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IGRA amendments tough on many, especially tribes

A bill to overhaul the Indian Gaming Regulatory Act contains provisions that will make just about every stakeholder in the $19 billion tribal casino industry unhappy.

Casino investors face more scrutiny if the bill is passed. Many investors will no longer be able to avoid review of deals with tribes even if the contracts don't directly deal with the management of the casino. A contract to build a casino, for example, must be reviewed if the facility costs more than $250,000.

The bill greatly expands the authority of the National Indian Gaming Commission. But the power comes with a price -- the agency would have to do a lot more work to review gaming and gaming-related contracts. In most cases, the NIGC would have to make decisions within 90 days, a major feat considering that it currently takes two to three years to make those same decisions now.

But the measure, introduced by Sen. John McCain (R-Arizona) on November 18, is perhaps the toughest on Indian Country. It overturns a major court victory that upheld tribal sovereignty. At the same time, it fails to address a critical U.S. Supreme Court case that tribal leaders say has eroded their rights.

More significantly, the bill makes it difficult for tribes to acquire new lands for gaming. It would block out-of-state casinos, impose new standards on land-into-trust applications, remove provisions that help newly recognized and restored tribes and eliminate altogether the two-part determination process for off-reservation casinos proposals.

The short, the bill does everything that most tribal and Indian gaming leaders had hoped it wouldn't do. Over the past two years, they have urged McCain to show restraint in making revisions to IGRA out of fear of a free-for-all in the halls of Congress, where scandals and controversy over Indian gaming have festered.

"Too much effort went into getting Congress to pass IGRA to have it potentially undone when IGRA is not the problem," said Jim Ransom, the chief of the St. Regis Mohawk Tribe of New York, at a Senate hearing this past June.

Only a few tribal leaders have supported a rewrite of IGRA. One of the most outspoken has been Deron Marquez, the chairman of the San Manuel Band of Mission Indians, a southern California tribe with a successful casino. He has testified before the House and the Senate and made public statements about the need to curb "reservation shopping."

"In California, there is a remarkable spin-off phenomenon to reservation shopping. The Governor�s office now picks the developers and tribes it wants to deal with and points them to willing towns for gaming deals," he said in testimony to the House in November. "In these instances, reservation shopping has turned into 'tribe shopping.'"

IGRA, in general, prohibits gaming on land taken into trust after 1988. But the bill contains exceptions in Section 20 that have been utilized by a number of tribes to open casinos on newly acquired lands.

By modifying Section 20, McCain hopes to address what he says are the "most troublesome" casino bids and "potential abuses" of the exceptions. "Troublesome" and "potential" are the key words here since most of the controversial proposals have not made it through the federal review process.

For example, no tribe has ever been granted approval to acquire land in another state and use it for gaming although some have tried. In the past three years alone, four Oklahoma tribes who sought out-of-state land have been rejected, either by the courts or by the federal government.

"Indian gaming is not out of control," Chief Charles D. Enyart of the Eastern Shawnee Tribe of Oklahoma said at a House hearing in May. The tribe is proposing to open several casinos in Ohio.

On the other hand, a number of newly recognized and restored tribes have been able to use the Section 20 exceptions to acquire a land base. These provisions would be removed if the McCain bill is passed as written.

"Without a land base, we are unable to provide housing to our members, unable to build health clinics, unable to participate in federal programs that are tied to being 'on or near a reservation,'" said John Barrett, the chairman of the Cowlitz Tribe of Washington, at a House hearing in November. The tribe gained recognition through the Bureau of Indian Affairs and has endured a lengthy process to acquire land for an initial reservation where a casino will be built.

In place of the exceptions, McCain says newly recognized and restored tribes won't be shut out of obtaining land for gaming and other purposes. The bill allows these tribes to reclaim ancestral territory so long as they have a "temporal, cultural, and geographic nexus" to the land.

For some tribes, that is a difficult or nearly impossible standard to meet. When the Lytton Band of Pomo Indians of California regained its federal recognition through a court case, the local county and wealthy wineries obtained an order that bars the tribe from opening a casino on its ancestral territory. The tribe has since acquired land in the Bay Area through a controversial piece of legislation that could be reversed by a separate bill McCain has endorsed.

In his floor statement on the bill, McCain said he understands the concerns about removing these provisions. But he said his amendments "strike a balance by curbing potential abuses of these exceptions, while not unfairly penalizing those who lost their lands through no fault of their own, or even had them taken illegally--often by force."

Since the passage of IGRA in 1988, only three tribes have successfully utilized the two-part determination process of Section 20 that requires the state governor to approve an off-reservation casino. Nevertheless, McCain says eliminating this process will curb "ill-advised deals" made by "unscrupulous developers seeking to profit off Indian tribes desperate for economic development."

According to federal officials, anywhere from 40 to 50 gaming proposals are pending at the NIGC and the BIA. If passed, McCain's bill would apply retroactively to these applications under a provision that applies to applications that were being reviewed, or in the process of being reviewed, as of November 18, the date the bill was introduced.

Get the Bill:
Indian Gaming Regulatory Act Amendments of 2005 (S.2078)

Relevant Documents:
McCain Floor Statement (November 18, 2005)

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