Senate committee takes first stab at gaming

Tuesday, June 26, 2007  

After a welcome respite, tribes will once again have to defend their $26 billion casino industry before the Senate Indian Affairs Committee.

As chairman of the committee during the 109th Congress, Sen. John McCain of Arizona held a large number of hearings on gaming in 2005 and 2006. The Republican presidential contender was adamant about reforming everything from off-reservation casinos to the definition of slot machines no matter how tribes felt.

Amid tribal opposition, no changes were made to the Indian Gaming Regulatory Act. And as Congress passed into the hands of Democrats, Sen. Byron Dorgan of North Dakota, the current chairman, vowed to focus on health, education, housing and other issues that some tribal leaders felt were neglected in the past two years.

Despite the pledge, Dorgan has called the committee's first gaming-related hearing this Thursday. But this time around, the conversation will be much more cordial as he seeks tribal views on a "discussion draft" bill to amend IGRA.

The draft, which has not been introduced, doesn't come anywhere close to the major overhaul McCain proposed last year. But it addresses one significant issue: the regulation Class III gaming, the most lucrative segment of the tribal casino industry.

The National Indian Gaming Commission has long contended it has the authority to regulate Class III games such as slot machines and card games. But the agency lost a major ruling when the D.C. Circuit Court of Appeals said that role belongs to tribes and states through the compacting process.

Although the case is still proceeding in the courts, the draft discussion bill would resolve the issue by affirming NIGC's powers in the Class III arena. When McCain tried to do the same thing, tribes objected, citing their front-line regulation and the participation of states.

Ernie Stevens Jr., the chairman of the National Indian Gaming Association, said "it is not the NIGC's job to establish federal regulations that override the sovereign decisions of tribes and states made through Class III gaming compacts" after the appeals court ruling last October.

Dorgan's proposal contains two major concessions that could address such concerns. The first provision requires the NIGC to defer to existing tribal-state Class III compacts as long as they meet certain "minimum standards."

Those "minimum standards" are the subject of another provision in the draft. NIGC would be required to form a "Class III regulatory committee" to consult with tribes about new rules for slot machines, card games and related casino games.

The committee would essentially be able to rewrite the NIGC's Minimum Internal Control Standards, or MICS, that are the subject of the court case. The D.C. Circuit said the agency has no power to enforce them against tribes because they address Class III gaming.

The MICS were originally developed during the Clinton administration. Even though tribes participated in a consultation process for the rules, they complained that NIGC lacked the authority to issue them and were vindicated by the appeals court.

Despite the legal victory, regulation of gaming remains a hot political issue. In California, the second-largest tribal casino market, Democrats are holding up several Class III compacts due to concerns about minimum standards.

Some tribes, along with the state Gambling Control Commission, sought to address the dispute by proposing minimum standards for California. According to press reports, however, a large number of tribes questioned or opposed the effort.

This Thursday's hearing takes place at 9:30am in Room 485 of the Russell Senate Office Building. The witness list has not been posted online.

Discussion Draft:
Class III regulation (June 2007)

Committee Notice:
HEARING on discussion draft legislation regarding the regulation of class III gaming (June 28, 2007)

NIGA Report:
The Economic Impact of Indian Gaming in 2006 (May 2007)

Relevant Links:
Senate Indian Affairs Committee - http://indian.senate.gov