McCain launches ‘broad based attack’ on Indian gaming regulation

WASHINGTON – If Sen. John McCain (R-AZ) gets his way, the Senate Committee on Indian Affairs will be revving up for a jurisdictional clash with tribal leaders over the National Indian Gaming Commission’s authority to regulate Class III gaming.

The Senate Committee on Indian Affairs held an oversight hearing on Indian gaming on July 29 to “examine priorities established by the new leadership of the National Indian Gaming Commission (NIGC) in areas including the NIGC’s regulatory role, staffing, budget, plans for consultation and training and technical assistance to tribes.”

Tracie Stevens, the new chair of the NIGC, testified in front of the committee for the first time exactly one month after her confirmation by the Senate. Other witnesses included Philip Hogen, the former NIGC chairman; Ernie Steven Jr., the chairman of the National Indian Gaming Association; and Mark Brnovich, director of the Arizona Department of Gaming.

Each witness gave an oral presentation of their written testimony, which is available on the committee’s Web site.

But it wasn’t until McCain showed up around 15 minutes before the end of the 90-minute hearing during the question and answer period that the real purpose of the hearing became apparent: McCain wants a legislative “fix” for what he called the “loophole” in Class III gaming regulations created by a 2006 legal ruling known as the CRIT decision, named after the Colorado River Indian Tribes.

That doesn’t bode well for the nations, said Joe Valandra (Rosebud Sioux), a former NIGC chief of staff, who is now a consultant on Indian gaming.

“I don’t think it’s what Sen. Dorgan necessarily intended, but it was clear that Sen. McCain, who insisted on this hearing, I understand – that’s why it happened so quickly – used the hearing as a vehicle to advance a ‘CRIT fix’ and some other amendments to the Indian Gaming Regulatory Act (IGRA) as well as a broad based attack on the regulation of Indian gaming,” Valandra said

NIGC had assumed the authority to regulate Class III gaming until the landmark 2006 court ruling that the CRIT could not be penalized for denying NIGC access to monitor the tribe’s compliance with the commission’s Minimum Internal Control Standards (MICS) for Class III gaming. The ruling affirmed that under IGRA, the NIGC does not have the authority to regulate Class III Indian casinos operating under tribal-state compacts.

Both Hogen and McCain vehemently disagreed with the ruling – and they still do.

The two men had what appeared to be a scripted exchange in support of a “CRIT fix.”

McCain asked Hogen for an assessment of the original NIGC charter and “how effective you think NIGC could be today?”

“There was a question at the time whether NIGC had that authority (to regulate Class III gaming) and people said isn’t that up to the states and the tribes, but we said, no, NIGC has that authority but the courts agreed with the tribes and we were unceremoniously booked out of the oversight of much of the Class III gaming,” Hogen said.

“To what effect?” McCain asked

Hogen said that the absence of NIGC oversight had little effect in places like Arizona, which he called a “shining example,” but in other places there is no state oversight.

“I think tribal gaming regulators do a better job if someone is looking over their shoulders,” Hogen said.

Does the NIGC have “sufficient authority” to do that? McCain asked.

Not according to the CRIT decision, Hogen said.

“Does that concern you?” McCain asked.

“Yes, it does. Not everywhere but there are soft spots that won’t be addressed unless that authority is restored or clarified,” Hogen said.

“So, it is your view that Congress should act legislatively to clarify that issue,” McCain said.

“That was my view when Congress had that legislation before it (in 2006) and it’s still my view,” Hogen said.

McCain asked if that view is shared by Indian county.

“Well, not all. They view it as an incursion (on tribal sovereignty),” Hogen said.

McCain started to ask if the absence of NIGC jurisdiction makes Indian gaming vulnerable to corruption such as in the case of Ivy Ong, a non Native man charged with corruption in connection with the Seminole Tribe of Oklahoma.

But he backed off when Hogen pointed out that the NIGC was still exercising jurisdiction over Class III gaming at the time.

“I guess my question is because of the CRIT decision has this made it more or less likely that corruption could creep into Indian gaming?”

“More likely,” Hogen said.

After his exchange with Hogen, McCain asked Tracie Stevens if she has the same concerns as Hogen.

Tracie Steven said the CRIT decision is of concern and her top priority is to review the situation to better understand it, but McCain interrupted before she could complete her thought.

“Do you have any understanding so far?”

Stevens began to respond, but McCain interrupted her again with the same question.

Turning his attention to National Indian Gaming Association Chairman Ernie Stevens, a prickly McCain said, “You probably disagree with some of my assertions?”

Ernie Stevens pointed out that Indian nations spend around $350 million a year on regulation and that MICS imposed by tribal regulators are as strong or stronger than the NIGC standards.

“Phil talks about looking over our shoulder. We have our tribal constituents looking over our shoulder. We have the state and local law enforcement looking over our shoulder. We answer to the leadership of our tribes, and after 25 years, we believe we’re doing a good job.”

In an interview after the hearing, Ernie Stevens said he will pro-actively respond to McCain’s latest claim that tribal-state regulation of Class III gaming is insufficient. He expressed respect for the state of Arizona’s regulations system, but also praised tribal regulators throughout the country.

“If it’s Sen. McCain’s desire to rehash the issue once again, then I’ll reconvene the NIGA/NCAI Taskforce to bring the issue forward again and again we will provide the senator and the committee with all kinds of shining examples of what it takes to protect the integrity of our gaming operations,” Ernie Stevens said.