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Bush administration pushes Class II gaming proposal
Tuesday, June 20, 2006

The Bush administration submitted its controversial Indian gaming proposal to top members of Congress earlier this month in hopes of landing a sponsor.

On June 7, the Department of Justice sent letters to House Speaker Dennis Hastert (R-Illinois) and Vice President Dick Cheney, who serves as president of the Senate. William E. Moschella, the assistant attorney general in charge of legislative affairs, asked the leaders for a chance to present the proposal.

"I am transmitting herewith a legislative proposal relating to the use of gambling devices as technologic aids in Class II gaming in Indian Country," the identical letters stated.

To the administration, the bill clarifies a key issue: What is the difference between an electronic bingo machine and a slot machine? Officials say the line has been blurred in a way that threatens the future of the $20 billion Indian gaming industry.

But to tribes, the legislation represents an attack on their economic gains. They argue it will stifle technological innovations that have been part of their industry since the first bingo halls were opened more than 20 years ago.

Either way, the "Gambling Devices Act of 2006" would bring about some major changes to Indian Country. It comes amid two other viable proposals -- including one that has already been sent to the Senate floor -- that place curbs on the expansion of tribal gaming.

At issue are two classes of games that are defined by the Indian Gaming Regulatory Act. Class II games like bingo can be operated free of state control while Class III games like slot machines a state-negotiated compact.

Some states have refused to negotiate such compacts or have placed their own restrictions on the use of slot machines. Many demand a share of revenues from lucrative Class II games.

In both situations, tribes turned to bingo machines to boost their revenues. With the help of gaming vendors, they offered technogically advanced versions of the game that, in many instances, have been quite successful. Tribes in Florida and Oklahoma have rapidly expanded their gaming empires based on Class II machines.

The success has drawn the scrutiny of the federal and state officials. They have contended that some of the souped-up games look and play just a little too much like slot machines.

But when the battles were taken to court, tribes and gaming interests prevailed in nearly every case, a record that set the stage for the controversy surrounding the legislative proposal.

Tribes reacted negatively during a series of consultation sessions held late last year and early this year. They said the legislation would overturn the court victories, give more power to the states and usurp the authority of the National Indian Gaming Commission, the independent regulatory agency.

In response, the administration made a number of changes to the proposal. Provisions that would have defined, in detail, the difference between Class II and Class III games have been deleted.

Instead, the legislation requires NIGC to consult with tribes before adopting Class II standards. The agency was already on that path before the Department of Justice objected to the approach.

Despite the shift, the proposed Class II definitions and game classification standards that were published in the Federal Register on May 25 would still bring about restrictions on the types of games that tribes can offer. Tribes will get a chance to air their concerns about the rules at five consultation sessions being held in July and August.

The meetings will be held in Minneapolis, Minnesota (July 10-11); Denver, Colorado (July 12-13); Washington, DC (July 18-19); Tacoma, Washington (July 24-25); Ontario, California (July 26-27); and Oklahoma City, Oklahoma (August 8-9).

Proposed Gambling Devices Act of 2006:
Letters to Hastert, Cheney (June 7, 2006)

Class II Regulations:
Classification Standards; Class II Gaming; Bingo, Lotto, et al.; Proposed Rule (May 25, 2006)
Definition for Electronic or Electromechanical Facsimile; Proposed Rule (May 25, 2006)s

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

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