[Senate Hearing 112-237]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-237

 ENFORCING THE INDIAN GAMING REGULATORY ACT: THE ROLE OF THE NATIONAL 
                INDIAN GAMING COMMISSION AND TRIBES AS 
                               REGULATORS

=======================================================================

                                HEARING

                               before the

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 28, 2011

                               __________

         Printed for the use of the Committee on Indian Affairs










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                      COMMITTEE ON INDIAN AFFAIRS

                   DANIEL K. AKAKA, Hawaii, Chairman
                 JOHN BARRASSO, Wyoming, Vice Chairman
DANIEL K. INOUYE, Hawaii             JOHN McCAIN, Arizona
KENT CONRAD, North Dakota            LISA MURKOWSKI, Alaska
TIM JOHNSON, South Dakota            JOHN HOEVEN, North Dakota
MARIA CANTWELL, Washington           MIKE CRAPO, Idaho
JON TESTER, Montana                  MIKE JOHANNS, Nebraska
TOM UDALL, New Mexico
AL FRANKEN, Minnesota
      Loretta A. Tuell, Majority Staff Director and Chief Counsel
     David A. Mullon Jr., Minority Staff Director and Chief Counsel













                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 28, 2011....................................     1
Statement of Senator Akaka.......................................     1
Statement of Senator Barrasso....................................     2
Statement of Senator Hoeven......................................    45
Statement of Senator McCain......................................    12
Statement of Senator Udall.......................................     2
    Prepared statement...........................................     2

                               Witnesses

Hummingbird, Jamie, Chairman, National Tribal Gaming 
  Commissioners/Regulators.......................................    22
    Prepared statement...........................................    24
Luger, J. Kurt, Executive Director, Great Plains Indian Gaming 
  Association....................................................    32
    Prepared statement...........................................    35
Morago, Sheila, Executive Director, Oklahoma Indian Gaming 
  Association....................................................    36
    Prepared statement...........................................    38
Meskill, John, Director, Mohegan Tribal Gaming Commission........    39
    Prepared statement...........................................    41
Stevens, Jr., Ernest L., Chairman, National Indian Gaming 
  Association; accompanied by Mark Van Norman, Executive Director    15
    Prepared statement...........................................    17
Stevens, Hon. Tracie, Chairwoman, National Indian Gaming 
  Commission.....................................................     3
    Prepared statement...........................................     5

                                Appendix

Monteau, Harold A., Attorney, Albuquerque, New Mexico, prepared 
  statement......................................................    51
Response to written questions submitted by Hon. John Barrasso to:
    John Meskill.................................................    54
    Sheila Morago................................................    55

 
                      ENFORCING THE INDIAN GAMING 
                    REGULATORY ACT: THE ROLE OF THE 
                   NATIONAL INDIAN GAMING COMMISSION 
                        AND TRIBES AS REGULATORS

                              ----------                              


                        THURSDAY, JULY 28, 2011



                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:45 p.m. in room 
628, Dirksen Senate Office Building, Hon. Daniel K. Akaka, 
Chairman of the Committee, presiding.

          OPENING STATEMENT OF HON. DANIEL K. AKAKA, 
                    U.S. SENATOR FROM HAWAII

    The Chairman. The Committee will come to order.
    Aloha and welcome to the Committee's oversight hearing.
    This hearing is on enforcing the Indian Gaming Regulatory 
Act: The Role of the National Indian Gaming Commission and 
Tribes as Regulators.
    When the Indian Gaming Regulatory Act was passed by 
Congress in 1988, Indian gaming was a $100 million industry. 
Today, it is a $26 billion industry and there are 236 Tribes 
operating 422 gaming facilities in 28 States.
    It is important that such a growth industry is well 
regulated for Tribal Governments, patrons and the beneficiaries 
of the gaming revenues, the Tribal members. The Tribes, as the 
primary beneficiaries of Indian gaming, have the greatest 
interest in making sure their operations are well run.
    Tribal Governments use these gaming revenues to fund 
essential government services such as education, health care, 
cultural programs and Tribal infrastructure. But the Indian 
Gaming Regulatory Act also created a role for States and the 
Federal Government, thereby setting up a three-tiered 
regulatory scheme for Indian gaming.
    Today, there are approximately 2,800 regulators at the 
Tribal level; 500 at the State level, and 100 at the National 
Indian Gaming Commission. Tribal Governments spend 
approximately $250 million each year to fund their gaming 
commissions. The National Indian Gaming Commission is funded at 
$16 million annually.
    At today's hearing, we will hear from Tracie Stevens, the 
Chair of the National Indian Gaming Commission. We are looking 
forward to learning about her first year in office, the 
Commission's activities during the past year, and their plans 
going forward.
    We will also hear from regulators and Tribal gaming 
organizations who are on the ground every day protecting the 
integrity of Indian gaming.
    I would like to remind our witnesses that they have five 
minutes to present their oral testimony, and their full written 
testimony will be entered into the record. The hearing record 
will also remain open for two weeks so any other interested 
parties are welcome to submit written testimony for the record.
    At this time, I would like to ask Senator Barrasso for any 
opening statement he may have.

               STATEMENT OF HON. JOHN BARRASSO, 
                   U.S. SENATOR FROM WYOMING

    Senator Barrasso. Thank you very much, Mr. Chairman. I 
appreciate your holding the hearing, because as you have looked 
into the statistics, I agree. I found the same things. 
According to the National Indian Gaming Commission, gross 
revenues for Indian gaming in 2010 was over $26 billion. That 
is a lot of money and the activities that generate that kind of 
money must be regulated effectively.
    Obviously, gaming is a cash business and keeping the 
business clean is critical. No one, be it contractors or 
vendors or players or employees, should illegally benefit at 
the expense of the Tribe or the gaming public.
    According to the National Indian Gaming Commission 2009 
Compliance Report, most Tribes did comply with the key 
regulatory requirements. The 2010 Compliance Report is not yet 
available to provide us with the most current information. 
However, these reports do not assess how theft and crime at 
Indian gaming facilities have been addressed. Also, some feel 
that the decision in the Colorado River Indian Tribes case has 
unduly limited the oversight role of the National Indian Gaming 
Commission.
    Of course, many Tribes disagree with that view, so 
hopefully the Committee is going to be able to hear from the 
Commission on that issue, as well as from the Tribal witnesses.
    So, again, thank you for holding the hearing, Mr. Chairman.
    The Chairman. Thank you very much.
    Senator Udall, any comments?

                 STATEMENT OF HON. TOM UDALL, 
                  U.S. SENATOR FROM NEW MEXICO

    Senator Udall. I would put my statement in the record so we 
can proceed to the witnesses. Thank you very much, Mr. 
Chairman.
    [The prepared statement of Senator Udall follows:]

   Prepared Statement of Hon. Tom Udall, U.S. Senator from New Mexico
    The regulation of Indian Gaming is an important and difficult 
issue. It is important that Tribal sovereignty is respected and 
maintained while the existing laws and regulations are implemented.
    I look forward to hearing from the Chair of the National Indian 
Gaming Commission. I know Ms. Stevens has been in this position for 
about a year now, and that this is the first time is several years that 
there has been a fully appointed commission.
    I am encouraged to hear that Chairwoman Stevens' focus on 
conducting meaningful government-to-government consultation with Tribes 
has continued throughout the last year since her appointment. I look 
forward to hearing more about how that consultation is going.
    There are many issues relating to gaming that Tribes and the NIGC 
have been grappling with over the past years. I look forward to hearing 
the views of the panel on the future of Indian Gaming regulation, and 
what is needed in this area.

    The Chairman. Thank you very much. It will be made part of 
the record.
    I would like to now welcome our first witness. Ms. Tracie 
Stevens is the Chairwoman of the National Indian Gaming 
Commission.
    Ms. Stevens, please proceed with your remarks.

 STATEMENT OF HON. TRACIE STEVENS, CHAIRWOMAN, NATIONAL INDIAN 
                       GAMING COMMISSION

    Ms. Stevens. Thank you, Chairman Akaka, Vice Chairman 
Barrasso and Members of the Committee for inviting me to 
testify here today.
    My name is Tracie Stevens and I am a member of the Tulalip 
Tribe. It is an honor to appear before you in my capacity as 
Chairwoman of the National Indian Gaming Commission. With me 
today is Commissioner Dan Little. I would also like to take a 
moment to recognize my Vice Chairman from Tulalip Tribe, Glen 
Gobin, who is also in the audience.
    Today, I will provide a brief overview of the status of 
Tribal gaming and an update on the Commission's progress with 
our four priorities: consultation and relationship-building; 
technical assistance and training; a review of the Commission's 
regulations; and a review of agency operations.
    Currently, 240 federally-recognized Tribes operate a total 
of 422 Tribal gaming facilities in 28 States. Tribal growth 
gaming revenues for 2010 essentially mirror 2009 revenues of 
$26.5 billion. Approximately half of Tribal gaming operations 
generate annual gross gaming revenues of $25 million or less. 
Even modest revenues enable Tribal governments to provide much- 
needed services to Tribal members and create jobs in 
communities otherwise suffering from high unemployment.
    IGRA establishes a framework under which Tribes, States and 
the Federal Government regulate Indian gaming. Within the 
Federal Government, multiple agencies take part in ensuring the 
integrity of the industry, including DOJ, FBI, Treasury's 
FinCEN, and BIA Law Enforcement. NIGC works in cooperation with 
these law enforcement agencies to share information that may 
potentially indicate a criminal violation of law.
    In addition to NIGC, Tribal governments collectively employ 
approximately 5,900 Tribal gaming regulators and States 
collectively employ approximately 640 people to regulate Tribal 
gaming. Thus, NIGC, Tribes and States combine to employ over 
6,600 people to regulate Indian gaming.
    I would now like to turn to our efforts on consultation and 
relationship-building. We are in the final stages of revising 
our Tribal consultation policy. It is through meaningful 
government-to-government consultation that the NIGC will be 
able to make well informed, fully considered decisions 
concerning regulations and policies.
    As part of our relationship-building, we work closely with 
the FBI, DOJ, and U.S. Attorneys' Office when we receive 
information indicating a violation of criminal law. This 
relationship-building strengthens the collective ability of 
Tribes, States and the Federal Government to protect Indian 
gaming.
    The Commission believes a strong, well-targeted technical 
assistance and training program can preempt the need for 
additional regulations or for enforcement actions, can reduce 
compliance issues, and can enhance operations, performance and 
integrity.
    Since June 2010, we have provided 831 instructional hours 
of training to over 2,800 Tribal leaders, Tribal regulators and 
casino operations. We are also reviewing our training 
catalogues with input from Tribes on how best to tailor NIGC 
training to meet the needs of Tribal regulators and the 
industry.
    Training and technical assistance will be an evolving 
process which will be aligned with Tribal needs, as well as to 
ensure the integrity of the industry.
    The Commission is also in the process of reviewing its 
current regulations, examining their effectiveness, and seeking 
input from Tribes, and also the public in an effort to identify 
areas of improvement and any needed changes. We are proceeding 
in a manner in which the Commission strives to circulate 
preliminary discussion drafts for public comment before 
proceeding with the rulemaking process.
    As part of our regulatory review, we are examining Class 
III minimum internal control standards, or otherwise known as 
MICS in light of the CRIT decision. All Tribes have adopted 
internal controls. Tribes and the public universally support 
Class III MICS. We have heard a variety of suggested approaches 
to the CRIT decision as discussed more fully in my written 
testimony.
    Let me be clear, however, that the Commission will solve 
this issue in a manner that ensures the integrity of the 
industry and that Tribes receive the revenues generated by 
Tribal facilities.
    As part of our regulatory review, we have held 11 
consultations throughout the Country, including a consultation 
that is being held right now at the Department of Interior and 
these transcripts from this consultation and comments are 
posted on our website as they become available.
    We are also working to ensure that the NIGC in the 21st 
century is the smartest, more transparent and better equipped 
agency that continues to be responsive and adapted to the needs 
of the Tribal gaming industry. We have partnered with OPM to 
evaluate our operations and identify areas of improvement.
    The Commission is committed to focusing resources and 
maximizing cooperation and coordination with Tribal, State and 
Federal agencies.
    In conclusion, I want to stress my commitment to enforcing 
the law. While the overwhelming majority of Tribal facilities 
are model businesses and our goal is to keep Tribes in 
compliance, make no mistake: serious violations have serious 
consequences. When a third party unlawfully managed a facility 
and took unconscionable amounts of revenue that should be going 
to develop Tribal health and welfare, I issued a violation and 
ordered them to pay those Tribal funds back.
    When Tribes operate facilities in disregard of the law, I 
work with State and Federal authorities to shut them down. I do 
not hesitate to refer criminal matters to the FBI and the U.S. 
Attorneys' offices and I will continue to do so to ensure that 
Tribes are the primary beneficiaries of Indian gaming.
    That concludes my testimony and I am happy to answer any 
questions you may have.
    Thank you.
    [The prepared statement of Ms. Stevens follows:]

Prepared Statement of Hon. Tracie Stevens, Chairwoman, National Indian 
                           Gaming Commission













    The Chairman. Thank you very much for your testimony.
    Chairwoman Stevens, your Commission has placed an emphasis 
on training and technical assistance for Tribal regulators. 
Have you noticed a decrease in enforcement actions as a result 
of increased training for regulators?
    Ms. Stevens. Thank you, Chairman Akaka, for your question.
    My sense is that it is, although this particular initiative 
is a long-term initiative and we have been in office for a year 
and we are, like I said, revamping our curriculum. Technical 
assistance and training is a statutory requirement for the 
NIGC, but the Commission firmly believes that technical 
assistance and training help Tribes stay in compliance. Our 
basic principle is what we call ACE: assistance, compliance and 
enforcement, and in that order. And technical assistance and 
training is an essential component of that principle.
    We have held 92 trainings since June of last year, with 
2,800 attendees, 830 training hours, and over 200 Tribes 
represented.
    Now, I do want to clarify. We see training and technical 
assistance a little differently. Training we have these 
classroom-style trainings that we plan. Sometimes we do this 
for individuals and sometimes we do this for regional Tribes so 
that we can meet with multiple Tribes and conduct training.
    Technical assistance, on the other hand, is unique to the 
situation to the Tribes, and it is our field staff, which I 
have to commend in our Enforcement Division and our Audit 
Division and our General Counsel's Office, who work with Tribes 
on a day-to- day basis. Every day, they are talking to Tribes, 
providing assistance and guidance to keep them in compliance. 
And that is ongoing.
    As I said, I think my sense is that it is helping. We do 
talk to our enforcement staff on a regular basis. They can keep 
us informed and they are in most cases able to keep Tribes in 
compliance and keep enforcement actions down and teach Tribes 
how to stay in compliance.
    The Chairman. Thank you.
    After you became Chair of NIGC, you committed to 
undertaking a comprehensive review of the Colorado River 
decision and determining whether legislative action is 
necessary. Where are you on that review process? And do you 
have any recommendations for whether legislation is necessary?
    Ms. Stevens. Thank you, Chairman Akaka, for your question.
    I do recall that conversation last year, and we set out 
immediately on looking at what I call the post-CRIT world. The 
decision was made five years ago and I wanted to know more 
about what the landscape was for Class III minimum internal 
control standards, and directed the staff at the NIGC to start 
researching that particular topic.
    Our preliminary research shows that there are 24 States 
that have Class III gaming compacts; 15 of those 24 States 
require the Tribes to adopt comprehensive minimum internal 
control standards that are as stringent as the NIGC's. That is 
83 percent of the gross gaming revenue.
    An additional nine Tribes' compacts require Tribes to adopt 
specific controls or to develop their own internal controls. As 
I said in my opening statement and in my written testimony as 
well, is that all Tribes have minimum internal control 
standards.
    As part of this review, we have included the particular 
topic in our regulatory review that we are undergoing that I 
detailed in my written testimony, and are discussing this issue 
with Tribes to get a better understanding of where they are in 
their particular region or their State or with their compacts, 
and how this impacts them.
    In terms of a recommendation, we are still in the process 
of reviewing what Tribes have to say because there have been a 
number of different ways that this could affect Tribes. As I 
said, if 24 States require this in compacts, I am a little 
concerned about upsetting an apple cart there. But as I 
mentioned in my written testimony, this may be a hybrid 
approach that we may have to take in light of the decision.
    We have heard from Tribes, some suggestions from Tribes 
that the NIGC MICS are left in place or that we provide 
guidance. We have also heard suggestions that this be addressed 
in Tribal- State compacts and others suggest that NIGC MICS may 
be adopted into Tribal ordinances.
    As I said, we are still in the process of addressing this 
administratively and we want to solve this particular matter in 
a way that is respectful to all three sovereign governments: 
Tribes, States and the Federal Government.
    The Chairman. So from what you have just said, you look at 
doing it administratively.
    Ms. Stevens. We are doing that right now. I understand 
there is not any legislation, and without language, I couldn't 
comment in the absence of language. But I am trying to address 
this administratively and be respectful to all the agreements 
that are out there with the States and with the Tribes.
    The Chairman. Thank you very much.
    Now, I would like to call on Senator McCain for your 
questions.

                STATEMENT OF HON. JOHN McCAIN, 
                   U.S. SENATOR FROM ARIZONA

    Senator McCain. Well, thank you, Mr. Chairman.
    The question that I asked you I guess it was seven months 
ago, do you believe that there is a need for a legislative fix 
to the CRIT decision as it is known as. I ask you that question 
again.
    Ms. Stevens. Thank you, Senator, for your question.
    Like I mentioned to Chairman Akaka, at this time I would be 
remiss in trying to respond to language that I don't see.
    Senator McCain. I don't understand that logic. There is a 
problem as a result of the CRIT decision. That is the ability 
or lack of capability of the Indian Gaming Commission to have 
access to records and do the investigative work that was 
envisioned when the legislation was passed. Being the coauthor 
of that legislation, I am very intimately familiar with it.
    Now, I ask you the question again seven months later. Is 
there a need for a legislative addressing of the impact of the 
CRIT decision? Now, how that is written would be the second 
step, I might say. The first step is, is there a need for a 
legislative result, seven months later. I asked that question 
in the beginning. You said you would consult and find out and 
give me an answer. You are not giving me an answer today.
    Ms. Stevens. Well, as I said in my response to Chairman 
Akaka, we are still in the process of discussing this with 
Tribes.
    Senator McCain. I see. And how much longer will you be in 
this process of discussing?
    Ms. Stevens. Right now, we are scheduled for the next six 
months.
    Senator McCain. So it will be 13 months from the time that 
you were made the chairman before you are able to reach a 
conclusion on this issue. That is really remarkable.
    Are you aware that there was an FBI raid on the Choctaw 
casino in Mississippi last Tuesday, I believe it was, or July 
13th?
    Ms. Stevens. Yes, I am.
    Senator McCain. Do you know anything about that?
    Ms. Stevens. That is an active investigation right now, 
Senator, and as much as I would like to provide you with 
information, I would not be able to.
    Senator McCain. You do know about it?
    Ms. Stevens. Yes, I do.
    Senator McCain. According to testimony, you have also held 
eight consultations ``to develop more effective ways to consult 
with Tribes,'' according to your testimony. So in other words, 
you have had eight consultations on how to consult.
    Ms. Stevens. I guess you could put it that way. That is one 
way to look at it. It is in response to the President's memo on 
consultation with Tribal governments and being respectful to 
Tribes, an also examining our consultation policy. We would 
like to talk to Tribes before we change the policy.
    Senator McCain. Well, may I say your predecessor had a 
strong opinion about whether there was a need to address 
legislatively a CRIT fix. I think it is really remarkable it is 
going to be 13 months before you could reach a conclusion 
whether there should be a legislative fix or not. I guess it is 
another incredible waste of the taxpayers' dollars.
    I have no more questions, Mr. Chairman.
    The Chairman. Thank you, Senator McCain.
    Senator Udall, your questions?
    Senator Udall. Thank you, Senator Akaka.
    Ms. Stevens, when you visited the Committee last year for a 
similar hearing on gaming, you expressed intentions to increase 
government-to-government relations with the Tribes. How has 
that effort been going? Have you been successful? Where do you 
need to do more work? How are you ensuring that all Tribes are 
able to give input in any future changes in regulations made by 
the NIGC and whether they game or not? And what is the status 
of your draft consultation policy?
    Ms. Stevens. Thank you, Senator, for your questions.
    Upon coming into office, the three commissions met and we 
mapped out these four priorities that I mentioned today both 
orally and in my written testimony.
    The first thing that was on our list is improving our 
consultation process. We have changed our formatting. When we 
consult with Tribes, we do it in a group forum so that Tribes 
can hear what other Tribes have to say. We can hear common 
problems and common solutions and it is an exchange and it is a 
dialogue.
    The other thing that we have done is we have brought out to 
Tribes the NIGC to areas that don't normally see the NIGC. So 
we are going to rural areas and putting the burden of travel on 
the NIGC.
    We also give adequate and timely notice prior to a 
consultation so that Tribes can make arrangements to attend. 
And if they are unable to attend, we put our transcripts on the 
Internet. They are always available and have comment periods 
that allow Tribes time if they are unable to meet with us in 
person to give us their comments on any policy or changes that 
we may be considering.
    And our draft consultation policy right now, we received 
input through those eight consultations that Senator McCain 
mentioned, so that we could look back and see what worked 
previously, what didn't work previously, and consider what 
Tribes had to say before we started changing our policy.
    We drafted a policy with Tribal input and we issued it in 
April. We had about a 60-day comment period for that draft 
consultation policy. We are in the process of reading those 
comments from Tribes and we will be finalizing that. And 
overall, we have had very supportive comments from Tribes on 
our revamped and revised consultation policy.
    Senator Udall. Can you give me, and maybe you can't because 
of the status of this, but how the comments have been going? 
And have they appreciated the consultation process that you 
have developed, and that kind of thing?
    Ms. Stevens. What we have heard so far is an appreciation 
for, one, timely notice; two, inclusion prior to drafting 
anything and that goes to honoring Executive Order 13175 that 
states that Federal agencies should talk to Tribes first before 
making changes. And that is one particular area that Tribes 
have been very supportive of.
    And then finally just the change in format. It took 
everybody a little while to get accustomed to the new 
roundtable format, but it has been very helpful to have our 
format structured that way so that we can have very candid 
conversations. And so far, it has been very supportive.
    I have to say, Tribes don't always agree with what I have 
to say and we are finding that out through our regulatory 
review process. But just because we don't agree, doesn't mean 
we can't be respectful.
    Senator Udall. One of the major complaints I hear with my 
Tribes in New Mexico, 22 Tribes, and some have gaming and some 
don't, is the word. You used the word consultation. And I think 
the fact that you are going out in advance before doing 
regulations and consulting and spending the time with them and 
giving them notice, I think that really makes a difference. It 
may take some time, slow down some of the rest of the things 
you are doing, but it is something that I think is a sore point 
with many Tribes, that when it comes to various governmental 
agencies that the word consultation is there, and yet the 
governmental agencies don't do it.
    And so I think they appreciate the effort that you are 
taking, and I look forward to this Committee being briefed on 
that as we move forward.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator Udall.
    I would like to say mahalo, thank you very much, Chairwoman 
Stevens, for your testimony and your comments. We want to wish 
you well, and as I look forward to the future, we need to make 
every effort to keep things just and I think you folks are 
striving to do that.
    And so I want to wish you well and to keep in touch with 
you on matters that affect the Indian Tribes. So thank you 
again for being here.
    Ms. Stevens. Thank you, Chairman, I look forward to keeping 
the Committee informed.
    The Chairman. Thank you.
    I would like to invite the second panel to the witness 
table: Mr. Ernest Stevens, Jr., Chairman of the National Indian 
Gaming Association and Mr. Jamie Hummingbird, Chairperson of 
the National Tribal Gaming Commissioners and Regulators.
    Welcome to the Committee. It is good to have you here and 
hear your testimony.
    Mr. Stevens, will you please proceed with your testimony?

        STATEMENT OF ERNEST L. STEVENS, JR., CHAIRMAN, 
        NATIONAL INDIAN GAMING ASSOCIATION; ACCOMPANIED 
             BY MARK VAN NORMAN, EXECUTIVE DIRECTOR

    Mr. Stevens. Good afternoon, Mr. Chairman, Senator Udall. 
It is an honor to be here this afternoon. I want to thank you 
for this opportunity to testify on the role of Tribal 
governments as regulators in Indian gaming operations.
    I would like to ask that my written statement be placed in 
the hearing record. My statement includes a number of 
statistics that reinforce what Indian gaming means to Indian 
Country and lists the significant benefits to our State and 
local government neighbors.
    Indian gaming is Tribal self-determination. Gaming is an 
exercise of inherent authority affirmed, confirmed and guided 
by the Indian Gaming Regulatory Act.
    The Chairman. It will be included in the record.
    Mr. Stevens. IGRA is largely a result of the Cabazon 
Supreme Court case. That decision recognized President Reagan's 
policy to support Tribal self-government and self-sufficiency; 
237 Indian Tribes nationwide have made the Act work.
    For many Tribes, Indian gaming is first and foremost about 
jobs and rebuilding Tribal communities. For many Indian people, 
Indian gaming has provided them with their first opportunity 
for quality employment. And more importantly, it is bringing 
entire families back to Indian Country. We like that, Mr. 
Chairman. We are excited about that.
    In 2010, Indian gaming generated a total of more than 
600,000 direct and indirect jobs. These jobs go to Indian and 
non-Indian alike. Without question, we are putting people to 
work.
    In times when States are struggling to meet budget 
shortfalls, Indian Tribes are going out of their way to help 
make up the difference. In many States, Indian gaming 
charitable contributions are working to prevent layoffs of 
teachers, health care providers and public safety officials.
    In little more than 30 years, Indian gaming has helped to 
begin to rebuild many struggling Native communities. New 
reservation economies are enhancing living conditions 
throughout Indian Country. Because of Indian gaming, Tribal 
governments are stronger, people are healthier, and an entire 
generation of Indian youth has hope for a better future.
    So that is what is at stake. Tribal governments understand 
that this progress wouldn't be possible without a strong 
regulatory system and Tribes have committed significant 
resources to regulation. IGRA established a three-tiered system 
of regulation. The Act provides for a system of joint 
regulation by Tribes and the Federal Government for Class II 
gaming. With regard to Class III gaming, the regulatory system 
developed between Tribal and State governments through the 
compacting process. In addition, NIGC maintains a strong 
oversight role with respect to Class III gaming.
    As a result of this three-tiered system, Indian gaming is 
subject to more stringent regulation and security than any 
gaming operation in any jurisdiction of the United States. This 
system employs 3,400 regulators and staff to protect Indian 
gaming. In 2010 alone, Tribes spent approximately $345 million 
to regulate their operations. We are not perfect. People have 
tested our systems, but these people have been convicted, lost 
their gaming license, and terminated never to work in our 
industry again.
    Against the backdrop of comprehensive regulation, the FBI 
and the Justice Department have repeatedly testified that there 
has been no substantial infiltration of organized crime in 
Indian gaming. This is not an accident, Mr. Chairman. The 
system is costly. It is comprehensive. And our record and 
experience shows that it is working.
    I would like to acknowledge the current Administration for 
its commitment to agency-wide Tribal consultation. At the 
Department of Justice, the increased cooperation and 
coordination between Tribal gaming regulators, Tribal police 
and the U.S. Attorneys sends a strong message that any crimes 
in Indian Country or against Indian gaming operations will be 
dealt with in accordance with the law.
    Senator, if I can, I want to introduce Mr. Stanley Rocky 
Papasodora, a long-time Indian gaming regulator. Rocky is the 
Director of Security for the Leech Lake Band of Ojibwe. Rocky 
is standing. I want to introduce Rocky quickly because he is 
the Chairman of the Tribal Gaming Protections Network, a 
national group of national regulators and security personnel.
    Now, Rocky would be the first to tell you. He is an old 
boxer so he still has that name, but his name is Stanley 
Papasodora, and he is one of our leaders in this regulatory 
industry. And his Tribe flew him out here to stand with us.
    But he coordinates a national effort nationwide of national 
regulators and security folks that talk about cheats and scams 
throughout this Country. And he would be the first to tell you 
that the strength lies within the more local and regional. But 
they have to communicate because one goes here, the other one 
is going someplace else. And we are on top of it and these 
Indian security personnel are on top of it, and we stop crime 
because of it regularly.
    Thank you, Rocky.
    The Chairman. Welcome. Nice to have you here.
    Mr. Stevens. NIGA appreciates the increased government-to-
government consultation on the part of the NIGC. Consultation 
has begun to repair relationships with Tribal governments, 
which also has led to increased coordination and further 
improvements to regulation.
    That said, there are several areas where we must work 
towards improvement. Given the complex nature of the 
regulations, the frequency of revisions, there is a significant 
need for increased training and technical assistance. In 
addition, there is a longstanding need to bring stability and 
clarity to Class II Indian gaming.
    In conclusion, Mr. Chairman, I want to reiterate that 
Indian gaming is working. It is rebuilding Tribal economies, 
benefitting non-Indian communities, and providing hope for 
future generations of Indian people. We are mindful of what is 
at stake and the Tribes nationwide are committed to maintain a 
strong, seamless and comprehensive system of regulation. Much 
of the credit of this success goes to the Tribal leaders, Mr. 
Chairman, who make the decisions to spend $345 million each 
year to regulate their operations and to the thousands of men 
and women who are the day-to-day frontline regulators of the 
Indian gaming operations just like Mr. Papasodora and obviously 
Mr. Hummingbird, too. I am looking to my right. I am right-
handed.
    Mr. Chairman and to the Committee, this concludes my 
remarks. I am trying to stay within my time limit, but again, 
the emphasis I want to make to you, Mr. Chairman, is these 
people have given their life and their heart to protect our 
industry. We are doing a great job and work very hard at it, 
and we spend a lot of resources doing so.
    Thank you for hearing my comments today, Mr. Chairman and 
Mr. Senator, sir.
    [The prepared statement of Mr. Stevens follows:]

Prepared Statement of Ernest L. Stevens, Jr., Chairman, National Indian 
                           Gaming Association
Introduction
    Good afternoon Chairman Akaka, Vice Chairman Barrasso, and Members 
of the Committee. My name is Ernest Stevens, Jr., Chairman of the 
National Indian Gaming Association (NIGA) and a member of the Oneida 
Nation of Wisconsin. NIGA is an interTribal association of 184 
federally recognized Indian Tribes united behind the mission of 
protecting Tribal sovereignty and preserving the ability of Tribes to 
attain economic self-sufficiency through gaming and other economic 
endeavors. I want to thank the Committee for this opportunity to 
provide our views on the role of Tribal governments and the National 
Indian Gaming Commission (NIGC) as regulators of Indian gaming 
operations.
Indian Tribes As Governments
    I testified one year ago today before this Committee about the 
general state of Indian gaming. As I did then, I again would like to 
first place Indian gaming in proper context, by briefly providing some 
background about the Constitutional status of Indian Tribes in the 
United States, and discuss briefly what Indian gaming means to Indian 
country.
    As this Committee well knows, before contact with European Nations, 
Indian Tribes were independent self-governing entities vested with full 
authority and control over their lands, citizens, and visitors to their 
lands. The Nations of England, France, and Spain all acknowledged 
Tribes as sovereigns and entered into treaties with various Tribes to 
establish commerce and trade agreements, form wartime alliances, and 
preserve the peace.
    The United States Constitution specifically acknowledges the 
importance of trade with Tribal governments in the Commerce Clause, 
which states that ``Congress shall have power to . . . regulate 
commerce with foreign nations, and among the several states, and with 
the Indian Tribes.'' U.S. Constitution, Article I, section 8, clause 3. 
The United States also entered into hundreds of treaties with Tribal 
governments. Through these treaties, Tribes ceded hundreds of millions 
of acres of Tribal homelands to help build this great Nation. In 
return, the United States promised to provide for the education, 
health, public safety and general welfare of Indian people. The U.S. 
Supreme Court later acknowledged that this course of dealing with 
Tribal governments established a trust relationship between Tribes and 
the United States, with accompanying obligations on the part of the 
United States towards Indian people.
    Over the past two centuries plus, the federal government has fallen 
far short in meeting these solemn treaty and trust obligations. In the 
late 1800's, the United States adopted and implemented a policy of 
forced Assimilation, whereby the federal government took Indian 
children from their homes, and placed them in military and religious 
boarding schools where they were forbidden from speaking their language 
or practicing their Native religions. The concurrent policy of 
Allotment sought to destroy Tribal governing structures, sold off 
treaty-protected Indian lands, and had the result of further eroding 
Tribal land bases and devastating Tribal economies. Finally, the 
Termination policy of the 1950's again sought to put an end to Tribal 
governing structures, eliminate remaining Tribal land bases, and 
attempted to relocate individual Indians from Tribal lands with the 
help of one-way bus tickets to urban areas with the promise of 
vocational education.
    These policies resulted in death of hundreds of thousands of our 
ancestors, the taking of hundreds of millions of acres of Tribal 
homelands, the suppression of Tribal religion and culture, and the 
destruction of Tribal economies. The aftermath of these policies 
continues to plague Indian country to this day.
Tribal Government Self-Determination
    Time and time again, these policies were revealed as failures. The 
persistence and perseverance of Indian people demonstrated to the 
federal government that Indian country was not going to fade away. On 
July 8, 1970, President Nixon formally repudiated the policy of 
Termination and adopted a policy supporting Indian Self-Determination, 
which seeks to improve Indian education, fosters Tribal culture, and 
enhances Tribal economic development, among other goals. Self-
Determination remains the Indian Affairs policy of the United States to 
this day. Tribal governments have seen progress in rebuilding their 
communities as a result of the Self-Determination policy.
    In the late 1960's and early 1970's, Tribal governments took self-
determination to heart, and opened the first Indian gaming operations 
to generate governmental revenue to fund essential Tribal government 
programs and meet the shortfalls in the federal obligations to provide 
for Indian education, health, and the general welfare of Indian people.
    State governments and commercial gaming operations challenged the 
rights of Tribes to conduct gaming on their lands. These challenges 
culminated in the Supreme Court case of California v. Cabazon Band of 
Mission Indians, 480 U.S. 202 (1987). The Cabazon Court upheld the 
right of Tribes, as governments, to conduct gaming on their lands free 
from state control or interference. The Court reasoned that Indian 
gaming is crucial to Tribal self-determination and self-governance 
because it provides Tribal governments with a means to generate 
governmental revenue for essential services and functions.
    In 1988, one year after the Cabazon decision, Congress enacted the 
Indian Gaming Regulatory Act (IGRA). The stated goals of IGRA include 
the promotion of Tribal economic development and self-sufficiency, 
strengthening Tribal governments, and establishing a federal framework 
to regulate Indian gaming. The Act also established the National Indian 
Gaming Commission (NIGC). While there are dozens of forms of gaming in 
America, the NIGC is the only federal commission to regulate any form 
of gaming in the United States.
    IGRA did not come from Indian country. A number of Tribal 
governments strongly opposed the federal legislation. The Act is far 
from perfect, and the U.S. Supreme Court has added to its 
imperfections. However, for nearly 23 years, more than 200 Tribes 
nationwide have made IGRA work to help begin to rebuild their 
communities and meet the stated goals of the Act.
State of Indian Gaming
    Indian gaming is the Native American success story. For more than 
three decades, Indian gaming has proven to be the most successful tool 
for economic development for many Indian Tribes. In 2010, 236 of the 
565 federally recognized Indian Tribal governments operated gaming to 
generate revenue for their communities.
    Many Tribes have used revenue from Indian gaming to put a new face 
on their communities. Indian Tribes have dedicated gaming revenues to 
improve basic health, education, and public safety services on Indian 
lands. We have used gaming dollars to improve Tribal infrastructure, 
including the construction of roads, hospitals, schools, police 
buildings, water projects, and many others. Gaming revenues also enable 
Tribes to diversify their economies beyond gaming. Because of capital 
provided by gaming, Tribes have invested in renewable energy projects, 
retails operations, manufacturing and other entrepreneurial ventures.
    For many Tribes, Indian gaming is first and foremost about jobs. 
Indian gaming is a proven job creator, establishing and fostering over 
600,000 direct and indirect American jobs in 2010. Indian gaming has 
provided many individual Indians with their first opportunity at work. 
Just as importantly Indian gaming is bringing entire families back to 
Indian country. Because of Indian gaming, reservations are again 
becoming livable homes, as promised in hundreds of treaties. These 
American jobs go to both Indian and non-Indian alike. Without question, 
we are putting people to work.
    Indian gaming also benefits federal, state, and local governments. 
A June 2011 National Public Radio report, titled ``Casino Revenue Helps 
Tribes Aid Local Governments,'' acknowledged that revenue from the 
Stillaguamish Tribe of Washington helped prevent additional layoffs at 
the local Everett, Washington prosecutor's office. The article also 
noted to the $1.3 million that the Tulalip Tribes recently gave to the 
local school district after they heard about possible budget cuts and 
teacher layoffs. These same scenarios are taking place in more than a 
hundred local jurisdictions throughout the United States, saving 
thousands of jobs for American health care workers, fire fighters, 
police officers, and many other local officials that provide essential 
services to children, elders, and others.
    In 2010, Indian gaming generated close to $13 billion for federal, 
state and local governments budgets through compact and service 
agreements, indirect payment of employment, income, sales and other 
state taxes, and reduced general welfare payments. Despite the fact 
that Indian Tribes are governments, not subject to direct taxation, 
individual Indians pay federal income taxes, the people who work at 
casinos pay taxes, and those who do business with Tribal casinos pay 
taxes. As employers, Tribes also pay employment taxes to fund social 
security and participate as governments in the federal unemployment 
system. Indian Tribes also made more than $100 million in charitable 
contributions to other Tribes, nearby state and local governments, and 
non-profits and private organizations. In short, Indian gaming has 
become a vital piece of the national economy.
    As this Committee has highlighted over the past several years, much 
more needs to be done. Indian gaming is not a cure all, and many Tribal 
communities continue to suffer the devastating effects of the past 
failed federal policies. Too many of our people continue to live with 
disease and poverty. Indian health care is substandard, violent crime 
is multiple times the national average, and unemployment on Indian 
reservations nationwide averages 50 percent. Again, only 236 of the 565 
federal recognized Tribes are able to use gaming as a means of economic 
development.
    To broaden the economic success of Indian gaming, NIGA is working 
with our Member Tribes to further encourage Tribe-to-Tribe giving and 
lending. Through our American Indian Business Network, we work to 
highlight the benefits of hiring Native owned businesses and 
procurement of Native produced goods and services. Empowering Tribal 
entrepreneurs and Tribal government owned businesses, will serve to 
further diversify and strengthen Tribal economies.
    In addition, we applaud the ongoing efforts of the NIGC to adopt a 
regulation to implement the Buy Indian Act. The Buy Indian Act, states 
simply: ``so far as may be practicable Indian labor shall be employed, 
and purchases of the products of Indian industry may be made in open 
market in the discretion of the Secretary of the Interior.'' 25 U.S.C. 
47. Such a regulation should give preference to qualified Tribal 
government-owned and individual Indian-owned businesses when the NIGC 
procures goods or services. These efforts fully comport with the stated 
goals of IGRA to foster Tribal economic self-sufficiency.
    While much more must be done, Indian gaming has proven to be one of 
the best available tools for Tribal economic development. Indian gaming 
has helped many Tribes begin to rebuild communities that were once 
forgotten. Because of Indian gaming, our Tribal governments are 
stronger, our people are healthier, and an entire generation of Indian 
youth has hope for a better future.
Tribal Government Regulation of Indian Gaming
    That's what is at stake. Tribal governments realize that none of 
these benefits would be possible without a strong regulatory system to 
protect Tribal revenue and to preserve the integrity of our operations.
    With regard to regulation, IGRA established a three-tiered system. 
This Committee's 1988 report on the Act makes clear the original intent 
for the regulatory system under the Act:

        ``[IGRA] provides for a system of joint regulation by Tribe and 
        the federal government for Class II gaming on Indian lands and 
        a system of compacts between Tribes and states for regulation 
        of Class III gaming. The bill establishes the NIGC as an 
        independent agency within the Department of the Interior. The 
        Commission will have a regulatory role for Class II gaming and 
        an oversight role with respect to Class III gaming.''

        Senate Report 100-446, at 1 (Aug. 3, 1988).

    This regulatory system vests local Tribal government regulators 
with the primary day-to-day responsibility for regulating Indian gaming 
operations. This only makes sense, because no one has a greater 
interest in protecting the integrity of Indian gaming than Tribes.
    This framework contrasts from the failed framework of criminal 
jurisdiction in Indian country where Tribes rely on federal officials 
to investigate and prosecute crimes that occur on Indian lands from 
offices and courtrooms that are often located hundreds of miles from 
Indian country. Despite recent reforms, this system is a proven 
failure. Washington, D.C. is simply not equipped to police Indian lands 
or make local decisions for Tribal communities.
    While Tribes take on the primary day-to-day role of regulating 
Indian gaming operations, IGRA requires on coordination and cooperation 
with the federal and state governments (in the case of Class III 
gaming) to make this comprehensive regulatory system work. The Tribal, 
state, and the federal governments must all work hand-in-hand to ensure 
the effective regulation of Indian gaming.
    Under the Act, the NIGC has direct authority to monitor Class II 
gaming on Indian lands on a continuing basis and has full authority to 
inspect and examine all premises on which Class II gaming is being 
conducted.
    Class III gaming is primarily regulated through a framework 
established through individual Tribal-state gaming compacts. Here the 
two sovereigns agree upon a framework to regulate Class III gaming 
based on arms length negotiations. As noted above, Congress intended 
that the NIGC would maintain an oversight of Class III gaming. As a 
result, under the Act, the NIGC:

   reviews and approves Class III Tribal gaming regulatory laws 
        and ordinances;

   reviews Tribal background checks and gaming licenses of 
        Class III gaming personnel;

   receives and reviews annual independent audits of Tribal 
        gaming facilities, including Class III gaming (all contracts 
        for supplies and services over $25,000 annually are subject to 
        those audits);

   approves all Tribal management contracts; and

   works with Tribal gaming regulatory agencies to ensure 
        proper implementation of Tribal gaming regulatory ordinances.

    This comprehensive system of regulation is expensive and time 
consuming, but Tribal leaders know what's at stake and know that strong 
regulation is the cost of a successful operation. Despite the 
Recession, Tribal governments have continued to dedicate tremendous 
resources to the regulation of Indian gaming. In 2010, Tribes spent 
more than $345 million on Tribal, state, and federal regulation:

   $250 million to fund Tribal government gaming regulatory 
        agencies;

   $80 million to reimburse states for state regulatory 
        activities negotiated and agreed to pursuant to approved 
        Tribal-state Class III gaming compacts; and

   $16 million to fully fund the operations and activities of 
        the National Indian Gaming Commission.

    The Indian gaming regulatory system employs more than 3,400 expert 
regulators and staff to protect Indian gaming. Tribal governments 
employ approximately 2,800 gaming regulators and staff. Among the ranks 
of Tribal regulators are former FBI agents, BIA, Tribal and state 
police officers, former state gaming compliance regulators, military 
officers, accountants, auditors, attorneys and bank surveillance 
officers. In addition, state governments employ more than 500 state 
gaming regulators, staff and law enforcement officers to help Tribes 
regulate Indian gaming. At the federal level, the NIGC employs more 
than 100 regulators and staff.
    In addition to the NIGC, a number of other federal officials help 
regulate and protect Indian gaming operations. Tribes work with the FBI 
and U.S. Attorneys offices to investigate and prosecute anyone who 
would cheat, embezzle, or defraud an Indian gaming facility--this 
applies to management, employees, and patrons. 18 U.S.C.  1163. Tribal 
regulators also work with the Treasury Department's Internal Revenues 
Service to ensure federal tax compliance and the Financial Crimes 
Enforcement Network (FinCEN) to prevent money laundering. Finally, 
Tribes work with the Secret Service to prevent counterfeiting.
    Tribal governments have also invested heavily in high tech state-
of-the-art surveillance and security equipment, and employ professional 
personnel to operate these systems. Tribal surveillance systems are on 
par with the best systems in the gaming industry, and exceed standards 
employed by state and commercial gaming operations.
    Against this backdrop of comprehensive regulation, the FBI and the 
Justice Department have repeatedly testified that there has been no 
substantial infiltration of organized crime on Indian gaming. This 
system is costly, it's comprehensive, and our record and our experience 
shows that it's working.
    NIGA is encouraged by the Administration's rededication to agency-
wide government-to-government consultation with Indian Tribes. On 
November 5, 2009, President Obama issued an Executive Memorandum 
directing each federal agency to submit to the Director of the Office 
of Management and Budget (OMB), a detailed plan to implement the 
policies and directives of Executive Order 13175. Over the past two 
years, all agencies have submitted and have begun to implement Tribal 
consultation plans, and many have established offices of Tribal 
government relations. These offices have opened countless doors and 
programs to Tribes in agencies that were previously closed to Indian 
country.
    With regard to Indian gaming, at the Department of Justice, the 
increased cooperation and coordination between Tribal gaming 
regulators, Tribal police, and U.S. Attorneys sends a strong message 
that any crimes in Indian country or against Indian gaming operations 
will be prosecuted to the fullest extent of the law.
    NIGA also appreciates the increased consultation on the part of the 
NIGC. Increased consultation has begun to repair frayed relationships 
with Tribal governments, and has led to increased coordination, and 
further improvements to regulation.
    NIGA is working with the NIGC to improve several areas, including 
training and technical assistance, Class II gaming regulations, and the 
facility licensing regulations. Tribal governments are encouraged by 
the NIGC's ongoing regulatory review. While these areas are detailed in 
comments to a variety of NIGC proposed rules, I will focus my testimony 
on the need to review regulations relating to Class II gaming.
Class II Indian Gaming
    Congress, in enacting IGRA, struck a careful balance among the 
respective interests of three sovereigns: Tribal, federal, and state 
governments. That balance was critically upset by the Supreme Court's 
1996 decision in Seminole Tribe v. Florida, which found that a state 
could refuse to negotiate Class III Tribal-state gaming compacts in 
good faith. This decision has resulted in a number of states (that 
condone and regulate other forms of gaming) exercising veto authority 
over Class III Indian gaming. As a result, Indian Tribes in these 
states rely solely on Class II gaming to generate governmental revenue 
to provide essential services to meet the many needs of their 
communities.
    For most of the past decade, the NIGC has created great uncertainty 
in the area of Class II Indian gaming. With little Tribal input, the 
NIGC in past years developed unworkable gaming classification standards 
that went beyond the statutory authority granted to the Commission in 
IGRA and that threatened the economic viability of Class II gaming. 
Many of these proposed regulations sought to limit Class II games to 
only those in play in 1988. This view stands in direct conflict with 
congressional intent. The Senate Committee Report to IGRA states the 
following:

        The Committee specifically rejects any inference that Tribes 
        should restrict Class II games to existing game sizes, levels 
        of participation, or current technology. The Committee intends 
        that Tribes be given the opportunity to take advantage of 
        modern methods of conducting Class II games and the language 
        regarding technology is designed to provide maximum 
        flexibility.

        Senate Report 100-446, at 9 (Aug. 3, 1988).

    To better meet these intentions, the NIGC should make it a priority 
to revisit regulations that affect Class II Indian gaming in 
consultation with all Tribal governments and Tribal regulatory 
agencies. Specific areas with regard to Class II gaming that deserve a 
closer look include the Class II Minimum Internal Control Standards, 
technical standards for Class II gaming, and self-regulation of Class 
II gaming, among other areas.
    In this area, NIGA acknowledges the significant efforts of the 
Tribal leaders, Tribal regulators, and industry experts of the Indian 
Gaming Working Group. This Group invested a considerable amount of time 
and thought into comments and proposals to improve this area of the law 
and bring it closer to the original congressional intent.
Conclusion
    In conclusion, the Indian Gaming Regulatory Act has worked well to 
promote ``Tribal economic development, self-sufficiency, and strong 
Tribal governments,'' as Congress intended. Indian gaming is a true 
success story for Indian country and the Nation as a whole.
    Tribal governments are mindful of what's at stake, and Tribes 
nationwide have committed significant and precious resources to 
maintaining a strong, seamless, and comprehensive system of regulation. 
Much of the credit for this success goes to the Tribal leaders who made 
the decision to spend more than $345 million to regulate their 
operations, and to the thousands of men and women who are day-to-day 
front line regulators of Indian gaming operations. In short, Indian 
Country is proud of its gaming regulatory history and we are working 
hard to ensure that Tribal gaming regulation remains strong into the 
future.
    Mr. Chairman and Members of the Committee this concludes my 
remarks. Again, thank you for this opportunity to testify today.

    The Chairman. Thank you so much for your testimony.
    And now we will hear from Mr. Hummingbird. Will you please 
proceed with your testimony?

           STATEMENT OF JAMIE HUMMINGBIRD, CHAIRMAN, 
        NATIONAL TRIBAL GAMING COMMISSIONERS/REGULATORS

    Mr. Hummingbird. Thank you, Mr. Chairman.
    I want to say on behalf of the National Tribal Gaming 
Commissioners and Regulators that I am pleased to appear before 
you today to provide insight into the regulatory side of the 
Indian gaming industry from the perspective of a Tribal gaming 
regulator.
    As Mr. Stevens mentioned, my name is Jamie Hummingbird. I 
am a member and citizen of the Cherokee Nation where I serve as 
the Director. And I have been serving in my capacity as a 
regulator for 13 years. Before that, I had served in various 
capacities with the nation and have served my nation for 20 
years.
    Prior to the enactment of the Indian Gaming Regulatory Act, 
or IGRA, in 1988, Tribal gaming regulatory authorities, or 
TGRAs, played a pivotal role in overseeing the conduct of 
gaming offered on Indian lands. It was in the pre-IGRA era that 
the regulatory principles and responsibilities of gaming 
regulators were established and continue to be the foundation 
for each TGRA today, namely the protection of Tribal assets, 
protecting the integrity of the gaming environment, and 
accountability of the gaming operations.
    One constant concept in the minds of Tribes and TGRAs as 
these principles were expressed was that they were and remain 
an exercise of the Tribe's inherent sovereign authority to 
determine the conduct of its operations. The IGRA required 
Tribes to draft gaming ordinances establishing their respective 
gaming regulatory authorities. The Act further clarified the 
role of Tribal gaming regulators by specifying that Indian 
Tribes have the exclusive right to regulate gaming on Indian 
lands.
    In seeking balance of interests of the Federal Government 
and the State governments, IGRA also created the National 
Indian Gaming Commission to provide Federal regulatory 
oversight and, as necessary, various States were expected to 
utilize their existing regulatory bodies or to create them 
pursuant to the terms of a Tribal State compact.
    Further, IGRA allowed Tribes to offer games that were not 
expressly prohibited within the State in which they reside, and 
IGRA created gaming classifications and designated 
responsibility for regulating the various classes of gaming 
where Tribes are the sole regulators of Class I gaming and the 
primary regulator in Class II gaming, with the NIGC maintaining 
and oversight role.
    Tribes also share responsibility for regulation with States 
under the terms of the Tribal-State compacts.
    The Tribal gaming ordinances which are subject to the 
review and approval of the Chairman of the NIGC, fulfill basic 
requirements for Tribal propriety, revenue distribution, 
audits, the environment, public health and safety, and 
management background investigations.
    Tribal gaming regulatory authorities must evaluate their 
gaming environment and devise rules and regulations that are 
fitting to their unique circumstances. As extensions of the 
gaming ordinances, these regulations clarify the duties, 
authorities and methods by which Tribal gaming facilities are 
to be governed.
    The regulations address the licensing of gaming facilities, 
individuals and vendors, approval of games that are to be 
offered, handling tort and prize claims, surveillance, 
security, auditing and overseeing compliance with environmental 
and public health and safety activities.
    Tribes also utilize internal control standards as a tool to 
gauge a gaming facility's level of compliance with applicable 
laws and regulations. There are numerous other tools and 
processes that are utilized in these efforts, beginning with 
the employment of qualified personnel.
    Currently, and has been stated previously, the Tribal 
gaming industry is directly or indirectly responsible for 
employing over 600,000 individuals where there are 
approximately 4,000 Tribal gaming regulators monitoring and 
ensuring the maximum effective level of compliance with all 
gaming laws and regulations.
    TGRAs also maintain strong lines of communication with 
Federal law enforcement agencies, among them the Internal 
Revenue Service, the Financial Crimes Enforcement Network, the 
Office of Foreign Asset Control, and the Secret Service. Tribes 
also maintain healthy relationships with the State and the NIGC 
regulatory offices as they each have a role to play in the 
regulation of Indian gaming.
    Over the past several decades, Tribal gaming facilities 
have increased the level of sophistication of their gaming 
activities by using technology available as provided for by 
IGRA. Tribal regulators have also attained highly sophisticated 
levels of security and the qualifications of regulatory 
personnel have also increased. It is not uncommon for a TGRA to 
employ credentialed professionals such as certified fraud 
examiners, certified internal auditors, network security 
administrators and background investigation specialists. Each 
of these disciplines aids in the development and the refinement 
of Tribal gaming regulations and internal controls.
    The TGRAs must remain up to date as technology advances. In 
the recent past, gaming vendors have introduced wireless gaming 
and systems-based gaming and presently Internet gaming has 
become a topic that has garnered a great deal of attention by 
everyone in the gaming industry, including Tribes. And this 
issue and its potential impact on Tribal gaming will be 
carefully monitored by Tribes.
    In conclusion, Chairman Akaka, while everyone involved in 
Indian gaming can probably agree that the IGRA is less than 
perfect, it has proven to be a stable base for regulation. The 
IGRA has survived numerous amendment attempts due to the many 
successes that we have shown that overshadow its relatively 
minor shortcomings.
    Tribes have consistently demonstrated substantial 
compliance with all Tribal, Federal and where applicable, State 
laws and regulations. Tribal gaming regulators are capably 
performing the due diligence necessary to protect the Tribes 
and are proud of our history of protecting the integrity of the 
Indian gaming industry.
    The responsibility of regulating Tribal gaming facilities 
is a task that Tribal gaming regulators take very seriously, 
and it is the obligation to our Tribal citizens that drive us 
to excel.
    On behalf of the National Tribal Gaming Commissioners and 
Regulators, I thank you for the opportunity to appear before 
you today and welcome any questions that you may have.
    [The prepared statement of Mr. Hummingbird follows:]

  Prepared Statement of Jamie Hummingbird, Chairman, National Tribal 
                    Gaming Commissioners/Regulators
    Good afternoon Chairman Akaka, Vice-Chairman Barrasso, and Members 
of the Committee. My name is Jamie Hummingbird, Chairman of the 
National Tribal Gaming Commissioners/Regulators and member of the 
Cherokee Nation where I serve as Director of the Gaming Commission.
    The National Tribal Gaming Commissioners/Regulators is an 
organization comprised of Tribal gaming regulators from across America 
whose purpose is to promote the exchange of thoughts, information and 
ideas in the pursuit of regulatory practices that are consistent, 
stable, and fair.
    On behalf of the National Tribal Gaming Commissioners/Regulators I 
would like to express our thanks for begin provided the opportunity to 
offer comments before the Committee from the perspective of a Tribal 
gaming regulator. I would also like to thank the Committee and the 
National Indian Gaming Commission (NIGC) for the approach you have 
undertaken in seeking input from Tribes and their Gaming Commissions 
and Agencies in a transparent manner.
    The following comments are based upon the views of the membership 
of the National Tribal Gaming Commissioners/Regulators (NTGCR) 
experiences and their familiarity with the subject of today's hearing. 
Hopefully the comments will assist with a better understanding as to 
the manner by which the day-to-day regulators of Indian gaming 
operations view the role of the NIGC and the Tribal regulators in 
regard to their specific responsibilities.
Defining the Regulatory Structure
    Prior to the enactment of the Indian Gaming Regulatory Act (IGRA; 
the Act) in 1988, each Tribe's Tribal Gaming Regulatory Authorities 
(TGRA) played a pivotal role in overseeing the conduct of gaming 
offered on its respective Indian lands. It was in this pre-IGRA era 
that the principles of regulation, roles and responsibilities of gaming 
regulators were established, namely: protection of the Tribe's assets; 
protection of the integrity of the gaming environment; and 
accountability of the gaming operations. These principles of regulation 
were included as part of the IGRA and remain the foundation for each 
TGRA today.
    One constant concept incorporated in the regulations developed by 
the various Tribes and their TGRAs was that they were and remain an 
exercise of the Tribe's inherent sovereign authority to determine the 
conduct of their own affairs. This concept, although stated in a 
different manner, was articulated in the discussions and hearings held 
by the Select Committee on Indian Affairs leading up to the passage of 
and contained within the bill that would become the Indian Gaming 
Regulatory Act, Senate Bill 555. This concept of Tribal sovereign 
authority is reflected in the primary goal of the IGRA, which is to 
``preserve the right of Tribes to self-government.'' The senate report 
discussing S. 555 stated:

        ``In determining what patterns of jurisdiction and regulation 
        should govern the conduct of gaming activities on Indian lands, 
        the Committee has sought to preserve the principles which have 
        guided the evolution of Federal-Indian law for over 150 years. 
        The Committee recognizes and affirms the principle that by 
        virtue of their original Tribal sovereignty, Tribes reserved 
        certain rights when entering into treaties with the United 
        States, and that today, Tribal governments retain all rights 
        that were not expressly relinquished.''

    The Committee also sought to balance the interests of the states 
and the federal government along with those of the Tribes. The language 
contained in the IGRA provided the foundation on which the Indian 
gaming regulatory structure would be built.
    IGRA required Tribes to draft gaming ordinances that established 
their respective regulatory authorities to preside over the regulation 
of gaming activities occurring on Tribal lands. The Act further 
clarified the role of Tribal gaming regulators at 25 USC 2701 by 
specifying:

        ``The Congress finds that . . .

          (5)  Indian Tribes have the exclusive right to regulate 
        gaming activity on Indian lands if the gaming activity is not 
        specifically prohibited by Federal law and is conducted within 
        a State which does not, as a matter of criminal law and public 
        policy, prohibit such gaming activity.''

    The Act also created the NIGC to provide the federal presence in 
the Indian gaming regulatory realm. When necessary, the various states 
were expected to utilize their existing regulatory bodies or create 
them pursuant to the terms of a Tribal-state compact.
    With the advent of game classifications, games were placed in 
various categories which were subject to different regulatory systems. 
The responsibility for regulating the various classes of gaming was 
delineated as follows:

        Class I Gaming--social or traditional games played as a part of 
        Tribal ceremonies or celebrations falls under the exclusive 
        jurisdiction of the Tribes.

        Class II Gaming--bingo, pull-tabs, instant bingo, non-house 
        banked card games and other similar games wherein the Tribal 
        gaming regulatory authorities were established as the primary 
        regulators over gaming activities with the NIGC providing 
        oversight.

        Class III Gaming--all other forms of gaming that are not Class 
        I or Class II, which are traditionally considered slot 
        machines, horse-racing, and house banked card games, could only 
        be played in accordance with the terms of a Tribal-state 
        compact in which regulatory responsibility was shared between 
        the states and Tribes.

Tribal Gaming Regulatory Authorities--Roles and Responsibilities
    IGRA required Tribes to enact gaming ordinances, subject to the 
review and approval of the Chairman of the NIGC, that provides six (6) 
basic requirements:

        1.  The Indian Tribe will have the sole proprietary interest 
        and responsibility for the conduct of any gaming activity;

        2.  Net revenues from any Tribal gaming are not to be used for 
        purposes other than:

          a. to fund Tribal government operations or programs;

          b. to provide for the general welfare of the Indian Tribe and 
        its members;

          c. to promote Tribal economic development;

          d. to donate to charitable organizations; or

          e. to help fund operations of local government agencies;

        3.  Annual outside audits of the gaming, which may be 
        encompassed within existing independent Tribal audit systems, 
        will be provided by the Indian Tribe to the Commission;

        4.  All contracts for supplies, services, or concessions for a 
        contract amount in excess of $25,000 annually (except contracts 
        for professional legal or accounting services) relating to such 
        gaming shall be subject to such independent audits;

        5.  The construction and maintenance of the gaming facility, 
        and the operation of that gaming is conducted in a manner which 
        adequately protects the environment and the public health and 
        safety; and

        6.  There is an adequate system which ensures that background 
        investigations are conducted on the primary management 
        officials and key employees of the gaming enterprise and that 
        oversight of such officials and their management is conducted 
        on an ongoing basis.

    In order to fulfill this mandate, TGRAs must evaluate their Tribe's 
gaming environment and devise a set of rules and regulations that is 
compatible with their unique circumstances. As extensions of the gaming 
ordinances, these regulations clarify the duties, authorities, and 
methods by which Tribal gaming facilities are to be governed. The 
licensing of gaming facilities, individuals and vendors, approval of 
games that are to be offered, handling tort and prize claims, 
surveillance, security, auditing, and overseeing compliance with 
environmental, public health and safety activities.
    Tribes also utilize internal control standards as a tool to gauge a 
gaming facility's level of compliance with applicable laws and 
regulations. As you may be aware it was the National Indian Gaming 
Association (NIGA) and the National Congress of the American Indians 
(NCAI) Tribal Leaders Task Force in the 1990's that had the foresight 
to organize a group composed of Tribal regulatory professionals to 
develop Tribal Minimum Internal Control Standards based upon gaming 
industry standards. This group developed the first set of Tribal 
Minimum Internal Control Standards (MICS) that was later adopted by the 
NIGC as its MICS as a regulation. Since that time the NIGC has called 
upon Tribal professionals to review and/or assist in the development of 
various Indian gaming regulations.
    In addition since the development of the NIGA/NCAI Task Force, 
Tribes developed their own internal policies, procedures, and 
regulations in regard to day-to-day regulation. The NTGCR has assisted 
Tribes in developing their own internal regulations and procedures that 
have assisted many if not most TGRAs to be independent of the possible 
influence of Tribal politics.
    Numerous other tools are utilized in these efforts, none more 
effective than the employment of qualified personnel. The array 
educational and training skill sets of regulatory personnel range from 
former law enforcement and former military personnel to accountants, 
auditors, surveillance, and information systems professionals. This 
does not include other professionals retained by gaming regulators in 
the performance of their duties, such as professionals in the areas of 
law, environmental health, and risk management.
    It is estimated that there are over 628,000 persons employed by or 
in service to Tribal gaming facilities. These persons are employed by 
the gaming facility, vendors, and third-party lessees. The vast 
majority of these individuals must successfully complete a background 
investigation in order to be considered eligible to work in a Tribal 
gaming facility. Most often, the background investigation is performed 
by the TGRA, but may also be conducted by a state regulatory agency 
pursuant to a Tribal-state compact. The results of all investigations 
are provided to the NIGC for their review. Further, these 
investigations are performed at regular intervals after a person and/or 
vendor receives their initial gaming license, a large number of which 
must undergo the process on an annual basis.
    Currently, there are an estimated 3,500 individuals directly 
employed by Tribal gaming regulators that oversee all Tribal gaming 
operations on a daily basis. In addition, the National Indian Gaming 
Commission directly employs roughly 100 people to carry out its 
responsibilities. After accounting for the regulatory staff employed by 
the respective state gaming agencies and there are approximately over 
4,000 individuals that monitor and ensure the maximum level of 
compliance with all gaming laws and regulations across the nation in 
Indian country.
    These resources, including those utilized by the state and federal 
governments, are paid for by Tribes. Some individual TGRAs, by virtue 
of the number and/or size of their gaming operations, maintain 
operating budgets that rival that of the NIGC.
    According to data contained in the NIGA 2009 economic impact report 
on Indian gaming, there are 237 Indian Tribes operating 446 gaming 
facilities in 28 states. As a part of this, Tribes spent over an 
estimated $350 million in the following areas to regulate Indian 
gaming:

   $260 million to fund Tribal gaming regulatory authorities;
   $80 million to fund state regulatory agencies;
   $14 million to fund the National Indian Gaming Commission.

    TGRAs also call upon outside agencies as necessary to address 
issues warranting their particular expertise. Tribal, federal, and/or 
local law enforcement may assume control over any potential criminal 
activity. Likewise Tribal prosecutors, local district attorneys, or the 
United States Attorney General's office may prosecute any crime 
identified at a Tribal gaming facility. Across the country, state and 
federal attorneys have successfully prosecuted those that would 
jeopardize the integrity of the gaming facilities.
    The Department of the Treasury, through its various agencies, 
receives regular contact from Tribal gaming regulators and casino 
personnel as a part of maintaining strict oversight of transactions. 
Whether complying with the requirements of the Internal Revenue 
Service, the Financial Crimes Enforcement Network, or the Office of 
Foreign Asset Control, Tribes maintain strong lines of communication 
with federal agencies.
    Tribes also work closely with the Secret Service in the event any 
potentially counterfeit currency is confiscated. These relationships 
have led to several major arrests and prosecution of the offenders. 
Tribes have also assisted federal task forces investigating money 
laundering. These same cooperative relationships have been established 
with local police departments and sheriff's offices.
Indian Gaming--Past, Present, and Future
    Tribes have historically maintained a regulatory presence at its 
gaming facilities since their inception. This presence, although 
similar to the current state of Indian gaming regulation, began at a 
time when the number of Tribes participating in gaming and the number 
of facilities they operated were a fraction of the number currently in 
operation. The early regulatory systems were simpler in nature and 
relied heavily on records to be maintained either manually or within 
limited electronic data systems.
    Over the past several decades, Tribal gaming facilities began to 
expand their locations and increased the level of sophistication of its 
gaming activities by using the technology available at the time as 
permitted by the IGRA. Tribal regulators also grew in sophistication. 
Now, Tribal gaming facilities and regulators use state-of-the-art 
surveillance systems and computer monitoring systems to keep a watchful 
eye over Tribal assets and gaming facility activities.
    In addition to utilizing the newest technology to assist in 
overseeing Tribal gaming operations, TGRAs have become more adept in 
using qualified third parties for support. It is not uncommon for a 
Tribal gaming regulatory authority to employ individuals with 
credentials such as Certified Fraud Examiner, Certified Public 
Accountant, Certified Internal Auditor, Software Engineer, Systems 
Administrator, and Network Security Administrator, Pre-employment 
Screening and Background Investigation Specialist to name just a few. 
Each of these disciplines has aided in the development or refinement of 
Tribal gaming regulations and internal controls.
    Educating Tribal gaming regulators is a continual process, 
requiring constant monitoring of the gaming environment in an effort to 
prepare for emerging technology as well as changes in the legislative 
setting. TGRAs have led the way in developing meaningful regulations 
for their operations and continue to impact regulation development at 
the state and federal level. Tribal working groups working in various 
states as well as those formed to address federal regulations offer a 
collaborative means to creating effective and efficient regulations.
    That is not to say that once a regulation has been adopted that the 
process ends. Regulations must be regularly reviewed to determine their 
validity and effectiveness in relation to the state of the gaming 
industry. For example, in the past several years, gaming vendors have 
introduced wireless gaming and systems-based/server-assisted games. 
Most recently, Internet gaming has become a topic that has garnered a 
great deal of attention by everyone in the gaming industry, including 
Tribes, regardless of their role. This issue and its potential impact 
on Tribal gaming, like so many other developments in the gaming 
industry over the past three decades, will be carefully monitored by 
Tribes so that a system of regulation can be established.
    Several amendments to the Indian Gaming Regulatory Act have been 
proposed over the years. Two (2) of the more recent proposed amendments 
focused on off-reservation gaming and expanding the role and 
authorities of the National Indian Gaming Commission in light of the 
decision rendered in the Colorado River Indian Tribes v. National 
Indian Gaming Commission, 466 F.3d 134 (D.C. Cir. 2006)(i.e. the CRIT 
case). Tribes, too have sought to amend the Indian Gaming Regulatory 
Act so to address the decision rendered by the Supreme Court in the 
Seminole Tribe of Florida v. Florida, et. al., 517 U.S. 44, whereby the 
Court ruled that IGRA requires compacts are to be negotiated in good 
faith by both the states and Tribes.
    While everyone that deals with Indian gaming may agree that the 
IGRA is less than perfect, it has proven to be a stable base on which 
so much has been built. The Act has survived numerous amendment 
attempts due in large part to the great many successes that overshadow 
the few failures that have been experienced. Tribes have consistently 
demonstrated substantial compliance with all Tribal, federal, and, 
where applicable, state laws and regulations. These facts have been 
attested to by both state and federal oversight officials.
Conclusion
    Indian gaming had humble beginnings, as did the Tribal gaming 
regulators. The growth of Indian gaming under the IGRA has contributed 
to success of Tribal economic development and has led to the building 
of world-class gaming facilities. Along the way, Tribal gaming 
regulators have evolved into world-class regulators. The responsibility 
of regulating Tribal gaming facilities is a task that Tribal gaming 
regulators take very seriously. It is the obligation to our people that 
drives us to excel.
    It is our membership's belief that Tribal gaming regulators are 
capably performing the due diligence necessary to protect the assets of 
the Tribes and are proud of our history of protecting the integrity of 
the Indian gaming industry.

    The Chairman. Thank you very much, Mr. Hummingbird.
    Mr. Stevens, thank you so much for your statement. Let me 
specifically ask you this question about an issue. Do you think 
the Colorado River decision weakened Class III regulation at 
the Tribal level?
    Mr. Stevens. No, sir. Absolutely not. I believe that our 
systems are as strong or stronger today than they were five and 
a half or so years ago when this decision came down.
    Indian Country, and many of them are in the room today, has 
been real responsible about developing regulations to protect 
our industry. I think Mr. Hummingbird has the honor of not just 
representing his own Tribe, but working with all these Tribes 
to put together a solid foundation in Indian gaming regulatory 
responsibility, and we believe that we are on top of the game. 
We don't think we are perfect, but every day we are working 
hard to get better at it, sir.
    The Chairman. Well, it is good to hear that.
    Mr. Hummingbird, how has the role of Tribal gaming 
regulators changed in the 23 years since IGRA was enacted?
    Mr. Hummingbird. The Tribal gaming regulators today have 
seen their potential augmented by the work that has been done 
in the last 23 years. In those early days of Indian gaming 
under IGRA, the systems were much simpler. The operations were 
a little smaller. But as the years have seen the growth of 
Indian gaming just increase almost exponentially, so too has 
the experience and the effectiveness of Tribal gaming 
regulators.
    We have learned what the IGRA's intent is. We have made 
IGRA work. We are on the frontlines every day looking to 
advance, as Mr. Stevens just mentioned, looking for ways to 
improve what it is that we do. And not just because it is a 
requirement under IGRA, but because it is a part of our 
fulfillment of our obligation to our Tribe. We always seek to 
do better. We always want to stay ahead of the curve because we 
know there that things are out there that are coming our way.
    Just as we started this journey 23 years ago, I don't think 
anybody really contemplated where IGRA would take Tribes in the 
gaming arena. But now that we have had that 23 years and we 
have seen what has happened over the past two decades, we can 
anticipate and expect to have that same experience in the 
future. So we are always looking to evolve. We are always 
looking to advance.
    The Chairman. Well, thank you for those remarks. You know 
that as you become more successful, as you are seeing, it 
requires stronger regulations and I am glad to hear that you 
are keeping up with that.
    I have a question for both of you. There are some who 
believe IGRA should be opened up to revision. What are your 
thoughts on whether IGRA needs to be revised? And what, if any, 
legislative changes would you recommend?
    Mr. Stevens?
    Mr. Stevens. I apologize. I didn't introduce Mr. Van Norman 
because I didn't want to cut into my five minutes. So if I 
could, I want to introduce Mr. Mark Van Norman. He is the 
Executive Director of the National Indian Gaming Association. 
He is a lawyer and long-time veteran here in Washington, D.C., 
and he is a member of the Cheyenne River Sioux Tribe. I would 
like to have him give a quick summary of NIGA's position 
regarding that, as directed by the Tribal leadership.
    The Chairman. Thank you. We would love to hear from him.
    Mr. T4Van Norman. Thank you, Senator.
    We feel that there is already a strong system in place 
under the Indian Gaming Regulatory Act and that the NIGC does 
have authority. And they have been going out to Tribes to 
conduct reviews of the Tribal audits that are submitted to them 
on an annual basis.
    In addition, they have authority under the Act to review 
the Tribe's enforcement of the Tribal gaming regulatory 
ordinances that the NIGC approves. So when they go out for 
these audits, they can also review the Tribe's performance 
under their own Tribal laws.
    And this is a good system because it recognizes Indian 
sovereignty and self-determination and gives a level of 
oversight from the Federal Government that is not unduly 
intrusive on the legislative authority of Tribes. So we believe 
that the system is strong that is in place.
    One failing that there has been is that the Supreme Court 
struck down the safeguard for the Tribal-State compact system, 
and the Tribal-State compact system is set up as a system for 
two sovereigns, the Tribe and the State, to sit down and 
negotiate a regulatory framework and issues related to Class 
III gaming.
    And good faith is presumed on the part of the State, but if 
the State refuses to negotiate or does not negotiate in good 
faith, the Tribe may commence litigation. But in the Seminole 
case, the Supreme Court said that Congress did not have 
authority to waive the State's 11 th Amendment immunity. And we 
feel that if there were any legislation that that is the 
primary issue to be addressed.
    Thank you.
    The Chairman. Thank you very much.
    Mr. Stevens. Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Mr. Hummingbird?
    Mr. Hummingbird. Thank you, Mr. Chairman.
    I believe that, just as Mr. Van Norman has stated, I think 
Tribes would not necessarily be in favor of opening up IGRA to 
amendment simply because what we have built and what we have 
come to know as Indian gaming regulation has been made possible 
and has functioned well under the terms of IGRA as it is 
currently written.
    However, IGRA is open. I would highly suggest and highly 
recommend that there be equal representation. That there would 
be a good process that would allow Tribes and States and the 
Federal Government to maintain a level of parity that is equal 
to all.
    It is important I think to have regulatory input into such 
discussions as individuals in my field offer a great deal of 
insight into what constitutes and what can help lead to the 
development of meaningful regulation or meaningful policy.
    But in short, I would say that IGRA is working fine. There 
is an old saying, if it ain't broke, don't fix it.
    The Chairman. Thank you very much, Mr. Hummingbird.
    Mr. Udall, I'll ask for your questions.
    Senator Udall. Thank you, Chairman Akaka.
    Mr. Hummingbird, in your testimony you spoke about Tribal 
gaming regulatory authorities. How can the NIGC be more 
effective in supporting Tribes in establishing their gaming 
regulations and monitoring? And does the technical assistance 
provided by NIGC help? And how could that be more effective?
    Mr. Hummingbird. Thank you, Senator Udall.
    I think the role and the efforts that Chairwoman Stevens 
and her administration have undertaken are very beneficial to 
Tribes. I applaud the approach that she has taken with the 
consultations in seeking out from Tribes their input on what 
their needs are, as I believe that is one of the primary 
responsibilities that the NIGC has under IGRA.
    Tribes have come a long way. We are very effective at what 
we do, but that does not mean that we sit on our laurels and 
don't look to grow, and that we don't look to advance. And as 
people come into the regulatory world, as oftentimes turnover 
does lead to new people coming in, it is important to get the 
technical assistance and technical training out to Tribes. But 
it is important also for the NIGC to know what kind of training 
is needed out there and make a very targeted approach to 
meeting the needs of the Tribes.
    So I think the process that Chairwoman Stevens has 
undertaken will lead to a much better and a much more effective 
approach in providing the technical assistance that Tribes 
need.
    Senator Udall. And your sense is that the Tribal 
regulators, they get a lot of assistance and they are getting 
additional assistance from the NIGC, and that is an ongoing 
process that as it needs to be.
    Mr. Hummingbird. And continuing education is always a 
never-ending process. Organizations such as mine, we provide 
training to Tribal regulators specifically. NIGA provides 
training and there are other areas for that, but NIGC has a 
unique role to play in this and I think that they are on the 
right track to meeting that goal.
    Senator Udall. Shifting direction back to Mark Van Norman 
and Mr. Stevens on this issue of opening IGRA up, as I 
understood Mark's testimony, what he was saying is that if 
there was any area that Congress ought to look at it is this 
whole good faith negotiation area. And what you can have happen 
is the statute says that there should be good faith 
negotiations between States and Tribes. But if it doesn't 
happen, then Tribes have no place to go, basically.
    Is that what we are saying? I mean, they can go to court, 
but we have the ruling that the statute did not waive the 11th 
Amendment immunity. And so they can go to court, but then the 
State's put up immunity so there is no place for them to go.
    How many Tribes are in that situation now? Do you have a 
sense of that? Somebody is whispering in your ear there.
    Mr. T4Van Norman. We have a sense that Tribes have actually 
been very active in terms of engaging with the States and 
engaging with the public. And that there is a high level of 
support for Indian gaming among the public. We have been doing 
polling for years and what we have seen is a level of about 65 
percent public support. When people have a little bit of 
opportunity to come out to Indian Country and see the 
facilities, you see the support going up to 75 percent or more.
    So some of the Tribes who have been frustrated in the 
compact process have been able to go to the ballot and have 
successfully done initiatives to get some of their compacts 
going.
    We have other Tribes, as in New Mexico, that have worked 
with the legislature to get compacts going. California, they 
have waived the 11th Amendment immunity, but there have been 
some Tribes that have been frustrated by the States raising 
11th Amendment immunity. I think Montana, it would be an issue 
up there.
    So that is still an outstanding issue. We had a case in the 
Fifth Circuit and the court was split on the Secretary's 
regulations that were intended to fill that gap, and two of the 
judges said the Secretary either didn't have the authority or 
had not done it right. And one of the judges said the Secretary 
was spot-on.
    So that is an area that if there were going to be any 
legislation that Tribes would like to see remedied. I think in 
general, as Chairman Hummingbird mentioned, Tribes are not 
eager to amend the Indian Gaming Regulatory Act because I think 
folks are not convinced that Tribal rights would increase 
through that legislative process.
    Senator Udall. And so really what you are saying is that 
there are other avenues, though. There may not be avenues in 
court, but there may be avenues to go to public opinion. You 
can go to the legislature. You can get a referendum or some 
process you have citizens vote on. So there is some of that 
going on.
    And I know in New Mexico, the Governors, whether it is 
Democrats or Republicans, know that there are gaming facilities 
out there and they are enjoyed by people that like to go there. 
And so if an issue comes up of another Tribe wanting to do 
something, they are willing to negotiate with them. But I guess 
there are some areas where Tribes are blocked.
    Mr. T4Van Norman. Well, I could think of in Louisiana, 
there is one of the Tribes that is more newly recognized and 
the other Tribes have compacts, but then they were not able to 
get a compact and the Governor more recently has not been 
willing to negotiate with the Tribe that was newly recognized.
    So there are situations where the Tribes are completely 
blocked. But Tribes have worked hard under the Act to make the 
Act work.
    Senator Udall. Yes, and I think that statement is very 
true, your last statement. They have worked very hard to make 
it work.
    Thank you, Mr. Chairman. Thanks for your courtesy. Sorry 
about going over a little bit there.
    Mr. Stevens. Mr. Chairman, if I could, Mr. Chairman.
    Senator, I wanted just to tag onto the question of training 
and technical assistance. NIGA has advocated for many years 
that this be made a high priority. Now, we are, as Chairman 
Hummingbird has indicated, encouraged by the current National 
Indian Gaming Commission's posture regarding this as a 
priority. But we appreciate you asking that question because it 
is something that is very important to us and something that 
will help us to build the integrity in our operations. It is 
something that is of high priority of the 184-member Tribes 
that we represent.
    Thank you.
    The Chairman. Thank you very much for your responses. I 
want to tell you that your responses have been valuable to us 
and will help us proceed with you. And again, I want to stress 
that it is important that we keep in touch and continue to work 
together on these issues.
    So I want to thank you very much for being here today and 
helping us in this respect.
    Mr. Stevens. Thank you, Mr. Chairman. We will make sure 
this information gets out to our member Tribes. And they will 
utilize their voice maybe to submit comments through the 
written process.
    The Chairman. Thank you, Mr. Stevens.
    Thank you, Mr. Hummingbird.
    Mr. Hummingbird. Thank you for the opportunity to be here 
today.
    The Chairman. Thank you.
    Now, I would like to invite the third panel to the witness 
table: Mr. J. Kurt Luger who is Executive Director of the Great 
Plains Indian Gaming Association; Ms. Sheila Morago, Executive 
Director of the Oklahoma Indian Gaming Association; and Mr. 
John Meskill, Executive Director of the Mohegan Tribal Gaming 
Commission. I want to welcome you to the Committee.
    Mr. Luger, will you please proceed with your testimony?

 STATEMENT OF J. KURT LUGER, EXECUTIVE DIRECTOR, GREAT PLAINS 
                   INDIAN GAMING ASSOCIATION

    Mr. Luger. But I am going to throw some quantitative 
figures at you that you very seldom get to hear.
    I represent 36 Tribes in the Great Plains region, that is 
Montana, North Dakota, South Dakota, Wyoming, Iowa, Kansas and 
Nebraska. So I go from Kansas to the Texas border. You can see 
why I have to wear a hat on my bald head to get by.
    With that said, first of all, I want to give you our 
feelings on NIGC currently. We feel they are on the right 
track. Unfortunately, Senator McCain left here kind of in a 
huff, which is getting to be predictable, and quite frankly, we 
are getting tired of it.
    But the current NIGC has quantified in this regard. They 
have complied with Indian Educators v. Kempthorne. That is 
important to us. It is Indian preference in our Indian 
bureaucracies, Executive Order 13175 supported by Clinton, Bush 
and Obama. During Chairman Stevens' tenure, she has complied 
with that. Chairman Hogan, her predecessor, would not.
    What does it say? Respect for Tribal self-government and 
sovereignty, provide Tribes with maximum administrative 
discretion as possible, encourage Tribes to develop their own 
policies to achieve objectives, defer to Tribal standards where 
possible, and otherwise preserve the prerogatives under Indian 
authority.
    I don't see anything too darn wrong about that.
    Let's take North Dakota, for example. My dear friend, then 
Governor Hoeven, now Senator Hoeven, presided over three terms 
of our compact process. I have a strong message from our 
Tribes. We would like more respect for our Tribal Gaming 
Commissions. We know what the score is. We know damn well that 
we need to keep our customers satisfied and that we have to 
keep our doors open vis-a-vis three tiers of regulation. We are 
not idiots.
    If we don't comply and we don't regulate, we have no 
revenue. We have no option. We must be credible to our 
customers and we damn well are.
    Senator McCain picked out one FBI case, one out of a $26 
billion industry. That is a pretty damn good record. He doesn't 
say anything about the ones we have caught using our State and 
gaming compact people, our Tribal officials and Federal 
officials. It is a success story.
    In North Dakota, my little five operations in a State of 
800,000 people spent $7.1 million in regulatory costs last 
year. They have 325 regulators in our field in these little 
tiny, small, modest operations. We are regulated upon 
regulation upon regulation.
    In South Dakota, they spent $6.5 million in regulatory 
expenses last year. All the North Dakota Tribes and South 
Dakota Tribes have worked diligently through a State gaming 
compact process that needs to be recognized. We are under the 
gun. We meet every two years with our State Minority Leaders, 
Majority Leaders, Attorneys General, the Governor's Office. How 
are things going and do we need to make any adjustments.
    I would think that Senator Hoeven would tell you he has a 
pretty good understanding of how these relationships work. And 
obviously, being the authorizing body for three terms and felt 
more than comfortable with it, he certainly was satisfied and 
so was his Attorney General, both Republican.
    Our compacts provide GAAP IGRA standards for accounting, 
regulation, testing, reporting for machines to the State, 
regulations for table games, background checks conducted by the 
State Attorney General's Office, and licensing standards by our 
Tribal Gaming Commissioners, random inspections by the State 
Attorney General's Office. He can call up anytime and look at 
any dang thing he wants to, and Tribal gaming commissioners.
    I know for a fact, and I am sorry that Senator Hoeven was 
not feeling well today, but he has a great respect for the 
Tribal nations. You can see by the amount of votes that he won 
in that State to take this seat. And part of that, a large part 
of it is the way he handled one of the largest business we now 
operate which is gaming.
    And to think that we might need more regulation, I use 
Senator McCain's words, talk about a waste of taxpayers' 
expense in a recession we want to consider more regulation on 
our industry? I don't get it. Approximately, look at the 
economic impact. We are the epitome of IGRA in my region; 4,000 
full-time working people in the States of North and South 
Dakota with full benefits, including insurance. That is unheard 
of when I grew up there.
    Mr. Chairman, Mr. Udall, other Members of the Committee, 
you have known of projects over decades and decades that have 
failed and failed, but by God, this one didn't. It provided the 
employment feature. It provided us the relationship with the 
financial institutions to finally get a loan once in a while. 
It has enhanced our relationships regionally, locally, and 
politically.
    In 2010, our in-State purchasing in North and South Dakota 
was $125 million; 122 communities in North Dakota got checks 
from our casinos; 91 communities in the State of South Dakota 
got checks from our casinos. It is working.
    Federal and State reporting requirements, that would be a 
problem. We do have some redundancy in there, but that seems to 
be formatting in nature, things that can take place.
    And I have to stop to say hello to my dear and good friend, 
Senator Hoeven. I just got done bragging you up, Senator. I am 
sorry.
    [Laughter.]
    Mr. Luger. You will see it in the testimony. And as Senator 
Hoeven sits, I am here to tell you that I doubt there are few 
in Congress, and I am bragging on Senator Hoeven's part, that 
would have the unique responsibility of dealing with these 
treaty issues on a day-to-day basis in the Executive Branch for 
three terms. And he left there, I could not say that this man 
would have any more respect for our Tribal membership, our 
veterans, and our businesses than you can have.
    And I am here to tell you, I am ready to answer the two 
questions. We damn well don't need a legislative fix. It is the 
last thing we need. The predecessor he was talking about in my 
opinion and many in Indian Country was a personal bone and it 
is time to bury that bone. There has been no ill effects out of 
the Colorado River case. We are more astute than that. If 
anything, our radar screens went on even higher to make sure 
that there wasn't. But the fact remains that you can go out to 
the Attorney General's Office and the Governor's Office and say 
what is wrong out there in Indian Country. Where are all these 
crimes taking place?
    And I am here to tell you under Governor Hoeven, his 
Attorney General and their law enforcement people, our Tribal 
gaming enforcement people, and our State law enforcement people 
worked together. And whenever we did find a problem, the only 
question was where could we send them to the maximum 
jurisdiction for sentencing? And it was a cooperative effort 
led by this fine gentleman right here, now Senator Hoeven.
    And in closing, I would like to say that it has almost 
become predictable for this legislative fix to come up and I 
can't see how it would ever get into law anyway. I just don't 
see a legislative track for it because I am telling you, for 
me, as I am here testifying, that I don't see the need for it. 
There is no hue and cry for it out there in the Executive 
Branch world and our State governments or their Attorneys 
General office.
    In closing, I would like to thank the Honorable Members of 
the Commission for their continued support of our veterans, our 
beloved veterans. They need care of their in-service and when 
they come back from service. Senator Hoeven is a perfect 
example of somebody that went out of his way to do everything 
he could. He has buried several of our Tribal members; has been 
there; has seen the sorrow; has seen the needs.
    And with that said, I cannot thank you enough to the 
Members I know on this Committee of your previous support for 
our veterans' affairs.
    And the last thing is, and I reflect directly on this man 
here as well as myself, the flood damage on the Missouri River. 
Please don't forget that. That is a huge story that is not 
being played out in the media. Our good Senator lost his own 
home. I lost my home. There are many others out there that have 
and it still continues today.
    So I want to thank the Members of this Committee for their 
time. I am honored to be here and stand ready to answer any 
questions that you have of me.
    Thank you.
    [The prepared statement of Mr. Luger follows:]

 Prepared Statement of J. Kurt Luger, Executive Director, Great Plains 
                       Indian Gaming Association
    Good Morning, Chairman Akaka and Members of the Committee. Thank 
you for inviting me to testify this morning.
    My name is Kurt Luger and I am a member of the Cheyenne River Sioux 
Tribe. I grew up on the Standing Rock Sioux reservation in North Dakota 
on my family ranch and my family operates a grocery store and small 
business in Fort Yates, North Dakota.
    I serve as the Executive Director of the Great Plains Indian Gaming 
Association which covers North Dakota, South Dakota, Nebraska, Iowa, 
Kansas, Wyoming, and Montana. GPIGA was in 1997, and we have 289 Tribes 
as Members. Together these Tribal nations exercise jurisdiction over 
fifteen (15) million acres of federal trust land.
    At GPIGA, our mission is to bring together the federally recognized 
Indian Nations in the Great Plains Region who are operating gaming 
enterprises in a spirit of cooperation to develop common strategies and 
positions concerning issues affecting all gaming Tribes; to promote 
Tribal economic development and its positive impacts within the Great 
Plains; to provide pertinent and contemporary information for the 
benefit of the GPIGA member nations; to draw upon the unique status of 
those Great Plains Indian Nations which have treaties between 
themselves and the United States; and to provide our Member Tribes with 
information about national legislation and issues affecting Tribal 
economic development.
    The National Indian Gaming Commission was established to assist 
Indian Tribes with the regulation of Indian gaming. Under IGRA, Tribal 
gaming regulators are the primary day-to-day regulators of Indian 
gaming and they regulate Indian gaming under Tribal gaming ordinances, 
which are approved by the NIGC provided that they conform to minimum 
federal statutory standards.
    It bears repeating that Tribal regulators are the primary 
regulators of Indian gaming. In North Dakota for example, Tribal 
governments employ more than 325 Tribal regulators and staff. Tribal 
governments spend more than $7.4 million on Tribal and state regulation 
of Indian gaming in North Dakota. That's $1.48 million per Tribal 
government and we run relatively modest operations. In the future, our 
Tribal government's regulatory efforts and expenditures need to be 
recognized to provide an accurate overall picture of regulatory 
expenditures in Indian country.
    Naturally, we are concerned about the manner in which the NIGC 
approaches its mission to assist Tribes in regulating Indian gaming. 
Under the previous administration we found an uncooperative environment 
and often Tribes were left with the impression the NIGC had chosen to 
write regulations without Tribal input. In addition, we were concerned 
with the lack of training and technical assistance on those regulations 
to Indian Tribes and Tribal regulators. Under the current NIGC 
Commission chaired by the Honorable Tracie Stevens, the atmosphere is 
one of greater cooperation and understanding of the role of the Tribal 
gaming commissions. The current Commission has improved the 
relationship between our Tribal gaming industry and the federal 
regulatory authority. They have taken sincere steps to improve 
government to government relationships with our Tribal nations through 
the implementation of a real Tribal consultation policy. The current 
Commission has complied with Indian Educators Federation v. Kempthorne, 
which ruled that Indian preference in hiring applied to all ``positions 
in the Department of the Interior, whether within or without the Bureau 
of Indian Affairs, that directly and primarily relate to providing 
services to Indians . . .''
    The current Commission has taken great strides to strengthen the 
United States' government-to-government relationships with Indian 
Tribes. In 2000, President Clinton issued Executive Order No. 13175, 
which directed Federal agencies to consult and coordinate with Indian 
Tribes on Federal rulemaking and agency actions that had substantial 
direct impacts on Tribal self-government, Tribal lands and treaty 
rights. The Executive Order provided that agencies shall adhere to the 
following criteria:

   Respect for Tribal self-government and sovereignty, treaty 
        and other rights that arise from the Federal trust 
        relationship;

   Provide Tribes with the maximum administrative discretion 
        possible; and

   Encourage Tribes to develop their own policies to achieve 
        objectives, defer to Tribal standards where possible, and 
        otherwise preserve the prerogatives authority of Indian Tribes.

    The Executive Order also directed Federal agencies to consider the 
need for the regulation in light of Tribal interests, take Tribal 
concerns into account, and use consensual mechanisms for 
decisionmaking, including negotiated rulemaking, where appropriate. On 
September 23, 2004, President Bush issued an Executive Memorandum 
directing Federal agencies to adhere to Executive Order 13175. On 
November 5, 2009 President Obama signed a memorandum which directed 
each agency head to submit a detailed plan of how they would implement 
the policies and directives of Executive Order 13175. With the current 
Commission's extensive consultation schedule the Federal-Tribal 
government-to-government relationship has become more meaningful.
    In closing, we encourage the NIGC to continue the direction of 
cooperation and mutual respect for our Tribal economic development 
ventures.

    The Chairman. Thank you very much.
    Ms. Morago, will you please proceed with your testimony?

STATEMENT OF SHEILA MORAGO, EXECUTIVE DIRECTOR, OKLAHOMA INDIAN 
                       GAMING ASSOCIATION

    Ms. Morago. Thank you, Chairman Akaka and distinguished 
Members of the Committee. On behalf of the Oklahoma Indian 
Gaming Association and its 22 member Tribes, allow me to extend 
my deepest appreciation for this opportunity to provide 
testimony to you today.
    My name is Sheila Morago. I am a proud member of the Gila 
River Indian Community. I am the Executive Director of the 
Oklahoma Indian Gaming Association, a position I have held for 
the last two months.
    While my tenure at OIGA has recently begun, I have been in 
the business of Indian gaming since 1994. Most recently, I 
spent eight years as the Executive Director for the Arizona 
Indian Gaming Association.
    Tribal governmental gaming in Oklahoma has come a long way 
from our first days in bingo halls in the early 1980s to now 
being the fourth-largest gaming jurisdiction in the United 
States, doing over $3 billion in business. We are surpassed 
only by Nevada, California, and New Jersey in size of total 
gaming revenues generated.
    In 2009, the gross rate of gaming in Oklahoma led the 
Nation. Oklahoma is home to 39 Tribes, 33 of whom engage in 
gaming as a form of economic development. These 33 Tribes 
operate 111 gaming facilities, which range in size from a fuel 
stop with a few machines to large, full-scale destination 
resorts.
    While many think that we have become large overnight, our 
growth has been slow and deliberate. Since the early days in 
Oklahoma, Tribes have used their gaming revenues to better the 
lives of their Tribal members. Gaming revenue has been used to 
backfill ever-shrinking Federal funds and we have used these 
revenues to educate our children, take care of our elders, 
improve our infrastructure, and taking to heart the true 
meaning of IGRA.
    The first Tribal-State compacts were signed in 1992, which 
allowed horse racing wagers in Tribal casinos. The current 
compacts in Oklahoma were approved by the citizens of the State 
through referendum in 2004. Through these compacts, for the 
first time the Tribes share their revenues from compacted games 
with the State. This revenue-sharing with the State of Oklahoma 
has now grown to exceed $100 million annually.
    While the 2005 compacts expanded Class III gaming options 
available to our customers, Oklahoma remains a very strong 
Class II market. For that reason, we occupy a very unique niche 
in the Indian gaming industry and we understand our business 
very well as evidenced by the continued strong growth of our 
gaming business. We have applied these lessons learned with 
every expansion we have undertaken.
    We also understand how to regulate our gaming very 
effectively. While I say that with pride, it is not a 
meaningless boast. The Tribal gaming regulators from Oklahoma 
are among the most highly regarded regulators in the Country. 
In fact, many State regulators have come to visit our 
regulators seeking the benefit of their expertise.
    One of the reasons Oklahoma Tribes have developed such a 
strong regulatory pedigree is they realized early on that in 
the development of smart and effective regulations, our Tribal 
regulators had to work closely with our facility operators. 
This process has worked very effectively for many years in 
jurisdictions like Nevada. It has enabled them to promulgate 
regulations that are workable because the regulations are based 
on real business operations that take place in the casinos.
    This regulatory development process has been very important 
in Oklahoma because our Tribes have been leaders in Class II 
gaming to where it is today, including the tremendous 
technological innovations we have made.
    There are many unique features to our machines. To be smart 
and effective in our regulatory efforts, we have had to develop 
processes and procedures specifically tailored to Class II 
gaming. So to be honest, our Tribes were disappointed when the 
prior NIGC Chair and his staff did not respect our many years 
of expertise and refused to consider opinions we offered on how 
the NIGC can best write effective regulations, particularly 
with regard to the Class II games.
    We never expected NIGC to agree with us on all matters all 
the time. However, we merely asked for respectful consideration 
of our views. We are very pleased now to say that from our 
perspective, the current NIGC Chair and her staff have taken 
the time to hear our views and to carefully deliberate on how 
to develop the most effective regulations.
    Again, we do not anticipate the NIGC to agree with us on 
all matters all the time. However, we greatly appreciate the 
respectful consideration of our opinions. The OIGA member 
Tribes have been pleased with the deliberate pace at which the 
NIGC has proceeded in its regulatory review. It has been our 
desire to have the most effective and efficient regulations, 
and we believe that it is important to take our time to get it 
right.
    Unlike commercial gaming, Oklahoma Tribes use their gaming 
revenues for governmental purposes. We are responsible to our 
Tribal members to operate our gaming facilities in the most 
efficient and effective manner possible in keeping with sound 
business and good regulatory practice. Every dollar that is not 
wisely spent in our gaming operations and regulation are 
dollars that do not go to educate our children, provide health 
care to our elders, and build safer roads or any of the other 
myriad government responsibilities we have.
    This current consultation and regulatory schedule we 
believe will result in the right regulations. Furthermore, it 
will provide the NIGC with the time to ensure they will be able 
to fulfill their Federal trust responsibilities under IGRA. And 
finally, having regulations that are drafted so they fit our 
unique industry will end the constant redrafting and reworking 
of Class II Federal regulations that have taken so much time 
and exhausted Tribal resources that are needed badly elsewhere.
    Thank you, Members of the Committee, for the opportunity to 
present our views of the OIGA member Tribes. I stand ready to 
answer any questions you may have.
    [The prepared statement of Ms. Morago follows:]

   Prepared Statement of Sheila Morago, Executive Director, Oklahoma 
                       Indian Gaming Association
    Good afternoon Chairman Akaka, Vice Chairman Barrasso, and 
distinguished members of the Committee.
    On behalf the Oklahoma Indian Gaming Association and its 22 member 
Tribes, allow me to extend my deepest appreciation for this opportunity 
to provide testimony to you today. My name is Sheila Morago and I am a 
proud member of the Gila River Indian Community. I am the Executive 
Director of the Oklahoma Indian Gaming Association, a position I have 
held for the last two months. While my tenure at OIGA has really just 
begun, I have been in the business of Indian Gaming since 1994. Most 
recently I spent 8 years as the Executive Director of the Arizona 
Indian Gaming Association.
    Tribal Governmental Gaming in Oklahoma has come a long way from our 
first days as bingo halls in the early 1980s, to now being the fourth 
largest gaming jurisdiction in the United States doing over $3 billion 
in business. We are surpassed only by Nevada, California and New Jersey 
in size of total gaming revenues generated. In 2009 the growth rate of 
gaming in Oklahoma led the nation.
    Oklahoma is home to 39 Tribes, 33 of whom engage in gaming as a 
form of economic development. These 33 Tribes operate 111 gaming 
facilities, which range in size from fuel stops with a few machines, to 
large full-scale destination resorts. While many may think that we have 
become large overnight our growth has been slow and deliberate.
    Since it's earliest day's Tribes in Oklahoma have used their gaming 
revenues to better the lives of their Tribal members. Gaming revenues 
have been used to back-fill ever shrinking federal funds and we have 
used these revenues to educate our children, take care of our elders, 
improved our infrastructure and taking to heart the true meaning of 
IGRA.
    The first Tribal state compacts were signed in 1992, which allowed 
horseracing wagers at Tribal casinos. The current compacts in Oklahoma 
were approved by the citizens of the state through a referendum in 
2004. Through these compacts, for the first time, the Tribes shared 
their revenues from compacted games with the state. This revenue 
sharing with the state of Oklahoma has grown to now exceed $100 million 
annually.
    While the 2005 compacts expanded the Class III gaming options 
available to our customers, Oklahoma remains a very strong Class II 
gaming market. For that reason we occupy a unique niche in the Indian 
gaming industry. And we understand our business very well, as is 
evidenced by the continued strong growth in our gaming businesses. We 
have applied our lessons learned to each expansion we have done.
    We also understand how to regulate our gaming very effectively. 
While I say this with pride, it is not a meaningless boast. The Tribal 
gaming regulators from Oklahoma are among the most highly regarded 
regulators in the country. In fact, many state regulators have come to 
visit with our regulators seeking to benefit from their expertise.
    One of the reasons the Oklahoma Tribes have developed such a strong 
regulatory pedigree, is they recognized early on that to develop 
``smart'' and effective regulations, our Tribal regulators had to work 
closely with our facility operators. This process has worked very 
effectively for years in jurisdictions like Nevada. It has enabled them 
to promulgate regulations that are workable because the regulations are 
based on the real business operations that take place in the casino.
    This regulatory development process has been very important in 
Oklahoma. Because our Tribes have been the leaders in advancing Class 
II gaming to where it is today, including the tremendous technological 
innovations we have made, there are many unique features to our games. 
To be smart and effective in our regulatory efforts, we have had to 
develop processes and procedures that are specifically tailored to 
Class II gaming.
    So to be honest, our Tribes were disappointed when the prior NIGC 
chairman and his staff did not respect our many years of expertise and 
refused to consider the opinions we offered on how the NIGC can best 
write effective regulations, particularly with regard to Class II 
games. We never expected the NIGC to agree with us on all matters all 
the time. However, we merely asked for respectful consideration of our 
views.
    We are very pleased now to say that, from our perspective, the 
current NIGC chair and her staff have taken the time to hear our views, 
and to carefully deliberate on how to develop the most effective 
regulations. Again, we do not anticipate that the NIGC will agree with 
us on all matters all the time. However, we greatly appreciate the 
respectful consideration of our opinions.
    The OIGA member Tribes have been pleased with the deliberate pace 
with which the NIGC has proceeded in its regulatory review. It has 
always been our desire to have the most efficient and effective 
regulation, and we believe that it is important to take the time to get 
it right.
    Unlike commercial gaming, Oklahoma Tribes use their gaming revenues 
for governmental purposes. We are responsible to our Tribal members to 
operate our gaming facilities in the most efficient and effective 
manner possible, in keeping with sound business practices and good 
regulatory practices. Every dollar that is not wisely spent in our 
gaming operation and regulation, is a dollar that does not go to 
educate our children, provide healthcare to our elders, build safer 
roads, or any other of the myriad governmental responsibilities we 
have.
    This current consultation and regulatory promulgation schedule we 
believe will result in the ``right'' regulations. Furthermore, it will 
provide the NIGC with the time to insure they will be able to fulfill 
their federal trust responsibilities under IGRA. And finally, having 
regulations that are drafted so they fit our unique industry will end 
the constant redrafting and reworking of Class II federal regulations 
that has taken so much time and exhausted Tribal resources that are 
badly needed elsewhere.
    Thank you members of the Committee for the opportunity to present 
the views of the OIGA member Tribes, and I stand ready to answer any 
questions you may have.

    The Chairman. Thank you very much for your testimony.
    Mr. Meskill, will you please proceed with your testimony?

  STATEMENT OF JOHN MESKILL, DIRECTOR, MOHEGAN TRIBAL GAMING 
                           COMMISSION

    Mr. Meskill. Thank you, Chairman Akaka, Members of the 
Committee and staff.
    My name is John Meskill. I have been the Director of the 
Mohegan Tribal Gaming Commission since April of 2001. Prior to 
my employment by the Mohegan Tribe, I served as the Executive 
Director of the Mashantucket Pequot Gaming Commission, and 
before that, I served for four and a half years as the 
Executive Director of the State of Connecticut's Gaming 
Regulatory Agency, the Division of Special Revenue.
    I was also a member of the NIGC's Minimum Internal Controls 
Advisory Committee in 2004 and 2005.
    I appreciate the opportunity to testify today regarding the 
role of Tribal regulators as the primary regulatory authority 
of Tribal gaming operations. In my 19-plus years as a gaming 
regulator, I have seen first-hand the serious commitment the 
Tribes have to protect the integrity of their gaming 
operations. This commitment involves considerable resources 
expended by the Tribes.
    For example, in fiscal year 2011, the Mohegan Tribe will 
spend over $26 million on regulatory costs for its own 
employees, including police, public safety and compliance 
personnel, plus outside auditors and an additional $6.8 million 
for costs assessed by the State of Connecticut for regulatory 
services the State provides related to Mohegan Sun. Detail on 
these regulatory services and expenses are set forth in 
schedule A that is attached to my testimony.
    Under the Mohegan Tribe's compact with the State of 
Connecticut, I work closely with the State Gaming Agency in 
administering a comprehensive regulatory framework that is 
closely tailored to the types of games and scope of gaming 
which are enjoyed under the constant development of Mohegan 
Sun.
    Under our Tribal-State compact, which was first signed and 
approved in 1994, the State Gaming Agency and the Commission I 
oversee jointly regulate all aspects of Class III gaming on the 
Mohegan Reservation through standards of operation and 
management.
    Each proposed change to the standards of operation and 
management, which are necessarily frequent, is required to be 
sent to the State Gaming Agency for its review and comment, and 
in certain sensitive areas such as cage operations and 
technical standards for slot machines, State approval is 
required before such standards may be implemented.
    This process, which also includes outside certification, 
for example, of new gaming equipment, can be lengthy and 
detailed. So my agency appreciates the NIGC as a valuable 
resource when it comes to developing and enhancing standards. 
However, we also appreciate that the Commission's role for 
Class III gaming does not extend a third layer of review and 
regulation over those standards of operation and management, 
which of necessity need to be adaptable to the needs of a 
particular Tribal gaming jurisdiction.
    By compact, the State Gaming Agency also licenses Mohegan 
Sun's gaming employees after a background investigation for 
each employee has been completed by the Connecticut State 
Police. While we don't always agree with the State on all 
regulatory issues, we are usually able to find common ground in 
resolving our differences.
    In the 15 years the Mohegan Tribe has operated its casino, 
the State has never alleged that the Tribe has failed to comply 
with the provisions of the State gaming compact.
    Over the years, I have also worked closely with NIGC and I 
have a great deal of respect for the wide range of expertise 
that has been assembled at that agency. While the CRIT decision 
has altered the mission of the agency, the NIGC continues to be 
a valuable resource for Tribal regulators when we seek advice 
on accounting and auditing issues, and questions about gaming 
technology that they have reviewed in other jurisdictions, and 
best practices for internal controls. I have always found the 
staff at NIGC to be informative and responsive.
    And in closing, I also want to thank the Committee for 
scheduling this hearing to coincide with NIGC consultation, 
which I am also attending with the Vice Chairman of the Mohegan 
Tribe, James Gessner. I know that the Mohegan Tribe appreciates 
this Committee's longstanding respect for the government-to-
government relationships between the Tribes and the Federal 
Government and the Tribe also appreciates NIGC's renewed 
efforts to consult with the Tribes in all aspects of the 
regulatory rules and rulemaking.
    Again, I would like to thank the Chairman and the Members 
of the Committee for the opportunity to testify today.
    Thank you.
    [The prepared statement of Mr. Meskill follows:]

  Prepared Statement of John Meskill, Director, Mohegan Tribal Gaming 
                               Commission











    The Chairman. Thank you very much, Mr. Meskill.
    Now, we will have questions for you. I would like to defer 
first to Senator Udall for questions.
    Senator Udall. Chairman Akaka, I would defer to Senator 
Hoeven. I have had an opportunity to question here, and if he 
has any questions or any statement he wants to make, I would 
let him go first. Thank you.
    The Chairman. Senator Hoeven?

                STATEMENT OF HON. JOHN HOEVEN, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Hoeven. Thank you, Mr. Chairman.
    I would like to thank all of the witnesses for being here 
today.
    Kurt, good to see you again. During my 10 years as 
Governor, I had the opportunity to work with Kurt and others on 
our gaming compacts on behalf of Native Americans in our State. 
And it has been a tremendous working relationship. And I think 
he is right. I think if it works that well in other States, it 
really is not in need of a legislative solution. We were always 
able to come together both through the Governor's Office and 
through Kurt as our State Director, working with the Tribal 
Chairman; a tremendous mutual respect and great working 
relationship. And it has been tremendously beneficial to the 
Tribe.
    And the other thing is through Kurt's good work that I hope 
happens in other States is there was also the opportunity to 
reach out to our legislature and engage them not just on issues 
that related to Tribal gaming, but the whole gamut of other 
issues that really opened a door. The working relationship that 
was established both between the Executive Branch in North 
Dakota and the Legislative Branch with the Tribes through the 
work we did on our gaming compacts opened up the door to other 
opportunities in regard to economic issues, for example, 
drilling oil wells on particularly one of our reservations, 
which now is a tremendous economic activity.
    And again, I think that relationship really developed out 
of a lot of the work that Kurt had helped facilitate through 
the gaming compacts, but also on social issues, law 
enforcement, education, as well as just the opportunity to 
build those personal relationships that created some bonds and 
some trust.
    The Luger family also raises and trains horses, and as a 
matter of fact, we had many occasions to ride horses together. 
Nobody trains them better than Kurt and his brother.
    My point being I think you can get things done when you 
build those kind of relationships. So however we approach this 
at the Federal level, it is still going to come back to the 
people and building those bonds and those relationships and 
that aspect of trust I think to truly make progress.
    So I am really pleased you are here. I think you have so 
much to offer in terms of how to do this. Kurt also worked for 
Senator Daschle at one time, and so he understands not only 
both sides of the aisle, but also the federal-state-Tribal 
relationship.
    And so I really want to commend our Chairman for inviting 
Kurt to be part of the panel and these other outstanding panel 
members as well. Also, I really would look, Kurt, maybe to you 
to just I guess give us some of your thoughts in terms of as 
we, I mean from either a Federal or a State perspective, what 
are the three keys to making sure that we handle these gaming 
compacts well? And then also a couple of keys as we wrestle 
with some of these tough issues like Internet gaming, which can 
also be very controversial. Just your thoughts.
    And then I would ask the other panel members for their 
thoughts in both regards. What makes for a successful State 
relationship, in your opinion? How do we really make sure we 
have the framework from a Federal perspective to have those 
successful State relationships with the Tribal nations, to just 
address for a minute the Internet gaming issue that obviously 
is a big issue right now.
    Mr. Luger. The three at the top of the list are very easy 
for me. I practice them every day. One is trust. You have to 
take the time and energy, the Tribes, to engage the legislature 
and the Executive Branch and build those relationships. You 
have to. There is no other way around it. There is no easy cut. 
People need to know you before they trust you.
    Transparency. I think now-Senator Hoeven, then-Governor 
Hoeven will tell you that the key to our relationship was 
transparency and being able to trust when one said something, 
we were going to stick to it. It is a must in any relationship, 
and if you don't know somebody, you can't build to that.
    And the third, i.e. the Internet, is we have to be able to 
as Tribes to be able to report accurately to our State 
counterparts and our colleagues and quantify what the actual 
data is. What is the score? How well are you doing? What are 
your activities, whether it be criminal activities or revenue, 
things of that nature.
    But I get back to those trusting relationships. This 
Committee is very lucky. This man is committed to Indian 
Country; has been for a long time. And the trust that we got 
during his Administration led to a lot more baloney sandwiches 
in Indian Country than before he got there. And it is key and 
it is not easy. You have to get to know each other and stay 
engaged.
    And that would be my advice to Tribes not to shy away from 
State legislatures and the Executive Branch; engage them 
because it is part of the story. We have all been used to 
engaging in the Federal end of things, but times are changing. 
And Senator Hoeven and I had a common goal, and we were the 
epitome of it: jobs, jobs and jobs.
    We got 4,000 new jobs in the State of North Dakota. That is 
hard to create. And so if that is what you are looking for, 
that you want your people gainfully employed, their quality of 
standards brought up, you can figure out the obstacles that are 
in between those two central thoughts.
    And again, I cannot tell you, the Committee, that you are 
going to enjoy the presence of our dear former Governor is a 
tremendous fellow and a dear, dear friend.
    Senator Hoeven. Mr. Chairman, I see my time has expired, so 
I will defer if that is best. I can come back. I would like to 
ask about Internet gaming for just a minute when there is time, 
and to the other panel members, thank you.
    The Chairman. Senator Udall?
    Senator Udall. Thank you, Chairman Akaka.
    Kurt, you mentioned the Colorado River case, and I think 
you said, I don't want to quote you directly, that our radar 
went up. And then you said something, we took additional 
actions. And I am wondering what did that case mean to the 
three members of the panel? And were there things that you did? 
And any thoughts you have on that issue?
    Mr. Luger. Mostly from a sensitive point of view. We had 
been doing the technical things, but we were beat up badly by 
the media and that is where this disrespect. We kept wondering, 
well, this is one case, one scenario. But at the same time, we 
felt, the rest of us in Indian Country were being disregarded 
on all the good work that we were doing.
    We spend our checkbook and work our buns off I know in the 
State of North Dakota to make sure that our games are clean. 
And I tell you what, if we are not doing that, the Attorney 
General is standing right there with that State Indian compact 
reassuring that it gets a secondary eyeball there. So there is 
a lot of attention to it.
    To answer your question, it would be the sensitivity that 
that case represented to everybody, when in fact our gaming 
commissions have worked diligently from day one.
    And the other thing I think is forgotten in here, and I 
know Senator Hoeven knows well about this of a particular case 
that we had in Spirit Lake. We have invested in the best 
technology out there when it comes to security and 
surveillance. We all have. And that stuff is expensive. I can 
pick the pigment out of your skin in every one of my casinos. 
Just drop a card and I will pick you up. And that is expensive 
and it is top of the line, first class stuff, the same thing 
that Las Vegas uses, if not better and we don't get credit for 
that.
    And so those are the things that we just doubly check the 
i's and cross the t's in making sure that our main thing, and 
you know this, that our customers are assured that when they 
come into our house of entertainment, that the games are 
credible.
    Senator Udall. Ms. Morago or Mr. Meskill, do you have any 
thoughts on that issue?
    Ms. Morago. Senator Udall, I do. I could repeat everything 
because I thoroughly agree with Kurt and the other panelists on 
this.
    But I would like to give you one additional thought 
process. There have been many financial commitments based on 
current law. And one of the things we have to think of is when 
you change current law, what does that do to financial 
commitments? People have loans. People have bonds out. So we 
have to take a look at that, too. And I agree with Kurt 
completely on the parts and pieces where Tribes are doing well 
on this. If it ain't broke, don't fix it.
    Mr. Meskill. Senator, I think that probably the CRIT 
decision just reinforced to us what our role was. We always 
knew we were the primary regulator and we knew we were the 
first line of defense for the Tribe. So I think it just 
instilled in us that we have to do that much better a job and 
we have to work better with the State.
    But I would say that those minimum internal control 
standards that the NIGC has in place. It is about a 100-page 
document. It is a good base document, but every Tribe I have 
dealt with has internal controls that far exceed those MICS. So 
the Tribes are well ahead of the curve anyway, I think. And the 
CRIT decision I think just reinforced that we are the front 
line.
    Senator Udall. Thank you very much.
    Thank you, Chairman Akaka. I don't have any more questions.
    The Chairman. Thank you very much, Senator Udall.
    Let me defer to Senator Hoeven for further questions.
    Senator Hoeven. Well, I just wanted to follow up a little 
bit maybe with all three of the panel members on your feelings 
on Internet gaming. Because you know that is a hot topic and an 
issue now. And are having experience, and you see it on the 
ground every day and how it affects people and so forth. I 
would just like, from all three of you, your perspective on it 
is good, is it bad, how should it be addressed, and what the 
impacts would be.
    Mr. Luger. Obviously, Senator, as you know better than 
most, is the brick and mortar operations. In a rural setting 
like the States of North Dakota, South Dakota, Montana, are 
dear friend Mr. Udall in your area, and we see it as this. The 
Federal prohibition has played its role. It is still in play. 
There is a lot of talk that there are a lot of pressures coming 
from certain States to bring it from that direction.
    But as we speak now, Indian Country is very concerned that 
the State gaming compact process be maintained and respected. 
We took years to work those regulatory items; two, that Federal 
taxes are not applied to those. We feel strongly about that. 
And three, that the current foreign operations, and I think 
somebody quoted me the other day that they are now quantifying 
it as a $10 billion industry out there in the Caymans and so on 
and so forth.
    We need to be assured that there is going to be a fair 
playing field when it comes to regulation. Now, as it is, poker 
is the only game in town. That is what everybody is talking 
about. But we are very concerned that anything that comes down 
the road that the respect for our current Federal-State gaming 
compact relationship, the fact that we feel strongly that this 
is something that should amount to a Federal tax for us, and a 
strong consideration that the brick-and-mortar systems which we 
in the domestic market are relying upon, especially in North 
and South Dakota, have a way to participate.
    And I will just give you an idea. We are currently talking 
about a consortium and a collective effort. The Internet is a 
huge place. And you know, Senator, if someone puts their little 
finger up in the air, I don't know if it is ever going to 
attract enough attention. So the branding of that aspect to 
create a business acumen that we have to apply to it is 
certainly a challenge to us.
    But from a policy point of view, we are very concerned that 
our State gaming compact relationship is reviewed and 
considered. We feel strongly that we shouldn't be paying taxes 
with it. And this is something that needs to be moved along 
very, very carefully because of the infrastructure investment 
that we already have in our brick-and-mortar systems.
    Ms. Morago. Senator, NIGA came up with some general 
principles about the Internet last year that all the Tribes 
agreed upon. And having said that, we support all those general 
principles.
    But I think we have to look at it in terms of any past 
legislation that has been put forth that specifically deals 
with commercial gaming. And it gives commercial gaming a real 
step up on this economic development. And I have to say that we 
are as capable as a commercial gaming entity of doing this 
economic adventure.
    So while we are looking at this and drafting, I think it is 
important for us to look at it in terms of commercial and 
Nevada isn't the only game in town. We are perfectly capable of 
operating and regulating this new adventure. And I think that 
while you are looking at these proposals being put forward that 
you have to remember that. This shouldn't be a monopoly for the 
commercial gaming industry where we don't have access to it.
    So we think whatever legislation comes down the pike, it 
has got to be open for everybody to have access to it and not 
just for the few people that can do it.
    Mr. Meskill. Senator, I concur with everything that has 
been said. It seems like Internet gaming is going to happen. It 
is a question of when. I know the Tribe that I work for if it 
occurs, they certainly would like to be in a position that they 
can protect their investment that they have in their facility, 
you know, the billions of dollars that they put into their 
facility.
    So if consideration is given to the Tribes to participate, 
it would somehow be complementary to the facilities that they 
have built over the years. And I think it is important that the 
Tribes' interests are protected when that legislation happens 
because, as Sheila said, if it is left exclusively to the 
commercial casino operators, Tribal gaming is going to suffer 
greatly.
    Senator Hoeven. Well, again, I want to thank you. Did you 
have anything else, Kurt, or anyone else to add? If you have 
any other thoughts on Internet gaming because obviously it is 
something we will be dealing with. And so we certainly want 
your thoughts.
    Mr. Luger. Briefly, I just happen to have something that I 
know would be of great interest to you. We have six principles 
that we put together from our Great Plains Tribes and I will 
provide a draft to the Committee. But they are as follows. 
Indian Tribes and Tribal governments are ready to operate, 
regulate, tax and license Internet gaming and those rights must 
not be subordinated by non- Federal authority. Internet gaming 
authorized by Indian Tribes must be available to customers in 
any locale where Internet gaming is not criminally prohibited.
    Consistent with long-held Federal law and policy, Tribal 
revenues not be subject to tax. Existing Tribal government 
rights under State compacts must be respected. And five, the 
legislation must not open up the Indian Gaming Regulatory Act 
for amendments. And our sixth plank that we submitting to NIGA 
is Federal legalization of Internet gaming must provide 
positive economic benefits for Indian Country.
    So thank you very much for your time.
    Senator Hoeven. Thanks, Kurt.
    Any other thoughts? Again, I want to thank the panel 
members and I want to thank the Chairman for bringing in people 
who are very knowledgeable on this important issue.
    Thank you, Mr. Chairman.
    The Chairman. Thank you very much, Senator, for your 
questions.
    In the interests of time, I do have questions. I will 
submit my questions for the record.
    It is good to hear from you and directly from the Tribes, 
and we want to maintain that relationship with you and continue 
to communicate with you on issues that can in some cases 
improve what is happening here.
    One of the questions that we are asking was whether some of 
these changes, if changes are needed, should come 
administratively or legislatively. And so this is what we can 
work on as we continue here.
    And as I said, you have really been successful. Your whole 
industry is increasing and proceeding quickly. And as a result, 
I think you will agree with me that we need to work hard at 
keeping up with the law and also to apply justice to what we 
have out there. And of course, to continue to help our Tribes 
with their needs.
    So again, I want to thank you so much and thank the Members 
of this Committee, as well as the staff on both sides of the 
aisle of this Committee for the work that they have done. We 
will, of course, again look down the line and see where we are 
in regards to gaming. And so let's keep working together on 
this.
    So let me express again my mahalo and thank you very much 
to the witnesses today. The Committee, like the NIGC and Tribal 
regulators, takes its oversight role over Indian gaming very 
seriously, and Indian gaming has proven to be the single most 
effective economic development that the Tribes can participate 
in, and provide services for their Tribal members.
    I am encouraged by what I have heard today from the Federal 
and Tribal regulators. The diligence that you show every day in 
ensuring that Indian gaming is being conducted as intended 
under IGRA is commendable.
    So let's continue this, and again thank you very much.
    And this hearing is adjourned.
    [Whereupon, at 4:25 p.m., the Committee was adjourned.]




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