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PROPOSED CIVIL FINE ASSESSMENT 

Ref: CFA 99-5 

SENT BY FACSIMILE AND CERTIFIED MAIL 

To: Chad Smith, Principal Chief 

Cherokee Nation of Oklahoma 

P.0 Box 179 

Tahlequah, Oklahoma 74465 

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

(IGRA) and 25 C.F.R. Part 575, the Chairman of the National Indian Gaming Commission 

(NIGC or the Commission) hereby provides notice of his intent to assess a civil fine against the 

Cherokee Nation of Oklahoma (hereinafter referred to as the "Nation" or the "Respondent"), for 

violation of 25 U.S.C. $ 2710(d) and 25 C.F.R. $ 573.6(a)(l I), as set forth in detail in Notice of 

Violation and Closure Order, Reference NOV-99-5lCO-99-5, dated July 8, 1999, a copy of 

which is attached. 

2. Authority. Under 25 U.S.C. $ 2713(a) and 25 C.F.R. $- 575.4, the Chairman 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. 9 573.3. If noncompliance continues for more than one day, the Chairman may treat 

each daily illegal act as a separate violation in calculating an appropriate civil fine assessment. 

25 C.F.R. $- 575.4(a)(2). 

3. Circumstances of the Violation. Respondent, through Cherokee Nation Enterprises, Inc., a 

wholly owned, tribally chartered, corporate entity, operates gaming establishments on tribal land 

in the State of Oklahoma. Respondent offered a gaming device known as "Reels and Deals" for 

play in its gaming facilities. Respondent does not have a compact with the State of Oklahoma 

for the play of Class I11 gaming devices in its gaming facilities. On July 8, 1999, the NIGC 

Chairman, believing play of the "Reels and Deals" device to be a Class I11 gaming activity as 

defined by the IGRA, issued a Notice of Violation and Closure Order (NOVICO 99-05) directing 

Respondent to cease and desist in the operation of the device in its gaming facilities. Respondent 

appealed the Notice of Violation and Closure Order but did not comply with the Closure Order. 

Under an agreement with the Chairman to resolve the appeal (the "Procedural Stipulation"), 

yllvr Respondent continued to offer play of the "Reels and Deals" gaming device while its appeal of 

the Notice of Violation and Closure Order was pending before the NIGC. On May 24,2002, the 
Commission issued a Notice of Decision and Order in the matter finding the "Reels and Deals" 

game to be a Class I11 gaming activity, play of which is prohibited by the IGRA in gaming 

operations on Indian lands in the absence of an approved tribal-state compact, and sustaining the 

Notice of Violation and Closure Order issued by the Chairman. Respondent discontinued play of 

the "Reels and Deals" gaming device on May 27,2002. 

4. In arriving at a proposed civil fine, the Chairman has considered the factors prescribed in 

25 C.F.R. 9 575.4, as follows: 

I. Economic benefit of noncompliance. On June 17,2002, under the terms 

of the Procedural Stipulation, Respondent provided financial information 

regarding its "Cornmissions" fiom the play of gaming devices that were 

the subject of the underlying Notice of Violation and Closure Order. The 

information demonstrates substantial economic benefit to the Respondent 

based on play of the gaming device in its gaming facilities. Because of the 

continuing nature of this violation, each day these devices were played 

illegally will be treated as a separate violation. A total of 1205 days 

elapsed from the date these devices were observed in play in Respondent's 

gaming facilities (February 7, 1999) until the date the devices were 

withdrawn from play (May 27,2002), as represented by Respondent. 

11. Seriousness of the violation. The operation of class I11 gambling devices, 

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

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

as the regulations of the NIGC. By virtue of its inclusion as a criminal 

matter, Congress deemed this to be a serious violation. While serious, 

during negotiations for the Procedural Stipulation which set forth an 

intended process by which the parties would conduct the proceedings on 

appeal, the Chairman agreed that play of the particular gaming device at 

issue while the appeal was pending would not to be viewed as a 

substantial threat to the integrity of Indian gaming or bad faith, a position 

to which the Chairman adheres in this proposed civil fine assessment. 

111. History of violations. Respondent has no history of violations in the last 

five years that became final actions of the Commission. 

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

and intentional and not the result of negligence. Respondent was on 

notice that the machines at issue were considered to be Class 111 gambling 

devices by the Chairman, the play of which could only be under a compact 

between Respondent and the State of Oklahoma. Respondent consciously 

chose to operate the gaming devices nonetheless, and to profit thereby, 

and did not make an effort to correct the violation by discontinuing play. 

Respondent's position on this matter is reflected in a brief filed with the 

Chairman on June 17,2002, and in a letter attached thereto dated 
February 8, 1999. These submissions were considered in a determination 

of the Proposed Civil Fine Assessment. The Chairman acknowledges 

Respondent's effort to limit its play of the gaming device at issue in this 

matter to the number specified in the Procedural Stipulation. 

V. Good faith. Under the Commission's regulation, the Chairman may 

reduce the amount of civil fine based on the degree of good faith in 

achieving rapid compliance after notice of the violation. Respondent 

made the conscious choice to continue play of the gaming device at issue 

despite the Notice of Violation and Closure Order. Accordingly, a basis 

does not exist to reduce the fine based on Respondent's attempt to achieve 

rapid compliance after notification of the violation. Respondent did 

discontinue play of the device but not until after notice of the Commission 

decision. 

5. Assessment. WHEREFORE, having carefully reviewed the above factors and the written 

information submitted by Respondent about the violation, a fine in the amount of $3,976,500 is 

assessed on the Nation for operation of illegal gambling devices through May 27,2002. This 

sum represents an initial fine of $3,300 and treats each subsequent day of illegal activity as a 

separate violation for which an additional fine at the rate of $3,300 per day is assessed. 

6. Appeal Rights. Under 25 C.F.R. $577.3, the respondent may appeal the proposed fine to the 

full Commission within thirty (30) days after service of this Notice of Proposed Civil Fine 

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

1441 L St., N.W., Suite 9100, Washington, D.C. 20005. The respondent has a right to assistance 

of counsel in such an appeal. A notice of appeal must reference this Notice of Proposed Civil 

Fine Assessment. Within ten (10) days after filing a notice of appeal, the Respondent must file 

with the Commission a supplemental statement that states, with particularity, the relief desired 

and the grounds therefore and that includes, when available, supporting evidence in the form of 

affidavits. If the Respondent wishes to present oral testimony or witnesses at the hearing, the 

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. 

The 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. 

Montie R. Deer 

Chairman 

National Indian Gaming Commission