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Let the Games Begin

St. Regis sues Kempthorne; NIGC's 'bright line' between classes II and III

SYRACUSE, N.Y. - Frustrated with continued delays in the processing of its application for a casino in New York's Catskill Mountains, the St. Regis Mohawk Tribe has filed a federal lawsuit against Interior Department Secretary Dirk Kempthorne.

The secretary, a former Republican governor of Idaho, is on record as opposing ''off-reservation'' casinos. The St. Regis application for a casino at Monticello has been ready since last February, and despite approval from New York Gov. Eliot Spitzer, Kempthorne has taken no action on it. Over the past several months, Mohawk leaders have repeatedly requested meetings with him; they have not been given the courtesy of an answer, much less a decision.

But we may have a clue as to Interior's future take on this supposed ''reservation shopping.'' On Oct. 1, Legal Times newspaper revealed the text of a letter sent to tribes with pending ''off-reservation'' casino applications by Interior Deputy Associate Secretary James Cason. In the letter, Legal Times reported that Cason said Interior is pondering a model ''where the likelihood of accepting off-reservation land into trust decreases with the distance the subject parcel is from the Tribe's established reservation or ancestral lands, and the majority of tribal members.'' [emphasis added]

Apparently geography matters. So the question now becomes: ''Will Interior take history into account?''

The ancestral Mohawk homeland lies along the majestic river that today bears the tribe's name. In the years leading up to the American Revolution, encroaching colonial settlers forced most Mohawks out of the area. Today, the tribe's sole American reservation is at Akwesasne, which sits along the St. Lawrence River, roughly 225 miles due north of Monticello as the crow flies. Other recognized bands of Mohawks reside in Ontario and Quebec.

But the ancestral Mohawk homeland lies only some 75 miles north of Monticello, one-third of the distance to Akwesasne. All ''off-reservation'' Indian casino applications are different, each with its merits and circumstances.

Cason's model should not be the sole deciding factor in the St. Regis application, or any application for that matter. But if it is going to play a role, Interior must take the historical displacement of tribes from their homelands into account. Many Indian nations, through no fault of their own, are today located on reservations distant from their original homes. If geography is to be a critical determinant in deciding the fate of a tribal casino, historical factors must carry equal or greater weight.

Proposed regulations

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The National Indian Gaming Commission in late October issued a set of proposed regulations intended to clarify the distinction between Class II and Class III gaming machines.

The basic difference between the classes can be boiled down to whom the player is competing against. If the machine is linked to others and players play against each other, it's a Class II game. If the player is playing against the house, it's a Class III game. But the technological complexity of many new gaming devices; the fact that machines of different classes may appear to be identical, legal challenges regarding the classification of certain games; and confusion over whether a machine itself is the game or merely a tool through which to play the game has forced the need for a clearer demarcation between the two classes.

''These proposed standards will clarify the distinction between the technological aids tribes may use to play Class II games - bingo and the like - which may be utilized without compacts with their states, from that equipment used for the play of Class III games, such as slot machines, which may only be played when there is an approved tribal/state compact for that activity,'' said NIGC Chairman Philip Hogen in an Oct. 24 press release.

Hogen stressed the need for a clear distinction, a ''bright line,'' between the classes, citing disputes over technology that could challenge the ''dominant market position'' that many gaming tribes hold in Class II.

''Those challenges could come in the way of allegations that technology for Class II has gone beyond its limit,'' he said in the release. ''It could come as well by increased competition for this market where states expand their limits on bingo-type technology, if they see no meaningful constraints on tribal activity in this area.''

Of equal significance might be the potential impact on revenue sharing. Tribes offering Class III games must, of course, enter a tribal/state compact. Such compacts, more often than not, contain provisions for tribes to pay some percentage of their profits to the state that surrounds them.

But Class II gaming requires no tribal/state compact - tribes may offer Class II games free from state oversight and without revenue sharing. Thus anything perceived as weakening Class II and strengthening Class III gives gaming tribes the impression that state hands will sink deeper into their pocketbooks. Hogen said that the proposed rules should allay such fears.

''Bingo and Class II gaming is the bedrock upon which Indian gaming was built, and its integrity needs to be maintained,'' Hogen said. ''With the bright line that will be drawn when these regulations are finalized, tribes may confidently invest in equipment, lenders concerns over challenges in this area will be allayed, and tribes will have a clearer basis from which to negotiate with states for Class III compacts.''

To view the proposed regulations, visit www.nigc.gov. The regulator will accept public comments on them for 45 days after their publication in the Federal Register.