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NIGC experiences growing pains

WASHINGTON - Tribal representatives are at odds with the National Indian Gaming Commission (NIGC) when it comes to the oversight and regulation of gaming operations on Indian lands.

Since 1997, the commission has doubled in size and increased its operating budget from $3 million to $7.2 million annually. This new growth spurred new questions and concerns from some within Indian country.

"In 1997, I appeared before the Senate Committee on Indian Affairs and testified that we were fully supportive of the intentions to raise the level of efficiency and independent integrity of the NIGC, even if that meant increasing the fees imposed on our operations," said Richard Hill, chairman of the National Indian Gaming Association. "Today, nearly two years later, I must say that we are not at all comfortable with the actions taken by the NIGC in that time span."

In 1988, the NIGC was established as an independent federal regulatory agency when Congress passed the Indian Gaming Regulatory Act (IGRA). The commission was created to regulate gaming activities on tribal lands to shield Indian tribes from organized crime and other "corrupting influences," ensure that Indian tribes are the primary beneficiaries of gaming revenues and assure gaming is conducted "fairly and honestly."

It is comprised of three commissioners appointed by the president and confirmed by the Senate. Two associate commissioners are appointed by the Secretary of the Interior. The commission is authorized to carry out enforcement actions, background investigations, audits, approve tribal gaming ordinances and management contracts, and create regulations.

It operated on a limited budget until Congress amended IGRA in 1997 which also granted authority to assess fees on Class III gaming operations and increase the ceiling limit on fee collection from $3 million to $8 million annually. It is the appearance of this broad authority which created some tension between tribes and the commission.

"Indian gaming requires strong regulation and effective oversight," said Monte Deer, commission chairman. "Under IGRA, it is our responsibility to ensure that gaming is conducted free from potential corrupting influences and in a way that strengthens tribal economies and governments."

The commission reports there are 195 tribes operating 309 gaming operations in 28 states, with the total annual revenue for all Indian gaming up from $500 million in 1988 to more than $9.6 billion last year. With such a dramatic increase in operating facilities and gaming tribes, the commission says there was no other choice than to push for a larger budget.

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"Prior to 1997 it was a real struggle for the commission to carry out its mandate under IGRA even minimally," Deer said. "Today, while we remain a lean operation, we are much better staffed and equipped to carry out the important responsibilities Congress has delegated us."

The commission has also expanded to include five field offices in Portland, Sacramento, Phoenix, St. Paul and Tulsa. Each office is staffed with at least five gaming regulators who include investigators, auditors and professionals certified in conducting background checks. They are finishing regulations on tribal internal operating standards and are about to initiate rule making on environment, public health and safety.

This expansion and the way regulations were drafted brought strong criticism from some tribes. One problem with regulations occurred in Oklahoma over the definition of "Class II" gaming. IGRA defines "Class II" gaming as bingo and other similar games. It permits tribes to use "technologic aids" to play such games. However, it prohibits play on machine "facsimiles," such as poker machines, without a compact. The commission regulations that defined facsimiles broadly, forced some tribes into ongoing litigation.

"Unfortunately, the meaning and parameters of Class II gaming has been a source of continuing controversy since the passage of IGRA and the NIGC's first issuance of regulations," said Tracy Burris, chairman of the Oklahoma Indian Gaming Association. "Because the issue has not been resolved, the tribes and their vendors have spent millions of dollars in legal fees to defend themselves in litigation."

Although the commission is moving forward with a number of initiatives, basic concerns regarding poor communication and consultation continue to dog officials. Representatives of the National Indian Gaming Association, the largest Indian gaming association in the United States, claim requests for information repeatedly have been ignored and that the consultation process has not been followed.

"NIGA remains supportive of a respected, independent, objective and efficient NIGC, yet no communications have been shared with us regarding how the NIGC plans to meet those goals," Hill said. "Instead, we face a number of new regulatory initiatives that infringe upon Indian nations' governmental authority and are duplicative of existing regulatory structures."

The commission responds to such criticism by increasing its presence in Indian country and instituting a report process on the commission activities.

"We have begun holding quarterly consultations across the country in order to obtain input from tribal gaming representatives and leaders," Deer said. "We are also finalizing a comprehensive report on the activities of the NIGC over the past two years that will be published later this summer."

With so many issues at stake such as jurisdiction, fee assessment, and enforcement, the growing pains the commission is experiencing may become a part of everyday life. Indian gaming is an issue under extreme scrutiny, from a wide range of interested parties. A federal body, such as the commission, charged with the oversight of all Indian gaming, may have to get used to the spotlight.