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NIGC's Class II rules come under fire from tribes

Fresh from the defeat of an off-reservation casino bill, tribal leaders on Tuesday took aim at new regulations that would bring significant changes to the $23 billion Indian gaming industry.

At an all-day hearing before the National Indian Gaming Commission, tribal leaders, industry experts and legal advocates repeatedly criticized the proposal. They called it a major setback to the benefits tribal casinos have brought to reservations and surrounding communities.

Many cited improvements in education, health care and social services, along with better relations with local governments. "[Gaming] has had a major impact," said Margie Mejia, the chairwoman of the Lytton Band of Pomo Indians in northern California, whose tribe was terminated in the 1950s.

But the NIGC's proposal to redefine the game of bingo threatens all of the gains, she charged. The tribe's facility in the Bay Area exclusively offers electronic bingo-based machines that would be considered illegal if the regulations are adopted, she said.

"It's really termination for my people again," Mejia said.

Other Indian Country representatives came with similar stories. Tracie Stevens, the governmental affairs director for the Tulalip Tribes of Washington, said the tribe would have "no choice" but to remove hundreds of machines and eliminate at least 40 jobs if the rules become law.

"We know the proposal will have adversely impact Tulalip," said Stevens, who stood in for chairman Stan Jones.

Buford Rolin, the chairman of the Poarch Band of Creek Indians in Alabama, said his tribe would lose business because the NIGC's proposal restricts the types of games that can be operated at casinos. He projected an 80 percent decrease in gaming revenues at one facility and a loss of 500 jobs at another.

"We will no longer be able to keep pace with our competitors and will be forced to close up," Rolin told NIGC chairman Phil Hogen colleague Chuck Choney.

Others connected to the Indian gaming industry agreed with the assessments even as they tried to offer neutral views on the controversy. Nick Farley, the president of a testing lab in Ohio, acknowledged that the NIGC's proposal can be followed if adopted.

But he said some of the proposed definitions and classification standards "contradict" existing rules. He indicated that it would take more testing time to determine whether casino machines adhere to the new regulations.

The only person who outright spoke in favor of the NIGC's proposal was Sharon Tolten-Reese, the deputy director of the Washington State Gaming Commission. She said the definitions and standards would clear up "gray areas" of the law.

But she appeared to back track on some of her statements after facing criticism from tribal representatives in the audience, who questioned why she suggested that some tribes in Washington were operating "illegal" machines.

Despite the overwhelming opposition, Hogen said the NIGC hopes to move forward with the changes. He said the rules would bring stability to a contentious area of law.

The proposal has been in the works for more than two years. At one point, the rules were tied up due to an inter-agency dispute with the Department of Justice, which has taken a tough stance against tribes who offer electronic casino machines.

Tribes were able to lobby the administration to revise and hold back a Justice initiative that would have imposed even stronger restrictions on the industry than the ones being considered by the NIGC.

At issue is whether the use of technology turns an electronic bingo game into a slot machine or a slot equivalent. Tribal representatives argue that the Indian Gaming Regulatory Act of 1988 envisioned that these types of games would remain legal.

NIGC, however, has issued opinions that have pushed some of the games into the slot machine category. The distinction is significant because slot machines and similar games can only be operated with the consent of the state under a tribal-state compact.

Bingo and pull-tabs, known as Class II games, can be offered free of state control.

Class II represents a small portion of the $23 billion tribal casino industry. Most of the money comes from Class III games like slots and card games.

But tribes are facing increasing demands from states to share more of their Class III revenues. So NIGC officials like Hogen acknowledge that Class II remains crucial to the future of the industry.

"Bingo is the bedrock of Indian gaming," said Hogen, who called IGRA "the single most effective economic development engine in the history of federal Indian policy."

The comment period on the rules is set to close at the end of the month. Some have asked for an extension so that NIGC can conduct a broader economic analysis of the impact of the proposal.

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