The $20 billion Indian gaming industry faces additional oversight and scrutiny under a controversial bill approved by a Senate committee on Wednesday.

A crowd of more than 100, some of whom hired line holders to secure seats, packed the small Senate Indian Affairs Committee room as members debated the first major overhaul of the Indian Gaming Regulatory Act since 1988. It took nearly 45 minutes to go through three amendments before the measure, sponsored by Sen. John McCain (R-Arizona) and Sen. Byron Dorgan (D-North Dakota), was endorsed.

"The ayes have it," McCain, the chairman of the committee, said unceremoniously after a voice vote on S.2078, the Indian Gaming Regulatory Act Amendments of 2005.

McCain introduced the bill last November in order to increase federal regulation of Indian gaming and restrict off-reservation casinos. A substitute he brought to the committee yesterday maintains those goals but some significant changes have been made to the original proposal.

The first change affects the National Indian Gaming Commission's power to review gaming and gaming-related contracts. After hearing complaints of a "bottleneck" that could be created as a result of the new authority, McCain and Dorgan clarified the types of agreements that are subject to federal approval.

For example, contracts between tribes will not fall under the act, a provision that benefits wealthy tribes like the Mohegans of Connecticut, who are financing Indian casinos elsewhere in the nation. "We've actually encouraged tribe-to-tribe cooperation," said Dorgan, the vice chairman of the committee.

McCain and Dorgan also added language to delay the effective date of the NIGC's new authority until the agency consults with Indian Country on new regulations.

A second major change comes to the provisions affecting the acquisition of new lands for gaming. Under Section 20 of IGRA, tribes can open casinos on land that is currently not part of a reservation as long as they meet one of four exceptions or go through the two-part determination process that requires state and federal approval.

McCain originally sought to eliminate almost every part of Section 20. The substitute approved yesterday only gets rid of the two-part determination process -- used for three off-reservation casino since 1988 -- and the land claim settlement exception -- used for one off-reservation casino since 1988.

The exception for newly recognized tribes and the exception for restored tribes was put back into the bill. But these tribes will be required to demonstrate historical, geographical and temporal ties to the land they want to use for gaming.

The Interior Department will be required to consult with nearby tribes and local governments, something the agency already does, although McCain said yesterday that the current process is "arguably unfair" to local communities and non-Indians.

The fourth exception, a special exclusion for Oklahoma tribes, remains unaffected by the bill.

During the meeting, three amendments brought up for review were subject to considerable debate. On all the amendments, Republican members of the committee were pitted against Democrats.

For the first amendment, McCain sought to impose a March 29 cutoff date on new land-into-trust applications. He said the "grandfather" clause was necessary to prevent tribes from seeking off-reservation casinos under current law while the bill makes its way through the Congress.

But Democrats on the committee, including Dorgan, Sen. Kent Conrad (D-North Dakota) and Sen. Maria Cantwell (D-Washington), questioned how the provision would affect tribes that have publicly stated their gaming plans but may not have filed the paperwork yet. In North Dakota, the Turtle Mountain Band of Chippewa appear to be in that situation with their off-reservation casino in Grand Forks, while the Spokane Tribe in Washington might fall into the same category for a casino in a Spokane suburb.

"Is it right that we just shut the door today?" Conrad wondered. "I must say it troubles me."

Dorgan and Conrad said they came to the meeting expecting a cutoff date of April 15, a suggestion that ran into opposition from Republicans. "We're debating as to how we should give them two more weeks to do what we want to eliminate," said Sen. Richard Burr (R-North Carolina), a new member of the panel.

McCain reluctantly agreed to the date change. "I'll do April 15," he said. "If there's flood of applications, on the floor I'll go back to March 29, OK, and we'll have a vote [by] the full Senate." Dorgan said he would agree to such a change.

The second amendment also drew sparring along party lines. Sen. Daniel Inouye (D-Hawaii), the most recent vice chairman of the committee, introduced language to "fix" the U.S. Supreme Court's decision in Seminole Tribe v. Florida, a case from 1996 that allows states to refuse to negotiate with tribes even if Class III gaming is legal in the state.

The amendment would give tribes the right to file a lawsuit if a state fails to respond within 180 days to an attempt to negotiate. "This is just to give the Indian, a sovereign, his day in court," said Inouye.

Dorgan spoke in favor of the proposal and said it corrects instances of discrimination in which tribes are denied the right to seek Class III gaming. He also noted that the bill provides a "fix" to a more recent court decision that, unlike the Seminole case, went in favor of tribal interests.

But McCain objected, arguing that the committee -- which is under his control -- never held a hearing to examine the "repercussions" of the issue. "This amendment enables Class III gaming in states where they don't want it," he said.

He called a voice vote, during which the Democrats said "Aye" but the Republicans said "Nay." He then asked for a recorded vote, with all six Democrats -- including Sen. Daniel Akaka of Hawaii voting by proxy -- in favor while five Republicans were in opposition.

McCain then registered a no vote, resulting in a 6-6 tie that prevented the amendment from being included in the substitute.

The final amendment was introduced by Sen. Tom Coburn (R-Oklahoma). He drafted language to require tribes to disclose their gaming revenues, an issue he raised at a hearing last summer.

"Tribes are already required to report their gaming revenues to the National Indian Gaming Commission," he said. "Why not make that information publicly available to their citizens of these tribes so that they have the information they need to hold their elected leaders accountable."

McCain, who previously opposed Coburn on an Indian health care amendment, initially questioned the scope of the proposal. He wondered whether it would force tribes to open their books to the public at large.

But after clarifying that it would be limited to tribal members, McCain said he supported it and tied the issue to Jack Abramoff, the disgraced lobbyist who pleaded guilty to defrauding tribes. "I doubt if most tribal members of the Coushatta Tribe would have approved of a contract with Mr. Abramoff to give him $20 million," he said, referring to one of the tribes involved in the scandal.

Democrats, however, questioned the idea. Dorgan said the disclosure requirement "steps a bit on the sovereignty issue" and suggested a hearing. Inouye said it was unfair because the federal government doesn't place similar requirements on foreign governments who do business in the U.S.

"One sovereign does not tell another sovereign what to do," he said.

But the amendment was approved by a voice vote before the final voice vote on the measure was called.

The bill now goes to the Senate floor for consideration. A companion has not been introduced in the House, but Rep. Richard Pombo (R-California), the chairman of the Resources Committee, has proposed his own IGRA amendments that conflict with McCain's, although they share similar goals of restricting off-reservation casinos.

Since 1988, there have been no major amendments to IGRA. Competing federal, tribal and state interests have blocked passage of any significant changes.

McCain IGRA Bill:
Indian Gaming Regulatory Act Amendments of 2005 (S.2078)

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

Relevant Links:
National Indian Gaming Commission - http://www.nigc.gov
National Indian Gaming Association - http://www.indiangaming.org
Senate Indian Affairs Committee - http://indian.senate.gov
Sen. John McCain - http://mccain.senate/gov