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National Indian Gaming Commission budget gets boost

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WASHINGTON - While the rest of Indian country is reeling over budget cuts for the upcoming 2004 fiscal year, the gaming regulatory agency received an unexpected gain from the Omnibus Appropriation Bill that recently passed Congress.

National Indian Gaming Commission Chairman Phil Hogen said he was pleased that the ceiling on fees to finance NIGC was increased to $12 million. The new cap will take effect in fiscal 2004.

Congress, is supposed to include $2 million for the NIGC budget, but has never done so. The regulatory agency has been running on fees collected from the gaming industry, but has been limited to an $8 million ceiling. Hogen said it has been difficult to operate with financial caps as the industry grows.

"The President included the $2 million in his budget but it was caught up in the mess. The House kept in the $2 million, but the Senate zeroed it out. The joint conference committee raised the cap to $12 million," Hogen said.

The $12 million cap is not a budget item using taxpayer money for regulation. That money is collected as fees from the Indian gaming industry.

"I take this as good news. It shows the administration and Congress are doing the right thing in supporting the Indian gaming industry and regulation."

The current year budget is still capped at $8 million, but the NIGC expects to make it through the year on savings on salaries when Montie Deer, former NIGC chairman, resigned. A few other positions were also open

The NIGC is allowed to set the rate charged the Indian gaming industry only up to the cap, which is imposed by Congress.

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The NIGC changes the rate per $1,000 of net revenue to match the cap. For example, because of the growth in casino take, the rate imposed on the 2002 net revenue will be 65 cents per $1,000 and for 2003, 59 cents per $1,000.

When Indian Gaming Regulatory Act of 1988 formed the Commission, it was allowed only to charge the rate against the Class II revenues, but in 1997 Congress changed the fee structure to allow rate charges against Class III gaming as well. In the beginning the cap was set at $2 million, but at that rate the NIGC couldn't keep up with the growth of the industry.

"The Senate Indian Affairs Committee wants their say," said Hogen. "Congress will give them time to review the law and to make changes on a long-term basis.

"In 1997 we were desperate and the ceiling was increased to $8 million. Congress still has the authority to appropriate the $2 million, but it has never done that."

Hogen said he has advised Congress to set flexible or floating caps that will expand or contract with the size of the industry. That will allow the NIGC to continue to regulate the gaming industry without having to cut expenses, which may include cutting regulators.

"It doesn't make sense to have a finite number. There are 14 vacancies we can't fill with an $8 million cap. We need to open an office in southern California and in the Great Plains," Hogen said.

Hogen said the NIGC would welcome the $2 million from taxpayers, but that the money should be spent on consulting with the gaming tribes.

The appropriations also include $120,000 for consultation with tribes. The language in the bill directs the NIGC to consult with tribal government on both the development of the new fee schedule and on new regulations published in the Federal Register in 2002, some of which are controversial.

The regulation of Indian gaming has come under fire by the media and by anti-gaming groups and individuals. The Indian gaming industry denies the accusations of poor regulation. Hogen said that consultation with the tribes and the NIGC would help improve the public image.