NIGC’s Hogen issues ‘vigorous response’ to call for his replacement

WASHINGTON – Phil Hogen, the chairman of the National Indian Gaming Commission has given “a vigorous response” to a story that appeared in Indian Country Today in which the National Indian Gaming Association asked President Barack Obama to replace Hogen and stop the commission from publishing new gaming rules until the new official is in place.

In a posting on the Gambling Compliance Web site, the NIGC chairman said that those calling for his “immediate” replacement misunderstand the new regulation the commission is considering.

In the ICT story, tribal leaders objected to the proposed regulation requiring jackpot payouts to be validated by a backroom accounting system, a technical standard being passed off as a Minimum Internal Controls Standard.

They said the proposal would require a type of technology that is usually patented in a manufacturer’s gaming system, requiring the gaming operation either to have that particular manufacturer’s system or to pay the manufacturer a royalty fee to use its proprietary technology.

Hogen did not respond to requests for comment from ICT for the original story.

But he told Gambling Compliance that the proposed regulation would not require tribes to buy expensive new accounting systems.

“We are not saying to anyone you have to buy any particular piece of equipment.”

Rather, the rules would require tribes to keep track of certain transactions, and, if they do so through an online accounting system, that system must work properly, the report said.

But, in a letter to Obama, Quapaw Tribal Gaming Agency Director Barbara Kyser-Collier said the proposed regulations are “product standards.”

“A most important danger is that such rules could favor certain manufacturers and drive tribal costs higher. Currently, the technology at issue already ranges from $4 million to $40 million, depending on the size of the gaming operation. It is very likely that the cost to tribal governments could exceed $100 million, driving tribal governments with small and marginal operations out of the gaming business altogether.”

Gambling Compliance reiterated complaints from tribal leaders who are “angry over what they claim was a lack of consultation by the NIGC over the new rule.”

Hogen did not respond directly to the tribal leaders’ claim of a lack of consultation.

The Web site also republished a quote from J.R. Matthews, Quapaw Tribe of Oklahoma vice chairman and NIGA treasurer, who also complained that the commission is not abiding by presidential orders to put a hold on new regulations.

“The fact is that Phil Hogen refuses to acknowledge that the former president put out a presidential order that no new regulations were to be issued and President Obama’s chief of staff extended the order until the regulations could be reviewed by President Obama’s newly appointed administrators. Those guys (at NIGC) are out of control.”

Hogen did offer “a terse comment” when asked if he was surprised by NIGA’s call for his replacement, Gambling Compliance said.

“Given the source, I am not surprised,” he said.

Hogen attributed the friction as part of the relationship between a regulator and the industry it oversees, Gambling Compliance reported.

“We are the regulators. We represent the regulated community. There is always some dynamic tension between the two entities.”

In its letter to Obama, NIGA listed a number of executive orders and federal laws that “NIGC should follow.”

The association pointed out that Hogen, a Bush-era appointee, “is holding out for almost five years past his original term,” and urged his immediate replacement and a delay in the publication of any new rules until the new official can review them.

Hogen told Gaming Compliance there’s no need to push him out the door.

“I am eagerly awaiting the president’s appointment of my replacement. I sure hope I am long gone by the time these regulations ever become either proposed regulations or final regulations – and we are a long way from that.”