Federal officials and Indian leaders urged a Senate committee on Wednesday to change the federal law that paved the way for the $15.9 billion tribal gaming industry.

Much of the concern centered over larger and larger payments that state governments are seeking from tribes. Representatives of the Bureau of Indian Affairs and the National Indian Gaming Association want Congress to provide clear direction in situations where revenue-sharing is appropriate.

"Indian gaming is not a reason for state budget problems and should not be used as a way out," said Ernie Stevens, president of NIGA. "Shifting the burden to tribal governments is not reasonable or fair."

The BIA official in charge of gaming was even more specific and said Congress should consider a cap on the percentage of net revenues a tribe might share. "I think it should be single digit, maybe, or, you know 10 percent," said George Skibine, the acting deputy assistant secretary for policy and economic development. "I think if it goes above that, I think it will be problematic for the tribes."

Currently, six states have compacts with tribes that require some sort of revenue-sharing. They range from 25 percent of slot machine proceeds in Connecticut to a cap of 8 percent of slot revenues in New Mexico. All were approved by the BIA, or allowed to go into effect by the agency. One tribal-state agreement was the result of a court case.

As the industry expands, more and more states are looking to take a piece of wealth. In places like California and Minnesota, officials say budget deficits and the impacts of casinos require tribes to pay their "fair share."

The real reason for the trend, however, was traced to a 1996 decision from the U.S. Supreme Court. In a case involving the Seminole Tribe of Florida, the court ruled that states can refuse to negotiate a gaming compact.

"We found that one of the participants didn't have to participate," observed Sen. Ben Nighthorse Campbell (R-Colorado).

Skibine and Stevens both testified the ruling has led to an increase in revenue-sharing proposals, particularly ones that don't grant tribes full exclusivity to gaming. "If the tribes don't sign the compacts, there is very little remedy," Skibine told the committee, because the state can raise a sovereign immunity defense in court.

"States are using Seminole to impose unreasonable demands on tribes," Stevens said.

Despite the recognition of the problem, the bill being considered by he Senate Indian Affairs Committee does not include what is known as a Seminole fix. Campbell, chairman of the committee, is the sponsor of S.1529, the Indian Gaming Regulatory Act Amendments of 2003.

Instead, the language directs the BIA to consider whether tribal needs are being met before allowing revenue-sharing. But Skibine said this is an "extremely difficult" determination to make.

"In fact, it is likely that the needs of many of these tribes are not met," he said. "There are unmet needs ... with many, many tribes. If that's the case then there will never be revenue-sharing if we have to address the unmet needs of the tribe."

Skibine also discussed another area of pressure the industry is facing as more and more tribes seek to acquire lands hundreds of miles away from their current reservations, sometimes in other states. He told the committee there is no reason to deny such acquisitions because "it would definitely be an economic benefit to tribes."

However, several members of Congress have waged campaigns against "reservation shopping." Earlier this year, House Republicans inserted language in an appropriations bill discouraging two tribes, one in Oklahoma and another in Louisiana, from seeking such lands.

Skibine was not specific about what changes could be made in this area. Currently, federal law and procedures require the state governor to concur with off-reservation land acquisitions. But for land within a tribe's former reservation, a common situation in Oklahoma, there is no such requirement.

Yesterday's hearing was attended by many tribal leaders and representatives of gaming groups. The California Nations Indian Gaming Association, representing 62 tribes, was in town for its impact week meeting.

Anthony Miranda, president of CNIGA, said in an interview that the organization has not adopted a stance on revenue-sharing. "That really is an issue between the [individual] tribes and the state," he said.

Currently, a small group of tribes are working with Gov. Arnold Schwarzenegger (R), who campaigned on revenue-sharing, to negotiate agreements. His aides have suggested a 25 percent rate on slot machine proceeds.

Jacob Coin, CNIGA's executive director, was somewhat surprised with Skibine's recommendation of a percentage cap. "This is the first we've heard that," he said. "Tribes really need to be given a chance to meet their needs."

Attempts to amend the Indian Gaming Regulatory Act are made every Congressional session but none have made it through. State governments are loathe to give up any bargaining power they have in the process.

Relevant Documents:
Text of S.1529 | Campbell Floor Statement on S.1529

Senate Testimony:
Written Witness Testimony (March 24, 2004)

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