or replacement should not required elected governments to take any actions,

etc. A comprehensive review and rewrite is required so as to address the limits of the NIGC’s

authority to order Tribal governments to act.  

e. It would be preferable, after review, that the regulation be substantially revised and the

issuance of a series of Bulletins to cover best practices would result. 

RECOMMEND THAT THIS BE ISSUED AS BULLETIN. 

REG. 571 INSPECTION AND ACCESS     THIS IS NOT A PRIORITY  

(1) Should this section be revised to clarify access to papers, books, and records, including at sites

maintained or owned by 3rd parties?

a.

b. Other types of enforcement actions and requests for information under for example, §2715

require a clear set of criteria and procedural rules so as to protect Due Process.

Yes. The CRIT case has established some limits that must be recognized.

REG. 573 ENFORFCEMENT       THIS IS  A PRIORITY  

(1) Should there be a process for withdrawing a NOV after issuance?

a. Yes

b. It is the view of some that the Chair possesses the power under the various provisions of

IGRA that authorize the issuance of an NOV. If the Chair has the discretion to authorize, then

it follows that the Chair may withdrawal using that same discretion. This would be

analogous to the power to enter into a settlement agreement.

(2) Under what conditions and circumstances is it appropriate to withdraw an NOV?

a. Recommend guidelines for when withdrawal is Appropriate.

NEW   TRIBAL ADVISORY COMMITTEE       THIS IS NOT A PRIORITY  

(1) When should a Tribal Advisory Committee (TAC) be formed?

a. When requested by Tribes and when the Chair needs comprehensive advice on a given topic

and experience from the Tribe is key to the issue..  

(2) Should a regulation be adopted or a policy statement made?

a. Policy statement along with plans for complying or exempting from FACA.

(3) Is financial cost a relevant factor in determining whether or not to form a TAC?
a. Yes, but a minor factor

(4) The Executive Order – Improving Regulations and Regulatory Review – issued on January 18th and  

the Presidential Memoranda issued on the same topic on the same day should be used in the

development of any policy relating to TAC formation and utilization.

NEW   SOLE PROPRIETARY INTERES

a. See comments above  

T     THIS IS NOT A PRIORITY  

NEW   COMMUNICATION POLICY OR REGULATION IDENTIFYING WHEN AND HOW THE NIGC

COMMUNICATES WITH TRIBES        

THIS IS NOT A PRIORITY  

(1) Should there be a regulation that sets a process for determining how and with whom the NIGC

communicates at a Tribe?

a. After extensive consultation with Tribes, the NIGC should use policy statements and

bulletins

b. It is likely that there will not be a one fits all answer. Tribes and Tribal governance process

are varied based on culture and practical considerations. The NIGC must be prepared to

adapt to Tribes not vice versa

(2) wha

(3)If so hat process should be used?

What types of communication, and t protocols should be included?

a.

, w

a. Decide after consultation with the Tribes

Decide after consultation with the Tribes

NEW   BUY INDIAN ACT       THIS IS NOT A PRIORITY    

(1) Should the NIGC adopt a “Buy Indian” regulation consistent with 25 U.S.C. 47?

Yes – simple and straightforward