Phil Hogen: Defending NIGC's actions on Class II

Wednesday, February 11, 2009  

"The NIGC, under my direction, has tried to keep Indian gaming safe by protecting a class of games that can soundly be defended as Class II in the light of statutory language and existing case law.With its recently-enacted Technical Standards and Minimum Internal Control Standards (MICS), NIGC met, albeit somewhat late, an important need for minimum standards to guide the construction and operation of a relatively young gaming format – electronic systems that interconnect players playing bingo and bingo-like games against one another. The NIGC adopted these standards after extensive consultations not only with tribal governments, but also with tribal gaming operators and regulators, who in turn consulted extensively with those who design and build the equipment and the laboratories that analyze it.With these standards, tribal regulators will be better able to ensure the integrity and security of Class II gaming and to better track and document its play and its individual transactions. This, I submit, will foster this important segment of the Indian gaming industry and encourage and guide the manufacturers that supply it.

In crafting these regulations, we recognized that the industry was ahead of us and that considerable investments had been made in equipment that likely could not meet all the new standards. To accommodate that situation, we provided for a “grandfathering” of equipment. Equipment that meets certain essential, limited standards concerning fairness and security could be profitably used for five years notwithstanding the absence of full compliance with all of the Technical Standards. By the end of that five-year period, the market will ensure that fully compliant equipment will have replaced the grandfathered equipment.

Although a stated goal of our original rule-making process was to draw a brighter line to distinguish the “computers and electronic and technologic aids” used for Class II bingo from Class III “slot machines of any kind” and “electronic facsimiles of games of chance,” we adopted no such regulations. Nevertheless, there is still a need to make such a distinction, and greater clarity to assist in this would be useful to regulators at all levels and to the industry."

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Phil Hogen: NIGC Perspective on Class II and MICS (Indian Gaming February 2009)