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Indian gaming law proposal undergoes big changes
Tuesday, February 28, 2006

The Bush administration is scaling back its controversial gaming law proposal amid overwhelming opposition in Indian Country, outgoing U.S. Attorney Tom Heffelfinger said on Monday.

Addressing the winter session of the National Congress of American Indians in Washington, D.C., Heffelfinger said the measure has been "significantly revised" in response to tribal complaints. Provisions that would have defined a Class II gaming device -- the most highly contested part of the bill -- have been deleted, he told tribal leaders.

"The tribal consultation that was held worked," Heffelfinger said, citing three meetings organized by the Department of Justice and the National Indian Gaming Commission.

Although he couldn't release copies of the latest revisions, Heffelfinger said the changes put the power back into the NIGC. Tribes had complained that DOJ was overstepping its bounds by seeking a legislative solution for what has so far been a regulatory issue.

So the measure will direct the NIGC to develop its own gaming machine definitions, a process the agency was undertaking before officials at DOJ intervened and proposed the bill. "The tribes generally did not like that the DOJ was going to define, through statute, the Class II standards," Heffelfinger said.

"The revised statute," he continued, "recognizes these concerns."

Heffelfinger said the bill also directs the NIGC to conduct a study of the economic impacts of the proposed Class II definitions. Tribes had argued that limiting the types of games they could offer would wreck the $19 billion, and growing, Indian gaming industry.

"Every time, heaven forbid, some type of economic freedom and democracy might break out in Indian Country, the playing field gets a little bit, you know, slanted back towards the Indians and all of a sudden the rug gets jerked out from under us," Wesley Edmo, council member for the Shoshone-Bannock Tribes of Idaho, said at a DOJ/NIGC meeting last month.

Another complaint centered on provisions that would have imposed criminal penalties for violating the NIGC's civil regulations. Heffelfinger said the bill will now protect tribes from criminal enforcement so long as the gaming standards are followed.

"We dramatically changed the statute," he told NCAI. "We created a safe harbor statute."

Finally, Heffelfinger said the bill will not give DOJ any power over the NIGC's regulatory process or the final Class II definitions that are developed. Tribes had complained that DOJ was being given veto authority over NIGC.

"We have deleted that portion of the law," Heffelfinger said in response.

Despite the revisions, the goal of the measure remains the same. Due to advances in technology, Heffelfinger said it is necessary to draw a "bright line" distinction between Class II games like bingo and Class III games like slot machines.

Under the Indian Gaming Regulatory Act, tribes can offer Class II games without state approval. Class III games, on the other hand, require a compact with the state, whose officials often demand a share of the revenues from such machines.

To avoid that debate and to exercise greater control over their enterprises, tribes have turned to Class II devices even in states like California where slot machines are legal, a move that has state officials across the country seeking a way back into the game. The latest dispute has arisen on the White Earth Ojibwe Reservation in Minnesota, where the governor once threatened to allow more non-Indian gaming unless tribes gave up $350 million in revenues.

The reliance on the Class II market, however, has not changed the nature of the Indian gaming industry. The NIGC estimates that 90 percent of revenues are still derived from Class III games.

The latest changes are now going through a "vetting" process and Heffelfinger anticipated swift movement on the bill once that process is complete. He said the measure will be introduced in the Senate -- with Sen. John McCain (R-Arizona) as the most likely sponsor, according to DOJ -- and hearings will be scheduled.

Heffelfinger's appearance yesterday was his last before tribes as the U.S. Attorney for the state of Minnesota. After more than four years on the job, he is stepping down from the post tomorrow. He said he will speak at the Federal Bar Association's Indian law conference next month in Albuquerque, New Mexico, to present the results of a methamphetamine study.

Relevant Links:
Johnson Act Amendments, Office of Tribal Justice - http://www.usdoj.gov/otj/johnson.html
National Indian Gaming Commission - http://www.nigc.gov