To:   National Indian Gaming Commission

From: Ms. Monica Perez, Chairperson  

Kickapoo Traditional Tribe of Texas Gaming Commission

Date: February 12, 2011  

Re: FINAL COMMENTS ‐ Framework for evaluating the NIGC Notice of Inquiry and Request for

Information

             

The NIGC review should be focused on the Primary Regulator – the Tribes. Federal regulations and

standards need to be complimentary and supportive. NIGC regulations and standards should deal

with fundamental fairness, due process, and protection of individual and Tribal rights in the

context of fulfilling regulatory oversight, enforcement, and approvals.
Kickapoo Traditional Tribe of Texas Gaming Commission 

NOI Comments to NIGC 

February 12, 2011 

110212 KTTT GC   2

NIGC

Regulation Title Comment

502.15 Management Contract

This is NOT a priority

item.

(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 follow IGRA in all its considerations.

(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

follow IGRA in all its considerations.  

(3) Having raised this particular area for possible regulatory action, if the

NIGC decides to proceed or otherwise set this aside, a clear statement

as to the reasons for such decision is advisable.

(4) Your statements should reflect how Gaming Tribes will benefit!

502.16 Net Revenues

This is NOT a priority

item.

(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.

b. The NIGC needs to explain to Tribes how this benefits Tribes as

change is not disclosed other than reflecting GAAP.

(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.  

(3) Having raised this particular area for possible regulatory action, if the

NIGC decides to proceed or otherwise set this aside, a clear statement

as to the reasons for such decision is advisable and needed to

maintain continuity for Tribes.
Kickapoo Traditional Tribe of Texas Gaming Commission 

NOI Comments to NIGC 

February 12, 2011 

110212 KTTT GC   3

NIGC

Regulation Title Comment

514 Fees

This is NOT a priority

item.

Priority for late

payment procedure

system

(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.

b. IGRA outlines the collection of fees quarterly and allows Tribes

freedom to adopt system that fits their need.

(2) Implementation timeframes?

a. The NIGC current Regulations clearly explains how to calculate

fees, as fees are based on last year revenues, it is based off

IGRA on a quarterly basis which covers both fiscal and calendar

year.  

(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.

b. Prior to NIGC, all tribes were covered by A‐133 that does not

have GAAP requirements. IGRA allowed for Tribes to following

normal accounting used by Tribes

(4) Fingerprint fees?

a. IGRA requires a law enforcement agency to run background

checks, the NIGC currently uses FBI to fulfill the law. If FBI has

concerns about meeting their mission as members of a working

group they should consult with tribes.

b. A Bulletin that sets out the process, procedures, and fees will

suffice.

(5) Late payment system vs. NOV?

a. A late payment system is preferable over the current practice of

issuing an NOV. 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.

b. This area is of great interest to Tribes. A late payment system

that is comprehensive and clear with due process protection

would be a great step forward in the relationship the NIGC has

with Tribes.  

c. IGRA allows Chairman the flexibility to do what is best for NIGC

and Tribes. All Tribes ask for is fairness in its dealings!
Kickapoo Traditional Tribe of Texas Gaming Commission 

NOI Comments to NIGC 

February 12, 2011 

110212 KTTT GC   4

NIGC

Regulation Title Comment

518 Self Regulation of Class

II

This is a priority item.

(1) How can this section be made to be less burdensome to comply with

and should it be revised?

a. Definitely, the NIGC should revise these regulations and make

sure that the steps to Self Regulation are as clear as possible

and not punitive in nature. 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 and encouraged by §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.

d. Having raised this particular area for possible regulatory

action, if the NIGC decides to proceed or otherwise set this

aside, a clear statement as to the reasons for such decision is

advisable and needed to maintain continuity for Tribes.

e. IGRA needs to be followed as to fees collected from Self‐

Regulation as 25%of 1% has to be collected, and current

Regulations at end has not met requirements of IGRA.

519 Service See §539 below

523 Review and Approval of

Existing Ordinances or

Resolutions

This is NOT a priority

item.

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

enacted prior to January 1993?

a. No, IGRA requires the Chairman of the NIGC this duty to

approve and disapprove ordinances. We don’t think the date of

1993 makes an ordinance less effective. Tribes are the Primary

Regulators and are expected to follow all laws and regulations,

so must the NIGC!

524 Appeals See §539 below
Kickapoo Traditional Tribe of Texas Gaming Commission 

NOI Comments to NIGC 

February 12, 2011 

110212 KTTT GC   5

NIGC

Regulation Title Comment

531 Collateral Agreements

This is NOT a priority

item.

(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, rejection, or approval letters

available to the public (with appropriate redactions).

ii. Make all declination, rejection, or approval letters final

Agency Action so that the parties have recourse and so

that a body of jurisprudence may develop.

iii. Perhaps limiting the review and potential regulation to

a definition of “Primary Beneficiary” would be helpful
Kickapoo Traditional Tribe of Texas Gaming Commission 

NOI Comments to NIGC 

February 12, 2011 

110212 KTTT GC   6

NIGC

Regulation Title Comment

and give enough guidance for the development of a

jurisprudential approach. It would also necessarily

involve a statement on the limits of “revenue sharing”

in light of the Rincon Case and the decision by DOI

disapproving the Habematolel Pomo of Upper Lake

compact.  

iv. 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.

e. IGRA makes it clear on priority interest and sets 70‐30 or 60‐40

in two sections of IGRA. One deals with Management

agreements and other with individual run operations. The

Creek Courts took up issue between Tribe and Communities, I

suggest you read as it held to IGRA!

533 Approval of

Management Contracts

This is NOT a priority

item.

(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
Kickapoo Traditional Tribe of Texas Gaming Commission 

NOI Comments to NIGC 

February 12, 2011 

110212 KTTT GC   7

NIGC

Regulation Title Comment

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 submitter’s

then disapproval can be the result.  

b. This should be clarified via a Bulletin.

c. IGRA sets forth your standard as Trustee, as it sets the Standard

at 70‐30 or 60‐40%, if contracts meet definition and Tribes and

parties agree, NIGC can offer suggestions but cannot refuse

approval, if standards meet and are agreed to.

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

item.

(1) Should changes be made to clarify the submission requirements for

Class II and Class III background investigations?

a. Yes.  

b. Any changes to §537 should be made to reflect  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.
Kickapoo Traditional Tribe of Texas Gaming Commission 

NOI Comments to NIGC 

February 12, 2011 

110212 KTTT GC   8

NIGC

Regulation Title Comment

539 Appeals

This is NOT a priority

item.

(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.

542 Class III MICS

THIS IS A PRIORITY ITEM.

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

guidelines?

a. Section §542 must be updated.   

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

i. Stating clearly that the provisions are advisory only;  

and 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.(Timeframe every 3 to 5 years)

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.

(Tribes adopt standards consistent with IGRA.)

(2) What are the implications?

a. 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.

b. Standards could be submitted that TGRA approve to meet

Compacts with States and meet Industry Standards!
Kickapoo Traditional Tribe of Texas Gaming Commission 

NOI Comments to NIGC 

February 12, 2011 

110212 KTTT GC   9

NIGC

Regulation Title Comment

543 Class II MICS

THIS IS A PRIORITY ITEM.

(1) Should these regulations be reviewed and revised?         And in which

manner?

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, as Primary Regulators, should develop Internal Controls

that reflect all areas that protect assets of the tribe. This could

be done with Standards that reflect the protection of Tribal

assets. As Class II gaming is an important asset to all tribes; we

know what areas require updating. Tribes should submit

suggestions that best reflect that responsibility. The current

MICS is not a minimum; all you have to do is consciously

analyze your NIGC checklist and review MICS audits and you

will see!

(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.

b. A broad approach to IGRA and a standard can be used to fulfill

this requirement. The NIGC needs to look to primary regulators

for guidance as they fulfill their role daily.  

547 Class II MTS for Gaming

Equipment

THIS IS A PRIORITY ITEM.

(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.  

c. Tribes have formed a working group that is preparing a revised

§547 to be adopted by Tribes and to be recommended to the

NIGC.

d. Tribes are writing Class II standards that fulfill Class II in all

aspects. The NIGC should look at this concept.
Kickapoo Traditional Tribe of Texas Gaming Commission 

NOI Comments to NIGC 

February 12, 2011 

110212 KTTT GC   10

NIGC

Regulation Title Comment

556 Background

Investigations for

Licensing

This is NOT a priority

item.

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

through the NIGC be formalized with regulations?

a. Yes and No

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.  

c. 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.

d. It is clear that a synopsis and conclusion must be submitted for

any finger prints to be accepted. If you read your regulations it

leaves no doubt that a pilot program that contains the two

factors is allowable!

New Fingerprinting for non‐

Primary Management

Officials or Key

Employees

This is NOT a priority

item.

(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 require such fingerprint requests on a case‐

by‐case basis, and must be consistent with Tribal regulations or

ordinances.

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.  

c. If the NIGC has approved a Gaming ordinance that requires

background checks on these individuals; and the tribes has

submitted the funds, the NIGC should honor. If the FBI has

raised issues or concerns, they should familiarize themselves

with IGRA and consult with Tribes to remedy the problem!

559 Facility License

Notifications, Renewals,

and Submissions

This is NOT a priority

item.

(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
Kickapoo Traditional Tribe of Texas Gaming Commission 

NOI Comments to NIGC 

February 12, 2011 

110212 KTTT GC   11

NIGC

Regulation Title Comment

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.

f. Having raised this particular area for possible regulatory

action, if the NIGC decides to proceed or otherwise set this

aside, a clear statement as to the reasons for such decision is

advisable and needed to maintain continuity for Tribes.

571 Inspection and Access

This is NOT a priority

item.

(1) Should this section be revised to clarify access to papers, books, and

records, including at sites maintained or owned by 3rd parties?

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

recognized.  

b. Other types of enforcement actions and requests for

information under §2715 require a clear set of criteria and

procedural rules so as to protect Due Process.

c. IGRA allows for Chairman to subpoena any information he

needs to make a decision. This process makes no difference as

to party involved!

573 Enforcement

This is NOT a priority

item.

(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; the Chair

should have the same discretion to withdraw a NOV.  

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

an NOV?

a. This would be at the discretion of the Chair.  

b. Prior to a hearing; before full Commission.

c. After full commission meets and does not reach same

conclusion as Chairman.

New Tribal Advisory

Committee

This is NOT a priority

item

(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.  

(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?
Kickapoo Traditional Tribe of Texas Gaming Commission 

NOI Comments to NIGC 

February 12, 2011 

110212 KTTT GC   12

NIGC

Regulation Title Comment

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 Interest

This is NOT a priority

item

a. See comments above.

b. IGRA, has established the interest as 70‐30 and 60‐40% no

other Standard exists.  

New Communication policy

or regulation

indentifying when and

how the NIGC

communicates with

Tribes

This is NOT a priority

item

(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. 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) What types of communication, and what protocols should be included?

a. Decision should be made taking into consideration individual

consultation with Tribes.

(3) If so, what process should be used?

a. Decision should be made taking into consideration individual

consultation with Tribes.

New Buy Indian Act  

This is NOT a priority

item

(1) Should the NIGC adopt a “Buy Indian” regulation consistent with 25

U.S.C. 47?

a. Yes – simple and straightforward

b. Since the Act was passed in 1910, and sister agencies

overlooked until 2010. I suggest following the three criteria that

law and they have used!