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WEDNESDAY, SEPTEMBER 4, 2002

"They are not as scary as they might be," Kevin Gover, a former Interior official, says.

As regulators responsible for the $12.7 billion and growing Indian gaming industry, "they" certainly wield a lot of power. They can shut down tribal businesses, make or break a casino deal and make rules governing the daily operation of casino facilities.

Who are they? They are the National Indian Gaming Commission, the third sovereign -- tribal, state and federal -- charged with regulating gaming in Indian Country.

The Bush administration has just named a new chairman, Phil Hogen, and two associate commissioners, Chuck Choney and Nelson Westrin, to the three-member NIGC. Here's a review of the major issues they will be facing.

NIGC Budget
NIGC's current budget is $7.9 million. The proposed fiscal year 2003 budget is $9.9 million.

Most of NIGC's funds, $7.9 million in fact, come from fees collected from tribes with gaming facilities. Tribes pay a certain percentage of their revenues, based on two "tiers," to the commission.

NIGC officials, past and present, frequently bemoan that the money is not nearly enough to regulate 290 facilities spread across the country. While Indian gaming revenues have doubled over the past decade, the NIGC's budget has not grown similarly.

Congress can give more money to the NIGC, which it is doing for 2003. Otherwise, the fees can increase, a move often opposed by tribes.

Casino Game Classification
Federal law created two classes of games: Class II, or bingo-like, and Class III, which includes slot machines, card games and related offerings.

By law, Class III games can only be operated under a tribal-state compact. But a number of states won't negotiate agreements, so tribes depend on Class II games for revenue.

For this reason, classification is perhaps the NIGC's most controversial duty. Tribes and casino game companies have taken the NIGC to court over its decisions.

When tribes operate Class III games without a compact, they can be fined up to $20,000 a day -- or worse, shut down. Two Texas tribes had to close their facilities within the past year.

New rules finalized this summer are supposed to clear the air but don't seem to be fulfilling this goal, as one company has already sued. The NIGC also threw out a proposed classification policy this summer, leaving it up to the incoming officials to finalize a new one, and perhaps revisit the classification issue.

Regulatory Powers
During the Clinton administration, the NIGC issued a number of rules affecting Indian casinos. They include environmental, health and safety standards and minimum internal control standards (MICS).

The regulations are lengthy and complex and have been controversial among tribes, many of whom resent the imposition of federal mandates. Tribal leaders have publicly questioned whether the NIGC has overstepped its authority.

The Colorado River Indian Tribes (CRIT) of Arizona currently have an administrative challenge to the MICS. The outgoing NIGC officials upheld the standards but the dispute may end up in the court system.

Indian Lands
By law, casinos can only operate on Indian land. The NIGC, tribes, states and the courts are in dispute over what that really means.

The issue has surfaced as tribes in states where Class II gaming is prohibited look elsewhere for economic development. Due to the policies of removal and allotment, there are parcels of Indian land in seemingly unusual places like Illinois or in urban areas. The Wyandotte Nation and the Miami Nation, both of Oklahoma, are notable examples.

Another land issue affects casinos. By law, Class II or Class III gaming cannot occur on land taken into trust post-1988 unless specific exceptions are met.

One requires the approval of a state governor. Three tribes in Wisconsin are currently challenging this provision as unconstitutional after their casino was rejected in 2001.

Another exception affects tribes in Oklahoma, where reservations were broken up through allotment. The NIGC has asked tribes in the state to document that their casinos are operating on Indian land.

Today on Indianz.Com:
Hogen tapped to oversee gaming (9/4)