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NIGC Must Deter Gaming Per Capita Misuse

It is easy to blame the Congress, the BIA,, and federal courts for allowing mass tribal disenrollment to flourish. They are all complicit.

But behind the scenes another federal entity plays a key role, especially in the increasing number of disenrollments tied to gaming per capitas: the National Indian Gaming Commission (NIGC).

Over the last five years, the NIGC has shied away from regulating gaming per capita distributions, and by doing so emboldened a growing number of tribal politicians to disenroll their kin to increase income for those politicians’ allies.

Between 2010 and 2015, the NIGC failed to take a single enforcement action for improper gaming per capita payments, even though several tribes during that time were rather obviously abusing per caps to kick members off tribal rolls.

The NIGC knew and still knows this, admitting to having received “several complaints over the last two years, where a Tribe has allegedly distributed gaming revenue without a Revenue Allocation Plan (RAP) formally approved by the [Interior] Secretary; or, where there is a RAP, if a tribe makes distributions of gaming revenue in addition to what is permitted by the terms of that RAP.”

The Commission is keenly aware of the disenrollments catalyzed by gaming per capita abuse. Yet the NIGC has done nothing.

Contrast that with the regulatory approach of former NIGC Commission Chairman Philip Hogen. On Chairman Hogen’s watch, the professed “standard underlying the NIGC’s approach to [per capita] expenditures is that where gaming revenues are spent in a manner that does not benefit the tribal government or tribal membership as a whole, the NIGC will investigate.”

Chairman Hogen made it known that he was aware that “per capita paybacks, or the lack thereof, were inextricably tied up with tribal membership disputes.” He also made plain that he would not hesitate to investigate or take enforcement action when gaming per capita payments were made “for the benefit of certain tribal officials or tribal factions rather than the benefit of the whole.”

The current NIGC’s refusal to regulate and deter gaming per capita abuses—or, frankly, to enforce the Indian Gaming Regulatory Act (IGRA)—was well documented in a 2015 report by the U.S. Government Accountability Office (GAO).

In 2009, the NIGC pursued forty-six enforcement actions (granted, most of which were for late fee payments or audit reports). In 2010 and 2011, the number plummeted to four and five, respectively. In 2012, the NIGC issued a single enforcement action, and took no enforcement action in 2013. The number rebounded to four in 2014.

The GAO specifically mentioned that the NIGC had not enforced RAP violations during the five-year period it reviewed. Not once.

When asked in January 2016 by Indian gaming investigative reporter Dave Palermo why the Commission has not “done any enforcement on issues dealing with disenrollment and per capita,” the NIGC deflected that it “has no jurisdiction to insert itself into a Tribe’s enrollment decisions. Determination of tribal citizenship or membership is an inherent sovereign power not to be interfered with by the NIGC.”

Determination of tribal citizenship, or who belongs, is in fact an inherent sovereign power of tribes. But disenrollment is not; it is a creature of two centuries of federal law and policy designed to assimilate or terminate Indians. This critical distinction continues to be lost in the federal lexicon, perhaps deliberately.

More to the point, while the NIGC does not have authority over any tribe’s “enrollment decisions,” the agency does possess the statutory power—and indeed is mandated—to intercede in disenrollment-related gaming per capita misuse. 25 U.S.C. § 2702(2); 25 C.F.R. § 290.14(b). The Commission can and should regulate the money. Prior NIGC Chairmen understood that. The current Commission demurs.

In Bulletin 2005-01, “Use of Net Gaming Revenues,” the NIGC claims that tribes can stem disenrollment linked to per capita abuse by creating “judicial or quasi-judicial mechanisms [to] serve as a check on improper distributions of gaming revenues.” However, tribal judicial mechanisms only provide a solution to those tribes that are already acting as responsible governments. And “quasi-judicial mechanisms,” i.e., tribal councils, are hardly a check on per capita misuse when they are responsible for the misuse or the related disenrollments.

The NIGC’s deference to an intra-tribal system of check and balance in that context, is derelict. So is the Commission when it comes to the trust responsibility it owes to every single enrolled member of gaming tribes.

By the admission of former NIGC Chairman Harold Monteau, the NIGC owes a “direct trust (fiduciary) responsibility to American Indians”—meaning not merely to tribal governments, but to tribal members, including those who face disenrollment. Chairman Monteau, too, was not afraid to enforce IGRA—even shutter casinos—when gaming monies became weaponry in internecine tribal conflicts.

Both Chairmen Hogen and Monteau understood that by taking enforcement action against one tribe, the next tribe was deterred from violating IGRA, which in turn deterred Congress from meddling with Indian gaming. Each took the long view.

Deterrence is crucial, and required by IGRA. 25 U.S.C. § 2702.

The NIGC is playing a dangerous game if it continues on the path it has since 2010. Continued Commission inaction will not only catalyze the next intra-tribal war, but also further embolden members of the United States Congress, in particular Senator John McCain, in building a case for greater federal oversight of Indian gaming.

Recall that in 2006 Sen. McCain proposed an amendment to IGRA that would have required federal oversight of a “reasonable method of providing for the general welfare of the Indian tribe and the members of the Indian tribes.” He was poised to cause federal oversight of tribal net gaming revenues.

In 2014, Sen. McCain proclaimed that his “primary concerns continues to be the performance . . . of the National Indian Gaming Commission as the chief Federal regulator for Indian gaming.” Last year, he called the GAO’s report “troubling.”

IGRA will only work if the Commission does its part to maintain Congressional confidence in the statute’s regulatory regime. Unless the NIGC finds a balance of federal regulatory enforcement against moneyed bad actors, and technical support in aid of tribal self-regulation over ill gotten gains, Sen. McCain and his brethren will “fix” IGRA—in a way that Indian Country almost certainly will not like.

Meanwhile, tribal governments and Indian people are already paying a steep price.

Fortunately, the NIGC can make a game-changing difference—by simply doing its job.

Gabriel S. Galanda is the managing partner of Galanda Broadman, PLLC. Gabe has written a forthcoming Gaming Law Review & Economics article, “The Reluctant Watchdog: How National Indian Gaming Commission Inaction Helps Tribes Disenroll Members For Profit, And Jeopardizes Indian Gaming As We Know It.” He descends from the Nomlaki and Concow Tribes, belonging to the Round Valley Indian Tribes.