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MONDAY, JUNE 17, 2002

Several Oklahoma tribes this weekend defied a federal order to shut down a controversial casino game whose future could rest on judicial interpretation of new regulations designed to limit court battles.

On-site visits to casinos by Indianz.Com confirmed the continued operation of the disputed machine. Security was high at one facility owned by the Chickasaw Nation, which is the subject of another federal review of its operations.

The tribes face closure and fines, according to the National Indian Gaming Commission (NIGC). Tim Harper, a region chief overseeing Oklahoma, Texas and Kansas, in a letter on Friday stated that the game can't be operated in Oklahoma without a tribal-state agreement.

But new regulations announced last week could force a different interpretation. The rules, being published in today's Federal Register, expand the definition of casino games to include machines that the NIGC once considered to be illegal.

The changes were fashioned in response to court challenges from tribes and the casino industry. The NIGC lost several cases because its casino definitions could not withstand judicial scrutiny.

"The uncomfortable result is that the commission cannot faithfully apply its own regulations that conform with the decisions of the courts," reads today's notice.

At issue are two sets of games known as Class II and Class III. Tribes can operate Class II games, such as bingo and pull-tabs, free of state involvement.

The more lucrative Class III category, which includes slot machines, card games and related offerings, can only be operated with a state-tribal compact. With the exception of off-track betting, Oklahoma prohibits these games.

Tribes have a lot to lose based on the distinction. At some casinos, including one Chickasaw facility visited, the majority of machines are now deemed illegal by the NIGC.

MultiMedia Games, the producer of the MegaNanza series of games, already filed a lawsuit seeking to resolve the dispute. The Texas-based company believes the machines are an electronic aid to bingo.

The new rules expand the definition of Class II games to include such aids, although there are exceptions that a court could interpret against MultiMedia. The company, however, was optimistic in a statement today.

"We are extremely pleased about the adoption of these new rules," said chairman and ceo Gordon T. Graves. "While they are not everything the tribes hoped for, they will take a lot of the guesswork out of designing electronic bingo games for Indian gaming."

"In light of these new regulations that appear favorable to Indian gaming and MegaNanza, we believe that it is unlikely that scarce government resources will be expended on these types of enforcement actions," he continued.

The changes, approved over the objections of NIGC Chairman Montie R. Deer, become final in 30 days. Today's Federal Register notice includes Deer's dissent that was published on Indianz.Com last week.

Relevant Documents:
Federal Register Notice (6/17) | Deer Dissent (6/8) | MegaNanza Adivsory Opinion (4/15)

Relevant Links:
National Indian Gaming Association - http://www.indiangaming.org
National Indian Gaming Commission - http://www.nigc.gov

Related Stories:
Objections to casino rules overruled (6/14)
Tribes seek limited federal role (6/13)
Tribe's land approvals questioned (6/11)
NIGC overturns gaming decision (6/6)
Authority of NIGC placed in doubt (5/10)
Authorities seize tribal records (5/7)
Tribes complain about gaming rules (4/29)
Disputed gaming policy advanced (3/22)
Gaming commission ignoring Norton order (1/28)
States object to proposed gaming policy (9/20)
NIGC takes a gamble on new regulations (7/26)