Senate panel holds first hearing on gaming in 110th Congress

Friday, June 29, 2007  

INDIANZ.COM LISTENING LOUNGE: • Opening Statements • Panel 1 Testimony | Panel 2 Testimony | Joint Q&A • Webcast

Tribal leaders told a Senate committee on Thursday they will oppose legislation to increase federal oversight of the $26 billion Indian gaming industry.

Citing strong regulation of their casinos, tribal witnesses said a proposal to add the National Indian Gaming Commission to the mix would duplicate existing efforts and infringe on their sovereignty. Class III gaming is governed by tribal laws and compacts negotiated with states, they testified.

"Indian tribes in North Dakota and throughout the nation are fully committed to strong regulation," said Myra Pearson, the chairwoman of the Spirit Lake Nation and chairwoman of the Great Plains Indian Gaming Association. "Our tribal leaders understand that we need strong regulation to protect the government revenue that Indian gaming provides."

Ron Allen, the chairman of the Jamestown S'Klallam Tribe of and the chairman of the Washington Indian Gaming Association, tied the Indian Gaming Regulatory Act to a series of federal laws that strengthened self-determination. He said attempts to add a layer of federal oversight would hinder those efforts.

"No one is more beat on by the public than Indian Country and so we have a great interest in the integrity of our gaming and our right to be able to advance its agenda," testified Allen, who also serves as treasurer of the National Congress of American Indians.

Valerie Welsh-Tahbo, a council member for the Colorado River Indian Tribes of Arizona, voiced similar sentiments. It was her tribe that won a federal court case that reaffirmed tribal and state sovereignty over Class III gaming, the most lucrative segment of the market.

"As a result of those court decisions, some members of this committee and others have expressed concerns that there exists a regulatory void," she said. "Certainly, in our case, there's no regulatory void."

Testifying in support of federal oversight was NIGC Chairman Phil Hogen, a member of the Oglala Sioux Tribe of South Dakota. He said it was "urgent" that Congress amend IGRA to ensure his agency has the authority to regulate every aspect of the Class III industry.

"There is a role, pursuant to the compact process, for state participation," he acknowledged. "However, that state participation is very uneven. There are places where states intensely participate ... and other places where the state really didn't show up."

Dean Shelton, the chairman of the California Gambling Control Commission, told the committee the state works well with tribes. But he said Gov. Arnold Schwarzenegger (R) supports a "three-pronged" approach to gaming that includes the federal government.

"We would encourage and support enhanced coordination and open lines of communication among all of these regulators," he said.

Sen. Byron Dorgan (D-North Dakota), the chairman of the committee, has proposed, but not introduced, the bill to affirm the NIGC's powers. He reiterated the "critical" need for federal oversight of more than 400 casinos across the nation.

"That doesn't mean we should over-regulate the industry but there should be two layers of regulation," he said at the onset of the hearing. "The first layer should be the tribal gaming commission ... and the second should either be the federal government or the state government providing effective oversight and regulation."

Dorgan also sought to reassure tribes that other issues -- including health care, housing and education -- remain his top priority. He noted that his proposal does not go as far as one introduced by Sen. John McCain (R-Arizona), the most recent chairman of the committee, last session.

"The draft proposal is a proposal that would provide a different approach" than McCain's bill, Dorgan said.

Sen. Lisa Murkowski (R-Arizona), who is acting as vice chairman due to the recent death of Sen. Craig Thomas (R-Wyoming), praised tribes for winning public confidence of their operations. "We would only dream of those kinds of approval ratings in the Congress," he said. She cited strong points on both sides of the debate and said she was keeping an "open mind" on the bill.

Despite the court ruling, NIGC retains broad authority over Class II games such as bingo and pull-tabs. The agency also has the power to approve casino management contracts and tribal gaming ordinances, and it plays a role in determining whether certain sites can be used for casinos.

But trying to regulate Class III gaming impinges on tribal and state sovereignty, an Interior Department judge, a federal judge and the D.C. Circuit Court of Appeals all have said. The rulings struck down the Minimum Internal Control Standards, or MICS, that NIGC first implemented during the Clinton administration in order to address the explosive growth of the industry.

The decision was seen as a major victory in Indian Country but it has not had a major effect on tribal gaming, Pearson said. "Nothing changed after the CRIT decision with regards to regulating Indian gaming in North Dakota," she said. The tribal-state compact already incorporates the MICS by reference, she added.

NIGC has adopted a business as usual approach as well. Although some tribes have challenged the MICS, Hogen in the past has said the case won't stop his agency from conducting audits or looking into casino operations.

In the meantime, the Bush administration has asked the D.C. Circuit to rehear the case. If that is denied, an appeal to the U.S. Supreme Court is possible, though the justices haven't taken an Indian gaming-related case in over six years and rejected two critical classification case in 2004.

Discussion Draft:
Class III regulation (June 2007)

Committee Notice:
HEARING on discussion draft legislation regarding the regulation of class III gaming (June 28, 2007)

NIGA Report:
The Economic Impact of Indian Gaming in 2006 (May 2007)

Relevant Links:
Senate Indian Affairs Committee - http://indian.senate.gov