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IGRA amendments mired in debate over revenues
Tuesday, April 13, 2004

A bill to reform federal oversight of the $15.9 billion Indian gaming industry stalled last week amid complaints that it could weaken ongoing negotiations to send more tribal casino revenues to state coffers.

The Senate Indian Affairs Committee took up the amendments to the Indian Gaming Regulatory Act at a business meeting last Wednesday. Sen. Harry Reid, a Democrat from Nevada who often holds back gaming-related bills, objected to its consideration due to a lack of a quorum. Only four members were present.

Sen. Ben Nighthorse Campbell (R-Colo.), the chairman of the committee and chief sponsor of S.1529, responded that he would delay the bill. Reid indicated he would work with staff to resolve his concerns but did not elaborate.

Indian gaming has been the subject of three hearings in the past two years. At the most recent one, tribal leaders and a Bureau of Indian Affairs official called on Congress to restrict states' attempts to limit revenue-sharing in gaming compacts.

Several states, most notably California, are looking to tribes to patch up billion-dollar holes in their budgets. The tactic has drawn criticism from the National Indian Gaming Association, the largest tribal gaming group.

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

Campbell's bill seeks to provide more guidance to the BIA, which is charged under IGRA to review tribal-state gaming compacts. According to George Skibine, the acting deputy assistant secretary for policy and economic development, the number of such agreements, in which tribes contribute a percentage of their revenues to the state, has exploded in recent years.

"There are unmet needs ... with many, many tribes," Skibine said in response to language that would direct the BIA to consider whether tribal needs are being satisfied. "If that's the case then there will never be revenue-sharing if we have to address the unmet needs of the tribe."

The discussion has generated complaints from California Gov. Arnold Schwarzenegger (R), who sent a letter to Campbell and Sen. Daniel Inouye (D-Hawaii), the other co-sponsor, on the eve of the March 24 hearing. "The sole purpose of this amendment appears to be to limit the ability of the state to ensure its fair share of the revenue generated by the tribes' gaming operations," he wrote.

Sen. Dianne Feinstein (D-Calif.), who has been critical of efforts by tribes to open casinos in urban areas, echoed those sentiments in a follow-up letter. "In regard to revenue sharing, I believe this legislation could restrict the rights of states and local governments to receive fair compensation from tribes," she wrote on April 1.

Schwarzenegger campaigned on a promise to take more revenues from tribes and his office is negotiating with a handful of tribes that are willing to share more revenues in exchange for an expansion of their gaming rights. But the overwhelming majority of the 50-plus tribes with casinos object to the premise that they aren't contributing enough to the state's economy.

"Overall, it is estimated more than 200,000 Californians are now employed, either directly or indirectly, by Indian gaming," said Anthony Miranda, chairman of the California Nations Indian Gaming Association, at a conference in January. "That adds up to billions in wages, benefits and other payments generated directly and indirectly by Indian gaming."

Tribes aren't entirely satisfied with S.1529 either. NIGA and the National Congress of American Indians say it should include provisions to address a 1996 U.S. Supreme Court decision that puts tribes at a significant legal and political disadvantage when seeking to negotiate compacts. States can walk away from the table, and even refuse to negotiate, due to sovereign immunity.

NIGA and NCAI also say the bill should not expand the authority of the National Indian Gaming Commission, a federal agency, to regulate Class III games such as slot machines, card games and related offerings. The tribes say these matters should be handled under tribal-state compacts.

The Indian Gaming Regulatory Act was passed in 1988 in the wake of a Supreme Court decision that confirmed the inherent right of tribes to offer gaming free of state regulation. That right was modified through the bill with the introduction of compacts between states and tribes and classification of the market into two classes of games.

Attempts over the years to amend the law in any significant manner have failed to pass.

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

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

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

Related Stories:
Senate panel debates changes to Indian gaming act (03/25)
Tribal leaders share views on threats to sovereignty (01/20)
Calif. tribes confront 'dangers' facing gaming (01/15)
Campbell cites pressure facing Indian gaming industry (08/05)

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