The Senate Indian Affairs Committee held an oversight hearing this morning on the regulation of the $18.5 billion Indian gaming industry. Here's an update of some of the major points made by members of the committee and some of the witnesses. Tune in tomorrow for additional updates.

Sen. John McCain (R-Arizona)
Committee chairman John McCain said he supports legislation to clarify the National Indian Gaming Commission's authority to regulate Class III games and to define technical standards for Class II machines. He questioned a lawsuit by the Colorado River Indian Tribes, based in his state, to challenge NIGC's authority on Class III, and he urged the NIGC and the Department of Justice to resolve their differences over which Class II games tribes can offer in the absence of a tribal-state compact.

McCain said he would support legislation to allow NIGC to review casino consulting agreements, which aren't covered by federal law. Management contracts are covered by the law but tribes and their developers often devise consulting agreements to avoid the NIGC's lengthy approval process.

McCain also said he would hold a hearing on land-into-trust practices by tribes. He reiterated his concerns about a Congressional rider that allowed a California tribe to obtain trust lands in the heart of the Bay Area without going through the state and federal approval process. "I think this is a huge problem," he said.

Sen. Tom Coburn (R-Oklahoma)
Tom Coburn, one of the newest members of the committee, said he was extremely bothered by the way the Bureau of Indian Affairs handles land-into-trust applications for tribes in his state. "It's not necessarily a fair process," he said. He also said larger tribes are engaging in tactics that hurt smaller tribes. "Those that are in the game want to keep those that are not in the game from being in the game."

NIGC Chairman Phil Hogen
The National Indian Gaming Commission has submitted a legislative proposal to overhaul the Indian Gaming Regulatory Act. Chairman Phil Hogen cited the need for more resources to regulate the industry, including Class III and Class II standards. He said the agency has a difference of opinion with DOJ about the use of Class II games.

Hogen tempered his remarks with strong support for tribal sovereignty and praise for the expansion of the industry. He said tribes are the chief regulators of gaming and that too much federal oversight could pose a problem. "Indians invented Indian gaming," he said, "and the Great White Father shouldn't tell them where to spend every penny."

Interior Department Inspector General Earl Devaney
Inspector General Earl Devaney announced that he is finalizing an investigation into the land-into-trust process. He said he was troubled by tribes who asked the Bureau of Indian Affairs to acquire land for non-gaming purposes but later converted the land into gaming. "That's a problem," he said. "The BIA didn't know it happened."

Devaney said he was concerned with NIGC's "dual role" within Indian Country. On one hand, the agency is expected to consult and work with tribes but on the other hand, the agency has to enforce the law on the tribes, he noted. "It's hard to wear a white hat on Monday and Tuesday and switch to a black hat on Friday and Saturday," he said.

Devaney said he supported changes in law that would bar ex-Interior Department officials from immediately going to work on tribal issues in the private sector. "It's not necessary," he told the committee, "to carve out this exception."

Devaney reiterated concerns about the huge financial resources being poured into the federal recognition process.

U.S. Attorney Tom Heffelfinger
Tom Heffelfinger, the U.S. Attorney for Minnesota and the chair of the DOJ Native American Issues sub-committee, talked about efforts to reign in casino crime but acknowledged he had limited data. "We have not been able to quantify the actual theft losses," he noted, but said any loss of revenues from tribal casinos is cause for alarm.

Heffelfinger acknowledged that DOJ is taking a different strategy with respect to Class II games. The courts have ruled against DOJ in every case involving which Class II games can be operated without a tribal-state compact but DOJ continues to fight tribes on the issue.

Relevant Documents:
Testimony: Oversight Hearing Before the Senate Committee on Indian Affairs on the Regulation of Indian Gaming (April 27, 2005)

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