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Best of Liz Benston

Gaming Guru

Liz Benston

Regulator: Tribal Recognition System Flawed

13 February 2004

LAS VEGAS -- A top Nevada casino regulator Thursday called for a review of the federal process by which Indian tribes are recognized and lands are approved for casino development, calling the current system "perverse" and unfair for some tribes.

"It's a perverse system when older, more established tribes are at a competitive disadvantage to brand new tribes," state Gaming Control Board Member Scott Scherer said at a conference of gaming attorneys and regulators in Henderson sponsored by the American Bar Association.

Interpretations of federal law are allowing recently created tribes with a handful of members to secure more lucrative lands for casinos than the majority of tribes with historical lands that are in remote areas, said Scherer.

"It's a loophole that investors are exploiting" to link up with landless tribes and bankroll the purchase of land for development, he said after the conference.

Las Vegas-based commercial casino giants are in the midst of assessing the effect of expanding tribal casinos across the border in California and continue to seek contracts to run casinos for tribes there and in other states.

Nevada regulators have generally avoided weighing in on the tribal gambling debate. American Gaming Association Chief Executive Frank Fahrenkopf said Thursday that the trade group -- which represents most major commercial casino companies -- doesn't take positions on Indian gaming because some members are in business deals with tribes and others are not.

Scherer, a former attorney, said his position is based on his interpretation of the law and does not necessarily reflect the view of the Gaming Control Board.

Scherer said he wasn't speaking on the issue because of threats by tribes to open casinos in Nevada or threats to Nevada's gaming industry from tribes in adjacent states. Scherer said he was speaking out because he feels the tribal-recognition process needs to be reviewed.

However, Scherer's comments are sure to be of interest to Nevada-based casino companies -- both those involved in Indian gaming and those not involved -- because he regulates them.

The Indian Gaming Regulatory Act of 1988 allows for tribes to build casinos on their reservations or acquire additional land for casino development by receiving approval from the state's governor, he said. But tribes without existing reservations have in some cases received prime land for a casino from the federal government without gubernatorial approval, he said.

That view doesn't take into account the fact that several Indian tribes were terminated and had their land taken away from them by the federal government decades earlier, said Nelson Westrin, vice chairman of the National Indian Gaming Commission.

Without the opportunity to secure lands of their own, tribes "would have been deprived totally of the federal policy interest that tribes have the means of using gaming in order to promote economic development, self-sufficiency and strong tribal government," said Westrin, who also attended the conference.

"Since the late 1960s, federal policy has been to promote tribal sovereignty, to promote tribal economic development and self-sufficiency and to get tribes off their dependence on federal funding," he said.

The Federated Indians of Graton Rancheria and the United Auburn Indian Community -- two Northern California tribes that have struck business agreements with Station Casinos Inc. of Las Vegas -- both were restored by acts of Congress.

Michael Rossetti, legal counsel to Secretary of the Interior Gale Norton, who oversees the Bureau of Indian Affairs, said Norton is taking a careful approach to analyzing individual land claims brought by tribes.

The federal process has "checks and balances" by which tribes may secure land for development, he said. Landless tribes must show that their land claim will not harm the local community and states may pursue legal action in objection to a tribe's claim.

Public officials in some states such as California and Connecticut are criticizing the process by which some tribes have obtained land for casinos.

In Connecticut -- a state where many local residents and state officials have turned against the prospect of gambling expansion -- state Attorney General Richard Blumenthal has called for a congressional investigation into the lobbying efforts by wealthy tribes seeking federal recognition. The state's congressional members also have asked the U.S. House Committee on Government Reform to study the issue.