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Tribes line up against tighter casino regulation

29 June 2007

WASHINGTON, DC -- Tribal officials on Thursday voiced opposition to legislation that would increase federal regulation of Indian casinos.

The draft bill is a response to a ruling in October by the U.S. Court of Appeals in Washington, D.C., that said the Indian Gaming Regulatory Act of 1988 does not authorize federal regulation of tribal casinos.

States and tribes should regulate Indian casinos through compacts, the court said.

The ruling was a victory for the Colorado River Indian Tribes, who denied the National Indian Gaming Commission financial records from the BlueWater casino in Parker, Ariz., in January 2001.

Sen. Byron Dorgan, D-N.D., has authored legislation that would authorize the NIGC, the federal agency charged with regulating tribal gambling, to establish minimum internal control standards for Indian casinos. The Indian casinos produced revenue of about $25.5 billion in 2006.

Dorgan, who is chairman of the Senate Indian Affairs Committee, said he has not yet introduced the bill but wanted to discuss it with tribal and federal officials during Thursday's committee hearing.

"The result of the case, I think, has created some gaps in the regulation of Indian gaming," Dorgan said. "Those gaps are of concern to me."

Tribal representatives told the committee the Indian gaming industry is thriving and lawmakers should be careful about amending the Indian Gaming Regulatory Act of 1988.

"How much power should the (NIGC) have? We do not want to empower them with a provision that basically says that the tribe and the state have to come to this agency, and say, 'Mother, may I?' " said Ron Allen, who is chairman of the Indian Gaming Association in Washington state.

One of the committee members, Sen. Daniel Inouye, D-Hawaii, went further, saying he would do everything he could to make sure Dorgan's bill disappears.

"I think the Indian nations have done extremely well. They haven't had any major scandal," Inouye said. "Compare that with the so-call well-run activities of New Jersey and Las Vegas and see how the Indians have done. The one big scandal that involved Indian gaming came about because a non-Indian tried to scam and con Indians."

Inouye was referring to lobbyist Jack Abramoff, who is serving 5 years and 10 months in prison for bilking Indian gaming tribes and bribing members of Congress.

Philip Hogen, who is the NIGC chairman, said his agency is not seeking to use Dorgan's bill to increase his agency's regulatory authority over tribal casinos.

Instead, the bill would restore the agency's power to establish minimum internal control standards for Indian casinos, Hogen said.

The standards cover activities such as cash handling, internal auditing, surveillance and inspections of gambling equipment.

The agency began setting the standards to cope with the explosive growth of tribal casinos in the 1990s, Hogen said, when it became clear that state regulation was spotty.

"The (court) decision took that tool away from the National Indian Gaming Commission. I think we need it back," Hogen said.

Dean Shelton, who is the chairman of the California Gambling Control Commission, told the committee that Gov. Arnold Schwarzenegger, R-Calif., wants federal officials to set minimum internal control standards for tribal casinos in his state.

Schwarzenegger sees the NIGC as "filling a void" in the regulation of California tribal casinos, Shelton said.

"California has grown so immensely in gaming," Shelton said. "We (California regulators) have not geared up to be doing what we should be doing."

From a little more than $1 million in gaming revenue in 2001, California tribal casinos produced more than $7 billion in 2006, Shelton said.

The Senate committee hearing followed a 236-194 vote Tuesday in the House rejecting an amendment by Rep. Charles Dent, R-Pa., to cut off federal funding for new Indian casinos that would be located away from a tribe's reservation.

Tribes line up against tighter casino regulation is republished from CasinoVendors.com.