Senate committee considers Indian gaming needs
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THURSDAY, MAY 15, 2003

The head of the National Indian Gaming Commission on Wednesday laid out a broad agenda aimed at beefing up regulation of the $12 billion and growing tribal casino industry.

NIGC Chairman Phil Hogen, a Bush appointee, called for additional funding, changes in federal law and improvements in gaming-related procedures. Speaking at a Senate hearing, he said the agency plays a "secondary" yet important role in the oversight and enforcement of nearly 300 casino facilities in more than two dozen states.

"We think we know our place within the Indian gaming scheme of things," he told the Senate Indian Affairs Committee. "We wouldn't be here if it were just for the federal government -- Indian gaming was created by Indians."

But Hogen still said the NIGC needs additional funds to carry out its mission. The agency's budget, based on fees from tribal governments, is capped at $8 million for the current year and the money is already allocated, he told the panel, forcing a hiring freeze for key audit and investigative positions.

"We're kind of in a bind over there," he said.

Congress has authorized a one-time increase to $12 million for fiscal year 2004 and Hogen wants lawmakers to eliminate the fee cap and create a "floating" structure. If the industry grows, so will NIGC's budget and if it shrinks, so will the agency's resources, he said.

Beyond funding, Hogen said the Indian Gaming Regulatory Act needs to be amended to clarify several critical areas. "There's probably a couple of things that everyone who's in Indian gaming agrees on with respect to IGRA," he said. "One is that it's not perfect and two, everybody is afraid that if it's ever amended, it will be amended in a way they won't like, so there's not much impetus to change it."

Hogen suggested two major changes. One would reinforce NIGC's authority over the lucrative Class III gaming market, which includes slot machines and card games. Tribes are resisting federal oversight based on ambiguities in the law, he said.

"And then we end up in court hassling about that," he advised the panel.

The second change affects NIGC's inability to evaluate tribal casino partners. Although IGRA authorizes NIGC to approve management contracts -- an often lengthy process -- tribes are instead entering into consulting, vending and other types of third-party agreements in order to avoid scrutiny, Hogen said.

Although it helps speed up development, Hogen said the practice puts tribes at risk to people "who want to sneak in under the cover of darkness" to avoid a true management contract that requires background reviews.

"If in fact those folks fun afoul of the rules, run off with the tribe's money, we have no authority over them," he told the panel.

Finally, Hogen addressed procedural elements of Indian gaming, including regulations that allow tribes to enter into Class III compacts when states refuse to do. He said the Bush administration was making progress in both areas but said states aren't necessarily cooperating. A 1996 Supreme Court decision, Seminole Tribe v. Florida, has protected states from lawsuits under IGRA.

"We think that the playing field should be leveled again so that states and tribes are on the same footing," he said.

The second procedural area was tribal consultation. NIGC doesn't have a consultation policy and Hogen said the agency was trying to formalize one. But he said the agency won't adopt a lengthy or comprehensive process like the Bureau of Indian Affairs.

"In my view we can't afford to do anything that complex," he said. "I think that's too cumbersome."

Disagreeing with Hogen's assessment and description of NIGC's needs was Ernie Stevens, president of the National Indian Gaming Association. The organization represents more than 150 gaming tribes and is the prominent voice for tribal issues.

Stevens agreed that NIGC needs additional funds but he said tribes, who contribute entirely to the budget, need to be consulted directly. He expressed disappointment with the agency's efforts so far.

"As a federal partner in the system, NIGC must strive to support and complement, but not duplicate, tribal and state regulatory activities," he said.

Stevens called on Congress to direct NIGC to adopt a formal consultation process and hold meetings throughout Indian Country. And if the agency receives additional funds, they should be used to help tribes directly, he said.

"We have so many checks and balances in this system," he said, "In total, tribes invest over $212 million annually for the regulation of Indian gaming."

Stevens opposed attempts to license or review tribal casino partners. "This proposal would grind activity and tribal operations to a halt," he told the committee. "NIGC should not impose a new barrier to economic activity in Indian Country."

As for authority over Class III gaming, Stevens said tribal-state compacts already cover this area of the industry. The federal government should defer to the other sovereigns "with a few narrow exceptions," he said.

Stevens agreed that the Seminole decision was harmful to Indian Country. He asked the committee to adopt the Department of Interior's regulations in this area into law, a step that Hogen considered somewhat risky due to state opposition.

Hogen said Secretary Gale Norton is finalizing Class III procedures for the Santee Sioux Tribe of Nebraska and the Seminole Tribe of Florida. In both instances, the process has been extremely slow moving. The Clinton administration had in fact finalized rules for the Seminole Tribe but Norton pulled them back.

Relevant Links:
National Indian Gaming Commission -
National Indian Gaming Association -

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