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Federal Document Clearing House Congressional Testimony 

July 19, 2000, Wednesday 

SECTION: CAPITOL HILL HEARING TESTIMONY 

LENGTH: 4814 words 

COMMITTEE: SENATE INDIAN AFFAIRS 

HEADLINE: TESTIMONY NATIONAL INDIAN GAMING COMMISSION 

TESTIMONY-BY: MONTIE R. DEER , CHAIRMAN 

AFFILIATION: NATIONAL INDIAN GAMING COMMISSION 

BODY: 

 July 19, 2000 CORRECTED COPY TESTIMONY OF THE HONORABLE MONTIE R. DEER, 

CHAIRMAN NATIONAL INDIAN GAMING COMMISSION BEFORE THE SENATE 

COMMITTEE ON INDIAN AFFAIRS Oversight Hearing on the Activities of the National Indian 

Gaming Commission Mr. Chairman, Mr. Vice-Chairman, members of the Committee, my name is 
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Testimony July 19, 2000, Wednesday 

Montie Deer and I am the Chairman of the National Indian Gaming Commission (NIGC or Commission). Thank you for the opportunity to appear before you today to testify on the activities of the 

NIGC. 1, along with Vice-Chair Elizabeth Homer and Commissioner Teresa Poust thank you for 

your on-going support and interest in tribal governmental gaming regulation and the NIGC. Since I 

last testified before you, the NIGC has undergone a dramatic change in size and make-up. The current Commission is just completing its first year together. I took office in March of 1999 and was 

joined by Commissioners Homer and Poust last summer. Together, we form the first Commission to 

be comprised wholly of enrolled tribal members and possibly the first to enjoy nearly concurrent 

terms, providing a measure of continuity particularly welcome during this critical period of transformation. The Indian gaming industry continues to grow at a rapid pace. From an annual total of 

$500 million in annual gross revenue in 1988, the industry now garners over $9.6 billion in annual 

gross gaming revenue. Currently, there are 195 tribes operating 309 gaming operations in 28 states. 

These governmental gaming operations span from Connecticut to California and vary in size from 

small, one-room bingo operations to an operation that boasts the largest casino floor in North America. Regardless of size, I know we all agree that Indian gaming requires strong regulation and effective oversight. Under IGRA, it is our responsibility to ensure that gaming is conducted in a way that 

strengthens tribal economies and governments and that tribal gaming is conducted free from potential corrupting influences. Quite frankly, until 1997 when Congress amended IGRA to permit the 

NIGC to assess fees on class III tribal gaming operations and increased the ceiling on assessments 

from $3 to $8 million annually, it was a real struggle for the Commission to carry out its mandate 

under IGRA even minimally. We have come a long way in the last year. I remember during a previous appearance before this Committee that one member commented that seven investigators working out of the trunks of their cars" was not the kind of oversight that Congress contemplated when 
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Testimony July 19, 2000, Wednesday 

IGRA was enacted. Today, while we remain a lean operation, we are much better staffed and 

equipped to carry out the important responsibilities Congress has delegated to us. We recognize, 

however, that even with the additional resources available, we will not be able to do the kind of job 

needed without effective regulation and enforcement at the tribal level --- the front line of gaming 

regulation. At its core, IGRA represents a new kind of federal-Indian relationship in which tribal 

governments and federal agencies share jurisdiction and coordinate responsibilities. Effective regulation at the tribal level, combined with close coordination between tribes and NIGC, increases 

regulatory effectiveness, efficiency, and, most importantly, the overall integrity of tribal governmental gaming. These reasons underlie this Commission's primary policy objectives of promoting 

strong, independent tribal gaming regulatory agencies within tribal governments and securing compliance with the law through education, training, and technical assistance. Voluntary compliance is 

the best kind of compliance and we have found that the vast majority of gaining tribes strive to be in 

compliance with the law. That is, when we identify a regulatory problem at a tribal governmental 

gaining facility, the tribes are quick to respond. In addition to our policy of obtaining voluntary 

compliance through education, training and technical assistance, the Commission has worked hard 

to institute a series of reforms designed to strengthen its operational capacity and to better equip its 

staff. Regional Offices and Staff The centerpiece of the NIGC's expansion plan was the establishment of regional field offices. Regional field offices allow the NIGC to locate its resources closer to 

Indian country, where the tribal government gaming occurs. More importantly, the regional offices 

allow NIGC personnel to more efficiently and readily offer technical training and assistance to 

tribal gaming regulators and operators. In just the past year, five new field offices were opened in 

Portland, Sacramento, Phoenix, St. Paul and Tulsa. Each office is staffed with at least five (5) gaming regulators and include investigators, auditors and professionals certified in conducting back-
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ground checks. We have estimated the operational costs of each field office to be between $500,000 

and $600,000 per year, or approximately $3 million in total. This figure includes housekeeping 

costs, salaries, benefits and travel. Further, in the past the Commission's limited staff could only 

make it to each of the 309 gaming facilities once a year - currently we are able to make quarterly 

site visits to each facility -- approximately 1,500 site visits each year. Importantly, 44 out of the 

Commission's current 77 employees are within the NIGC's Enforcement, Audit and Contract divisions. These divisions carry out the lion's share of the Commission's work. This is, no doubt, a far 

cry from just two years ago when, as you know, the NIGC had a handful of investigators, "working 

out of their cars." I am pleased to report to you that we have already received much positive feedback on the regional office concept. Both tribal gaming commissioners and tribal leaders have indicated to me that they appreciate ready access to our regional offices and staff. Headguarters Expansion As the Commission has expanded its presence in the field, we have also found it necessary to 

expand the Washington D.C. offices. A majority of the support for our field offices occurs here in 

Washington. As a result, we have experienced an increase in staff in every division. We were fortunate enough to locate some additional space on the 10th floor of our current building; accordingly, 

we were able to avoid expensive moving and relocation costs. The majority of our staff still resides 

on the 9th floor and we are currently renovating that space. Our new offices on the 10th floor house 

the Commission, Chief of Staff, General Counsel and the offices of Congressional and Public Affairs. We are proud of our new offices and invite you to come by and visit us at your earliest opportunity. Overall, the size of the NIGC staff more than doubled from 30 to 77 full-time positions, and 

two new organizational components were created - the Audits division, and the Office of SelfRegulation. The Regional offices house 37 of those 77 employees. To further improve operations, 

each staff member was equipped with reliable hardware supported by a new central network system. 
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The Commission also enhanced its data management capability with a new central database system. 

Work is now progressing on a new central records and document management system. Current Fee 

Structure Despite the growing demands, pressures, and increased availability of resources, the 

Commission has taken a careful and disciplined approach to its expansion initiative. A conscious 

effort was made to institute change at a pace that the Commission could readily absorb. The Commission's FY 2000 budget of $7.2 million remains well below the $8.0 million dollar ceiling set by 

Congress. This money is collected by assessing a fee rate of .09% on tribal gross gaining revenues 

above the first $1.5 million for each operation. Careful planning and cautious execution has enabled 

the Commission to keep the assessment of tribal fees below the permissible threshold while at the 

same time increasing service effectiveness. Further, I must note that it is highly probable that the 

rate will be reduced based on the increase in tribal gross gaming revenues. NIGC Regulations Let 

me also share with you what the increase in funding and staff has meant in terms of the substantive 

regulation of Indian gaming. In the past 18 months, the Commission embarked upon an ambitious 

regulatory and policy agenda that included, finalizing the Minimum Internal Control Standards 

regulations; finalizing Self-Regulation rules for Class 11 gaming; promulgating a proposed Gaining 

Classification regulation; and initiating a rulemaking addressing the Environment, Public Health, 

and Safety. These are summarized as follows: 1.Minimum Internal Control Standards (MICS) (Final Rule - These rules are designed to protect the integrity of Indian gaming by setting standards for 

such critical areas as cash handling, game play, licensing documentation, auditing, security and surveillance. The NIGC formed a tribal advisory committee that assisted in the drafting of these regulations. In developing the MICS, the NIGC evaluated and considered control standards from other 

sources, including New Jersey, Nevada and the National Indian Gaming Association. 2.SelfRegulation (Final Rule) - These regulations afford tribes the opportunity to assume greater regula-
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tory control over their Class 11 facilities and decrease their fees owed to the NIGC. Tribes applying 

for a self-regulation certificate will undergo an on-site visit by a team of NIGC investigators and 

auditors and must satisfy rigorous approval requirements. 3.Environment, Public Health and Safety 

Regulations (Notice of Proposed Rule Making) - The NIGC has formed a tribal advisory committee 

which will soon submit a proposed rule. The rule will address the portion of IGRA that requires 

tribal gaming ordinances to provide for the protection of the environment, public health and safety. 

4.Game Classification Regulations (Proposed Rule) - The NIGC has proposed a rule that establishes 

a formal process for the classification of games played on Indian land under IGRA. The regulation 

was proposed in response to a growing number of requests by tribal gaming commissions and the 

gaining industry for advice as to whether a particular game is Class II or Class 111. The NIGC held 

a field hearing on the proposed rule in January in Tulsa, Oklahoma. Independent Tribal Gaming 

Commissions Among its highest policy priorities is the Commission's objective to encourage and 

support strong, effective and independent tribal gaming commissions. As governments, tribes, generally through a tribal gaming commission, provide front-line, day-to-day regulation of tribal governmental gaming activities. Akin to the diversity in tribal governmental gaming operations, tribal 

gaming commissions vary in size and sophistication. Tribal gaming commissions that oversee large 

gaming operations have personnel and budgets nearly as large or larger than the NIGC's and have 

experienced personnel with expertise from New Jersey or Nevada. Other tribal gaming commissions are not as fortunate and rely heavily on the NIGC to provide expertise and assistance. Regardless of the size of the operation or gaming commission, strong regulation and enforcement of 

the law at the local level is critical to the integrity of the operation and decreases the likelihood that 

federal enforcement will be warranted. To this end, the Commission issued a bulletin on the independence of tribal gaming commissions and embarked upon an aggressive training initiative for 
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tribal gaining commissioners and regulators. With 309 gaining establishments operated by 195 

tribal governments in 28 states, effective tribal regulation is vitally important from the Commission's perspective. Education, Training and Technical Assistance The NIGC has made a strong effort to provide education, training and technical assistance as a means to secure regulatory compliance. We believe our efforts are paying dividends. During the past year, the NIGC provided over 20 

training seminars on topics such as the MICS, self-regulation, employee background checks, tribal 

gaming ordinances, management contracts and tribal gaming commissions. These training sessions 

were, of course, free and attended by over 1000 tribal gaming officials and leaders. The Commission has received much positive feedback on these training sessions and many tribal gaming officials have asked the NIGC to provide even more, training. I am also pleased to report that on July 

31 to August 4, 2000, the National Judicial College at the University of Nevada in Reno, will offer a 

course entitled, "Essential Skills for Tribal Gaming Commissions." I am an adjunct faculty member 

of the judicial college and have taken the lead in creating this course. Along with former NIGC 

Chairman Tadd Johnson and former Vice- Chairman Phil Hogen, I sit on the curriculum committee. 

The National Judicial College has implemented its Department of Justice grant to provide full 

scholarships to 40 tribal gaming commissioners to attend this training session. This course has 

drawn the largest amount of applicants for any single course offered by the college. Consultation 

Poligy In the spirit of the government-to-government relationship, respect for tribal sovereignty and 

the President's Executive Order on Coordination and Consultation with Indian Tribal Governments, 

we have adopted a policy of tribal consultation when we consider substantive regulations. As previously discussed, we formed tribal advisory committees for the formulation of the MICS and the environment, public health and safety rules. The advisory committees consisted of about 10 members 

and included a cross section of large to small gaming operations from the various regions of the 
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United States. Further, the Commission has begun holding quarterly consultations across the country in order to obtain input from tribal gaming representatives and leaders. On May 18, 2000, the 

NIGC held its first consultation in Sacramento, California. The Commission discussed with tribal 

gaming commissions and industry representatives, the various concerns surrounding California Indian gaming. The Commission's next consultation will be held in St. Paul, Minnesota on September 

27-28, 2000. Increased Communications Still another aspect of our expansion has included updating and improving the ways we communicate with the regulated community. We have upgraded 

our computer and phone systems, created a website (www.nigc.gov <http://www.nigc.gov>), and 

are publishing a regular newsletter. In a simple, but perhaps more important way, we as a Commission have tried to visit as much of Indian country and as many Indian gaming establishments as possible. I know personally, I have toured over 40 reservations in the past year. In each instance I have 

made an effort to talk face-to-face with the gaming commissions and tribal leaders to explain the 

activities of the NIGC as well as what we believe to be our role in the regulation of their facilities. I 

know that my fellow Commissioners have made numerous visits as well. Office of General Counsel The Office of General Counsel (OGC) is responsible for, among other things: providing legal 

support to the agency for enforcement actions initiated under IGRA; reviewing and recommending 

to the Chairman the approval or disapproval of tribal gaming ordinances and contracts; coordinating 

federal litigation with the Department of Justice; issuing game classification opinions; and providing all other necessary legal support. The expansion of investigators and auditors in the field has 

increased the need for legal support. Eight attorneys, one paralegal and one legal clerk currently 

staff the 0GC- Further, the office is now handling or assisting in seventeen (I 7) federal court cases, 

nine (9)administrative law cases and two (2) major rule makings. Audit Division Another important 

substantive addition to the NIGC has been the creation of our Audit Division. We currently employ 
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five auditors. These auditors have already assisted in numerous investigations and have conducted 

independent audits of several tribal gaming facilities. In several instances we came on-site at the 

invitation of the tribe, to assist in ferreting out irregularities, or to simply educate the gaming commission on gaming auditing functions. For example, recently, at the request of the tribe, the NIGC 

sent three auditors to a South Dakota gaming facility to perform a MICS compliance audit. We believe this is a valuable service we provide to the gaming tribes. The Commission is confident that 

its efforts to improve communications, establish closer working relationships, and provide education and support, coupled with its enhanced operational capabilities, will result in high levels of 

voluntary compliance with federal Indian gaming laws and regulations throughout Indian Country. 

The Commission is taking advantage of its increased size, capability, and presence in Indian Country to fine-tune operations; provide more services to tribal gaming regulatory agencies; and focus on 

its regulatory and policy agendas. We are committed to leaving the Commission an even stronger, 

more productive institution than ever before. The near concurrence of our terms leaves us well situated to build upon the foundation left by earlier Commissions and we look forward to the many new 

challenges that lie ahead. I trust the forgoing has been responsive to your request. In addition to my 

testimony, we are finalizing a comprehensive report on the activities of the NIGC over the past two 

years that will be published later this summer. We look forward to providing you with a copy of the 

report in the very near future. Should you have additional questions, we stand ready to provide any 

information responsive to your concerns. 

LOAD-DATE: August 21, 2000, Monday