[Senate Hearing 113-502]
[From the U.S. Government Publishing Office]
S. Hrg. 113-502
INDIAN GAMING: THE NEXT 25 YEARS
=======================================================================
HEARING
before the
COMMITTEE ON INDIAN AFFAIRS
UNITED STATES SENATE
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
JULY 23, 2014
__________
Printed for the use of the Committee on Indian Affairs
______
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COMMITTEE ON INDIAN AFFAIRS
JON TESTER, Montana, Chairman
JOHN BARRASSO, Wyoming, Vice Chairman
TIM JOHNSON, South Dakota JOHN McCAIN, Arizona
MARIA CANTWELL, Washington LISA MURKOWSKI, Alaska
TOM UDALL, New Mexico JOHN HOEVEN, North Dakota
AL FRANKEN, Minnesota MIKE CRAPO, Idaho
MARK BEGICH, Alaska DEB FISCHER, Nebraska
BRIAN SCHATZ, Hawaii
HEIDI HEITKAMP, North Dakota
Mary J. Pavel, Majority Staff Director and Chief Counsel
Rhonda Harjo, Minority Deputy Chief Counsel
C O N T E N T S
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Page
Hearing held on July 23, 2014.................................... 1
Statement of Senator Barrasso.................................... 4
Statement of Senator Franken..................................... 41
Statement of Senator Heitkamp.................................... 38
Statement of Senator McCain...................................... 2
Statement of Senator Tester...................................... 1
Witnesses
Chaudhuri, Jonodev Osceola, Vice Chairman, National Indian Gaming
Commission..................................................... 18
Prepared statement........................................... 20
Enos, Hon. Diane, President, Salt River Pima-Maricopa Indian
Community...................................................... 70
Prepared statement........................................... 72
Fennell, Anne-Marie, Director, Natural Resources and Environment,
U.S. Government Accountability Office.......................... 24
Prepared statement........................................... 25
Gosar, Hon. Paul A., U.S. Representative from Arizona............ 5
Prepared statement........................................... 7
Grijalva, Hon. Raul M., U.S. Representative from Arizona......... 10
Prepared statement........................................... 12
Hicks, Hon. Michell, Principal Chief, Eastern Band of Cherokee
Indians........................................................ 47
Prepared statement........................................... 49
Norris, Jr., Hon. Ned, Chairman, Tohono O'odham Nation........... 88
Prepared statement........................................... 89
Stafne, Hon. A.T., Chairman, Assiniboine and Sioux Tribes of the
Fort Peck Indian Reservation................................... 43
Prepared statement........................................... 45
Stevens, Jr., Ernest L., Chairman, National Indian Gaming
Association.................................................... 51
Prepared statement........................................... 54
Washburn, Hon. Kevin, Assistant Secretary--Indian Affairs, U.S.
Department of the Interior..................................... 14
Prepared statement........................................... 15
Weiers, Hon. Jerry, Mayor, City of Glendale, Arizona............. 83
Prepared statement........................................... 85
Appendix
Balderas, Hon. Ruben, President, Fort McDowell Yavapai Nation,
prepared statement............................................. 106
Cate, Matthew, Executive Director, California State Association
of Counties, prepared statement................................ 101
Counts, Hon. Sherry J., Chairwoman, Hualapai Tribe, prepared
statement...................................................... 99
Escalanti Sr., Hon. Keeny, President, Fort Yuma Quechan Indian
Nation, prepared statement..................................... 129
Letters, submitted for the record
Light, Steven Andrew, Ph.D. and Kathryn R.L. Rand, J.D., Co-
Directors, Institute for the Study of Tribal Gaming Law and
Policy, joint prepared statement............................... 119
Mendoza, Gregory, Governor, Gila River Indian Community, prepared
statement...................................................... 109
Response to written questions submitted to Hon. Kevin Washburn
by:
Hon. John McCain............................................. 144
Hon. Jon Tester.............................................. 144
Rambler, Hon. Terry, Chairman, San Carlos Apache Tribe, prepared
statement...................................................... 125
Shelly, Hon. Ben, President, Navajo Nation, prepared statement... 116
Tilousi, Rex, Chairman, Havasupai Tribal Council, prepared
statement...................................................... 114
INDIAN GAMING: THE NEXT 25 YEARS
----------
WEDNESDAY, JULY 23, 2014
U.S. Senate,
Committee on Indian Affairs,
Washington, DC.
The Committee met, pursuant to notice, at 3:30 p.m. in room
628, Dirksen Senate Office Building, Hon. Jon Tester,
Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. JON TESTER,
U.S. SENATOR FROM MONTANA
The Chairman. I will call the Committee on Indian Affairs
to order.
I want to welcome everybody to this hearing. As the
Chairman of this Committee, I am very aware of the dire need
for access to capital and economic development on reservations
across this Nation. In some parts of Indian Country, gaming is
become the primary component of creating and sustaining a
tribal economy.
Over the 25 years since enactment of the Indian Gaming
Regulatory Act, we have witnessed a tremendous growth of tribal
gaming. One of the architects of that Act is a member of this
Committee, Senator John McCain. He and Mo Udall, then a
Congressman, crafted this bill in the House while Senator
Inouye led this issue in the Senate. I want to thank Senator
McCain for his leadership, both then and now, on issues of
importance to Indian Country.
The Indian Gaming Regulatory Act sought to protect tribal
gaming revenues and ensure that the funds were used for job
creation and health care, infrastructure, education and other
programs to benefit tribal members. The Act sought to ensure
that gaming on Indian lands would be preserved as a viable
means of achieving economic self-sufficiency for tribal
governments.
As Stand Up California recognized in a recent letter to me
and the Vice Chairman, it said in the short span of two decades
and a half, IGRA has achieved the goal of economic self-
determination for tribes previously not thought possible. The
Indian Gaming Regulatory Act established and charged the
National Indian Gaming Commission with the responsibility to
monitor gaming activity, inspect the gaming premises, conduct
background investigations, audit and review financial records,
and take enforcement actions where necessary.
At the same time, the Act acknowledged that tribal
governments would continue to serve as the day-to-day
regulators of Indian gaming operations. Today, there are nearly
6,000 regulators at the tribal level, 570 at the State level
and more than 100 individuals at the National Indian Gaming
Commission.
In 2013, tribal governments spent more than $400 million to
regulate their gaming facilities. The National Indian Gaming
Commission is funded $20 million annually through fees levied
against tribal gaming operations. Tribal gaming has come a long
way in the 25 years since IGRA was enacted.
While not a cure-all for many serious challenges facing
Indian Country, gaming has provided numerous benefits to the
communities who operate successful facilities. These are
sophisticated operations, often employing significant numbers
of tribal members and non-Indians in their communities. Tribal
sovereignty and self-governance are important issues for me and
for this Committee. While gaming is not the answer for every
tribe, all tribal nations have the right to determine the best
possible future for their people.
Today we are going to hear from witnesses how gaming has
benefited Indian Country over the 25 years since IGRA was
enacted. We will also hear about where the industry is heading
and how tribal and Federal regulators address any issues that
arise.
We will also get a preview from the General Accountability
Office examination of Indian gaming that is being done at the
request of myself, the Vice Chairman, Senator Cantwell and
Senator McCain.
Before I ask Senator McCain if he has any opening
statement, I would just like to say that there are a number of
issues affecting Indian Country. Since I became Chair earlier
this year, this Committee has held numerous Committee hearings
on education, health, energy, economic development, trust,
natural resources, that list goes on and on. I wish we had the
kind of crowd we have here today at those hearings.
Indian gaming has been a great opportunity for Indian
Country. But all of these other issues are ones that require
this level of attention. I hope this is something we can
continue to highlight in this Committee.
With that, Senator McCain, do you have any opening
statements?
STATEMENT OF HON. JOHN McCAIN,
U.S. SENATOR FROM ARIZONA
Senator McCain. I thank you, Mr. Chairman. I thank you for
your leadership in this Committee and your dedication to Indian
Country.
These are very difficult and complex issues, as you
mentioned, that come before this Committee. I serve on a number
of committees, and I would argue perhaps the most complex
issues that I have been engaged in in many ways are those that
come under the jurisdiction of this Committee. I thank you for
your leadership and I thank you for holding today's oversight
hearing on Indian gaming. It has been more than 25 years since
Congress enacted the Indian Gaming Regulatory Act of 1988. And
I am proud to say that Indian gaming stands today as a proven
economic driver that empowers over 240 gaming tribes across the
Nation to pursue the principles of Indian self-determination
and tribal self-governance.
I worked closely with the late Senator Dan Inouye to work
to develop IGRA in response to the Supreme Court's landmark
Cabazon decision that held that Indian tribes have a sovereign
right to conduct a certain level of gaming on reservation
lands, particularly when States allow some form of gaming. It
was left to Congress to address several unresolved questions
such as the appropriate level of Federal, State and tribal
oversight, and what tribal lands are eligible for gaming
facilities.
The process of enacting IGRA was complex, but in the end, I
believe that it has achieved a careful balance between the
concepts of tribal sovereignty and States' rights. Today, as
you mentioned, Mr. Chairman, the gaming industry generates
about $28 billion a year. In my home State of Arizona, tribes
collect roughly $1.8 billion a year in gaming revenues. Non-
Indian communities in Arizona have also benefited under the
Arizona Tribal-State Gaming Compact by receiving over $1
billion in gaming shared revenues since 2002 for a variety of
public benefits, including education, local governments,
tourism, trauma care services and wildlife conservation.
I am hopeful that today's oversight hearing will revisit
the importance of Indian gaming by highlighting its
achievements and airing the challenges that exist today. One of
my primary concerns continues to be the performance and legal
limitations of the National Indian Gaming Commission as the
chief Federal regulator for Indian gaming. We should also
discuss the matter of off-reservation gaming including the
situation in my home State of Arizona and elsewhere across the
Nation. It has been many years since Congress has evaluated the
impacts of Indian casinos on nearby non-Indian communities
which is increasingly relevant given the desire of many in
Congress to enact a Carcieri effect that would address the 2009
Supreme Court ruling preventing the Interior Department from
taking land into trust for a large number of tribes across the
Country.
Mr. Chairman, I want to thank you again for inviting
witnesses from Arizona. I look forward to the Committee
hearing, in particular the views of the proposed casino in
Glendale, Arizona. As my colleagues know, IGRA allows for a
Vegas-style gaming facility to be built on trust lands if they
were acquired by an Indian tribe under a congressionally
approved land claims settlement, in Glendale's case, the Gila
Band Indian Reservation Lands Replacement Act of 1986. That law
compensated the Tohono O'odham nation for lands that were
flooded by the Army Corps Painted Dam near Gila Bend, Arizona.
The Tohono O'odham Tribe is one of the small number of tribes
in the Nation, I believe one out of three, that are using this
IGRA exception but under a great deal of controversy and
litigation.
I share the objections of many Arizonans when I see a
casino being air-dropped into the metro Phoenix area. However,
I also understand that the Federal district court has decided
in favor of the Tohono O'odham nation to acquire the land
consistent with the technical wording of the Arizona compact
and that the Glendale city council recently voted in support
for the casino, which was a reversal, I might add.
These and other factors could complicate Senate
consideration of the bill that passed the house last year to
prohibit gaming on the Glendale parcel. It is my desire that
the Committee fully understand the tremendous amount of
controversy that this situation has generated in Arizona and
how the courts are applying the land claims settlement
exception under IGRA. I know it is a complex issue, Mr.
Chairman, and I appreciate your attention to it. I say to my
friends from Arizona, I still hope that we can resolve this
issue by sitting down, party to party, individual to
individual, tribe to government, and try and resolve this issue
which has caused so much controversy and difficulties in our
State of Arizona. I know I speak for Senator Flake when I say
both of us are committed to try to help resolve this issue.
I thank you, Mr. Chairman.
The Chairman. Thank you, Senator McCain. I want to thank
you for your leadership over the many, many years that you have
served both in the House and the Senate on Indian Country
issues. We are going to need your guidance and your input on
this Arizona issue as it progresses.
With that, Senator Barrasso, your opening statement.
STATEMENT OF HON. JOHN BARRASSO,
U.S. SENATOR FROM WYOMING
Senator Barrasso. Thank you very much, Mr. Chairman, for
holding this hearing. I welcome Representative Gosar,
Representative Grijalva, I see them both in the back there.
There is a line, Mr. Chairman, way down the hall out there.
Obviously there is a lot of interest in this. Welcome to the
Committee.
According to the National Indian Gaming Commission, gross
revenues for Indian gaming in 2013 totaled $28 billion. Gaming
activities must be regulated effectively. No one, be it
contractors, vendors, players or employees should illegally
benefit at the expense of the tribes or the gaming public. So
to protect the integrity of Indian gaming, the National Indian
Gaming Commission implemented an initiative focused on
assistance, compliance and enforcement. I, along with Senators
McCain and Cantwell and you, Mr. Chairman, requested the GAO,
the Government Accountability Office, to conduct a study on
Indian gaming with an emphasis on regulation. The GAO is still
conducting that study and will provide us with preliminary
findings today.
I look forward to hearing the GAO evaluation of the
commission's initiative, and also urge the commission to work
closely with the GAO in this study.
I also understand the President has announced his intent to
nominate Mr. Chaudhuri, one of our witnesses today, as chairman
of the National Indian Gaming Commission. Congratulations. The
commission needs to be appropriately staffed so that it may
conduct its responsibilities as outlined in the Indian Gaming
Regulatory Act.
I want to welcome the witnesses and look forward to the
testimony. Thank you, Mr. Chairman.
The Chairman. Thank you, Vice Chairman Barrasso. Before we
get to our first panel, we are honored today to have a couple
of our colleagues from the House with us, Congressman Gosar and
Congressman Grijalva. Thank you for being here today to discuss
the current issues affecting tribal gaming in Arizona. I want
to thank you for being here to discuss those topics. With that,
we will begin with you, Congressman Gosar.
STATEMENT OF HON. PAUL A. GOSAR, U.S. REPRESENTATIVE FROM
ARIZONA
Mr. Gosar. Thank you, Chairman Tester and members of the
Committee. Thank you for the opportunity to testify regarding
the future of Indian gaming and the need of passage of H.R.
1410.
I have been actively involved in the troubling off-
reservation gaming issue in my home State of Arizona involving
the Tohono O'odham Nation. The tribe is attempting to move from
their ancestral lands in Tucson into another tribe's former
reservation in the Phoenix metropolitan area for the sole
purpose of building a casino. This comes after the Tohono
O'odham and other Arizona tribes adopted a compact approved by
Arizona voters which expressly promised that there would be no
additional casinos or gaming in the Phoenix metro area until
2027.
In exchange for this promise, the voters granted the tribes
a statewide monopoly on gaming and other tribes gave up
significant rights. This Committee has before it H.R. 1410, the
Keep the Promise Act, sponsored by my good friend and
colleague, Trent Franks, from Arizona, that ensures the promise
of no additional casinos in the Phoenix area is kept until the
existing tribal-State gaming compact expires without
interfering in the trust acquisition itself.
In exchange for exclusivity in Arizona, the tribes agreed
to cap the number of casinos in the state and particularly in
the Phoenix metro area, to restrict the number of machines in
the State and to share the machine revenues with the rural,
non-gaming tribes so that all could benefit. Every urban tribe
except for the Tohono O'odham agreed to this limitation. Tohono
O'odham refused, citing the need for a new casino in the Tucson
city area, or in the rural part of the tribe's reservation. The
State and other tribes finally agreed to the restrictions on
gaming being pushed by Arizona's governor and others, but also
yielded to the TO's stated need.
After the agreement was reached, the tribes and the State
promoted their model compact by saturating the airways with
press releases, voter handouts, billboards and television and
radio interviews. Tohono O'odham spent nearly $1.8 million
urging Arizona voters to rely on the limitation that included
no additional casinos in the Phoenix area.
However, in 2001, while negotiations were ongoing and
unbeknownst to everyone, Tohono O'odham had begun efforts to
find land in the Phoenix area to open their fourth casino. What
is worse is that while Tohono O'odham was planning to buy the
land in Glendale for a casino, the city of Glendale was
building a public school a few blocks away. That school opened
in 2004; the Tohono O'odham kept their intentions concealed
until five years later.
The voters approved the tribal-State compact in 2002 and
rejected two competing propositions to expand gaming in the
metropolitan area. In 2003, a few months after the voters
approved the compact, Tohono O'odham finalized its multi-year
effort to purchase land in Glendale for a casino and used a
shell corporation to conceal its identity. The voters approved
the proposition of the 17-tribe coalition because it was sold
to the voters as the only proposition that would halt the
growth of gaming in Phoenix and keep Indian gaming out of local
communities.
The system was a national model. It was working well until
2009, when the Tohono O'odham announced that it would seek
lands in trust off the reservation and in the Phoenix area for
gaming. Tohono O'odham's dismissal of their promise to build no
additional casinos in Phoenix is not something that Congress
can ignore when the result would be so harmful to something
that has been such a prominent national model. No entity,
government or otherwise, should be rewarded for deceptive
conduct that violates a compact and is contrary to the will of
the voters.
TO likes to say that to date, they are winning in the
courts, which is a continuation of the deceitful manner in
which they have dealt with this issue. Tohono O'odham fails to
mention that the reason the court did not rule against them in
a recent case was not due to the strength of their position,
but because of the issue of sovereign immunity.
In fact, after reviewing one of the claims, the district
court stated that the evidence would appear to support the
claim that the Tohono O'odham fraudulently induced other tribes
and the State into agreeing to the gaming compact. However, the
court did not rule because it was barred by the nation's
sovereign immunity.
The Supreme Court recently has in fact ruled on a similar
issue, but not in the favor the tribe is boasting. In the case
of Michigan v. The Bay Mills Indian Community, the court upheld
the tribe's sovereign immunity from being sued by the State of
Michigan. But, it also stated that only Congress can act when a
tribe raises such immunity. That is exactly why this
legislation is necessary. Failure to adopt this common sense
legislation will negatively impact gaming and upend compacts
throughout the Nation.
I would also like to submit for the record a map that shows
all the different islands within the city of Phoenix in which
such gaming could occur. To give a slight aspect to this, one
small little aspect in here is 100 acres, right here. It is
kind of hard to see, but that little tiny dot is 100 acres.
So with that, I yield back the balance of my time and thank
you for the opportunity to express my views.
[The prepared statement of Mr. Gosar follows:]
Prepared Statement of Hon. Paul A. Gosar, U.S. Representative from
Arizona
Attachment
The Chairman. Thank you for your statement, Congressman
Gosar. We appreciate it.
Congressman Grijalva?
STATEMENT OF HON. RAUL M. GRIJALVA, U.S. REPRESENTATIVE FROM
ARIZONA
Mr. Grijalva. Good afternoon, Chairman Tester, Vice
Chairman Barrasso and my friend, Senator McCain. Thank you for
including H.R. 1410 in this hearing.
Most of the Tohono O'odham nation's reservation and its
32,000 enrolled members are located within my congressional
district. I have known and worked with the nation for a very,
very long time, and I am privileged to represent them here in
Washington. And I truly appreciate the Committee's invitation
to come and speak at your hearing.
The Corps of Engineers destroyed nearly 10,000 acres of the
nation's reservation known as the Gila Bend Indian reservation.
The Gila Bend Reservation is located in Maricopa County and
serves the nation's San Lucy District. The suffering of the
people who live in the san Lucy District and the economic harm
the destruction did to the nation as a whole are well
documented in the legislative history of the 1986 Gila Bend
Indian Reservation Lands Replacement Act. The 1986 Act provided
that if the nation would waive its legal claims against the
United States, and if the nation would relinquish its rights to
the land and water for most of the Gila Bend Reservation, that
the United States in return would provide replacement
reservation lands to the nation. The 1986 Act also required
that those replacement lands be treated ``as a reservation for
all purposes.'' That legislation was introduced by an icon of
our State, Congressman Mo Udall, and co-sponsored by another
icon from our State, then-Representative John McCain.
Complying with all Federal laws and agreements, including
the 1986 Act, a 1987 settlement agreement, the Indian Gaming
Regulatory Act and the tribal-State compact, in 2009 the nation
asked the Department of Interior to take into trust replacement
reservation land in the west valley portion of Maricopa County.
Earlier this month, Interior completed that process and the
West Valley land is now part of the nation's reservation.
The proponents of H.R. 1410 raise many arguments as to why
the nation's West Valley land could not be taken into trust as
part of the replacement reservation which the United States
promised in the 1986 Act. But the Federal courts rejected these
arguments and sent the issue back to Interior. Now Interior has
issued a lengthy opinion in support of the nation and taken the
land into trust to be part of the nation's reservation.
The proponents of H.R. 1410 then argue that the nation's
tribal-State gaming compact does not allow the nation to
conduct gaming in the greater Phoenix area. The proponents of
H.R. 1410 again took this argument to the Federal courts; but
again, the Federal courts rejected their arguments, finding
that, ``No reasonable reading of the compact could lead a
person to conclude that it prohibited new casinos in the
Phoenix area.''
The proponents of H.R. 1410 also argued that the Indian
Gaming Regulatory Act prohibits gaming on land a nation
acquires under the 1986 Act. But here too, Federal court ruled
that gaming on this land is ``expressly permitted by the Indian
Gaming Regulatory Act.'' Finally, they have argued the nation
must be held to some phantom promise. But the same court noted
that the express language of the compact itself makes it clear,
even if there had been such a promise, it could never have
been, in the courts words, valid or binding.
Contrary to recent lobbying rhetoric, the fact is, the
official position of most of the municipalities in the West
Valley is one of support for the nation's economic development
project and opposition to H.R. 1410. In addition to nearby West
Valley cities of Peoria, Tolleson, the mayor of Phoenix,
Surprise, also the city of Glendale now formally support the
nation's proposed economic development and oppose H.R. 1410. I
realize that the mayor of Glendale's personal views are not in
sync with those of the city council, but it is important to
underscore that Glendale's official position is embodied in two
recent resolutions, one which opposes H.R. 1410 and another
which supports gaming-related economic development in the West
Valley reservation. To the best of my knowledge, the only
municipality to take an official position supporting H.R. 1410
is the city of Scottsdale, which conveniently is located on the
other side of Phoenix in the East Valley.
I should take a moment to recognize in the audience today
Mayor Bob Barrett of Peoria, and Glendale City Councilmen Gary
Sherwood and Sammy Chavira. They are here today to urge the
Committee to not move H.R. 1410 forward.
I want to underscore one thing, that we need to be
cognizant that if we enact H.R. 1410, other liabilities will be
open to the United States: taking of land, breach of contract
for the bargain that was struck in the 1986 Act. We would be
liable for hundreds of millions of dollars. The way I see it,
we are essentially asking the American taxpayer to pay for
special interest legislation designed to protect East Valley's
tribes' gaming market and the American taxpayer would bear the
full liability for that protection.
The United States of America, in the 1986 Act, the
intention was to make the nation whole. It did. And every court
case, every administrative review has upheld that law and the
tribe's right to the West Valley and the development of that.
So I would hope that this Committee looks further into it,
examines it, but essentially we have a commitment as a nation.
It is an honorable commitment. And I think we should not move
this law forward, and honor the commitment that we made in
1986. With that, I yield back.
[The prepared statement of Mr. Grijalva follows:]
Prepared Statement of Hon. Raul M. Grijalva, U.S. Representative from
Arizona
Good afternoon Chairman Tester, Vice Chairman Barrasso, and Members
of the Committee, and special greetings to my colleague from Arizona,
Senator McCain. Most of the Tohono O'odham Nation's Reservation and its
32,000 enrolled members are located within my congressional district. I
have known and worked with the Nation for a very long time, and I truly
appreciate the Committee's invitation to speak at today's hearing.
The Corps of Engineers inadvertently destroyed nearly 10,000 acres
of that part of the Nation's reservation known as the Gila Bend Indian
Reservation. The Gila Bend reservation is located in Maricopa County,
and serves the Nation's San Lucy District. The suffering of the people
who live in the San Lucy District, and the economic harm the
destruction did to the Nation as a whole, are well documented in the
legislative history of the 1986 Gila Bend Indian Reservation Lands
Replacement Act. The 1986 Act provided that if the Nation would waive
its legal claims against the United States, and if the Nation would
relinquish its rights to the land and water at most of the Gila Bend
reservation, the United States in return would provide replacement
reservation lands to the Nation. The 1986 Act also required that these
replacement lands be treated, and I quote, as a ``reservation for ALL
purposes.''
Complying with all federal laws and agreements, including the 1986
Act, a 1987 settlement agreement, the Indian Gaming Regulatory Act, and
its tribal-state compact, in 2009 the Nation asked the Department of
the Interior take into trust replacement reservation land in the West
Valley portion of Maricopa County. Earlier this month, Interior
completed that process, and the West Valley land is now part of the
Nation's reservation.
The proponents of H.R. 1410 raised many arguments as to why the
Nation's West Valley land could not be taken into trust as part of the
replacement reservation which the United States promised in the 1986
Act. But the federal courts rejected those arguments and sent the issue
back to Interior. Now Interior has issued a lengthy opinion in support
of the Nation, and taken the land in trust to be part of the Nation's
reservation.
The proponents of H.R. 1410 then argued that the Nation's tribal-
state gaming compact does not allow the Nation to conduct gaming in the
greater Phoenix area. As they had a right to do, the proponents of H.R.
1410 again took their arguments to the federal courts. But again, the
federal courts rejected their arguments, finding that, and I quote
again, ``no reasonable reading of the Compact could lead a person to
conclude that it prohibited new casinos in the Phoenix area''.
The proponents of H.R. 1410 also argued that the Indian Gaming
Regulatory Act prohibits gaming on land the Nation acquires under the
1986 Act. But here too, a federal court ruled that gaming on this land
is, quote, ``expressly permitted'' by the Indian Gaming Regulatory Act.
Finally, they have argued that the Nation must be held to some phantom
``promise'', but the same court noted that the express language of the
compact itself makes clear that even if there had been such a promise
it could never have been, in the court's words, ``valid or binding''.
Contrary to recent lobbying rhetoric, the fact is that the official
position of most of the municipalities in the West Valley is one of
support for the Nation's economic development project and opposition to
H.R. 1410. In addition, the nearby West Valley cities of Peoria,
Tolleson, and Surprise, the City of Glendale now formally supports the
Nation's proposed economic development, and opposes H.R. 1410. I
realize that the Mayor of Glendale's personal views are not in sync
with those of his City Council, but it is important to underscore that
Glendale's official position is embodied in two recent resolutions, one
which opposes H.R. 1410 and another which supports gaming-related
economic development on the Nation's West Valley reservation. To the
best of my knowledge, the only municipality to take an official
position supporting H.R. 1410 is the City of Scottsdale, which is
located on the other side of Phoenix in the East Valley.
I should take a moment now to recognize in the audience today Mayor
Bob Barrett of Peoria, and Glendale Councilmen Gary Sherwood and Sammy
Chavira. They are here today to urge this Committee to not take action
to move H.R. 1410 forward.
I want also to underscore that we need to be cognizant that
enactment of H.R. 1410 likely will create for the Nation a new set of
claims against the United States, including a claim for an
unconstitutional taking of the Nation's confirmed property rights in
its West Valley reservation, and a claim for breach contract based on
the Unites States' failure to live up to its end of the bargain struck
in the 1986 Act. The amount of money damages that could be awarded to
the Nation could run into the hundreds of millions of dollars. The way
I see it, we essentially are asking the American taxpayer to pay for
special interest legislation designed to protect the East Valley
tribes' market.
The Nation has been subjected to a long, ugly campaign by the
proponents of H.R. 1410. The Nation has patiently accepted every
challenge and answered every question. Over the last five years, the
federal courts and the Department of the Interior have studied every
allegation, and have now made their pronouncements. In every case, the
judicial and executive branches of the Federal Government have found
the Nation to have acted honorably within the letter and spirit of the
law.
After the United States illegally destroyed nearly 10,000 acres of
the Tohono O'odham Nation's land, it made a solemn promise to make the
Nation whole by allowing the Nation to acquire new land that would be
treated as a replacement reservation, as 1986 Act says, for ALL
purposes. The West Valley reservation lies in the same county, and has
the same gaming eligibility status, as the land that was destroyed.
When the Department of the Interior took that land into trust, it
honored the obligation that the United States took on when it made into
law the 1986 Act. The acquisition of replacement land as required by
land claim settlements simply cannot fairly or honestly characterized
as ``reservation shopping''--these acquisition are instead the
fulfillment of federal promises for compensation for historical
wrongdoing.
The federal courts and the executive branch have done their part to
honor the United States' commitments in the 1986 Act, and it is my
great hope that we in Congress will also do our part, by not moving
H.R. 1410 even one step further towards enactment into law.
I thank you again for your kind invitation to testify today, and I
am happy to answer any questions you might have for me.
The Chairman. Congressman Grijalva, thank you. Thank you
for your testimony as well as Congressman Gosar's testimony. I
think each of your testimony indicates this is a complicated
issue; there is some difference of opinion. We appreciate your
both coming to the good side and visiting with us.
[Laughter.]
The Chairman. Thank you very much.
Mr. Gosar. Mr. Chairman, I also have a letter from Ed
Pastor that found its way over. I would like to have that
included in the record, in support of H.R. 1410.
The Chairman. I would just say, without objection, this
record will stay open for two weeks. If you have more things
you want to put into the record, it will be in. Thank you all.
We are going to have our first panel of witnesses that we
can question come up, which includes Kevin Washburn, Assistant
Secretary for Indian Affairs at the Department of the Interior.
We are also going to hear from Jonodev Chaudhuri, Vice Chairman
of the National Indian Gaming Commission. As the Vice Chairman
pointed out, he is nominated to be the next chairman of the
National Indian Gaming Commission. Congratulations, Jonodev.
And finally, Ms. Ann-Marie Fennell, who is Director of
Natural Resources and Environment at the Government
Accountability Office. I want to thank you all. Your full
written statements will be part of the record. We would ask you
to keep your statements to within five minutes. As always, the
hearing record is going to remain open for a couple of weeks,
as I told the previous panel, for those who wish to submit
written statements.
Before we start with your testimony, Assistant Secretary
Washburn, it was a few months ago Brian Cladoosby, Swinomish
Tribe, was up as NCAI chair and you were giving him a bad time.
I want to have Brian come to the well for a second, because he
has a presentation for you.
[Laughter.]
Mr. Cladoosby. Thank you, Senator. As you know, a couple of
months ago Kevin and I testified on Carcieri. He told you, any
questions that you have, just to point them to me, point them
to the guy with the basket on his head.
The Chairman. That is right.
Mr. Cladoosby. So thank you very much for allowing me to
present the Assistant Secretary, Kevin Washburn, with this
cedar hat from the Northwest. He will also be known as the man
with the basket on his head.
The Chairman. So we will know to direct the questions to
Kevin.
[Laughter, applause.]
The Chairman. Once again, thank you all for being here
today.
Senator McCain. I think you should wear it for the entire
hearing.
[Laughter.]
The Chairman. I guess we could entertain a motion to that
effect.
Kevin, you may proceed.
STATEMENT OF HON. KEVIN WASHBURN, ASSISTANT
SECRETARY--INDIAN AFFAIRS, U.S. DEPARTMENT OF THE
INTERIOR
Mr. Washburn. Thank you very much, Chairman, and thank you,
Vice Chairman Barrasso and Senator McCain, especially for your
continuity on this subject. You are the one person who we have
here who has been involved with Congress since IGRA was passed.
It is good to have you here.
Indian gaming, like this Committee, is bipartisan and non-
partisan. Though sometimes it is fairly parochial, I guess as
we saw from the first panel. But Indian gaming is very, very
important to Indian tribes. No one believes, I don't believe,
that we have enough money to fulfill our trust responsibility
to Indian tribes in the Federal appropriations process. I think
it is fair to say that the Federal government doesn't have
enough money to do a lot of the things that it needs to get
done. I am sure that the trust responsibility is in that same
category.
Gaming revenues eclipse by a very large measure the amount
of revenues that we have in my budget in Indian Affairs at the
Department of Interior, including the BIA and the BIE. Our
budget is about $2.5 billion and Indian gaming revenues are
about $28 billion. So our budget is less than 10 percent of
what comes in through Indian gaming. In fact, gaming revenues
eclipse by a large measure all the Federal revenues toward
Indian tribes. So gaming is an important piece of the puzzle
for economies on Indian reservations.
I also am a big believer in tribal self-governance. And
frankly, Indian gaming, much more than our own appropriations,
has underwritten tribal self-determination and tribal self-
governance. It has funded those things, and that is a very
important aspect of Indian gaming.
Chairman, most of the subjects that you mentioned, you have
been holding a lot of hearings, and most of the subjects that
you mentioned are, at least at some tribes, underwritten by
Indian gaming revenues. We need greater Federal appropriations,
perhaps, but Indian gaming revenues help out a lot.
The sad thing is, and I tried to get this across in my
written testimony, is that Indian gaming revenues have really
plateaued. They have been pretty flat since about 2007. Unlike
commercial gambling, commercial gaming operations and revenues
continue to grow, especially when you consider racinos. Indian
gaming has really started to plateau. This in some ways causes
us a concern. I don't anticipate dramatic future growth. I
think we have seen that the days of tremendous growth are
probably behind us for Indian gaming. That means we are going
to have to learn to live with the existing amounts of revenues.
We continue in some ways to hope for increased Indian
gaming, but we also are in an awkward position when a new
gaming operation is proposed. Competition is bad and
predictability is good, and existing gaming operations are very
happy not to have competition. And we proceed with great
caution and great care when someone asks us to take land into
trust for a new gaming operation and we will continue to do
that. We will exercise great scrutiny and we will always follow
the law when we are asked to do that.
So the next 25 years for Indian gaming I believe is
uncertain. Nothing lasts forever. No great economic resource
lasts forever, and I am concerned where we will be in another
25 years. For now, Indian gaming remains a very, very important
part of the picture on Indian reservations. It would be folly
not to recognize that.
With that, I will stop and await further questions. Thank
you.
[The prepared statement of Mr. Washburn follows:]
Prepared Statement of Hon. Kevin Washburn, Assistant Secretary--Indian
Affairs, U.S. Department of the Interior
Good afternoon Chairman Tester, Vice Chairman Barrasso, and Members
of the Committee. My name is Kevin Washburn and I am the Assistant
Secretary for Indian Affairs at the Department of the Interior
(Department). Thank you for the opportunity to provide the Department's
views at this oversight hearing on the Indian Gaming Regulatory Act
(IGRA).
Indian Gaming 25 Years After the Enactment of IGRA
As this Committee is well aware, in 1987 the Supreme Court affirmed
the right of tribes to conduct gaming on their reservations. The
following year, Congress enacted IGRA to establish a federal regulatory
framework for the conduct of gaming on Indian lands. When IGRA was
enacted, non-Indian casino gaming was limited primarily to Nevada and
New Jersey. At that time, tribal gaming on Indian lands generated
estimated annual revenues of between $100 million and $500 million.
More than twenty-five years later, much has changed. Tribal gaming
on Indian lands since 1987 has grown dramatically. However, since 2007,
Indian gaming revenues have grown very little and have stabilized in
the range of $26 to $28 billion annually. Commercial (non-Indian)
gaming is now much larger than Indian gaming, and the commercial gaming
industry continues to grow, particularly when so-called ``racinos'' are
included. In sum, while Indian gaming growth appears to have plateaued,
commercial gaming continues to grow. Put another way, Indian gaming's
overall share of the gaming market is decreasing.
After 25 years, the benefits of Indian gaming are readily apparent.
Indian gaming revenues are important for tribal governments. Gaming
revenues eclipse, by a large measure, all federal appropriations for
Indian tribes. Gaming revenues are devoted to every aspect of tribal
communities--from housing to elder care to language revitalization and
job training. Gaming provides employment opportunities and spurs
business development in many communities that otherwise struggled
through generations of poverty. While Indian gaming is not a panacea to
poverty for all tribal communities, it has dramatically righted the
trajectory for many tribes and helped them to become much more
successful and self-sufficient.
While we attribute much of the improvement in the delivery of
governmental services in Indian country in recent decades to the
development of the federal policy favoring tribal self-governance,
Indian gaming has helped to underwrite many of the successes we have
seen. Indian gaming revenues have helped to develop tribal governmental
capacities in myriad ways. For example, many members of the newest
generation of tribal lawyers, doctors and other professionals were
supported by scholarships made possible through Indian gaming.
While most of the Indian gaming revenues are used to pay wages, the
costs of financing, and other ordinary costs of doing business, the
profits from Indian gaming are used primarily to improve the welfare of
Indian people. Indian gaming, after all, is required by law to be owned
and licensed by tribal governments and to primarily benefit the Indian
tribe and Congress has specified that Indian gaming revenues may be
used only for specific purposes.
While tribes remain leaders in the industry and continue to
dominate in some regional markets, they are facing more and more
competition from state-licensed commercial casinos. In contrast to
governmental revenues developed by Indian gaming, the profits of non-
Indian commercial casinos are used differently. Commercial casinos are
ordinary ``for profit'' businesses and they have a different legal
duty: to enrich their shareholders. It is thus disappointing to us, in
some ways, that we see growth in Indian gaming slowing and commercial
gaming taking an ever larger share of the gaming market.
We frequently face a misperception that tribes are acquiring land
and opening gaming facilities at a fast pace. The growth numbers alone
belie this argument. Of the over 1,700 successful trust acquisitions
processed since the beginning of the Obama administration in 2009,
fewer than 15 were for gaming purposes and even fewer were for off-
reservation gaming purposes. Also, it is not uncommon for a decade of
thoughtful deliberation to pass between the time a tribe applies for
land into trust for gaming and the Department decides on the
application and, if successful, takes the land into trust.
The numbers of gaming operations provided by the NIGC in its annual
revenue reports confirm that the number of gaming operations has
remained flat in recent years. In 2009, the NIGC announced in its
annual gaming revenue report that there were 419 Indian casinos
operating nationwide, and then it announced 422 in 2010, 421 in both
2011 and 2012, and 416 in 2013. In sum, concerns about dramatic growth
of Indian gaming are unfounded today.
In contrast, commercial non-Indian gaming casinos and racinos have
grown considerably during the same time period. Expanding commercial
gaming makes tribes nervous.
Of course, not all of the potential new competition comes from
commercial casinos. Some of the competition comes from other tribes.
Though new Indian casinos are rare, they too can cause disruption to
existing facilities. Competition can be tough in maturing markets with
slower growth. The potential for disruption to existing facilities is a
concern that we understand and it is one of the reasons we follow the
law so carefully in making decisions. Because of the potential impact
on tribes, we know that we must always be very cautious in authorizing
new Indian gaming opportunities and that we should do so only with
clear legal authorization and careful adherence to existing regulatory
procedural requirements.
The Regulatory Framework of IGRA
As you know, IGRA creates a regulatory scheme that seeks to balance
tribal, state, and federal interests in regulating gaming activities on
Indian lands: Class I gaming is regulated exclusively by Indian tribal
governments; Class II gaming regulation is reserved to tribal
governments in cooperation with the federal government; and, Class III
gaming is regulated primarily by tribal governments in cooperation with
the federal government and, to the extent negotiated in an approved
compact, a state government. The Department has certain roles in the
regulation of Indian gaming; other roles are performed by the National
Indian Gaming Commission and tribal or state gaming regulators.
Specifically, under IGRA the Department of the Interior reviews tribal-
state gaming compacts and fee-to-trust applications for gaming. The
NIGC reviews tribal gaming ordinances and management contracts and
retains civil enforcement authority for violations of IGRA.
With regard to compacts, IGRA carefully describes the topics to
address in a compact. Congress specifically named six subjects related
to the operation and regulation of Class III gaming activity that may
be addressed in a compact, and also included a limited catchall
provision authorizing the inclusion of provisions for ``any other
subjects that are directly related to the operation of [Class III]
gaming activities.'' The Department closely scrutinizes tribal-state
gaming compacts and disapproves compacts that do not squarely fall
within the topics delineated in IGRA. For example, Class II gaming is
not an authorized subject of negotiation for Class III compacts. The
regulation of Class II gaming is reserved for tribal and federal
regulation.
As the Committee is well aware, section 20 of IGRA generally
prohibits gaming on lands acquired in trust after IGRA's enactment on
October 17, 1988, and contains only a few exceptions. These limited and
narrow exceptions operate to provide equal footing for certain tribes
that were disadvantaged in relation to land. These include: the initial
reservation of an Indian tribe acknowledged by the Secretary under the
Federal acknowledgment process, restored lands for tribes restored
after termination, and lands acquired in settlement of a land claim. In
other cases, off-reservation trust lands are eligible for gaming only
if the Department makes a two-part determination that gaming on the
parcel is in the best interest of the tribe and not detrimental to the
surrounding community and the Governor of the State concurs in that
determination. In the 25 years since the passage of IGRA, only 8 times
has a governor concurred in a positive two-part determination.
The previous Administration promulgated extensive regulations to
implement section 20 and the Department continues to apply these
rigorous standards to every gaming decision. Also, the Department's
review of trust applications--regardless of location or the activity
the Tribe proposes to acquire the land for--is lengthy and deliberate.
For trust acquisitions, the Department carefully considers the concerns
of all stakeholders, including, of course, the applicant tribe, but
also the potentially impacted state, local and tribal governments and
the public at large. The Department actively solicits the views of
these stakeholders to insure that the decision is a fair decision for
the entire community.
It is important to note that the public, state and local
governments, and other tribal governments have many opportunities to
participate throughout the trust-acquisition process. Prior to deciding
whether to place the land into trust, the Department seeks comment from
state and local governments; the public and local governments are
notified and given an opportunity to provide input during the
environmental review process under the National Environmental Policy
Act (NEPA). Moreover, before off-reservation land can be found eligible
for gaming through the two-part determination process, the Department
requests additional comments from nearby tribal, state and local
governments. Among other interests, the Department is interested in the
economic consequences to the local community. Of course, in most cases,
significant cooperation occurs between tribes and state and local
governments in light of needs for adequate water treatment at new
facilities, resolving traffic, transportation and other infrastructure
issues, and sometimes emergency services. As a result of all of this
communication, we find that the interests of tribes and their
surrounding communities often become accommodated, if not aligned.
Conclusion
The future of Indian gaming is difficult to predict. Revenues from
Indian gaming have had a strongly positive impact on tribal
governments, helping tribes to build capacity and develop governmental
infrastructure. That said, few economic resources remain productive
forever. We continue to encourage gaming tribes to diversify
economically, just as we encourage non-gaming tribes to be creative in
seeking out economic development opportunities.
This concludes my prepared statement. Thank you for inviting the
Administration to testify. I am happy to answer any questions the
Subcommittee may have concerning our role with respect to Indian
gaming.
The Chairman. Thank you for your testimony, Kevin. With
that, Jonodev, you may proceed.
STATEMENT OF JONODEV OSCEOLA CHAUDHURI, VICE CHAIRMAN, NATIONAL
INDIAN GAMING COMMISSION
Mr. Chaudhuri. Thank you, Chairman. Good afternoon,
Chairman Tester and Vice Chairman Barrasso and Senators McCain
and Heitkamp and other members of the Committee.
My name is Jonodev Osceola Chaudhuri. I am a member of the
Muscogee Creek Nation and I serve as the Acting Chairman of the
National Indian Gaming Commission. Thank you for providing the
NIGC with this opportunity to testify today at this oversight
hearing.
For a more detailed discussion of the NIGC and its role
pursuant to IGRA, I direct you to our written testimony that we
have submitted.
I am honored by the Vice Chairman's congratulations; I am
deeply honored to receive the very recent nomination from the
President. I do look forward to a confirmation hearing at some
point. But today I am here to provide a brief overview of the
agency and discuss our thoughts on regulation of the Indian
gaming industry in the future.
Since being appointed to the commission over 10 months ago,
I have worked closely with Associate Commissioner Dan Little,
who is in the audience today, and commission staff, to build on
the initiatives of the last four years. The NIGC is committed
to upholding the statutory authority and responsibilities to
oversee the regulation of Indian gaming and where appropriate
and necessary, take enforcement action. But the NIGC recognizes
that it cannot fulfill its responsibilities alone. As the
primary day to day regulators on the ground, tribal governments
and their regulatory bodies have the greatest interest in
safeguarding an industry that has greatly contributed
invaluable improvements and opportunities to their communities.
It is a testament to the leadership of tribal governments,
their citizens and the work of their dedicated employees that
the Indian gaming industry has remained protected and stable.
In 2013, tribal facilities generated $28 billion in gross
gaming revenue as compared to $27.9 billion in 2012. Through
collaboration with all levels of gaming regulators, the NIGC
will continue to ensure the protection and success of the
gaming industry through diligent professional oversight and
enforcement.
To accomplish IGRA's stated policy goals, the NIGC
continues to be proactive in several areas, including
consultation, ongoing regulatory and operational review,
training and technical assistance and agency accountability.
The agency supports the Administration's commitment to Indian
Country, in terms of nation building, honoring tribal
sovereignty and self-determination and engaging in meaningful
consultation with tribes. 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.
So far this year, the commission has conducted four
separate consultation sessions which were attended by
representatives of more than 36 tribes. In addition to
consulting and working with tribes, we also work with other
regulatory bodies, including State agencies, such as those in
the Department of Gaming and the Nevada Gaming Control Board,
to name a few.
We do this to promote the integrity of Indian gaming.
Successful regulation depends on a properly trained workforce,
and the NIGC views training and technical assistance as a
valuable component to the agency's mission. We appreciate the
reference to the ACE Initiative made in opening statements
today. We deem the ACE Initiative as a pillar of our success
over the last few years. Our written testimony goes into detail
regarding the ACE Initiative. But bottom line, the idea is to
invest resources into working with tribes and tribal regulators
on the front end to minimize compliance issues on the back end.
As to the next 25 years of the industry, we recognize that
gaming will continue to play a significant role in many tribes'
nation-building efforts in the foreseeable future. A
fundamental policy of IGRA is ``to provide a statutory basis
for the operation of gaming by Indian tribes as a means of
promoting tribal economic development, self-sufficiency and
strong tribal governments.'' The NIGC understands how important
gaming is to tribal economic development and we are committed
to maintaining our ability to safeguard the industry, so that
the policy goals of IGRA are fully met.
Additionally, the NIGC realizes that constant technological
advances are not only changing the face of Indian gaming but
also necessitate that the NIGC continue to adapt to meet the
regulatory needs of the industry. As tribal gaming evolves, the
NIGC wants to continue to play a relevant role and ensure it
can meet the demands of new regulatory issues in a timely
manner. This desire has helped guide all recent agency
activity, great and small.
A perfect example of this is our use of our recent
headquarters relocation to upgrade existing IT capabilities.
Although it is impossible to predict the nature of the industry
in five years, let alone 25, we are confident that Indian
gaming in the future will continue to be shaped by many of the
same forces that have shaped it since the enactment of IGRA.
Specifically, tribes will continue to drive operational and
technological innovation within relevant legal parameters and
consistent with their respective cultural values and business
landscapes. Sound regulation helps provide a level playing
field for each tribe to consider whether and how to conduct
gaming, given the respective needs and opportunities.
We at the NIGC are committed to ensuring that we regulate
in a way that allows all gaming facilities, no matter how big
or small, to reach their full business potential and provide
the greatest contribution to their economic development and
nation-building efforts. The NIGC is committed to working
closely with this Committee and with Indian Country to ensure
the integrity of Indian gaming.
Thank you again, Chairman Tester, Vice Chairman Barrasso,
and members of the Committee. I appreciate your time and
attention today. I am happy to answer any questions that you
may have.
[The prepared statement of Mr. Chaudhuri follows:]
Prepared Statement of Jonodev Osceola Chaudhuri, Vice Chairman,
National Indian Gaming Commission
Thank you Chairman Tester, Vice Chairman Barrasso, and members of
the Committee for inviting me to testify today. It is an honor to
appear before you for the first time in my capacity as Vice Chairman of
the National Indian Gaming Commission (NIGC or Commission).
Over the past ten months, I have worked closely with Associate
Commissioner Dan Little and Commission staff to build on the
initiatives of the last four years.
Today I will provide you an overview of the status and future of
Indian gaming with an emphasis on the regulation of the industry.
The National Indian Gaming Commission--Powers, Duties, and
Responsibilities
The National Indian Gaming Commission (NIGC) was established by the
Indian Gaming Regulatory Act (IGRA) in order to provide Federal civil
regulatory oversight of Indian gaming. The NIGC is composed of three
members--the Chairperson and two associate commissioners. The
Chairperson is appointed by the President and must be confirmed by the
Senate. The associate commissioners are appointed by the Secretary of
the Interior. Under IGRA, at least two of the three commissioners must
be enrolled members of federally recognized Indian tribes, and no more
than two members may be of the same political party. Each commissioner
serves a three-year term, but a commissioner may serve after the
expiration of his or her term until a successor has been appointed.
IGRA establishes three classes of Indian gaming, each of which has
a different regulatory structure. Class I gaming is defined as
traditional and social gaming for minimal prizes. Class I gaming is
regulated exclusively by tribes.
Class II gaming is defined as the game of chance commonly known as
bingo (whether or not electronic, computer, or other technologic aids
are used in connection therewith) and, if played in the same location
as bingo, pull tabs, punch boards, tip jars, instant bingo, or other
games similar to bingo. Class II also includes non-banking card games,
such as poker, if such card games: (1) are explicitly authorized by the
laws of the State, or (2) are not explicitly prohibited by the laws of
the State, and are played at any location in the State, but only if
such card games are played in conformity with those laws and
regulations (if any) of the State regarding hours or periods of
operation of such card games of limitations on wagers or pot sizes in
such card games.
IGRA also specifies that Class II does not include slot machines or
electronic facsimiles of any game of chance. A tribe may conduct,
license, and regulate Class II gaming if the state in which the tribe
is located permits such gaming for any purpose and the tribal
government adopts a gaming ordinance which has been approved by the
NIGC Chair. Class II gaming is regulated by tribes with oversight by
the NIGC. States have no role in the regulation of Class II gaming.
Class III gaming includes all forms of gaming that are not Class I
or II, such as black jack, slot machines and craps. Class III is
generally referred to as full-scale casino style gaming. Class III
gaming may be lawfully conducted by an Indian tribe if: (1) the state
in which the tribe is located permits that particular type of Class III
gaming for any purpose by any person or organization; (2) the tribe and
the state have negotiated a compact that has been approved by the
Secretary of the Interior; and, (3) the tribe has adopted a tribal
gaming ordinance that has been approved by the NIGC. The Act
contemplates that the regulation of Class III gaming will be negotiated
by the tribes and states in a compact. However, given that the NIGC
must approve and provide regulatory oversight of items in the tribe's
gaming ordinance and Class III management contracts, it too has a role
in the regulation of Class III gaming.
Under IGRA, the NIGC has several specific responsibilities. First,
the NIGC Chairman must approve all tribal gaming ordinances before
Indian tribes may operate gaming on Indian lands. Also, if a tribe
wishes to use an outside contractor to manage its gaming operation, the
NIGC Chairman must first approve the management contract. In
conjunction with such review, the principals of each management company
must pass a detailed background investigation conducted by NIGC
investigators. IGRA also provides authority for the NIGC to inspect
gaming operations and monitor the tribes' use of gaming revenue. The
NIGC Chairman has the authority to bring enforcement actions and assess
civil fines against tribes or outside managers for any violation of
IGRA, the NIGC's regulations, or an approved tribal gaming ordinance.
Appeals from the NIGC Chairman's decisions regarding tribal gaming
ordinances, management contracts, and enforcement actions are heard by
the full Commission. Regulations and subpoenas are also issued by the
full Commission. IGRA also contains criminal provisions related to
theft from gaming operations on Indian lands. However, since the NIGC
has no criminal law enforcement authority, IGRA directs the agency to
report any potential criminal violations to the appropriate law
enforcement agency. These responsibilities enable the agency to fulfill
its statutory mission to protect tribes from organized crime and other
corrupting influences and ensure that tribes are the primary
beneficiary of the gaming activity.
In addition to the duties assigned to NIGC, IGRA also provides a
role for the Secretary of the Interior. Interior is charged with
approving tribal-state gaming compacts, issuing Class III gaming
procedures, and approving tribal revenue allocation plans. In many
instances, the Secretary must take land into trust before a parcel of
tribal land can be eligible for gaming under IGRA. Typically, Interior
will only take land into trust for gaming purposes if it first
determines that the land would be eligible for gaming. In 2008,
Interior promulgated regulations establishing procedures for
determining whether or not any of IGRA's exemptions for allowing gaming
on trust lands acquired after October 17, 1988, would apply.
Under IGRA and the NIGC regulations, each Indian tribe must license
every primary management official and key employee in its gaming
operations, as NIGC regulations define those terms. Before issuing such
licenses, the tribes must conduct individual background investigations
that include a search of the FBI's criminal history database. One
method of accessing such files is through the NIGC. A tribe may enter
an agreement with the NIGC whereby the tribe sends its fingerprint
cards to the NIGC, and the NIGC then forwards all cards received to the
FBI for criminal history searches. The NIGC and the FBI operate under a
memorandum of understanding for these purposes.
Indian gaming can only occur on Indian lands, which IGRA defines
as: All lands within the limits of an Indian reservation; and any lands
title to which is either held in trust by the United States for the
benefit of any Indian tribe or individual subject to restriction by the
United States against alienation and over which an Indian tribe
exercises governmental power. Under IGRA, gaming is prohibited on lands
acquired by the Secretary of the Interior into trust for the benefit of
an Indian tribe after October 17, 1988, unless the land falls within
certain exceptions listed in that provision.
To determine whether lands are Indian lands on which a Tribe may
conduct gaming, the Department of the Interior and the NIGC entered
into a memorandum of understanding which establishes a collaborative
process for determining whether a Tribe may conduct gaming on specific
parcels. Generally, Interior will determine whether lands are
reservation lands and Interior and NIGC will collaborate on whether the
Tribe has jurisdiction over those lands. If the lands are not within a
reservation, then Interior and NIGC will collaborate to determine
whether the lands meet the second test of trust or restricted lands. If
the lands qualify as Indian lands under IGRA but are ineligible for
gaming, the NIGC or the United States Attorney may close the facility.
If the lands are not Indian lands, the state and local laws apply and
jurisdiction over gaming on such lands is vested in the particular
state where the parcel is located.
IGRA restricts the uses of tribal gaming revenues to primarily
governmental purposes. However, if gaming revenues can adequately cover
such needs, then the tribe also may make per capita payments to
individual tribal members from the remaining proceeds (taxable as
personal income), provided such distributions are made pursuant to a
revenue allocation plan approved by the Secretary of the Interior. Many
gaming tribes make no per capita payments at all.
The NIGC is funded entirely by fees paid from the Indian gaming.
The NIGC's headquarters office is located at 90 K Street, NE, in
Washington, D.C. The agency has six regional offices: Portland, OR;
Sacramento, CA; Phoenix, AZ; St. Paul, MN; Tulsa, OK; Oklahoma City,
OK; and Washington, D.C. The NIGC's region offices house NIGC staff in
the Compliance Division, making it possible to have regular contact
with tribes at their gaming locations.
Over the last five years, the Commission has identified and
launched a series of major initiatives consistent with its statutory
mission. These included consultation and relationship building,
conducting a comprehensive regulatory review, providing technical
assistance and training, and improving agency operations. In advancing
these initiatives, the agency has changed its consultation process to
have a dialogue with tribes before regulatory changes are implemented
and before the rule-making process is initiated. Further, the
Commission revised its training program to more closely align with the
needs of the regulated community. To that end, the Commission reviewed
more than 20 regulations or potential regulations, utilizing an
informal pre-rulemaking process that respected tribal sovereignty by
soliciting tribal involvement early in the process. Finally, the
Commission created better communication systems, developed practices
and policies that allow employees to better perform their duties, and
created a line-item-specific budget that allows it to be more fiscally
responsible.
The State of the Industry
Currently, Indian gaming is being conducted in 28 states by 243 of
the 566, federally recognized tribes. Tribes have used gaming revenue
both to generate jobs and to provide fundamental services to their
communities, such as health care, housing, basic infrastructure and
education, to name a few. In addition, tribes both through their
compacts and charitable outreach regularly contribute to surrounding
communities to support infrastructure, emergency services, and other
community programs such as schools. While tribal gaming generates
modest to considerable revenues for individual tribes, tribal gaming
facilities in some regions provide jobs in areas otherwise suffering
from high unemployment.
As the primary day-to-day regulators on the ground 24 hours a day,
7 days a week, tribal governments and their regulatory bodies have the
greatest interest in safeguarding an industry that has greatly
contributed to invaluable improvements to their communities. It is a
testament to the leadership of tribal governments, their citizens, and
the work of their dedicated employees that the Indian gaming industry
has remained protected and stable. In 2013, tribal facilities generated
$28 billion in gross gaming revenue as compared to $27.9 billion in
2012. With continued collaboration, the NIGC will work with tribal
governments and their employees to ensure the continued protection and
success of the industry through diligent, professional oversight and
enforcement. Accordingly, while collaborative results are desirable,
the agency is committed to upholding the statutory authority and
responsibilities of my position to oversee the regulation of Indian
gaming, and where appropriate, take enforcement action.
Indian Gaming--The Next 25 years
A fundamental policy of IGRA is ``to provide a statutory basis for
the operation of gaming by Indian tribes as a means of promoting tribal
economic development, self-sufficiency, and strong tribal
governments,'' to ensure the regulatory and statutory compliance of all
tribal gaming facilities, and to safeguard tribal gaming operations
from organized crime and corrupting influences. To accomplish these
goals the NIGC continues to be proactive in several areas including:
Consultation and Building Relationships, ongoing Regulatory Review,
Training and Technical Assistance, and Agency Accountability.
The NIGC realizes that constant technologic advances are not only
changing the face of Indian gaming, but also necessitate that the NIGC
continue to adapt to meet the regulatory needs of the industry. As
tribal gaming evolves, the NIGC wants to continue to play a relevant
role in tribal gaming and ensure that it can meet the demands of new
regulatory issues in a timely manner.
Indian gaming is means by which tribes can achieve greater self-
determination and self-sufficiency. The NIGC understands how important
gaming is to tribal economic development and we are committed to
maintaining our ability to safeguard the industry so that the policy
goals of IGRA are fully met.
1. Consultation and Building Relationships
The agency supports the Administration's commitment to Indian
country in terms of nation building, honoring tribal sovereignty and
self-determination, and engaging in meaningful consultation with
tribes. The Commission developed a new government-to-government
consultation process in line with President Obama's November 5, 2009
Memorandum on Tribal Consultation, which directs federal agencies to
comply with Executive Order 13175, ``Consultation and Coordination with
Tribal Governments.''
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. This year the Commission conducted
four separate consultations sessions. These sessions were attended by
representatives of more than 36 tribes.
The NIGC makes a point of attending the meetings and conferences
held by national and regional tribal associations, such as the Great
Plains Indian Gaming Association (GPIGA), the Oklahoma Indian Gaming
Association (OIGA), the Washington Indian Gaming Association (WIGA),
the California Nations Indian Gaming Association (CNIGA), the Midwest
Alliance of Sovereign Tribes (MAST), New Mexico Indian Gaming
Association (NMIGA), National Indian Gaming Association (NIGA),
National Congress of American Indians (NCAI) National Tribal Gaming
Commissioners/Regulators (NTCG/R) and United South and Eastern Tribes
(USET).
The Commission is also committed to strengthening relationships and
building new ones. In addition to working with tribes, we also will
work with other regulatory bodies such as the Nevada Gaming Control
Board and the New Jersey Division of Gaming Enforcement to promote the
integrity of Indian gaming.
2. Regulatory Review
In November of 2010, the Commission commenced a full-scale
regulatory review to examine the effectiveness of our regulations and
identify any areas for improvement. Through a Notice of Inquiry
followed by more than 50 consultations with tribes and numerous
comments from the public, the Commission considered 20 regulations or
potential regulations with 17 of those being adopted and implemented
and one being repealed. It is our belief that reviews of regulations
should be done regularly so that the NIGC is responsive to changes in
the gaming industry and not serve as a barrier to progress.
3. Training and Technical Assistance
Successful regulation depends upon a properly trained workforce,
and the NIGC views training and technical assistance as a valuable
component of the NIGC's mission. Further, the Commission is statutorily
required to provide technical assistance to tribes. NIGC recognizes
that Tribes have a vested interest in their gaming operations. They are
an important source of funding for government programs and are often
the largest employer of tribal citizens and their neighbors. We also
recognize that in the 26 years since IGRA was passed, Tribes have
responded to their new role by creating sophisticated gaming regulatory
bodies of their own.
While the NIGC has an important regulatory role, Tribes are the on-
the-ground regulators of gaming. With over 5,410 tribal gaming
regulatory employees nationwide it is a much more efficient use of
resources to build their capabilities through training, technical
assistance, and coordination, than to go it alone.
To that end, we have been implementing the A.C.E. approach:
Assistance, Compliance, and Enforcement. This approach prevents
foreseeable problems through effective communication, training and
technical assistance, and compliance efforts. The first step of this
initiative is to provide assistance to achieve compliance with IGRA and
the NIGC regulations. This means staying abreast of industry changes
and communicating what they mean to gaming operators and regulators
through more and better training. Last year, we provided 194 training
events to 2751 participants. Currently this year we have provided 147
of training events to 2140 participants. By working with tribal gaming
regulators and sharing our knowledge, we increase the number of people
who can extinguish issues before they become blazing problems.
The second prong is Compliance. The Agency communicates with Tribes
early in the process if there is a potential compliance issue and works
with them to resolve any issues voluntarily.
The Agency uses its final tool--enforcement action--when necessary.
This three tiered approach ensures that the agency's statutory
responsibilities are performed in an efficient manner by respecting the
benefit of meaningful collaboration with tribes who are the primary
regulators of Indian gaming and have a foremost interest in
safeguarding tribal resources.
4. Agency Accountability
As you know, the NIGC is funded by fees paid by the tribes engaged
in Indian gaming. Being a good steward of the fees paid by the tribes
has been a top priority of the Commission. We are committed to
complying with all applicable laws, regulations, rules and executive
orders so as to give this Committee and the tribes confidence that the
NIGC is as concerned with how it runs its own operations as we are
about how the tribes run their operations. Recently, the Commission
undertook a comprehensive review of its budget and spending priorities.
A guiding principle of the review and budgeting decisions was that the
NIGC has a responsibility to use tribal resources wisely. As such, our
agency expenditures need to be both fiscally responsible and
transparent. We strive, consistent with applicable law, to be
transparent with regard to the expenditures of tribal fees for the
accomplishment of the NIGC's statutory responsibilities. The Commission
is working to ensure that the agency is operating in a manner that uses
these tribal resources most efficiently and effectively.
Conclusion
The NIGC is committed to working closely with this Committee and
Indian country to ensure the integrity of Indian gaming. Thank you
again, Chairman Tester, Vice Chairman Barrasso and members of the
Committee for your time and attention today. I am happy to answer any
questions that you may have for me.
The Chairman. Thank you, Jonodev.
Anne-Marie, you are up. Thanks.
STATEMENT OF ANNE-MARIE FENNELL, DIRECTOR, NATURAL RESOURCES
AND ENVIRONMENT, U.S. GOVERNMENT
ACCOUNTABILITY OFFICE
Ms. Fennell. Chairman Tester, Vice Chairman Barrasso and
members of the Committee, I am pleased to be here today to
provide preliminary observations on our ongoing review of the
Indian Gaming Oversight.
Over 25 years ago, the Indian Gaming Regulatory Act of 1988
was enacted and serves as the primary Federal statute governing
Indian gaming. Since that time, Indian gaming has become a
significant revenue source for many tribes. In fiscal year
2012, over 40 percent of federally-recognized tribes operated
more than 420 gaming establishments across 28 States.
My testimony today will describe our preliminary
observations from our ongoing work that examines, (1) how
Interior helps ensure compliance with IGRA through its review
of tribal-State compacts; (2) how States and selected tribes
regulate Indian gaming; and (3) how the National Indian Gaming
Commission regulates and oversees Indian gaming and whether
recent organizational changes have affected its oversight
approach.
First, Interior has a multi-step review process designed to
help ensure that tribal-State compacts comply with IGRA
provisions that may be contained in those compacts. Our review
indicated that 78 percent of the compacts submitted to Interior
for review since 1998 have been approved. While compacts
approved by Interior contain similar provisions, they do vary
in some respects, such as the types of revenue-sharing
arrangements between States and tribes.
Second, the roles of States and tribes in regulating Indian
gaming are established in tribal-State compacts for Class 3
gaming and tribal gaming ordinances for both Class 2 and 3.
Based on our preliminary observations for three States that we
have visited, Arizona, California and Oklahoma, we found that
approaches to regulating Indian gaming varied, as seen through
differences in the regulatory agency's organization, their
funding and their staffing levels.
For example, California divides its oversight
responsibilities between two agencies, whereas Arizona and
Oklahoma each have one agency.
For the seven tribes we have visited so far, each has
established tribal gaming commissions that perform various
regulatory functions to help ensure that their gaming
facilities are operating according to applicable tribal laws
and regulations and compacts.
Third, the commission plays an important role in regulating
and overseeing Indian gaming and ensuring compliance with IGRA.
Specifically, the commission monitors tribal gaming activities,
inspects gaming premises and takes enforcement actions when
necessary. In 2011, the commission implemented its Assistance,
Compliance and Enforcement initiative, which emphasizes
providing technical assistance to tribes to help achieve
compliance with IGRA. According to commission officials,
enforcement actions have decreased significantly in part as a
result of this initiative.
Also in 2011, the commission merged its enforcement and
audits division into one compliance division, which commission
officials said was done in part to emphasize compliance
assistance under its initiative.
In conclusion, Indian gaming has grown and evolved since
IGRA was enacted. Our ongoing work over the next several months
will continue to examine how tribes, States and the Federal
Government oversee gaming activities within the important
regulatory framework established by IGRA.
Chairman Tester, Vice Chairman Barrasso, and members of the
Committee, this completes my prepared statement. I would be
pleased to respond to any questions you may have.
[The prepared statement of Ms. Fennell follows:]
Prepared Statement of Anne-Marie Fennell, Director, Natural Resources
and Environment, U.S. Government Accountability Office
INDIAN GAMING--Preliminary Observations on the Regulation and Oversight
of Indian Gaming
Why GAO Did This Study
Over the past 25 years, Indian gaming has become a significant
source of revenue for many tribes, reaching $27.9 billion in 2012. At
that time, about 240 of the 566 federally recognized tribes operated
more than 420 gaming establishments ranging from bingo halls to
multimillion dollar casinos across 28 states. IGRA, the primary federal
statute governing Indian gaming, provides, among other things, a
statutory basis for the regulation of Indian gaming to assure that it
is conducted fairly and honestly. Tribes, states, Interior, and the
National Indian Gaming Commission have roles in regulating or
overseeing Indian gaming.
This testimony is based on GAO's preliminary observations from
ongoing work that examines (1) the process Interior uses to ensure
compliance with IGRA through its review of tribal-state compacts and
the types of provisions contained in these compacts; (2) how states and
selected tribes regulate Indian gaming; and (3) how the Commission
regulates and oversees Indian gaming and how, if at all, recent
organizational changes have affected its regulatory or oversight
approach.
In its ongoing work, GAO analyzed compacts; visited three states
and seven tribes (selected for geographic representations and revenue
generation) to discuss the oversight of Indian gaming; reviewed
Commission data on technical assistance and enforcement actions; and
interviewed Interior and Commission officials. GAO will continue to
collect information on these topics and produce a final report.
GAO is not making any recommendations in this testimony.
What GAO Found
The Department of the Interior (Interior) has a multistep review
process designed to help ensure that compacts comply with the Indian
Gaming Regulatory Act (IGRA). Such compacts are agreements between a
tribe and state that governs the conduct of the tribe's Class III (or
casino) gaming activities. Based on GAO's preliminary review, Interior
has approved 78 percent (382) of the tribal-state compacts submitted
since 1998. While the provisions in compacts approved by Interior are
largely similar, they do vary in some respects, such as the terms of
``revenue sharing'' arrangements established between states and tribes.
For example, some compacts do not provide for revenue sharing with
states, while some require tribes to share significant portions of
revenue with states. The remaining 22 percent (106) of compacts
reviewed were either (1) considered approved without action by the
Secretary of the Interior, (2) withdrawn, or (3) disapproved by
Interior for various reasons, such as when they were not consistent
with IGRA.
The roles of states and tribes in regulating Indian gaming vary and
are established in two key documents: (1) compacts for Class III gaming
and (2) tribal gaming ordinances, which provide the general framework
for day-to-day tribal regulation of Class II (including bingo) and
Class III gaming facilities. Based on GAO's preliminary observations of
ongoing work, GAO found that the three states visited--Arizona,
California, and Oklahoma--varied in their approaches to regulating
Indian gaming, as seen through differences in their regulatory
agencies' organization, staffing levels, and funding. For the seven
tribes GAO visited, each has established tribal gaming commissions that
perform various regulatory functions to help ensure that their gaming
facilities are operated in accordance with tribal laws and regulations
and, for Class III operations, the compact.
The National Indian Gaming Commission (Commission), an independent
commission created by IGRA within Interior, plays an important role in
regulating and overseeing Indian gaming by ensuring that Class II and
Class III gaming facilities comply with IGRA and applicable federal
regulations and tribal ordinances or resolutions. Among other things,
the Commission monitors tribal gaming activities, inspects gaming
premises, and takes enforcement actions when necessary. In 2011, the
Commission implemented its Assistance, Compliance, and Enforcement
initiative, which emphasizes providing assistance to tribes to achieve
compliance with IGRA. Through this initiative, the Commission has
sought to provide technical assistance and training to tribes so that
compliance issues may be resolved early and voluntarily without the
need for enforcement actions. According to Commission officials, in
part, as a result of this initiative, the number of enforcement actions
has decreased significantly. Also in 2011, as part of a broader
organizational realignment, the Commission merged its Enforcement and
Audits divisions into one Compliance Division. According to Commission
officials, this merger was deemed necessary, in part, to better support
the Commission's emphasis on compliance assistance under its
initiative.
Chairman Tester, Vice Chairman Barrasso, and Members of the
Committee:
I am pleased to be here today to provide some preliminary
observations from our ongoing review of Indian gaming oversight for
this committee. Over the past 25 years, Indian gaming has become a
significant source of revenue for many tribes. In fiscal year 2012, the
Indian gaming industry generated revenues totaling $27.9 billion and
included 420 gaming establishments in 28 states.
The Indian Gaming Regulatory Act (IGRA) was enacted in 1988 to
provide a statutory basis for the regulation of gaming on Indian lands.
IGRA created three classes of gaming and sets out regulatory
responsibilities for tribes, states and the federal government. Class I
gaming consists of social games played solely for prizes of minimal
value or traditional gaming played in connection with tribal ceremonies
or celebrations. This type of gaming is within the exclusive
jurisdiction of the tribes. Class II gaming includes bingo, games
similar to bingo, and certain card games. Class III gaming includes all
other types of games, including slot machines, craps, and roulette.
Class II and Class III are subject to federal regulation or oversight;
however, Class III is also subject to state regulation to the extent
specified in compacts between the tribe and state that allow such
gaming to occur. Compacts are agreements between the tribe and state
that establish the terms for how a tribe's Class III gaming activities
will be operated and regulated, among other things. The Secretary of
the Interior (Secretary) approves compacts and must publish a notice in
the Federal Register before they go into effect.
IGRA also created the National Indian Gaming Commission
(Commission), a commission within the Department of the Interior
(Interior), and charged it with regulating and overseeing various
aspects of Indian gaming. The Commission is composed of a Chair,
appointed by the President and confirmed by the Senate, and two
associate commissioners, appointed by the Secretary. The Commission
maintains its headquarters in Washington, D.C. and has seven regional
offices and three satellite offices and it has approximately 100 full-
time employees. To help ensure compliance with IGRA and its
implementing regulations, the Commission engages in various activities
to monitor the work of tribal gaming regulators--such as examining
records of gaming operations, inspecting gaming facilities, and
assessing tribe's compliance with minimum internal control standards
for Class II gaming. \1\ In addition, the Chair reviews and approves
various documents related to gaming operations, including tribal
ordinances or resolutions adopted by a tribe's governing body. \2\ In
2011, the Commission reorganized its oversight program by consolidating
its Enforcement and Audit divisions into a single Compliance Division.
---------------------------------------------------------------------------
\1\ Although the Commission's regulations establishing minimum
internal control standards applied to both Class II and Class III, in
2006, a federal circuit court ruled that IGRA did not authorize the
Commission to issue regulations establishing minimum internal control
standards for Class III gaming. Colorado River Indian Tribes v. Nat'l
Indian Gaming Comm'n, 466 F.3d 134 (D.C. Cir. 2006).
\2\ 2While IGRA refers to both tribal ordinances and resolutions,
this testimony will use the term tribal ordinances.
---------------------------------------------------------------------------
This testimony reflects our preliminary observations from our
ongoing review that examines (1) the process Interior uses to help
ensure compliance with IGRA through its review of compacts and the
types of provisions contained in these compacts; (2) how states and
selected tribes regulate Indian gaming; and (3) how the Commission
regulates and oversees Indian gaming and how, if at all, recent
organizational changes have affected its regulatory or oversight
approach.
To determine the process Interior uses to help ensure compliance
with IGRA through its review of compacts and the provisions contained
in these compacts, we obtained a list from Interior of all Indian
gaming compacts in effect as of July 2014 and analyzed the compacts to
identify key provisions, including those provisions related to tribal
and state regulation. We also obtained from Interior a list of all
compact decisions (e.g., approved, disapproved) from 1998 to the
present. We are in the process of verifying the accuracy of this list.
We also examined written guidance and other relevant documentation
describing Interior's process for reviewing gaming compacts and we
interviewed agency officials about how this review process helps ensure
compliance with IGRA.
To determine how states and selected tribes regulate Indian gaming,
for our ongoing review of Indian gaming oversight, we are in the
process of contacting all 28 states that have Indian gaming operations.
We are collecting information about how each of the 28 states oversees
Indian gaming including information on the states' regulatory
organizations, staffing, funding and expenditures, and the types of
monitoring and enforcement activities conducted by state agencies. For
our ongoing review, we are visiting 6 states--Arizona, California,
Michigan, New York, Oklahoma, and Washington. We chose these states to
provide geographic representation and because they are among the states
with the greatest revenue generated from Indian gaming. We have
completed visits to Arizona, California, and Oklahoma, which have about
45 percent of all Indian gaming operations. \3\ We are limiting the
discussion of our site visits to these three states for our preliminary
observations in this testimony. We are in the process of contacting the
remaining 22 states by telephone. Given that there are over 200 tribes
that conduct gaming, we will not be able to obtain information that is
representative of all gaming tribes. Rather, for each of the 6 states
that we visit, we are interviewing officials from at least one or two
federally recognized tribes with gaming operations regarding their
approaches to regulating Indian gaming. \4\ Our discussion today will
focus on 7 tribes that we have already visited. \5\
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\3\ While the number of gaming establishments was 420 in 2012, as
of July 7, 2014, the Commission reported 477 gaming establishments.
About 45 percent of the gaming establishments (216 out of 477) were
located in Arizona, California, and Oklahoma.
\4\ IGRA only authorizes federally recognized tribes--those
recognized by the Secretary of the Interior as eligible for the special
programs and services provided by the United States to Indians because
of their status as Indians--to conduct gaming activities.
\5\ As of this testimony, we have visited the Salt River Pima-
Maricopa Indian Community and the San Carlos Apache Tribe in Arizona;
Shingle Springs Band of Miwok Indians, United Auburn Indian Community
of the Auburn Rancheria, Yocha Dehe Wintun Nation in California; and
Chickasaw Nation and the Muscogee (Creek) Nation in Oklahoma.
---------------------------------------------------------------------------
To determine how the Commission regulates and oversees Indian
gaming and how, if at all, recent organizational changes have affected
its regulatory and oversight approach, for our ongoing review we are in
the process of collecting information on the Commission's policies and
procedures related to its regulation and oversight of Indian gaming.
Also, for fiscal years 2004 through 2013, we plan to obtain and analyze
data from the Commission about (1) technical assistance and training
provided to tribes, (2) monitoring activities and enforcement actions
taken, and (3) tribal compliance rates. We are also obtaining
information about the Commission's recent consolidation of its
Enforcement and Audit divisions into a Compliance Division, including
impacts of this consolidation, if any, on the Commission's regulatory
and oversight approach.
We are conducting our ongoing work in accordance with generally
accepted government auditing standards. Those standards require that we
plan and perform the audit to obtain sufficient, appropriate evidence
to provide a reasonable basis for our findings and conclusions based on
our audit objectives. We believe that the evidence we plan to obtain
will provide a reasonable basis for our findings and conclusions based
on our audit objectives. We provided a draft of this statement to
Interior and the Commission for their review. The Commission provided
technical comments which we incorporated as appropriate.
Background
Since fiscal year 1995, revenue from Indian gaming has grown from
$8.2 billion to $27.9 billion in fiscal year 2012 (see fig. 1). In
fiscal year 2012, about 240 of the 566 federally recognized tribes
operated more than 420 Indian gaming establishments across 28 states.
These establishments included a broad range of operations, from tribal
bingo to multimillion dollar casino gaming facilities. Of these
establishments, a few large operations account for a major portion of
the revenue.
IGRA is the primary federal statute governing Indian gaming. \6\
IGRA provides, among other things, a statutory basis for the regulation
of Indian gaming to shield it from corrupting influences, assure that
gaming is conducted fairly and honestly by both the operators and the
players, and ensure that tribes are the primary beneficiaries of gaming
operations. The act establishes the following three classes of gaming.
---------------------------------------------------------------------------
\6\ Pub. L. No. 100-497, 102 Stat. 2467 (1988).
Class I gaming consists of social gaming solely for nominal
prizes or traditional gaming played in connection with tribal
ceremonies or celebrations and is regulated solely by tribes
---------------------------------------------------------------------------
and not subject to IGRA.
Class II gaming includes bingo, pull-tabs, \7\ punch boards,
\8\ and certain card games \9\ and is regulated by the tribes
and the Commission.
\7\ A pull-tab is a gambling ticket that is sold as a means to play
a pull-tab game. The object of the ticket is to open the perforated
windows on the back of the ticket and match the symbols inside the
ticket to the winning combinations on the front of the ticket. The
winning pull-tab ticket is turned in for a monetary prize.
\8\ A punch board is a small board full of holes in which each hole
contains a slip of paper with symbols printed on it; a gambler pays a
small sum of money and pushes out a slip in the hope of obtaining one
that entitles the gambler to a prize.
\9\ Class II card games are nonbanking card games that the state
explicitly authorizes, or does not explicitly prohibit, and are played
legally elsewhere in the state, and are played in conformity with state
laws and regulations, if any, regarding hours, periods of operation,
and limitations on wagers and pot sizes.
Class III gaming includes all other forms of gaming,
including casino games and slot machines, and although both
Interior and the Commission play a role in overseeing certain
aspects of Class III gaming, it is regulated by the tribes and
---------------------------------------------------------------------------
the states pursuant to compacts.
A tribe may only conduct Class III gaming activities if such
activities are conducted in conformance with a compact, among other
things. According to the relevant Senate committee report, IGRA was
intended to provide a means by which tribal and state governments can
realize their unique and individual governmental objectives. \10\ The
Senate committee report also noted that the terms of each compact may
vary extensively and may allocate most or all of the jurisdictional
responsibility to the tribe, to the state, or to any variation in
between. \11\ These compacts are negotiated agreements that establish
the states' and tribes' regulatory roles and specify the games that are
allowed, among other things. IGRA specifies that compacts may include
provisions related to:
---------------------------------------------------------------------------
\10\ S. Rep. No. 100-446 at 6 (1988).
\11\ S. Rep. No. 100-446 at 14 (1988).
the application of criminal and civil laws and regulations
of the tribe and the state that are directly related to and
---------------------------------------------------------------------------
necessary for the licensing and regulation of gaming,
the allocation of civil and criminal jurisdiction between
the tribe and the state necessary to enforce those laws and
regulations,
state assessments of gaming activities as necessary to
defray costs of regulating gaming,
tribal taxation of gaming activities,
remedies for breach of contract,
standards for gaming activity operations and gaming facility
maintenance, and
any other subjects directly related to the operation of
gaming activities.
IGRA authorizes the Secretary to approve compacts and only allows
the Secretary to disapprove a compact if it violates IGRA, any other
federal law that does not relate to jurisdiction over gaming on Indian
lands, or the trust obligation of the United States to Indians.
Compacts only go into effect when a Notice of Approval from the
Secretary has been published in the Federal Register.
Class II and Class III gaming may only be conducted on Indian lands
in states that permit such gaming. Indian lands, as defined in IGRA,
are (1) all lands within the limits of an Indian reservation; (2) lands
held in trust by the United States for the benefit of an Indian tribe
or individual over which the tribe exercises governmental power; and
(3) lands held by an Indian tribe or individual that are subject to
restriction against alienation and over which the tribe exercises
governmental power. \12\
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\12\ 25 U.S.C. 2703(4). In addition, IGRA generally prohibits
gaming on lands acquired by the Secretary of the Interior in trust for
the benefit of an Indian tribe after October 17, 1988, although the act
also contains several exceptions to the general prohibition. Alienation
is the transfer of property.
---------------------------------------------------------------------------
Interior Uses a Multistep Review Process to Help Ensure That Compacts
Comply with IGRA
Interior has a multistep review process that helps to ensure that
compacts comply with relevant IGRA provisions and other applicable
laws. While compacts approved by Interior share similar provisions,
they do vary in some respects, such as the terms of ``revenue sharing''
arrangements between states and tribes and the extent to which the
compact addresses tribal interactions with local governments. Interior
cited a variety of reasons for allowing compacts to take effect without
Secretarial action (deemed approved) and for disapproving compacts.
Interior's Process for Reviewing Compacts
Interior's Office of Indian Gaming, under the supervision of the
Deputy Assistant Secretary of Indian Affairs Policy and Economic
Development, is responsible for reviewing compacts. According to Office
of Indian Gaming officials, on the day that a compact is received, the
Office of Indian Gaming date-stamps the compact and files the original
version. The Office of Indian Gaming has 10 days to conduct an initial
review of the compact. During this time, they will contact the
applicant tribe or state if any additional information is needed. After
this initial review, the Office of Indian Gaming sends a copy of the
compact to Interior's Office of the Solicitor to conduct a legal review
of the compact. The Office of the Solicitor has 10 days to review the
compact. After the Office of the Solicitor's review is complete, the
Office of Indian Gaming provides a copy of the compact and a summary of
relevant information to the Assistant Secretary of Indian Affairs, who
has 45 days to approve or disapprove the compact. Under IGRA, if a
compact is not approved or disapproved within 45 days of its
submission, then the compact is considered to have been approved
(referred to as ``deemed approved''), but only to the extent that it is
consistent with IGRA.
On June 18, 2014, the Office of Indian Gaming provided us with a
list of compacts that were approved, deemed approved, disapproved, or
withdrawn each year from 1998 to the present. We are in the process of
verifying the accuracy of this list. Based on our preliminary analysis
of this list of compacts, the Secretary received a total of 490
compacts during this time period to review. Of these, 78 percent (382)
were approved; 12 percent (60) were deemed approved; 6 percent (28)
were withdrawn; and 4 percent (18) were disapproved. \13\ The number of
compacts submitted varied from year to year, from a high of 66 in 1999
to a low of 8 in 2006.
---------------------------------------------------------------------------
\13\ For two of the compacts on the list provided by Interior, the
decision was not indicated. We are following up with Interior to
clarify the decision for these compacts.
---------------------------------------------------------------------------
Variety of Provisions Contained in Compacts Approved by Interior
The compacts approved by Interior share similar provisions but vary
in some respects. For example, while IGRA does not authorize states to
impose a tax or fee on tribes, apart from the assessment to defray
regulatory costs, the Secretary has approved compacts that contain
provisions for revenue sharing with states, so long as the states
provide the tribe with a comparable benefit in return--a benefit to
which the tribe would not otherwise be entitled. The amount of revenue
sharing varied widely in the compacts we reviewed. Some compacts do not
provide for revenue sharing, such as the 1991 compact between the Fond
du Lac Band of the Minnesota Chippewa Tribe and the state of Minnesota,
or the 2011 compact between the Flandreau Santee Sioux Tribe and the
state of South Dakota. In contrast, some compacts require the tribe to
share significant portions of revenue with the state. For example, the
2010 compact between the Seminole Tribe of Florida and the state of
Florida establishes percentages of net revenue that the tribe must give
to the state--as much as 25 percent--based on how much revenue the
tribe makes each year.
Approved compacts had provisions that varied in other ways, such as
the extent to which the compacts require the tribe to enter into
agreements with local governments. For example, the 2003 compact
between the La Posta Band of Diegueno Mission Indians and the state of
California requires the tribe to consult with the county and other
relevant local governments to develop agreements to prevent and
mitigate effects from any proposed gaming facility. Some compacts make
no mention of agreements with local governments.
Reasons Compacts Are Deemed Approved or Disapproved
Compacts that are not approved or disapproved within 45 days are
deemed approved, \14\ but only to the extent that they comply with
IGRA. According to Federal Register notices or decision letters that
accompany the compacts, Interior might not take action on a compact
within the statutory deadline for a variety of reasons. Federal
Register notices indicate that some compacts take effect without
Secretarial action because they only change the expiration date of a
previously approved compact and do not require additional review.
According to decision letters accompanying other compacts, the compacts
were deemed approved because they contained provisions that the
Secretary found to be questionable but not outright objectionable. For
example, the 2014 compact between the Mashpee Wampanoag Tribe and the
state of Massachusetts contained terms that could provide the
possibility in the future for the state to regulate certain Class II
games, which IGRA does not authorize, and Interior's letter cautioned
the state and tribe against implementing the compact in a way that
violated IGRA.
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\14\ Interior uses the term ``deemed'' approved to refer to those
compacts that take effect without Secretarial action, as opposed to
those the Secretary approves outright.
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Of the disapproved compacts we reviewed, the reasons for
disapproval varied. For example, compacts were disapproved because
lands proposed to be used for gaming were not Indian lands as defined
by IGRA or the compact established a management contract that did not
meet the requirements of IGRA. \15\
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\15\
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15A tribe many enter into a management contract for the operation
and management of its Class II or Class III gaming activity. A
management contract is any contract or collateral agreement between a
tribe and contractor, or a contractor and subcontractor, that provides
for the management of all or part of the gaming operation. Management
contracts must be approved by the Chair of the Commission.
State and Tribal Regulation of Indian Gaming
Compacts establish the responsibilities of both tribes and states
for regulating Class III gaming and identify the standards for the
gaming operation and maintenance of gaming facilities, as well as the
state and tribal laws and regulations that will be used to regulate the
gaming, among other things. In addition, tribal gaming ordinances,
which apply to Class II and Class III gaming, provide the general
framework for tribal regulation of gaming facilities. The ordinances
include specific procedures that must be followed by tribes and
standards that they must meet, among other things. Based on our
preliminary observations of ongoing work, we found that the approaches
of the three states we have visited to regulating Indian gaming vary,
as seen through differences in their regulatory agencies' organization,
staffing levels, and funding. For the seven tribes we have visited,
each has established tribal gaming regulatory agencies that govern the
day-to-day operations of their gaming facilities. These agencies
perform various regulatory functions to help ensure that their gaming
facilities are operated in accordance with tribal laws and regulations
and, for Class III operations, the compact.
Compacts and Tribal Gaming Ordinances Establish the Roles of States and
Tribes
The roles of states and tribes in regulating Indian gaming vary and
are established in two key documents: (1) compacts for Class III gaming
and (2) tribal ordinances for both Class II and Class III gaming.
Compacts that govern Class III gaming on Indian lands lay out the
responsibilities of both tribes and states for regulating gaming. For
example, compacts may include, but are not limited to, provisions
allowing the state to conduct inspections, certify employee licenses,
and review surveillance records. They may also include tribal
responsibilities to notify the state when they hire a new employee or
when they make changes to their gaming regulations or rules for gaming.
In addition, IGRA requires a tribe's governing body to adopt, and
the Commission Chair to approve, a tribal gaming ordinance before a
tribe can conduct Class II or Class III gaming. According to the
Commission, the tribal gaming ordinances are a key part of IGRA's
regulation for tribal gaming, providing the general framework for
tribal regulation of gaming facilities, and including specific
procedures and standards to be met. For the Chair to approve the
ordinances, they must provide, among other things, that:
the tribe will have sole proprietary interest in the gaming
activity;
gaming revenues will only be used for authorized purposes;
annual independent audits of gaming operations will be
provided to the Commission;
the construction, maintenance, and operation of the gaming
facilities will be conducted in a manner that adequately
protects the environment, public health and safety; and
the tribe perform background investigations and the
licensing of key employees and primary management officials in
accordance with certain requirements.
Along with the ordinance, a tribe must also submit other
documentation to the Commission, including copies of all tribal gaming
regulations. The Chair has 90 days after submission of a tribal gaming
ordinance to approve or disapprove it; if the Chair does not act within
90 days, the ordinance is considered to have been approved but only to
the extent it is consistent with IGRA.
States Vary in Their Approaches to Regulating Class III Indian Gaming
Based on our preliminary observations, the three states that we
have visited--Arizona, California, and Oklahoma--vary in their
approaches to regulating Class III gaming. As illustrated in table 1,
the three states differ in their organization, funding, and staffing
levels. \16\ For example, California divides its regulatory
responsibilities between two agencies, whereas Arizona and Oklahoma
each have one agency. We also observed that state budgets for the
regulation of Class III Indian gaming ranged from $1.1 million to $19.8
million and staffing levels ranged from 3 to 136 full-time equivalents.
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\16\ These differences are not, by themselves, an indication of
effectiveness.
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We also observed that the three states engaged in a variety of
regulatory activities, including conducting background checks on
current and prospective employees, licensing gaming devices, inspecting
gaming operations, and reviewing the gaming operator's surveillance.
Tribes Are Responsible for the Day-to-Day Regulation of Indian Gaming
The Commission recognizes that tribal governments are responsible
for the day-to-day regulation of gaming conducted on Indian lands.
While tribal governments have the authority to engage in gaming, the
Commission stresses the importance of tribes establishing a
comprehensive regulatory framework for gaming. According to the
Commission, comprehensive regulation by tribes is a necessary component
to ensure the integrity of the games and to protect the interest of the
tribe.
Each of the seven tribes we visited in Arizona, California, and
Oklahoma for our preliminary observations have established tribal
gaming regulatory agencies--also called tribal gaming commissions or
tribal gaming agencies--that perform various regulatory functions to
ensure that their gaming facilities are operated in accordance with
tribal laws and regulations and, for Class III operations, the compact.
For each of these tribes, the tribal gaming regulatory agency was
established by the tribal government for the exclusive purpose of
regulating and monitoring gaming on behalf of the tribe. In general,
the regulatory functions that can be performed by tribal gaming
regulatory agencies include:
developing licensing procedures for all employees of the
gaming operations,
conducting background investigations on primary management
officials and key employees,
obtaining annual independent outside audits and submitting
these audits to the Commission,
ensuring that net revenues from any gaming activities are
used for the limited purposes set forth in the gaming
ordinance,
promulgating tribal gaming regulations pursuant to tribal
law,
monitoring gaming activities to ensure compliance with
tribal laws and regulations, and
establishing or approving minimum internal control standards
or procedures for the gaming operation.
As part of our ongoing work, we plan to visit additional tribes to
discuss their approaches to regulating Indian gaming, and we will
summarize our findings in our final report.
The Commission's Regulation and Oversight of Indian Gaming and Impacts
of Recent Reorganization
The Commission plays an important role in regulating Class II
gaming and overseeing Class III gaming to ensure compliance with IGRA
and applicable federal and tribal regulations. Among other things, the
Commission monitors Class II gaming, inspects Class II gaming premises,
and takes enforcement actions when necessary. In 2011, the Commission
implemented its Assistance, Compliance, and Enforcement (ACE)
initiative, which emphasizes providing assistance to tribes to achieve
compliance with IGRA. Through this initiative, the Commission has
sought to provide technical assistance and training to tribes so that
compliance issues may be resolved early and voluntarily without the
need for a Notice of Violation, which we refer to as an enforcement
action. Also in 2011, as part of a broader organizational realignment,
the Commission merged its Enforcement and Audits divisions into one
Compliance Division. According to Commission officials, this merger was
deemed necessary, in part, to better support the Commission's emphasis
on compliance assistance under its ACE initiative.
The Commission Is Responsible for Ensuring That Gaming Facilities
Comply with IGRA and Applicable Federal and Tribal Regulations
IGRA established the Commission within Interior to provide federal
regulation of Class II and oversight of Class III Indian gaming. Among
other things, the Commission
monitors tribal Class II gaming activity;
inspects Class II gaming premises;
reviews licenses issued by tribes for key employees and
primary management officials;
audits and reviews financial records of Class II gaming
operations (and Class III operations when tribal gaming
ordinances provide for it); \17\
\17\ Notwithstanding the decision in Colorado River Indian Tribes
v. Nat'l Indian Gaming Comm'n, Commission officials told us that some
tribal gaming ordinances authorize the Commission to conduct audits and
reviews of Class III gaming activities.
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provides technical assistance and training to tribal gaming
commissions and operations, and;
when appropriate, undertakes enforcement actions for
violations of IGRA, the Commission's regulations and approved
tribal gaming ordinances.
The Commission also monitors tribal compliance with minimum
internal control standards, which specify in detail the minimum
practices tribes must establish and implement for gaming activities.
The Commission adopted these standards for gaming operations on Indian
lands in 1999; however, in 2006, a federal circuit court ruled that
IGRA did not authorize the Commission to issue regulations establishing
minimum internal control standards for Class III gaming. \18\
Commission officials explained that the impact of the court's decision
is tempered by compacts requiring tribes to adopt tribal internal
control standards for Class III gaming and that, in most cases, these
standards are at least as stringent, if not more, than the Commission's
Class III minimum internal control standards. Specifically, as of July
2014, Commission officials said 115 compacts in six states require
tribes to adopt tribal internal control standards that are at least as
stringent as the Commission's Class III standards. In addition to these
compact provisions, Commission officials said that 15 tribes in
California have gaming ordinances that provide for Commission
enforcement of the Commission's Class III minimum internal control
standards in lieu of the tribe ensuring compliance with tribal internal
control standards and state verification of that compliance. However,
Commission officials expressed concern that its minimum internal
control standards are out of date since the Commission does not have
the authority to amend these standards for Class III gaming. For
example, gaming reporting functions have improved since the Class III
minimum internal control standards were promulgated in 1999, and now
this reporting is in digital format rather than in the analog format
that the Class III minimum internal control standards suggest.
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\18\ Colorado River Indian Tribes v. Nat'l Indian Gaming Comm'n,
466 F.3d 134 (D.C. Cir. 2006).
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The Commission's Recent Initiative Seeks to Resolve Tribal Compliance
Issues Voluntarily, When Possible
In 2011, the Commission implemented its ACE initiative, which
emphasizes, among other things, providing assistance to tribes to
achieve compliance with IGRA. Through this initiative, the Commission
seeks to provide technical assistance and training to tribes so that
compliance issues may be resolved voluntarily without the need for
enforcement actions. However, Commission officials told us that
enforcement actions will still be taken when necessary.
As part of its ACE initiative, the Commission provides guidance,
technical assistance, and training to tribes to help build and sustain
their capacity to prevent, respond to, and recover from internal
control weaknesses and violations of IGRA and Commission regulations.
To improve the technical assistance and training that the Commission
offers to tribes, the Commission tracks the number of training and
technical assistance events it offers, their length in hours, the
number of people the training and technical assistance reaches, and
satisfaction rates with the training the Commission offers. In fiscal
year 2013, the Commission held 194 training and technical assistance
events that provided 754 hours of training and technical assistance and
reached 2,751 participants who were largely satisfied with the training
and technical assistance provided, according to a Commission report
(see table 2).
As indicated in table 2, the Commission has met or exceeded its
goals for training and technical assistance, with the exception of the
percentage of tribes attending training in fiscal year 2012.
To monitor tribal compliance with IGRA and applicable federal and
tribal regulations for both Class II and Class III operations--another
component of the Commission's ACE initiative--the Commission conducts
site visits and audits and evaluations of tribal gaming facilities,
among other things. The Commission has developed various performance
measures related to these compliance activities to help measure
progress toward achieving its goals. As shown in table 3, the
Commission met its goals for conducting site visits and audits in
fiscal years 2011 and 2012, but it did not meet its goals for these
activities in fiscal year 2013. \19\
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\19\ The Commission scaled back site visits in 2013 due to the
automatic, across-the-board cancellation of budgetary resources in
fiscal year 2013, known as sequestration.
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The Commission also tracks tribal compliance with what it defines
as eight primary obligations under IGRA, which are:
obtaining a compact approved by Interior prior to conducting
Class III gaming;
submitting investigative reports and suitability
determinations on each key employee and primary management
official, summarizing the results of the tribal background
investigation;
submitting fingerprint cards to the Commission for
processing;
submitting gaming employee applications to the Commission at
the commencement of employment;
adopting a gaming ordinance for Class II or Class III gaming
that has been approved by the Commission;
paying a fee assessment to the Commission based on gaming
revenues;
issuing a separate license for each facility where gaming is
conducted; and
submitting an annual independent audit of each Class II
gaming operation to the Commission.
In its 2012 report to the Secretary regarding tribal compliance
with these obligations, the Commission stated that tribes were in
compliance with most of the obligations. However, the report stated
that a number of tribes did not meet established deadlines for
submission of fee payments and audit reports. \20\
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\20\ National Indian Gaming Commission, Report to the Secretary of
the Interior on Compliance with the Indian Gaming Regulatory Act, Dec.
31, 2012.
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In recent years, the Commission has rarely initiated enforcement
actions. Our analysis of the last 10 years of publicly available
Notices of Violation--documents that describe the circumstances
surrounding the violation of the law, Commission regulation or tribal
ordinance and measures required to correct the violation--peaked in
fiscal years 2008 and 2009 (see table 4) before the implementation of
the ACE initiative. Prior to fiscal year 2010, the Commission issued
Notices of Violation most frequently to address untimely submissions of
annual audit statements or untimely fee statements.
Commission officials attributed the decline in the Commission's
enforcement actions since fiscal year 2009 to its more proactive,
preventative approach taken to help ensure compliance as called for by
the ACE initiative. Specifically, the ACE initiative seeks to prevent
violations from occurring since Commission officials are working
collaboratively with tribal regulators. Under the ACE initiative,
Commission officials said that enforcement is generally viewed as a
tool of last resort. Also, the Commission modified its regulations in
2012 so that fees or quarterly statements submitted late are now
subject to a fine rather than a Notice of Violation. \21\ As these were
the most common enforcement action initiated prior to fiscal year 2010,
some decline in enforcement actions would be expected. We are
continuing to collect and analyze data related to the Commission's
regulations and oversight of Indian gaming, and we will present that
information in our final report.
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\21\ Late payments are those received between 1 and 90 days late.
Payments received after 90 days are failures to pay, which subjects the
tribe to a potential notice of violation and civil fine assessment.
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The Commission's Reorganization Appears to Align with Its Emphasis on
Compliance Assistance
In 2011, as part of a broader organizational realignment, the
Commission merged its Enforcement and Audits divisions into one
Compliance Division. According to Commission officials, this merger was
deemed necessary, in part, to better support the Commission's emphasis
on compliance assistance through its ACE initiative. These officials
explained that centralizing compliance, enforcement, and auditing staff
into one division improves communication among these staff and allows
the Commission to identify compliance issues early. Early
identification of compliance issues, in turn, allows the Commission to
provide assistance to tribes before an issue becomes more serious. In
keeping with the ACE initiative, Commission officials said they would
prefer not to let compliance issues reach the enforcement stage. We
will continue to collect information on the Commission's
reorganization, and we will present this information in our final
report.
Chairman Tester, Vice Chairman Barrasso, and members of the
Committee, this completes my prepared statement. I would be happy to
respond to any questions that you or other members of the Committee may
have.
The Chairman. Thank you, Anne-Marie, for your statement.
And we do have questions.
I will start out with you, Kevin Washburn. The Department
approves Class 3 tribal-State gaming compacts. In 2012, the
Secretary disapproved a compact between the Mashpee Tribe and
the Commonwealth of Massachusetts because it violated the
tenets of IGRA. How many times has the department disapproved a
compact?
Mr. Washburn. Roughly 20 times, I believe, since 1998. I
think the GAO just said that we have approved compacts 78
percent of the time, I think that was the figure. So about one-
fifth of the time we failed to approve a compact.
The Chairman. Is there any sort of pattern for the reasons
why they are disapproved?
Mr. Washburn. Well, and this I think also sort of reflects
a little bit what the GAO testified to, revenue sharing with
States is something that comes up often in those compacts and
the disapprovals. Indian gaming is primarily supposed to
benefit Indian tribes. So we have looked with great scrutiny
where a compact has revenue sharing with a State. It is
supposed to be Indian gaming, not taxation for the State. So
that is one of the areas that is a hot issue.
Other issues are, for example, when the Class 3 gaming
compact addresses Class 2 gaming, because tribes are the
exclusive regulators, along with the NIGC, of Class 2 gaming.
So the States shouldn't have too much to say about what happens
with Class 2 gaming.
Another area is when it appears that a State is trying to
go beyond gaming. When it is trying to exercise authority over
other matters, water rights, land rights, that sort of thing.
The Chairman. IGRA has a provision that if the Secretary
doesn't approve an act within a certain period of time, it is
deemed approved. Has that ever happened?
Mr. Washburn. Absolutely. And let me explain why. If I
affirmatively approve a compact, I am basically vouching for
its legality. I am saying, this compact is okay. If instead we
deem it approved, it is deemed approved only to the extent it
is consistent with the Indian Gaming Regulatory Act. And as
Senator McCain probably knows better than anybody, the Indian
Gaming Regulatory Act is not a model of clarity in some
respects. It is not art, there are a lot of compromises that
were made in the Act. We sometimes have concerns about the
legality of a compact, but it is not necessarily a concern that
goes right to the heart of the compact, it is around a
peripheral issue. In those circumstances, we sometimes will
allow the compact to become deemed approved so we don't have to
decide on that question.
In essence what we are doing in that situation is punting
it to the parties or the courts to answer those questions. We
are loathed to disapprove a compact. We don't like to do it.
The Chairman. In your testimony you talk about the
Secretary's role in approving land into trust for gaming
purposes and the four exceptions in IGRA that allow tribes to
do gaming acquired after 1998. Do you know why Congress
included these exceptions in IGRA and if there are sound policy
reasons today for Congress to leave these exceptions in place?
Mr. Washburn. Yes, Chairman. IGRA ensures that newly-
recognized tribes or restored tribes are also allowed to game.
That is one of the reasons we have those exceptions. Or
landless tribes, tribes that did not have land in 1988, in
general, IGRA prohibits gaming on lands acquired after 1988.
But that would not be fair to some tribes if that were the
final statement.
So there are some exceptions in IGRA that allow gaming on
lands after 1988, so that the new tribes are on an equal
footing with the pre-existing tribes.
The Chairman. Jonodev, one of NIGC's roles is determining
whether a particular game is Class 2 or 3. The distinction is
important for tribes like Poarch Creek, where the State will
not negotiate a Class 3 compact and the tribe can only conduct
Class 2 gaming.
How do you answer folks who say that any gaming machine is
Class 3 gaming?
Mr. Chaudhuri. Thank you for the question. IGRA is very
specific as to the elements of Class 2 gaming as well as the
elements of Class 3. We are guided by IGRA, we implement IGRA.
We solely look, we start and end with the elements set forth in
IGRA in any gaming determination that we make. So in terms of a
specific game, it is hard to weigh in on any specific game in
the abstract. But when games are brought to the commission, we
are guided by the language of IGRA.
The Chairman. Senator Barrasso?
Senator Barrasso. Thank you very much, Mr. Chairman. If I
could just continue and follow up on that.
The Indian Gaming Regulatory Act sets forth specific duties
and responsibilities for the chairman. And I know this isn't a
confirmation hearing, but the specific duties for the chairman
of the National Indian Gaming Commission. For example, the
chairman can temporarily close a gaming facility, approve
tribal ordinances, management contracts. Without a chairman
right now, what enforcement actions can the commission take?
Mr. Chaudhuri. Thank you for your question, Vice Chairman.
Fortunately, given the nomination that was made very recently,
my authorities as acting chairman have resumed. So any chair-
specific authorities set forth in IGRA, the agency is fully
capable of carrying out. That said, much of the day to day work
that the agency performs requires close coordination with
regulatory partners as well as tribal and local and State
officials. That day to day activity takes place on the ground
through our regional offices as well as with support from
compliance officials at headquarters. All that day to day work
is not impacted by the absence of a chair.
Senator Barrasso. And you mentioned the ACE Initiative, as
you said, Assistance, Compliance and Enforcement. It is
intended to help tribes safeguard the integrity of their gaming
operations. Can you talk about some of the performance measures
that you have established to evaluate the success of the ACE
Initiative?
Mr. Chaudhuri. Thank you. As I alluded to in my spoken
testimony, and as I elaborated in my written testimony, we are
firmly of the mindset that adequate regulation requires a
trained workforce. And a trained workforce requires full
communication between and among all agency stakeholders.
So we work very closely through our training and technical
assistance capabilities with tribal regulators on the ground. A
wonderful metric for the success of the agency is in our
trainings as well as our site visits. Our trainings are way up
since implementation of the ACE Initiative. Just last year, in
2013, we trained 2,751 participants in Indian Country on up to
date regulations and best practices. Just this year, in 2014,
we have trained 2,140. So that is a great metric.
But on top of that, nothing about our enforcement
responsibilities, our oversight responsibilities is in any way
diminished by the recognition of the benefits of working with
tribal regulators on the front end.
Senator Barrasso. Thank you. I know, and these aren't just
a couple of training events. I understand about 341 different
events over the last two years with almost 5,000 participants
attending. So when we get to the next panel, I am going to ask
them, and they can prepare for this, if they can explain how
this initiative has actually reduced criminal activity in and
improved the integrity of Indian gaming. So we will hear how
this initiative has actually helped on the ground with
activities.
Ms. Fennell, your written testimony noted that in 2011 the
National Indian Gaming Commission did implement this ACE
Initiative, it emphasizes technical assistance, this training
for tribes to achieve compliance. Based on your review so far,
how effective is the initiative?
Ms. Fennell. At this point, we are still waiting for
compliance data and information to do additional analyses that
will allow us to look at the effectiveness of this particular
initiative. Right now what you have in our statement is
information that is available that has shown how they have set
goals and how they have achieved those goals. But we plan to do
additional work that will allow us to fully look at what the
compliance information shows about the effectiveness of the
initiative.
Senator Barrasso. Thank you. Because Mr. Chairman, I think
effectiveness of a key point of this whole thing. So we will
look forward to that additional follow-up report. Thank you,
Mr. Chairman.
The Chairman. Thank you, Senator Barrasso. Senator
Heitkamp?
STATEMENT OF HON. HEIDI HEITKAMP,
U.S. SENATOR FROM NORTH DAKOTA
Senator Heitkamp. Thank you, Mr. Chairman.
Just a couple quick questions. Kevin, obviously the whole
dream of Indian gaming is not just to provide a recreational
outlet for the surrounding areas, but it is to provide a
betterment for Indian Country and for people who live in the
community.
There has been some really interesting research that was
done in terms of gaming tribes and what they are able to do. I
think we don't notice those benefits as often as what we
should.
So this year, we have seen these studies. I am wondering if
you could just comment on the unseen benefits, the things that
we may not always count but we know are happening in Indian
Country as a result of this opportunity.
Mr. Washburn. Yes, thank you, Senator Heitkamp. Given your
concern for children, gaming has been tremendous in that
particular area. Chief Hicks is here from the Eastern Band of
Cherokee. There was a study over the past couple of years in
North Carolina that showed that even modest per capita payments
to people in poverty can make a huge difference, on mental
health, on dropout rates, on things like that, sort of negative
demographic effects. And children and tribal citizens are doing
much better, even with modest per capita payments of just a few
thousand dollars.
Certainly most Indian gaming revenues don't even go to per
capita payments, they go to social services and other benefits
for tribes that help them with governmental infrastructure. So
it has tremendous value, even if it is just a small amount of
gaming revenues.
Senator Heitkamp. And I would add to that that in many
places, the casino itself has become a cultural center, a place
of kind of understanding culture, being able to educate the
people who come into Indian Country about the culture, about
what has happened and provide that communication with other
communities. I can tell you that the surrounding communities,
we don't frequently add up the economic benefit to the
surrounding communities as well, both in terms of employment
and economic activity.
Anne-Marie, as someone who actually regulated Indian gaming
in my previous life, I am curious as you have kind of gone
through your study so far, what advice would you give both in
terms of negotiating a compact in terms of the regulatory
structure and what advice would you give to State regulatory
agencies in terms of your judgment at this point of best
practices?
Ms. Fennell. Senator, I appreciate the question. I think it
is still a little bit early for us to be able to draw out the
best practices at this stage. We have actually conducted three
site visits, we have three more that will be coming up. We are
contacting the remaining 22 States. We anticipate that we will
be able to show the variations that exist and different
approaches, and we will be able to perhaps draw some
conclusions at that particular time in terms of the various
approaches that have been taken.
Senator Heitkamp. I think it is important to point out that
where you look at casinos in Las Vegas, they are regulated by
the State, maybe a little bit of control by Las Vegas. But as
you look at regulatory authority, we have tribal regulation, we
have State regulation and we have Federal regulation. It has
all been geared to respond to people's concerns that Indian
gaming may in fact prove to be fraudulent in some places, may
not offer a fair chance to folks. I will tell you from the
standpoint of my experience, that has absolutely not been true.
So I think at some point we need to rethink that regulatory
structure and think about whether at some point we haven't
anticipated problems that haven't shown up. Maybe they haven't
shown up because of the regulation. But certainly I think it is
a fair question to ask.
The Chairman. Thank you, Senator Heitkamp. Senator McCain?
Senator McCain. Thank you, Mr. Chairman.
Mr. Washburn, I take it that you are familiar with the
issue that concerns us in Arizona concerning the proposed
casino in Glendale, Arizona. I understand that Interior took
the land into trust last week after following the court's
decision in favor of the Tohono O'odham Nation and the
interpretation of the Gila Bend Reservation Lands Replacement
Act. Is that true?
Mr. Washburn. Yes, sir, it is true."
Senator McCain. And that was basically on the grounds that
the Gila Bend Reservation Lands Replacement Act allowed for the
casino or the land to be taken by the tribe, and then there was
no prohibition as to what that land should be used for, is that
correct?
Mr. Washburn. That is correct, Senator, and I would go a
little bit further and say that we believe that the Gila Bend
Act actually mandated us to take that land into trust for the
Tohono O'odham Nation. We are following the law by doing so.
Senator McCain. And of course, when that legislation, the
Gila Bend Reservation Lands Replacement Act, there was no
Indian gaming at the time. So it was certainly not anticipated,
this controversy, at the time of the passage of that
legislation. Would you agree?
Mr. Washburn. Well, I am not sure I would fully agree,
Senator. There was certainly, Indian gaming was a hot issue in
the 1980s. It led to the Cabazon case in 1987. There were court
cases in California and Florida that went to the district
courts, then the circuit courts, and then the Cabazon case in
the Supreme Court. So at least there was some inkling of Indian
gaming at that time. And the Gila Bend Act just did not address
gaming.
Senator McCain. Does the Department of Interior need to
issue a final legal opinion on whether the Glendale parcel is
legally able to house a gaming operation?
Mr. Washburn. Well, there are some steps that need to
happen. I am not sure, given the district court opinion in the
case, that we need to do anything further with regard to an
Indian lands determination, because Judge Campbell did address
that matter in his opinion. However, the operation, if they do
choose to open an operation in Glendale, the Tohono O'odham
Nation will need a facility license under IGRA, which will
require them to interact with the NIGC to make sure that that
is a lawful facility. They will likely also have to deal with
the city of Glendale. If they are going to try to open up an
operation that is within a county island within some of the
exterior boundaries of the city of Glendale, they will probably
need to work with Maricopa County and the city of Glendale on
issues related to such a facility, such as traffic, water
services and those sorts of things, emergency services.
So I suspect there will be some negotiations along those
lines and some more hurdles for them to cross before they could
actually open a casino.
Senator McCain. Those are largely what is normally needed
when you set up an operation, or any business, actually. Are
you familiar with H.R. 1410, that is the legislation that was
proposed that would prevent this from happening? Does that
present a constitutional takings problem in your view?
Mr. Washburn. Well, I would have to consult with my lawyers
to answer that question, Senator. It is arguable.
Senator McCain. When you make these decisions, at least to
some degree the opinion of the local authorities and
governments are taken into some consideration, I would assume.
Mr. Washburn. In a discretionary situation, they certainly
are. We consult with the local community and the local
governments and the State government usually before taking land
into trust. We ask them questions about land use conflicts and
jurisdictional conflicts and the effect on the county tax rolls
and that sort of thing. So we do solicit their views quite a
bit. We also in the NEPA process, the National Environmental
Policy Act process, we also ask for the views of the public and
local communities.
Senator McCain. Do you ask for the opinion of other Indian
tribes who are engaged in gaming in the vicinity?
Mr. Washburn. We do certainly for off-reservation
acquisitions. Not necessarily for on-reservation acquisitions,
but for off-reservations acquisitions, yes, we do.
Senator McCain. And have you taken the strong opinion by
other tribes from Arizona concerning this operation being set
up by the Tohono O'odham Tribe?
Mr. Washburn. Senator McCain, that has been one of the most
agonizing parts of this whole process. Because I have enormous
respect for my friends at the Gila River Indian Community and
the Salt River Pima-Maricopa Community and many other tribes in
Arizona. And I have endeavored to listen to them and hear their
views. Ultimately this was a legal question as to what was the
meaning of the Gila Bend Act. We made the decision, we called
it like we saw it. But we certainly consulted at great length
with other tribes in Arizona.
Senator McCain. So unless Congress acts in a way to
prohibit what is happening now, it is inevitable that you will
see the Tohono O'odham tribe operating a casino in Glendale? Is
that pretty much the inevitability here?
Mr. Washburn. Well, they have the hurdles that I mentioned.
Senator McCain. Yes, the normal hurdles.
Mr. Washburn. It is the normal hurdles, although nothing is
ever really a sure thing in Indian gaming, Senator. I have seen
a lot of these things go sideways during their development.
There is a significant amount of financing that will be
required and lots of other issues.
Senator McCain. You can tell all parties involved that you
have thoroughly examined this issue? That it is, even though a
tough decision, that you have given it a great deal of time and
thought and consultation?
Mr. Washburn. I have, Senator.
Senator McCain. I thank you, Mr. Chairman.
The Chairman. Thank you. Senator Franken?
STATEMENT OF HON. AL FRANKEN,
U.S. SENATOR FROM MINNESOTA
Senator Franken. Thank you, Mr. Chairman. Assistant
Secretary Washburn, it is good to see you again.
There is a lot of debate about gaming in general. But one
aspect that is undeniable is the economic development benefit
of Indian gaming to tribes. In 2012, Indian gaming pulled in
$27.9 billion in revenue. As you said in your testimony,
between $26 and $28 billion yearly. That revenue creates jobs,
in answer to Senator Heitkamp's question you said that it makes
a difference. It makes a difference to kids, it makes a
difference to education. It funds direct payments to tribal
members, as you said, in some cases. Health care, schools,
water projects.
Due to the Federal trust responsibility, those are services
that the Federal Government would be responsible for funding,
were it not for the revenue that gaming provides, right?
Mr. Washburn. That is right.
Senator Franken. And we all know how underfunded the
Federal trust responsibility is, unfortunately.
Mr. Washburn. Yes.
Senator Franken. If Indian gaming vanished tomorrow and all
those needs shifted to Federal trust responsibility, what would
that look like? What would the budgetary impact on your agency
be?
Mr. Washburn. I shudder to think. Senator, Indian gaming,
the figure you quoted is more than ten times what the BIA and
BIE budgets are together. So we would have fewer tribal police
officers, we would have fewer scholarships for Indian children.
And we know the cost of higher education these days. We would
have fewer social workers. We would have fewer of all of the
things that we need in Indian Country to have healthy
communities.
Indian gaming is not for all tribes. It is less than half
of tribes that actually have Indian gaming. But for those
tribes, it is a significant source of income. I believe all 11
tribes in Minnesota have Indian gaming. And for some of them,
it is not a huge source of income, but it is a source.
And I would shudder to think what Indian Country would look
like without the revenues that come in from Indian gaming.
Senator Franken. In your testimony you describe the rise of
commercial gaming and you compare it as it is happening, the
flat-lining of Indian gaming. We are also going to hear today,
as Senator McCain talked about, inter-tribal competition for
gaming market share. We have already just laid out the
importance of Indian gaming for so many services, tribal lands.
What is the biggest threat to Indian gaming today and in
the future? Does a race to provide off-reservation gaming
invite more competition from commercial gaming?
Mr. Washburn. Senator Franken, I don't believe it does. I
think it is quite the opposite. Nature abhors a vacuum and
markets abhor a vacuum. So if there is not Indian gaming,
commercial gaming goes in typically where there is not already
Indian gaming. We are about to have gaming in Maryland. I would
just as soon that be Indian gaming, rather than commercial
gaming. Commercial gaming goes to enrich shareholders. Indian
gaming goes to help poor people, usually. It goes to support
tribal governments. It is governmental-owned gaming.
And so I would much rather see Indian gaming existing than
commercial gaming expanding.
Senator Franken. Let me ask Mr. Chaudhuri, do you have the
same take on that?
Mr. Chaudhuri. Absolutely. Both from a regular, well, at
the commission our emphasis is on the regulation of Indian
gaming. But in our work, we work closely with various agency
stakeholders, I know there will be testimony later today from
the National Indian Gaming Association, who track some of the
direct tie-ins between gaming revenue and services and nation-
building efforts on the ground. The threats to Indian gaming
are largely market-driven, but there are some regulatory issues
that we track. In short answer, yes.
Senator Franken. Okay. It is, I know I only have six
seconds left, technology. As new technology changes the
industry, what threats are there?
Mr. Chaudhuri. The threats don't necessarily raise
regulatory concerns in terms of the regulatory language that
applies to our mission. Gaming is inherently a technology-
driven industry. So when we are talking about protecting the
industry, we have to talk about staying up to date to minimize
vulnerabilities at any operational facility.
In terms of staying up to date, we need to stay up to date
ourselves to make sure that our training and technical
assistance is up to date. So obviously with any technology-
driven industry, you are worried about third-party threats,
cyber vulnerabilities. Those are ongoing concerns of the
industry.
Senator Franken. Thank you. Thank you, Mr. Chairman.
The Chairman. Thank you all. Just as a bit of housekeeping,
Anne-Marie, the Indian gaming study, when will that be ready
for prime time? When will you be done with it?
Ms. Fennell. We anticipate conducting additional audit work
over the next few months and will be speaking with your staff
regarding an actual issuance date. But we would anticipate
early in the new year.
The Chairman. Thank you very much, and I want to thank all
the panel members. Kevin, wear the basket well.
Now I am going to ask the next panel to come up. That panel
will include Chairman A.T. Stafne, of the Assiniboine and Sioux
Tribes of the Fort Peck Indian Reservation. I want to thank
Chairman Stafne for coming from beautiful Montana to be with us
here today and provide testimony on this important issue.
After A.T. gets done, we are going to hear from Principal
Chief Michell Hicks, of the Eastern Band of Cherokee Indians.
And finally, Mr. Ernest Stevens, Chairman of the National
Indian Gaming Association. I want to thank you all for being
here today. We look forward to your testimony, as you get
organized. As I said, we are going to hear from some tribal
folks and some regulatory folks. So with that, I would ask you,
Chairman Stafne, to begin.
If you can keep your testimony to five minutes, it would be
helpful, because we have another panel after this one. Your
full testimony will be a part of the record. Chairman Stafne,
you may begin.
STATEMENT OF HON. A.T. STAFNE, CHAIRMAN, ASSINIBOINE AND SIOUX
TRIBES OF THE FORT PECK INDIAN RESERVATION
Mr. Stafne. Thank you, Chairman Tester, Vice Chairman
Barrasso, Senator McCain, Senator Heitkamp and Senator Franken.
Thank you for allowing me to testify today concerning the next
25 years of Indian gaming.
I am A.T. Stafne, Chairman of the Assiniboine and Sioux
Tribes of the Fort Peck Reservation, located in northeastern
Montana. I will be blunt: for the 13,000 members of the
Assiniboine and Sioux Tribes, we have seen little economic
benefit from Indian gaming over the last 25 years. Unless
Congress acts and amends IGRA to alter the unequal playing
field that now exists between Indian tribes and the States, we
do not expect to see much improvement for our tribes in the
next 25 years.
If Congress continues to share our view that the Act's
original purposes empowering tribal governments and generating
much-needed income are important goals, it should consider
amendments to IGRA that give all tribes an opportunity to
benefit from Indian gaming and to curb unnecessary and costly
litigation which too often harms rather than helps Indian
tribes. In short, reversing the Rumsey Rancheria decision I
discuss below.
In adopting Indian gaming to strengthen tribal governments,
we doubt Congress intended a balance of power so heavily
weighted in favor of the States. Nor do we think Congress
intended to pit tribes and States against each other in costly
litigation that drags on for years. We also don't think
Congress intended to allow States to impose their laws and
regulations upon tribes in order for tribes to engage in gaming
once the civil, regulatory and criminal prohibitory mandate is
met; or that States should dictate to tribes the types of games
offered, prize limits or the number of games or facilities.
However, after 25 years, States now hold that power. State
boundary lines should not dictate the economic welfare of
federally-recognized Indian tribes.
Two Federal court decisions greatly limited our negotiation
strength against Montana to take full advantage of IGRA, as
many tribes have done to great success. The first is the
Supreme Court's Seminole decision that barred tribes from suing
States that did not negotiate gaming compacts in good faith.
The second case is the Ninth Circuit's Rumsey Rancheria
case, which held that States subject to the court's
jurisdiction, like Montana, can lawfully limit tribes to just
the type of Class 3 games played elsewhere in the State. Our
games are really no different than those played elsewhere in
the State. As a remote reservation, we lack the location and
infrastructure to attract large numbers of tourists. With some
modest exceptions, we offer the same games as the public can
play elsewhere in Montana, such as video poker, Keno and
limited live poker. Our isolation and limited games really
don't allow us to compete with 1,600 licensed gambling
operators and locations that offer 17,000 video gambling
machines to the public.
We have a small profit margin, which yields less than
$500,000 per year. The net profits that we earn represent less
than $40 per member. That buys about 10 gallons of gas in Wolf
Point. Our gaming profits actually go into the general fund for
governmental services, for our members, for programs not funded
or not adequately funded by the Federal Government.
We are a poor reservation. Nearly half the people living on
the reservation are below the Federal poverty level. At least
1,600 Native families on the reservation must survive on
incomes somewhere between $12,000 and $32,000 per year. It
should shock no one that we have the poorest health in the
State, and the average age of death of our tribal members in
the past two years has been 51.
Unprecedented oil exploration and development is occurring
in Bakken just off our reservation. We are not ready for it.
Our services and infrastructure are struggling to keep up, as
our cost of living rises. Despite the Federal Government's
promotion of Bakken oil exploitation, it has done little to
fund the ailing communities surrounding the Bakken. In looking
ahead to the next 25 years, we urge this Committee to consider
whether congressional policy has been fulfilled. For some
tribes, Indian gaming has been a huge success. But for the
majority of rural, remote, large land-based tribes, without a
distinctive Las Vegas style casino to compete against State
licensed gaming establishments, IGRA weakened and undermined by
the Seminole and Rumsey decisions, has not delivered the
promise of economic independence. Far from it.
Litigation over licensing and regulation, location, types
of eligible gaming activities and the process for the
negotiation of gaming compacts has been relentless. Too often
courts have ruled against tribal interests.
In conclusion, Congress has the authority and the
obligation consistent with its historic trust responsibility to
tribes to ensure that opportunities for economic advancement
and self-sufficiency through gaming are available to all Indian
tribes. Congress can play an instrumental role in bettering our
economic condition if it chooses to act.
We hope you do, and thank you for the opportunity.
[The prepared statement of Mr. Stafne follows:]
Prepared Statement of Hon. A.T. Stafne, Chairman, Assiniboine and Sioux
Tribes of the Fort Peck Indian Reservation
My name is A.T. Stafne and I am the Chairman of the Assiniboine and
Sioux Tribes of the Fort Peck Reservation. I would like to thank the
Committee for the opportunity to share our perspective, as a large,
rural, remote, and impoverished Tribe that has seen little economic
benefits from Indian gaming over the last 25 years.
The sparsely populated Fort Peck Reservation spans 2.1 million
acres of Montana's northeastern plains, which is roughly twice the size
of Glacier National Park. Our Reservation's Indian population is
approaching 8,000 while our overall Tribal enrollment is approximately
13,000 members.
Our Reservation remains one of the most impoverished communities in
the country. Nearly half of the people living on the Reservation are
below the federal poverty level. Recent U.S. Housing and Urban
Development (HUD) data reveals that nearly 1,600 Native families
residing on the Reservation have household incomes from less than 30
percent of Median Family Income to 80 percent of Median Family Income.
Roosevelt County, where most of our Reservation is located, has the
poorest health in the state of Montana. Moreover, our review of recent
data suggests that the average age of death of Fort Peck Tribal members
in the past two years is 51 years of age. It is not surprising, then,
that almost half the population living on the Reservation is under the
age of twentyfour. Thus, we are a poor, unhealthy, and young community.
In an effort to improve the social and economic conditions on our
Reservation, Tribal leadership at Fort Peck entered into a gaming
compact under the newly adopted Indian Gaming Regulatory Act with the
State of Montana in 1992. Although Las Vegas or Atlantic City-style
gaming did not, and does not now, exist in Montana, Class III gaming,
as it is defined under the Indian Gaming Act, was permitted.
Specifically, the State sanctioned its lottery, video poker and keno,
limited live poker, and horserace betting, along with a handful of
games of chance. During our negotiations, Montana took the position
that it could not agree to a compact that allowed the Tribes to engage
in games that were not permitted in the rest of the State--a position
the State continues to maintain.
Although we did not, and do not believe that Congress intended to
allow states to impose its laws and policies upon tribes in the context
of on-Reservation gaming, litigation was not a viable alternative for
us. Of course, the Supreme Court closed that door for us in the
Seminole decision, which barred tribes from suing states that did not
negotiate gaming compacts with tribes in good faith. And in the Rumsey
Rancheria case, the full Ninth Circuit court of appeals held that
states can lawfully limit tribes to just the type of Class III games
played elsewhere in the State, as Montana does.
The Fort Peck Tribes have done the best we can in these restricted
circumstances, but it has not been good enough to improve conditions on
our Reservation in any major way. The State of Montana and the Fort
Peck Tribes entered into a Compact in 1992, which was modified several
times over the years and rewritten a few years ago. The basic tenets of
the compact remain consistent with Montana's original position of
allowing only those types of games permitted under state law. Under our
compact, then, we have conducted video poker and keno, limited live
poker and a few other games of chance since 1992.
The nature of these games is to redistribute money among the
players, with a payout of roughly 90 percent of the money played. In
other words, the Tribes and its licensees share in only about a 10
percent profit margin. Although gross gaming receipts total roughly $10
million per year, the Tribes' annual profit on those receipts is
normally less than $500,000. Therefore, gaming provides very little
income to our Tribes.
We have no major metropolitan area anywhere near our Reservation.
Indeed, the total population of Montana is only about 1 million,
despite being geographically, the fourth largest state in the nation.
Still, tourism is a sizeable industry in Montana. Although Montana's
policy makers have not decided to include large-scale gaming in its
array of tourist activities, Montana's tribes should not be precluded
from making that policy decision themselves.
The ability of Tribal leadership to make decisions concerning our
Reservation has never been more important than now. Unprecedented oil
exploration and development is occurring in the Bakken just off our
Reservation. Our services and infrastructure are struggling to keep up
with the dramatically increased demand and population increases as a
result of the neighboring boom, but we are receiving little in return.
Despite the Federal Government's promotion of Bakken oil exploitation,
it has done little to fund the ailing communities surrounding the
Bakken. Similarly, the State of Montana has been unable to keep pace
with the rapidly increase demands in cities and counties surrounding
the Bakken.
Not only is there a need for greater revenue for government's like
ours, we are now realizing the population and traffic increases that
could support larger-scale gaming on our Reservation. Thus, there is no
better time to consider Indian gaming a means to generate revenue in
our region to fund vital governmental services, build infrastructure to
enhance our economy, and strengthen our Tribal government.
In 1988 Congress found that ``a principal goal of Federal Indian
policy is to promote tribal economic development, tribal self-
sufficiency, and strong tribal government,'' and enacted the Indian
Gaming Regulatory Act with a principal purpose ``to protect [Indian]
gaming as a means of generating tribal revenue.''
In looking ahead to the next 25 years of Indian Gaming we must,
then, consider whether Congressional policy has been fulfilled and its
purposes achieved. What have we learned in the last 25 years?
First, we know that Indian gaming has been, for some Tribes, the
largest single producer of revenue in history. For those Tribes engaged
in large-scale gaming enterprises, Indian gaming has produced
unprecedented income, boosting Tribal economies and Tribal self-
sufficiency, and enhancing Tribal government.
Second, we know that despite the success of some Tribes, Indian
gaming has provided little benefit to many tribes. Geographical
location is a barrier for economic development of any kind, and
certainly Indian gaming is not immune from geographical limitations.
However, geography is not the only barrier to Tribes interested in
seeking self-sufficiency through gaming. Indeed, the long arm of state
law and regulation--strengthened by the Seminole and Rumsey decisions--
continues to prohibit many Tribes, including Fort Peck, from obtaining
economic independence through gaming.
Third, we know that the realm of Indian gaming has been fraught
with costly litigation. Competing interests of tribal, state and
federal licensing and regulation, the location of gaming facilities,
the type of gaming activity, and the process for the negotiation of
gaming compacts, have been a constant topic of litigation over the last
25 years. Although Congress declared that one of the purposes of the
Indian Gaming Regulatory Act was ``to provide a statutory basis for the
regulation of gaming by an Indian tribe,'' which includes ``clear
standards,'' the courts have nevertheless been called upon to determine
issues involving Indian gaming at a disproportionate rate. Indeed,
through litigation, one primary component of the compact negotiation
process was struck down, namely Tribe's ability to sue states who fail
to negotiate with Tribes in good faith.
So we know that Indian gaming can serve to fulfill the purposes
established by Congress in 1988. Gaming can provide a meaningful source
of revenue that strengthens tribal economies, helps tribes in the
pursuit of self-sufficiency, and promotes strong tribal governments. If
Congress continues to share our view that these goals are important, it
should consider the other lessons we have learned in the context of
Indian gaming, including ways to ensure all tribes are afforded an
opportunity to benefit from Indian gaming and to curb the unnecessary
need for litigation which is costly and time consuming.
In our view, Congress should reconsider the balance of power that
now exists between tribes and states with regard to Indian gaming, and
in particular, the balance of power in negotiating compacts with Tribes
for Class III gaming. Congress cannot change the Seminole decision,
because Seminole is based on the Court's reading of the Constitution-
but it could alter the result of the Rumsey decision and allow tribes
to conduct any Class III games the Tribe wants to play, free of any
limits elsewhere in a state that allows Class III games.
Congress should reconsider whether it intended in 1988 to allow
states to impose its laws and regulations upon tribes in order for
tribes to engage in gaming. We do not think Congress intended for
states to dictate to tribes the types of games offered for play,
betting and prize limits, or the number of games or facilities.
However, after 25 years, it is quite clear as a practical matter that
states now hold that power. This leads to uneven results. As just one
example, since North Dakota allows tribes to conduct a very broad array
of Class III games, our neighboring tribe to the east--the Three
Affiliated Tribes of Fort Berthold--is able to operate a far more
lucrative gaming casino than we or any Montana tribe can do.
We do not think that was the balance of power Congress had in mind,
nor do we think this result is fair or consistent with Congress's
unique trust obligation to Indian tribes. We know that there will
always be barriers to prosperity, like geography and population. But we
truly believe that Congress has the authority and the obligation,
consistent with its historic trust responsibility to Indian tribes and
our members, to ensure that opportunities for economic advancement and
self-sufficiency through gaming are available to all Indian tribes.
Thank you for your serious consideration of these important issues.
I would be happy to answer any of your questions.
The Chairman. Thank you, Chairman Stafne.
Chief Hicks?
STATEMENT OF HON. MICHELL HICKS, PRINCIPAL CHIEF, EASTERN BAND
OF CHEROKEE INDIANS
Mr. Hicks. Good afternoon, Chairman. It is good to see you,
Vice Chairman Barrasso, and Senator Heitkamp and Senator
Franken. Thank you for allowing me to speak just a few minutes
today.
My name is Michell Hicks. I am Principal Chief of the
Eastern Band of Cherokee Nation. We reside in western North
Carolina. I have been in my capacity for about 11 years, and I
have been before this Committee in previous years. Again, I am
here to tell just a short story about our successes with
gaming. The story of my people is one of persecution, survival,
endurance and of course now, emergence. The survival of our
language and our culture and the willingness of our people to
protect our aboriginal lands and territory. Of course, our
dedication to educating our people and our recent emergence as
an economic power in our region. It makes us very unique.
I testify today that gaming has brought not only economic
benefits to our reservation but also positive social impacts,
of which I will give some examples just a little later on. On
life expectancy, poverty rates, educational attainment,
physical and mental well-being of Cherokee children and
families. And you know, for my responsibility, that is what it
is all about.
Before gaming came to Cherokee, our people struggled to
survive. The beauty of our homelands and our location at one of
the entrance points to the Great Smokey Mountains National Park
made us a natural industry for tourism on our reservation. But
seasonal tourism could not pull us out of poverty.
Our community has changed dramatically since our permanent
casino in 1997. Gaming revenues have allowed us to supplement
the shortage of Federal and State and of course internally-
generated funds we used to rely on, and helped us to become
more self-sufficient. I want to describe today just a few of
the critical ways in which these funds are improving the lives
of our people. And I will assure this Senate Committee today
that we are a priority-based tribe that is addressing issues
head on. Whether it is economic or whether it is social,
health, education, we are addressing them head on.
I want to draw your attention to the picture to my right.
We created a language academy about 10 years ago and
fortunately we were able to redo a hotel and permanently move
in our academy, where Cherokee is the first language within
this academy. Of course, we have to follow State standards. Our
oldest class currently is fifth graders. So we are very proud
of what we have been able to accomplish with this school. Of
course, it took a significant investment to create this
educational opportunity for these kids, not just building a
building, but creating that curriculum that can be taught and
maintained in the schools.
I will also refer to the next picture, which is the
Cherokee Central Schools. This was a significant project. We
are going to be starting our fifth year. It is Leeds certified.
One of the things that we put into place approximately in 2005
was an environmental proclamation. Every tree that came off
this 143 acres went back into the school. There are 350 wells.
We take advantage of the solar aspects and for lighting of the
facility. There are cultural aspects of the facility, as you
can see in this next picture here. It identifies the importance
of that to our students and to make sure that they clearly
understand their responsibility as they grow older to the tribe
and to maintain our culture and traditions.
We also, as we built this school, one of the things we did
was invest in 400 miles of fiber in western North Carolina.
Nobody thought we could do it, but we did it because we had to.
All schools, including the Cherokee Schools, are linked into
this fiber loop in western North Carolina. So we increased the
opportunity for any of our children, both for Indians and non-
Indians. Again, we are very proud of that aspect.
In regard to the health of our people, like many of the
nations, we deal with an epidemic of diabetes. So one of the
things we have been very proud of but also very diligent about
is we created a number of athletic and recreational and multi-
purpose facilities to allow our kids to enjoy these facilities
from many perspectives. Not all children are athletic, but
there are opportunities for them to defeat the disease of
diabetes. We have created seven of these facilities throughout
our tribe.
We converted an old textile factory into a fitness center,
which includes cardio, weight room, indoor walking track,
gymnasium and also an indoor pool, which also a lot of our
elders take advantage of, outside of our children. We designed
a state of the art skate park for bike riders and those who
like skateboards. Also a number of family parks and green
areas.
We just recently opened a youth center. We have had a youth
center in Cherokee since 1997, but we created a youth center in
a very remote part of our reservation. It was about 45 miles
away and we wanted to provide additional opportunities for
those kids. Overall, we serve about 400 children in the youth
center activities on a daily basis. This particular facility
will serve about 100.
Also as it relates to the health of our children, we have
created a women and children's center which includes children's
dental, a WIC program, of course psychological services, among
many other services. We are in the process of constructing a
new hospital that is technologically advanced, with MRI
systems, C-scan systems and of course the hospital system,
along with the other systems in western North Carolina, are
additionally hooked into our fiber that we have created.
I do want to tell one short story today. We are in the
process of taking over all the social services from the State
that we live in, which is North Carolina. We had a scenario
occur a few years ago where a young lady, she was less than two
years old, was supposed to be overseen by the county social
services, of course, the county police. And this young lady
ended up dying, she froze to death. So one of our major
priorities is to make sure that, and you all know this sitting
in this room today, that family can take care of family best.
And so we are taking over all those social services, pulling
those back into the tribe.
So as I sit here today and think about our responsibilities
as tribal leaders and leaders of this nation, all leaders
should first and foremost, in my opinion, be to children and
family. I feel that through these resources that we have been
blessed with at the Eastern Band that we have made it priority
to make sure that the infrastructure is in place but also the
training is in place, the teachers are in place, et cetera, to
make sure we are successful.
One last point, Mr. Chairman, I know I have run over, I do
want to call your attention, there is a study that was done by
Duke Medical School, the lady's name was Jane Costello. I would
like to submit this for the record. But it does talk about,
when you improve the financial income within a family, you can
definitely improve their lives.
With that, that concludes my testimony today and I
appreciate the opportunity.
[The prepared statement of Mr. Hicks follows:]
Prepared Statement of Hon. Michell Hicks, Principal Chief, Eastern Band
of Cherokee Indians
Thank you, Chairman Tester and Vice Chairman Barrasso, for the
opportunity to testify at this hearing today on tribal government
gaming.
My name is Michell Hicks; I am currently serving my third four-year
term as Principal Chief of the Eastern Band of Cherokee Indians, a
tribal government based in Cherokee, North Carolina, comprised of the
Cherokees that avoided the Trail of Tears and continue to live in the
mountains of Western North Carolina. We have about 15,000 tribal
members and most of our people live on the Eastern Band Cherokee
Reservation.
The story of my people is a story of persecution, survival,
endurance, and emergence. The history of the Eastern Band people
suggests that we should no longer exist. Oppressive federal policies,
competition and taking of our lands and resources, and efforts to turn
our people from Cherokee into non-Indians have all failed because of
the strength of spirit of our people.
This strength is demonstrated in many ways: the survival of our
language and culture, the willingness of our people to protect our
aboriginal lands and territory, and our recent emergence as a growing
economic power in our region of the country. Tribal government gaming
has been the primary driver for our ability to address the problems in
our community, on our terms, and support the culture and traditions
that never left. I can testify today that gaming has brought not only
economic benefits to our reservation but also positive impacts on
Cherokee life expectancy, poverty rates, educational attainment, and
the physical and mental wellbeing of Cherokee children.
My testimony today will focus on the positive impacts Cherokee
tribal gaming has had on Cherokee children.
Eastern Band Cherokee Reservation Before Gaming
Before tribal government gaming came to Cherokee, our people
struggled to get by in challenging economic conditions. The beauty of
our homeland in the Great Smokey Mountains and our location at one of
the entrance points of the Great Smokey Mountains National Park made
tourism a natural industry for our reservation. But tourism in the
mountains was seasonal. Most of the non-BIA or tribal government jobs
were related to the tourism that came in May and left in October. Most
of these jobs were for minimum wage in motels, craft shops, and small
diners. Most of the rest of year provided very limited economic
opportunities.
Many families found themselves being split because people would
have to travel off the reservation for work, sometimes for extended
periods of time, to support their families in construction or other
jobs. This situation tore at the fabric of the foundation of our
society, our families.
Eastern Band Cherokee Reservation After Gaming
In 1983, the Eastern Band opened its first bingo hall in Cherokee.
Known as ``big money bingo'' at the time, the bingo operated twice
monthly, offering higher payouts than other local bingos at the
churches and employing less than 100 people. While bingo brought
limited income and employment to the Tribe, many of our people learned
more about the business of gaming and what added resources could do to
change our community.
The casino opened in November 1997 and has grown from a simple
tribal operation to a large, complex, multi-product enterprise and
tourist destination attracting 3.1 million visitors in 2013.
Today, the reservation economy of the Eastern Band is in a period
of strong growth. Visitor-generated gaming revenue totaled $513 million
in 2013.
The casino's economic impact extends to the Western North Carolina
region, boosting per capita income from 70 percent of the state average
in the mid-1990s to more than 80 percent today, reducing historically
high unemployment rates and raising employment to the statewide
average. Our Tribal gaming enterprise spent $28 million on North
Carolina vendors for goods and services in 2011.
The Cherokee Preservation Foundation, funded by gaming revenues to
create new businesses and initiatives that provide the region's
residents with greater opportunity and stability, has contributed a
leveraged impact of about $99 million for additional social
improvements, environmental enhancements, workforce development, and
cultural preservation in the region.
With gaming dollars, the Tribe spent $5 million on Downtown
Revitalization Project, $13 million on affordable housing, and $20
million on a new Justice Center.
The Eastern Band is helping to build infrastructure with a $16
million investment into a 300-mile broadband fiber network that
connects to every school and hospital in Western North Carolina
The Eastern Band is creating jobs for our people and our neighbors.
80 percent of our 3,000 plus employees are non-members of the Eastern
Band.
Impacts on Cherokee Children
Today, a new generation of Cherokee children can learn their native
Cherokee language through the creation of the Kituwah Language and
Preservation Academy, which is funded with $7 million from gaming
revenues. The school operates for children ages 6 weeks through the
fifth grade and has adopted North Carolina state education standards.
Our children study a standard course of education using Cherokee as
their first language. But our commitment to our children's success has
driven us to develop an English course as well.
Thanks to gaming, the Cherokee tribal schools have one of the most
beautiful facilities of any school in the region. The Tribe's $130
million investment into Cherokee Central Schools, which are LEED
certified, pre-k-12, and reflect Cherokee culture, brings greater
opportunity to our young folks and builds pride in the community. This
intergenerational learning complex was designed utilizing the most
current theory of educational models including natural sunlight in
every classroom, gymnasium, library and student spaces. It features a
Gathering Place, a theatre in the round for the elementary students to
host cultural programs. The Gathering Place is designed in the model of
traditional council houses with seven sides. The classroom buildings
are of similar design with interior courtyards. The Cherokee Central
Schools also features a cultural arts center theatre with dance
studios, an art gallery and a state of the art theatre which has hosted
the North Carolina Symphony and the Atlanta Shakespeare Theatre as well
as our own Cherokee Cultural night for students to showcase their own
talents. More important is the athletic component of the school complex
which was designed to address the diabetes epidemic in our community.
We believe that teaching the children to control their health is an
essential life lesson.
The Eastern Band has built other athletic complexes to address that
issue as well including the John A. Crowe Recreation Complex, softball
and baseball fields, community gymnasiums in Birdtown, Painttown,
Wolfetown, Big Cove, Big Y, and Snowbird. We have also converted an old
textile factory building into the Ginger Welch Fitness Center, which
includes a cardio room, weight room, indoor walking track, gymnasium
and indoor pool to be enjoyed by children and families.
The Tribe has constructed the Cherokee Skate Park, which was
designed by our young people in conjunction with a professional design
firm. The skate park provides another amenity for our people and for
the visiting public. The Skate Park is also adjacent to the Cherokee
Family Park, which hosts a public playground, picnic area and access to
the Cherokee Riverwalk greenway.
I was so pleased last week to help open the Snowbird Youth Center,
a Boys and Girls Club located in the isolated Snowbird community
located 45 minutes from Cherokee. The new $4.1 million center replaces
an older center and provides classrooms, a dance studio, multipurpose
room, gymnasium, teaching kitchens, a computer lab and hiking trails.
The facility was built in conjunction with the National Forest Service
through a land use agreement. We believe this partnership will foster
more programs for this remote section of tribal lands in education and
community forest partnerships.
Even more profound than facilities and programs, research from Duke
University Medical School, the Great Smokeys Study, shows that an
infusion of income to tribal members can have a significant impact on
the health and wellbeing among Cherokee children who grow up in the
most financially stressed homes.
Professor Jane Costello, an epidemiologist from Duke Medical
School, had been following for four years 1,420 children living in
rural Western North Carolina, a quarter of whom were Cherokee. Roughly
one-fifth of the rural non-Indians in her study lived in poverty,
compared with more than half of the Cherokee children. By 2001, gaming
revenues had grown to a level that allowed the Tribe to provide direct
assistance to tribal members. As a result, the number of Cherokees
living below the poverty line had declined by half.
According to the Duke study, the poorest children tended to have
the greatest risk of psychiatric disorders, including emotional and
behavioral problems. But just four years after the payments to Cherokee
families from gaming revenues began, Professor Costello observed
substantial improvements among those who moved out of poverty. The
frequency of behavioral problems in Cherokee children declined by 40
percent, nearly reaching the risk level of children who had never
suffered from poverty.
Minor crimes committed by Cherokee youth declined. On-time high
school graduation rates improved. And by 2006, when the payments had
grown to about $9,000 yearly per member, Professor Costello observed
that the earlier the financial payments arrived in a child's life, the
better that child's mental health in early adulthood.
These Cherokee youth were roughly one-third less likely to develop
substance abuse and psychiatric problems in adulthood, compared with
the oldest group of Cherokee children and with neighboring rural whites
of the same age.
The Duke study also found that improvements to family income
improved parenting quality. The assistance from gaming eased the strain
of the feast-or-famine existence too many of our families were
surviving in.
Other evidence shows that these direct investments actually save
the Tribe and the federal government money in the long run. Randall
Akee, an economist at the University of California at Los Angeles and a
collaborator of Professor Costello's, calculates that 5 to 10 years
after age 19, the savings incurred by the Cherokee payments from gaming
are greater than the initial costs. This study says that the Eastern
Band Cherokee Tribal Government and the federal government benefit from
savings in reduced criminality, a reduced need for psychiatric care,
and savings gained from not repeating grades.
These third-party studies demonstrate the remarkably positive
influence Cherokee gaming has had on our Cherokee children.
Conclusion
In conclusion, tribal government gaming is not simply about
generating revenue for the tribal governments. The Eastern Band
Cherokee experience is that gaming can dramatically impact the lives of
Cherokee families, particularly our precious children in ways even we
never dreamed possible.
Thank you again for this opportunity to tell our story.
The Chairman. Thank you, Chief Hicks. Jane Costello has
been in front of this Committee and actually used your tribe as
an example. It was compelling testimony.
Ernie Stevens, you are up.
STATEMENT OF ERNEST L. STEVENS, JR., CHAIRMAN, NATIONAL INDIAN
GAMING ASSOCIATION
Mr. Stevens. Good afternoon, Mr. Chairman, Vice Chairman
Barrasso. I would like to thank you for allowing me this
opportunity. I would like to acknowledge the tribal leadership
in the room today led by President Brian Cladoosby of the
National Congress of American Indians.
Thank you for this opportunity to testify on the next 25
years of Indian gaming. Any discussion of Indian gaming must
begin with tribal sovereignty, sovereignty that is acknowledged
by the constitution through treaties with this Nation and
through hundreds of Federal court decisions like the Supreme
Court's Cabazon case. Finally, sovereignty that is acknowledged
through the hundreds of Federal laws like the Indian Gaming
Regulatory Act.
Indian gaming is Indian self-determination. Gaming is an
exercise of inherent authority affirmed, confirmed and guided
by the Indian Gaming Regulatory act. One of the Committee's
earliest hearings on Indian gaming took place in 1984. At the
time there were approximately 80 tribes engaged in gaming. Many
of those operations took place in temporary pop-up buildings or
local tribal gyms.
Back in the early 1970s, I remember the frustration as a
young athlete wanting to work out in a basketball facility. Too
often the gym was full with tables and food in preparation for
evening bingo games. Back then, two moms that are still told
about in this book called The Bingo Queens, they were community
leaders, they sat me down and explained to me that our nation,
with an economy that would keep our lights on, that was to help
me understand that I couldn't play in the basketball gym if
there were no lights. We played bingo to pay the bill.
From those humble means, Indian gaming has responsibly
grown to provide a steady source of revenue for 245 tribes in
28 States. In 2013, Indian gaming generated $28 billion in
direct revenue. Today the Oneida Nation has a state of the art
fitness center and more than one gym that is dedicated to
promoting exercise for all ages in our community. All this is a
direct result of Indian gaming.
For many tribes, Indian gaming is first and foremost about
jobs. Indian gaming has provided opportunities that bring
entire families back to the community. In the early 1980s, I
couldn't find a job in my home or in the city of Green Bay and
I left our community. As Indian gaming started to evolve, I
finished my education and made it back home. I was elected to
the tribal council in 1993 as gaming was really getting
underway. With the success of our gaming operation, we had an
employment base of 3,800 people. We were the top employer in
northeast Wisconsin.
Fast forward now to 2013. Indian gaming generated more than
650,000 direct and indirect jobs. These jobs go to Indian and
non-Indians alike. Without question, Mr. Chairman, we are
putting people to work. Today Indian gaming is helping to
maintain, generate and fuel an American economic recovery.
Before I speak to regulation, I want to acknowledge the
National Tribal Gaming Commission and Regulators Association
Chairman Jamie Hummingbird, who had to cancel his trip today to
stay with his family. Our prayers go out to the Hummingbird
family, Mr. Chairman.
Regulation is vital, and tribal leaders understand its
importance. In 2013 alone, tribes invested $422 million on
regulation. Our system employs 6,500 tribal, Federal and State
regulators and staff to protect Indian gaming. The system is
costly, it is comprehensive and our record and experience show
us that it is working, Mr. Chairman.
The first 25 years under IGRA has proven that Indian gaming
is a strong tool that helps tribes overcome injustice and
rebuild our communities. However, gaming is only one tool. To
ensure that success continues for the next 25 years, we are
working to diversify beyond gaming to strengthen small business
in our young Native entrepreneurs. The next 25 years will also
bring changes and constant challenges to Indian gaming,
challenges that we are aware include concerns with the IGRA
compacting process and the prospect of internet gaming.
As you have heard, and you will hear more on the next
panel, the issue of off-reservation gaming is also a challenge.
The issue isn't new. It came to a head in Congress in 2006.
NIGA member tribes took this issue head on. Indian gaming is
about rebuilding Indian homelands. NIGA supports regulations to
implement IGRA Section 20 that require tribes to show an
aboriginal or historical connection to land sought for gaming.
It also urges all tribes to respect and minimize any impacts on
aboriginal rights of nearby tribes. NIGA has a standing
resolution to this issue, Mr. Chairman.
To prepare for these changes and challenges, Indian Country
will rely on a strong partnership with this Committee, Congress
and the Administration. Indian Country will remain united and
work with NCAI in maintaining an open dialogue to build
consensus. We must all work together to continue to meet IGRA's
goal of strengthening tribal governments and achieving tribal
economic self-sufficiency.
In closing, Mr. Chairman, I want to share a very, very
brief story. A year ago, when we wrapped up our legislative
summer summit, a year ago almost to the day, sir, I returned
home to be by my grandmother's side. I was able to hold her
hand her last three days of her life. As I look back, we were
able to celebrate her life's accomplishments. As a young girl,
she was taken from her home and put into government-run
boarding schools, as many as five in three States before she
finished high school. The educational system that she endured
was much different than when she retired from the Oneida
Nation's school system in her mid-90s as a certified language
instructor. She worked in a state of the art educational
institution providing quality education combined with the
strong language culture and tradition that was once forbidden
in her world of boarding schools. She and her late brother,
Amos Christjohn, who is also in this book, were certified
school teachers into their 90s. My grandmother was a Turtle
Clan faith keeper and young folks have been appointed to fill
her shoes. Together they wrote a dictionary in the Oneida
language as one of many things they did to preserve what was
once forbidden in the educational system, the Oneida language.
Again, this language was forbidden.
Long after her brother's passing, one of Grandma's final
projects, into her late 90s, was to digitize her own voice in
this dictionary. After retirement, as Grandma wound down her
life surrounded by her family and community, she did so in a
state of the art nursing home named after her late sister, Anna
John, her son, Ernie, Sr., also a resident, by her side.
This is a clear and proud reflection of how far we have
come. A new school for our children, a nursing home for our
elders and a livable home for our community. Mr. Chairman and
members of the community, I again thank you for this
opportunity to testify and am prepared to answer any questions.
[The prepared statement of Mr. Stevens follows:]
Prepared Statement of Ernest L. Stevens, Jr., Chairman, National Indian
Gaming Association
Introduction
Good afternoon Chairman Tester, Vice Chairman Barrasso, and Members
of the Committee. My name is Ernest Stevens, Jr. I am a member of the
Oneida Nation of Wisconsin and Chairman of the National Indian Gaming
Association (NIGA). 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 endeavors. I want to thank
the Committee for this opportunity to provide testimony on ``Indian
Gaming: the Next 25 Years.''
Over the course of the five-year Great Recession, Indian gaming not
only survived but thrived in many regions. During the Recession, Indian
gaming revenues helped many nearby communities get through the tough
times, saving American jobs by providing funds for police officers,
teachers, prosecutors, and much more. Indian gaming has played and is
playing a large role in America's economic upturn. Today, tribal
governmental gaming is producing more jobs and generating more income
than ever before, and we are helping fuel America's recovery.
Gaming has been a part of Native American culture from the
beginning of time. Whether it is hand and stick games, bowl and dice
games, horse and relay races, and much more--gaming has always been a
part of our culture, ceremonies, and way of life. In contemporary
times, Indian gaming added tribal bingo and pull-tabs operations that
began in the 1960s and 1970s. These acts of Indian self-determination
were met with legal challenges that eventually led to Congress'
enactment of the Indian Gaming Regulatory Act (IGRA) in 1988.
As I will detail below, the Act is far from perfect. However, over
200 tribal governments have made IGRA work for our communities. The
first twenty-five years of Indian gaming under IGRA have seen our
Nations generate billions in tribal governmental revenue to rebuild our
communities, provide reservation-based jobs to many who never worked
before, and offer hope for an entire generation. I am confident that
our industry is here to stay. The next twenty-five years will see
Indian gaming maintain steady growth that will continue to strengthen
Native governing bodies, empower tribal communities, restore and
strengthen Native culture and language, and reinforce and build new
relationships with our neighbors. We will continue to accomplish all of
this while remaining dedicated to upholding the highest regulatory
standards of any form of gaming in the United States.
Native Nations: Pre-Dating the U.S. Constitution
Any discussion of Indian gaming must begin with the historic
background of Native Nations that pre-dates the U.S. Constitution,
evolves with the formation of the United States, and exists as a vital
part of this Nation's Constitution.
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 Indian lands. The
Nations of England, France, and Spain all acknowledged tribes as
sovereigns and entered into treaties to establish commerce and trade
agreements, form alliances, and preserve the peace.
Upon its formation, the United States also acknowledged the
sovereign authority of Indian tribes and entered into hundreds of
treaties. Through these treaties, Indian tribes ceded hundreds of
millions of acres of tribal homelands to help build this great Nation.
In return, the United States made many promises to provide for the
education, health, public safety and general welfare of Indian people.
The U.S. Constitution specifically acknowledges these treaties and the
sovereign authority of Indian tribes as separate governments. The
Commerce Clause provides that ``Congress shall have power to ...
regulate commerce with foreign nations, and among the several states,
and with the Indian tribes.'' Tribal citizens are referred to in the
Apportionment Clause (``Indians not taxed'') and excluded from
enumeration for congressional representation. The 14th Amendment
repeats the original reference to ``Indians not taxed'' and
acknowledges that tribal citizens were not subject to the jurisdiction
of the United States. By its very text, the Constitution establishes
the framework for the Federal Government-to-government relationship
with Indian tribes. The Constitution finally acknowledges that Indian
treaties, and the promises made, are the supreme law of the land.
Over the past two centuries, the Federal Government has fallen far
short in meeting these solemn promises and the government's resulting
trust responsibility. The late 1800's federal policy of forced
Assimilation authorized the taking of Indian children from their homes
and sending them to 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, eroded
remaining tribal land bases, and devastated our 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 from Indian lands 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 and IGRA
Tribal governments and individual Indians persevered. The United
States acknowledged that Indian tribes were not going to fade away and
recognized the failures of these policies. For more than 40 years now,
the United States has fostered an Indian affairs policy that supports
Indian self-determination and economic self-sufficiency.
President Nixon made clear that the policy of self-determination is
a direct rebuke to this Country's previous policy of termination. This
self-determination policy has been reaffirmed by every successive
President and continues to acknowledge that the Federal Government's
solemn treaty and trust obligations remain fully in force. In his
historic 1970 Message to Congress on Indian Affairs President Nixon
stated the following:
``The special relationship between Indians and the Federal
Government is the result instead of solemn obligations which
have been entered into by the United States Government. Down
through the years through written treaties and through formal
and informal agreements, our government has made specific
commitments to the Indian people. For their part, the Indians
have often surrendered claims to vast tracts of land and have
accepted life on government reservations. In exchange, the
government has agreed to provide community services such as
health, education and public safety, services which would
presumably allow Indian communities to enjoy a standard of
living comparable to that of other Americans.''
Tired of waiting on the United States to fulfill these promises, a
handful of tribal governments in the late 1960s and early 1970s
embraced self-determination and took measures to rebuild their
communities by opening the first modern Indian gaming operations. These
tribal governments used the revenue generated to fund essential tribal
government programs, cover the federal shortfalls, and to meet the
basic needs of their people.
State governments and commercial gaming operations challenged these
acts of Indian self-determination both in Congress and in the federal
courts. The legal challenges to the exercise of tribal governmental
gaming culminated in the Supreme Court's California v. Cabazon Band of
Mission Indians decision issued in February of 1987. The Cabazon Court
upheld the right of Indian 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. The
decision vindicated the right of tribal governments to engage in gaming
activity free of interference from state governments. With the Cabazon
decision, the debate in Congress and the legislative momentum and
leverage shifted from the state/commercial gaming industry position to
the tribal government position.
After Cabazon, states and commercial gaming interests nevertheless
doubled their legislative efforts, urging Congress to enact limits on
Indian gaming. Their primary rationale for opposing Indian gaming was
the threat of organized crime. However, this Committee found that after
approximately fifteen years of gaming activity on Indian reservations
(as of 1988) there had never been one clearly proven case of organized
criminal activity.
At the same time, many tribal leaders opposed the legislative
proposals that became IGRA. Their opposition focused primarily on the
proposal in IGRA that required tribal governments to enter into
compacts with the states in order to conduct Class III gaming. States
have historically been adversaries of tribal sovereignty, seeking to
regulate, tax, and impose jurisdiction over Indian lands. In addition,
Indian tribes entered into solemn treaties with the United States, not
the several states.
In October of 1988, approximately 18 months after the Cabazon
decision, Congress enacted 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
across America, the NIGC is the only federal agency that directly
regulates gambling in the United States.
In the end, IGRA is a compromise that balances the interests of
tribal, federal, and state governments. However, the Act is grounded
and premised on the fundamental principle of Indian law that government
powers retained by an Indian tribe are not, in general, delegated
powers granted by express acts of Congress, but rather ``inherent
powers of a limited sovereignty which has never been extinguished.''
The Act acknowledges that Indian tribes still possess those aspects of
sovereignty not withdrawn by treaty or statute. This principle guides
determinations regarding the scope of tribal authority in general and
in particular when implementing and interpreting IGRA.
As you can see, IGRA did not come from Indian Country. The Act is
far from perfect, and the U.S. Supreme Court has added to its
imperfections. However, for twenty-five years now, more than 200 tribes
nationwide have made IGRA work to help begin to rebuild our communities
and meet the stated goals of the Act.
The State of Indian Gaming: IGRA'S First 25 Years
It would be an understatement to say that Indian gaming has come
far in the past twenty-five years. Congress first began consideration
of legislation to regulate Indian gaming in 1984. In June of 1984, the
Interior Department's Deputy Assistant Secretary for Indian Affairs
testified that approximately 80 tribal governments were engaged in
gaming with estimated revenues in the tens of millions. At the time,
and for some time after the enactment of IGRA, many tribal gaming
operations began in temporary pop-up buildings or local tribal gyms.
Back in the early 1980s, I was playing basketball in the gym on our
Reservation. I remember that at least once a week the volunteers and
community leaders would chase us kids away to make room for chairs and
tables and food and to prepare for the evening's bingo games. Those
hard working Tribal volunteers and tribal government workers explained
at that time how Bingo revenues paid for the recreational equipment we
used and for the utility bills that kept the lights on at the gym.
Those prescient leaders probably foresaw today as our reservation has a
state of the art fitness center with more than a few gyms for our
Tribal youth to enjoy.
I know many Tribes whose gaming operations began from these humble
means, and Indian gaming has responsibly grown to provide a steady
source of governmental revenue for Indian tribes nationwide. In 2013,
245 tribal governments operated 445 gaming facilities in 28 states,
helping Indian gaming grow to $28.6 billion in direct revenues and $3.5
billion in ancillary revenues \1\ for a total of $32.1 billion in total
revenues. This represents a 2.5 percent increase from 2012. It's been
said before, but it holds true to this day: Indian gaming is the most
successful tool for economic development for many Indian tribes in over
two centuries.
---------------------------------------------------------------------------
\1\ Ancillary revenues include hotels, food and beverage,
entertainment, and other activities related to a tribal government's
gaming operation.
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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.
Indian Gaming and Job Creation
For many tribes, Indian gaming is first and foremost about jobs.
While Indian gaming has provided a significant source of revenue for
some tribal governments, many tribes engaged in Indian gaming continue
to face significant unmet needs in their communities. For these
communities, Indian gaming and its related activities have brought the
opportunity for employment to Indian lands that have been without such
opportunity in recent memory.
I went to college at Haskell University in the early 1980s in part
because I could not find a job, not on my Reservation or even in the
surrounding Green Bay community. As Indian gaming started to evolve I
finished my education and made my way back home. I was elected to the
Tribal Council in 1993, as gaming was really getting underway for our
Tribe. With the success of our Gaming operation we had an employment
base of 3,800 people on our reservation that drew heavily from the
surrounding Green Bay community. We remain one of the top employers in
northeastern Wisconsin. Not only did Indian gaming find work for a lot
of Indian people in my neighborhood, but we also found work for a lot
of non-Indian people in our neighboring communities who came and worked
for the Oneida Tribe.
Nationwide, Indian gaming is a proven job creator. Indian gaming
delivered over 665,000 direct and indirect American jobs in 2013 alone.
Indian gaming has provided many Native Americans with their first
opportunity at work at home on the reservation. Just as importantly,
jobs on the reservation generated by Indian gaming are bringing back
entire families that had moved away. Because of Indian gaming,
reservations are again becoming livable homesteads, as promised in
hundreds of treaties. As I noted above, these American jobs go to both
Indians and non-Indians alike. Throughout the Recession, Indian gaming
continued to create jobs and keep people employed in one of the
toughest times in American history. Without question, we are putting
people to work.
Of course, far too many tribal communities continue to suffer the
devastating impacts 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. Our Native youth are the most at-risk population in the United
States, confronting disparities in education, health, and safety.
Thirty-seven percent of Native youth live in poverty. Native youth
suffer suicide at a rate 2.5 times the national average. Fifty-eight
percent of 3- and 4-year-old Native children do not attend any form of
preschool. The graduation rate for Native high school students is 50
percent.
Indian gaming is part of the answer, but all of us-tribal leaders,
mentors, federal agencies, and Congress--can and must do more to
reverse these horrific statistics and establish more opportunities for
all residents of Indian Country.
Expanding the Reach of Indian Gaming's Benefits
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.
NIGA applauds the Administration's efforts to strengthen
implementation of the Buy Indian Act by targeting qualified tribal
government-owned and individual Indian-owned businesses in the federal
procurement process. These efforts fully comport with the stated goals
of Indian self -determination and the government's treaty and trust
obligations to Indian Country.
Indian gaming operations offer an anchor to reservation economic
development for 225 Native Nations, but tribal governments need help to
fulfill Indian Country's full potential. That help must come from the
Federal Government in the form of infrastructure development, tax
incentives, consistent and strong base funding levels to meet treaty
and trust obligations to help tribal governments provide basic services
to our citizens, and more.
For decades, the primary barrier to tribal economic development has
been the lack of basic infrastructure for water, roads, and sewer
services. In addition, there is a massive digital divide in Indian
Country that not only fails to support new businesses--it scares them
away. Indian gaming helps provide some tribes with funding for massive
infrastructure projects, but many more continue to rely on federal
funds for these significant projects. Federal funding mechanisms for
infrastructure development should be altered to provide direct funding
to tribal governments in the same manner that federal funds flow to
state and local governments for infrastructure development. Self-
determination is not a termination of the government's treaty and trust
obligations. We must continue to work together to rebuild our
communities.
Indian gaming is helping shape our next generation of Native
leaders. Gaming revenues are providing Native youth with educational
opportunities that were not available prior to gaming. Many others see
their friends and relatives become Native entrepreneurs, and see that
it's possible to succeed. We have to continue that trend. We have to
move our economies forward, not just in diversifying beyond gaming to
other tribal government-run entities, but by providing incentives for
our Native entrepreneurs to stay home or come home to build their dream
business. But we can't do it alone.
Good Neighbors: Reinforcing Existing and Forging New Relationships
``It is a long- and well-established principle of Federal-
Indian law as expressed in the United States Constitution,
reflected in Federal statutes, and articulated in decisions of
the Supreme Court, that unless authorized by an act of
Congress, the jurisdiction of State governments and the
application of state laws do not extend to Indian lands. In
modern times, even when Congress has enacted laws to allow a
limited application of State law on Indian lands, the Congress
has required the consent of tribal governments before State
jurisdiction can be extended to tribal lands.'' Sen. Rept. No.
100-446, at 5.
IGRA's requirement that tribal governments enter into compacts and
other agreements with state governments was the primary reason that
many Indian tribes opposed the legislation. When Congress debated IGRA
in the mid-1980s, tribal-state relations were not only contentious--in
many cases it was hostile and combative.
However, over the past twenty-five years under IGRA, many tribal
and state governments have forged strong relationships that have worked
to benefit all Americans. An unexpected outgrowth of IGRA is the
increased partnerships that have been forged between tribal, state and
local governments over the past twenty-five years. Effective tribal-
state partnerships enhance economic development in both of our
communities.
IGRA of course envisioned that tribal and state leaders would come
together in the best interests of their citizens and their governments
to negotiate and reach agreements on Class III gaming compacts. In some
cases, these compact negotiations were exhaustive, time consuming and
costly to both parties. In some case, they have gone smoothly. In a few
unfortunate cases, they have yet to take place. In those instances
where the compacting process has worked, it has greatly benefitted both
tribal and state communities.
The overall bottom line is that Indian gaming, in addition to
revitalizing tribal communities, has established a steady source of
revenue to state governments.
In 2013, Indian gaming generated over $13.6 billion for federal,
state and local government 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.
While IGRA is explicitly limited to gaming-related agreements, \2\
the gaming compact negotiation process has brought many tribal and
state governments to the negotiating table that never sat in the same
room. Putting tribal leaders together with state governors,
legislators, and local government officials has fostered relationships
that have led to a wide array of inter-governmental agreements covering
areas of taxation, cross-deputization, and more. These agreements have
fostered goodwill and greater understanding that serves everyone
involved.
---------------------------------------------------------------------------
\2\ IGRA is clear that the tribal-state compacting process is
limited to activities related to Indian gaming. The Act provides that
state may negotiate for assessments in such amounts as are necessary to
defray the costs of regulating gaming-related activity. However, the
Act is explicit in providing that it does not confer ``upon a State or
any of its political subdivisions authority to impose any tax, fee,
charge, or other assessment upon an Indian tribe. . .to engage in a
Class III activity. No State may refuse to enter into [compact]
negotiations. . .based upon the lack of authority in such State, or its
political subdivisions, to impose such a tax, fee, charge, or other
assessment.''
---------------------------------------------------------------------------
In addition, 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. A June 2011
National Public Radio report, titled ``Casino Revenue Helps Tribes Aid
Local Governments,'' acknowledged that contributions 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 took place in hundreds of local
jurisdictions throughout the United States. Indian gaming revenues
saved thousands of jobs for American health care workers, fire
fighters, police officers, and many other local officials that provide
essential services through the Recession.
Indian gaming has also increased the political participation of
tribal governments and individual Native Americans nationwide. One
positive outgrowth of this increased participation is that many Native
people are now seeking office in state and local government.
The National Caucus of Native American State Legislators (NCNASL),
formed in 1992, now has 76 members in 17 states. My good friend Kevin
Killer served as Treasurer of the Caucus' Executive Board in 2013. The
Caucus works to promote a better understanding of state-tribal issues
among policymakers and the public at large. Members work to encourage a
broad awareness of state-tribal issues and raise the profile of tribal
issues throughout the state legislative arena. The strength of
individual Native American legislators increases the ability of the
state legislatures to more appropriately address tribal issues and
develop public policy in cooperation with tribal governments.
While Indian Country has come a long way in the past twenty-five
years, the relationships built with our neighboring governments will
benefit future generations in ways that we have yet to realize.
Indian Gaming Regulation
Tribal governments realize that none of these benefits would be
possible without a strong regulatory system that protects tribal
revenue and preserves the integrity of our operations. The regulatory
system established under IGRA 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 tribal
governments.
While tribes take on the primary day-to-day role of regulating
Indian gaming operations, IGRA requires coordination and cooperation
with the federal and state governments to make this comprehensive
regulatory system work. 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 arm's length negotiations.
However, 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. Through the
Recession, tribal governments have continued to dedicate tremendous
resources to the regulation of Indian gaming. In 2013, tribes spent
more than $422 million on tribal, state, and federal regulation:
$319 million to fund tribal government gaming regulatory
agencies;
$83 million to reimburse states for state regulatory
activities negotiated and agreed to pursuant to approved
tribal-state Class III gaming compacts; and
$20 million to fully fund the operations and activities of
the National Indian Gaming Commission.
There are over 6,500 tribal, state, and federal regulators working
together to maintain the integrity of Indian gaming. \3\ NIGC is the
Federal civil regulatory agency primarily responsible--along with
tribal and state regulators--for regulation of Indian gaming on Indian
lands. Tribal governments employ approximately 5,900 gaming regulators
and states employ approximately 570 regulators. \4\
---------------------------------------------------------------------------
\3\ NIGC Testimony before the Senate Committee on Indian Affairs,
July 25, 2012.
\4\ Id.
---------------------------------------------------------------------------
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.
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.
Indian Gaming: The Next 25 Years
As I stated at the onset, NIGA is confident that the next twenty-
five years will see Indian gaming maintain steady responsible growth
that will further empower tribal communities. Just as much has changed
in the first twenty-five years under IGRA, Indian Country will continue
to adapt and anticipate future changes and make our own positive change
to advance tribal sovereignty and tribal government self-sufficiency.
Tribal-State Compacting Process
One change that NIGA will continue to work for is to restore
balance to the IGRA compacting process. I've twice noted to the fact
that many prominent tribal leaders opposed IGRA because of the Class
III compacting process. These leaders did not trust that state
governments would respect their obligations to negotiate in good faith,
or more fundamentally--negotiate.
This Committee's Report on IGRA sought to alleviate these concerns:
``[IGRA] grants a tribe the right to sue a State if compact
negotiations are not concluded. This section is the result of
the Committee balancing the interests of States in regulating
such gaming. Under this Act, Indian tribes will be required to
give up any legal right they may now have to engage in Class
III gaming if: (1) they choose to forgo gaming rather than to
opt for a compact that may involve State jurisdiction; or (2)
they opt for a compact and, for whatever reason, a compact is
not successfully negotiated. In contrast, States are not
required to forgo any State governmental rights to engage in or
regulate Class III gaming except whatever they may voluntarily
cede to a tribe under a compact. Thus, given this unequal
balance, the issue before the Committee was how to best
encourage States to deal fairly with tribes as sovereign
governments. The Committee elected, as the least offensive
option, to grant tribes the right to sue a State if a compact
is not negotiated and chose to apply the good faith standard as
the legal barometer for the State's dealing with tribes in
Class III gaming negotiations. . . . The Committee recognizes
that this may include issues of a very general nature and, and
course, trusts that courts will interpret any ambiguities on
these issues in a manner that will be most favorable to tribal
interests consistent with the legal standard used by courts for
over 150 years in deciding cases involving Indian tribes.''
Senate Report 100-446, at 15 (Aug. 3, 1988).
This compromise and the balance that it struck were short-lived.
Eight years after enactment, the United States Supreme Court destroyed
any balance to the IGRA compacting process in its 1996 decision in
Seminole Tribe of Florida v. Florida. The Court held that Congress did
not have the power to waive the states' 11th Amendment sovereign
immunity from suit in federal court to enforce IGRA's good faith
compact negotiation obligation imposed on the states.
Without a method to enforce the state's obligation to negotiate or
renegotiate compacts in good faith, many tribal governments are left
with the no-win proposition of either not moving forward on a project
that could be its only source of non-federal revenue or succumbing to
what could be viewed as a direct violation of the Act. IGRA makes clear
that the compacting process cannot be used by the states to impose any
tax or other fee upon the tribes that is not directly related to its
regulatory expenses under the compact. The Act provides--``No State may
refuse to enter into [compact] negotiations . . . based upon a lack of
authority to impose such a tax, fee, charge, or other assessment.''
NIGA's Member Tribes have consistently held the position against
opening IGRA for amendment. However, if Congress makes the decision to
alter the Act, the first provision in any proposal must either restore
balance to the compacting process or provide teeth to an alternative
administrative compacting process.
Class II Indian Gaming
Another aspect of Indian gaming that has undergone continuous
change over the first twenty-five years and will continue to face
change is the Class II industry. Indian Country is vigilant that any
changes to Class II Indian gaming are positive changes consistent with
Congress' intent that tribal governments take advantage of the
advancing technology to facilitate the play of such games.
As discussed above, the Seminole decision destroyed the careful
balance that IGRA struck in the Class III tribal-state gaming
compacting process. This decision has resulted in a number of states
that condone and regulate other forms of gaming essentially exercising
veto authority over Class III Indian gaming. As a result, some tribes
rely solely on Class II gaming to generate governmental revenue to
provide essential services to meet the many needs of their communities.
IGRA defines Class II Indian gaming as the game of chance commonly
known as bingo (whether or not played in connection with electronic or
technologic aids), played for monetary prizes, with cards bearing
numbers or other designations, in which the card holder covers numbers,
in which the game is won by the first person covering an arrangement,
including (if played in the same location) pull-tabs, lotto, punch
boards, tip jars, instant bingo, and other games similar to bingo.
This Committee's Report to IGRA clarifies the intent the definition
of Class II gaming is not static, and instead must be flexible to
enable tribal governments to employ advanced and latest technology:
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. In this regard, the Committee recognizes that
tribes may wish to join with other tribes to coordinate their
Class II operations and thereby enhance the potential of
increasing revenues. For example, linking participant players
at various reservations whether in the same or different
States, by means of telephone, cable, television or satellite
may be a reasonable approach for tribes to take. Simultaneous
games participation between and among reservations can be made
practical by use of computers and telecommunications technology
as long as the use of such technology does not change the
fundamental characteristics of the bingo or lotto games and as
long as such games are otherwise operated in accordance with
applicable Federal communications law. In other words, such
technology would merely broaden the potential participation
levels . . .
Section (4)(8)(A) also makes clear the Committee's intent that
pull-tabs, punch boards, tip jars, instant bingo and similar
sub-games may be played as integral parts of bingo enterprises
regulated by the act and, as opposed to free standing
enterprises of these sub-games, state regulatory laws are not
applicable to such sub-games, just as they are not applicable
to Indian bingo.
Senate Report 100-446, at 9 (Aug. 3, 1988).
From the early 1990s to the mid-2000s, the NIGC and the Justice
Department worked to the detriment of tribal governments, creating
great uncertainty in the area of Class II Indian gaming. The Commission
and DOJ narrowly defined the scope of Class II games. With little
tribal input, the NIGC developed unworkable proposed 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. These views
stood in direct conflict with the above-stated congressional intent. A
Report commissioned by the NIGC, titled ``The Potential Economic Impact
of the October 2007 Proposed Class II Regulations.'' The Report found
that the NIGC proposal ``would have a significant negative impact on
Indian tribes'', including decreases in gaming and non-gaming revenue,
Indian gaming facility closures, a decrease in jobs, and wide range of
broader negative impacts on Native economies. \5\
---------------------------------------------------------------------------
\5\ Meister, ``The Potential Economic Impact of the October 2007
Proposed Class II Gaming Regulations'' submitted to the NIGC, February
1, 2008. Found at http://www.nigc.gov/Portals/0/NIGC%20Uploads/
lawsregulations/proposedamendments/MeisterReport2FINAL2108.pdf
---------------------------------------------------------------------------
In 2005, the Department of Justice proposed amendments to the
Johnson Act, entitled the ``Gambling Devices Act Amendments of 2005.''
This proposal would have radically restructured the regulatory scheme
that applies to Indian gaming. It would have also reduced the scope of
Class II gaming by either rendering existing Class II games unlawful or
reclassifying them as Class III games.
A number of federal courts addressing the application of the
Johnson Act to Class II gaming have found that the Act simply does not
apply to Class II technologic aids. See United States v. 162 Megamania
Gambling Devices, 231 F.3d 713, 715 (10th Cir. 2000) (``Congress did
not intend the Johnson Act to apply if the game at issue fits within
the definition of a Class II game, and is played with the use of an
electronic aid.''); United States v. 103 Electronic Gambling Devices,
223 F.3d 1091, 1102 (9th Cir. 2000) (rejecting the notion that the
Johnson Act extends to technologic aids to the play of bingo); Diamond
Game Enterprises v. Reno, 230 F.3d 365, 367 (D.C. Cir. 2000) (noting
that Class II aids permitted by IGRA do not run afoul of the Johnson
Act); United States v. Burns, 725 F.Supp. 116, 124 (N.D.N.Y. 1989)
(indicating that IGRA makes the Johnson Act inapplicable to Class II
gaming and therefore tribes may use ``gambling devices'' in the context
of bingo).
The Ninth Circuit in United States v. 103 Electronic Gambling
Devices rejected the Justice Department's antiquated reading of the
scope of bingo under IGRA:
``The Government's efforts to capture more completely the
Platonic `essence' of traditional bingo are not helpful.
Whatever a nostalgic inquiry into the vital characteristics of
the game as it was played in our childhoods or home towns might
discover, IGRA's three explicit criteria, we hold, constitute
the sole and legal requirements for a game to count as Class II
bingo. . . . All told . . . the definition of bingo is broader
than the government would have us read it. We decline the
invitation to impose restrictions on its meaning besides those
Congress explicitly set forth in the statute. Class II bingo
under IGRA is not limited to the game we played as children.''
In Seneca-Cayuga Tribe of Oklahoma v. Nat'l Indian Gaming
Commission, 327 F.3d. 1019, 1032 (10th Cir. 2003), the Tenth Circuit
similarly rejected the NIGC's narrow reading of Class II games. That
court held that:
``Absent clear evidence to the contrary, we will not ascribe
to Congress the intent both to carefully craft through IGRA
this protection afforded to users of Class II technologic aids
and to simultaneously eviscerate those protections by exposing
users of Class II technologic aids to Johnson Act liability for
the very conduct authorized by IGRA. A better reading of the
statutory scheme is that through IGRA, Congress specifically
and affirmatively authorized the use of Class II technologic
aids, subject to compliance with the other IGRA provisions that
govern Class II gaming. Moreover, by shielding Indian country
users of Class II technologic aids from Johnson Act liability,
this construction gives meaning to both statutes, rather than
neutering one of legal import.''
The federal courts and public sentiment sufficiently put to rest
the NIGC's narrow proposed rule and the Justice Department's dangerous
legislative proposal to narrowly interpret Class II Indian gaming. The
NIGC proposed rules were withdrawn and the DOJ proposal did not gain
traction in Congress.
In recent years, the NIGC and Tribal regulators have worked
together to strengthen all regulatory aspects of Indian Gaming. Indian
gaming is one of the most regulated industries in America and we are
proud to stand on our record of strong regulation, adaptive
technologies, and revolutionary gaming innovations. We look forward to
further strengthening Class II Indian gaming, changing with advances in
technology as this Committee intended over the next twenty-five years
under IGRA.
Internet Gambling in the United States
Any discussion of the future of Indian gaming, and for that matter,
the future of the gaming industry in the United States, must
acknowledge the Internet as part of that future. The debate in Congress
regarding Internet gaming has been ongoing for more than 15 years.
NIGA's position on the issue has been consistent from the beginning. I
first testified on the issue before the House Financial Services
Committee in July of 2001. Then I stated that, ``NIGA is not seeking
legislation that would expand, promote, or prohibit Internet gaming.
However, we do ask that any legislation that goes forward, preserves
the rights of Tribal governments under existing law, and offers them
the same opportunity to participate in Internet gaming as any other
entity.'' Our position has not changed.
Over the ensuring years, NIGA's Member Tribes have developed
principles to guide legislation that would legalize Internet gaming in
the United States. These principles were developed over dozens of
meetings with NIGA's Internet Gaming Subcommittee, the NIGA-National
Congress of American Indians' (NCAI) Gaming Task Force, and with input
from many of the regional tribal gaming associations. In sum, they are
directives from our tribal leadership, which is guided by the mission
to protect tribal sovereignty and to protect rights of all tribes to
shape their economic futures. Our principles are grounded in that
mission. If Congress acts to legalize Internet gaming in the United
States, such legislation must:
acknowledge Indian tribes as sovereign governments with a
right to operate, regulate, tax and license Internet gaming,
and those rights must not be subordinated to any non-federal
authority;
make legal Internet gaming available to all federally
recognized Indian tribes, and tribal Internet gaming must be
available to customers in any location where Internet gaming is
not criminally prohibited;
acknowledge that tribal Internet gaming revenues are not
subject to taxation, as tribal government revenues are
dedicated to the benefit of our communities and thus are 100
percent taxed;
existing tribal government rights under tribal-state
compacts and IGRA;
not open IGRA for amendments in Congress;
provide positive economic benefits to Indian Country to
offset potential economic harm caused by legalization; and
provide tribal governments with the right to opt in to a
federal regulatory scheme, and not subject tribal eligibility
to a state government's decision to opt-out.
We simply ask that Congress acknowledge the Constitution's
recognition of Indian tribes as separate governments. In addition, we
ask that, like IGRA, federal Internet gaming legislation acknowledge
that Indian tribes still possess those aspects of sovereignty not
withdrawn by treaty or statute, or by implication ``as a necessary
result of their status.'' These fundamental principles of federal
Indian law must be maintained.
Land Into Trust For Gaming Purposes
The issue of Indian gaming on lands placed into trust for gaming
purposes has been a point of debate since enactment. From 2005 to 2006
the 109th Congress examined several proposals to amend IGRA's Section
20 process. IGRA's Section 20 establishes the general rule that Indian
gaming shall be conducted on Indian lands held in trust prior to
enactment of the Act on October 17, 1988. However, the same provision
balances this general prohibition with several exceptions to account
for past wrongs imposed by federal policies that decimated the
homelands of many Indian tribes.
Several bills were introduced in the 109th Congress to amend IGRA
to address concerns with off-reservation gaming. These proposals would
have set a dangerous precedent by subjecting all tribal governments to
the political whims of state and local governments.
NIGA facilitated dozens of meetings with our Member Tribes and with
the NIGA-NCAI Indian Gaming Task Force to debate the issue internally.
The elected tribal leadership was actively engaged in this important
discussion. The result of these negotiations was NIGA Resolutions
adopted in 2006 and 2007 that opposed the proposals to amend IGRA and
undermine tribal sovereignty. One of these Resolutions calls upon all
tribal governments to respect the homelands and aboriginal territory of
our brother and sister tribes. In addition, it acknowledges and urges
the United States to uphold its legal and moral fiduciary trust
obligations to ALL federally recognized Indian tribes, including tribes
that could be impacted by off reservation gaming. NCAI adopted similar
resolutions.
In recent Congress', including the current 113th Congress, the
issue of land into trust for gaming purposes is again being discussed.
NIGA's Board met in October of 2013 and reaffirmed our past resolutions
1-PHX-GM-3-28-07, \6\ which reaffirmed our consensus 2006 Albuquerque
Resolution 2-ABQ-4-4-06 on this important issue. The Title of the 2006
Resolution was ``Supporting The Secretary Of Interior's Promulgation Of
Regulations Concerning Gaming On After-Acquired Lands and opposing the
provisions of S. 2078 and H.R. 4893 that would amend Section 20 of the
Indian Gaming Regulatory Act (IGRA). While Interior has since
promulgated regulations to implement IGRA's Section 20 enforcement of
the regulation has been at times unclear and other times inconsistent.
---------------------------------------------------------------------------
\6\ The resolved clause in the Phoenix Resolution states ``NOW
THEREFORE BE IT RESOLVED, that NIGA reaffirms the position taken in
Resolution 2 ABQ 4-4-06, and will continue to work with the Department
of the Interior on its efforts to promulgate regulations to implement
Section 20 of IGRA and to ensure that full consultation with Indian
Tribes nationwide is accomplished prior to promulgation of a final
rule.''
The resolved clauses of the Albuquerque resolution state ``NOW
THEREFORE BE IT RESOLVED, NIGA strongly opposes amending Section 20 of
the Indian Gaming Regulatory Act, as proposed in S. 2078 and H.R. 4893;
BE IT FURTHER RESOLVED, NIGA opposes legislation that would diminish
the sovereign rights of Tribal Governments and opposes any effort to
subordinate Tribal Governments to local governments;
BE IT FURTHER RESOLVED, NIGA does hereby call upon Tribal
Governments proposing off-reservation gaming locations to promote
positive relationships with State and local governments and minimize
impacts on the aboriginal rights of nearby Tribes;
BE IT FURTHER RESOLVED, NIGA does hereby call upon Tribal
Governments proposing off-reservation gaming locations under the
Section 20 two-part Determination Process to demonstrate both: 1)
aboriginal or historical connection; and 2) cultural ties, based upon
actual inhabitance, to the proposed site, and to promote positive
relationships with State and local governments and minimize impacts on
the aboriginal rights of nearby Tribes; BE IT FURTHER RESOLVED, that
NIGA calls upon state and Tribal Governments to work together to ensure
that local government concerns are addressed through the existing
Tribal-State Compact process and the Section 20 two-part determination
process;
BE IT FURTHER RESOLVED, that NIGA does hereby call upon Congress to
adhere to the significant process set forth in IGRA's Section 20 with
due deliberation process of Congress and to refrain from appropriations
riders that bypass Section 20 or otherwise amend IGRA; BE IT FINALLY
RESOLVED, that NIGA supports the promulgation of regulations by the
Department of Interior, working directly with Tribal Governments in
accordance with Executive Order 13175, governing the implementation of
the Section 20 two-part determination process, respecting the interests
and rights of Tribal Governments, including nearby Indian Tribes, and
state and local governments.
---------------------------------------------------------------------------
The NIGA Tribal Membership's position on land into trust for gaming
purposes acknowledges that federal legislation must uphold the existing
policy of strengthening Indian self-determination and tribal
governments. At the same time, our position acknowledges and urges
respect for the diversity of our Member Tribes and the unique issues
and needs that each sovereign tribe faces at home.
Rebuilding Our Tribal Land Bases
A separate issue that has wrongly been linked to so-called ``off-
reservation gaming'' is the important issue of restoring tribal
homelands. For five years, NIGA and all of Indian Country has been
dedicated to enacting legislative to reserve the Supreme Court's attack
in the 2009 Carcieri v. Salazar decision. The decision strikes at the
core of tribal sovereignty: the ability of Tribes to restore our
homelands. The results of the Carcieri decision across Indian Country
are widespread, killing jobs and deterring investment and economic
development on Indian lands.
The decision has led to dozens of related federal court challenges,
including Patchak and more recently the Big Lagoon Rancheria v.
California decision.
Three years after issuing the Carcieri decision, the U.S. Supreme
Court in June of 2012 compounded its attack on tribal governments
issuing the decision in Match-E-Be-Nash-She-Wish Band of Potawatomi v.
Patchak. The Patchak Court held that any individual has standing under
the Administrative Procedures Act (APA) to bring a federal lawsuit to
challenge the Interior Department's tribal land to trust
determinations. The Court reasoned that Patchak's claim falls within
the ``zone-of-interests'' that the IRA regulates. The zone-of-interests
standard is subject to a low threshold, and merely requires a
recognizable relation to the acquisition or use of Indian lands. As a
result, the Patchak case opens up to legal challenges ALL tribal land
to trust decisions made within the past six years, which is the statute
of limitations under the APA.
On January 21, 2014, the Ninth Circuit, in Big Lagoon, further
raised the urgency for a legislative fix to the land into trust issue.
The court, in this highly questionable decision, refused to respect the
status of Indian lands placed into trust 20 years ago. It conducted an
ad hoc determination of whether the Tribe was under federal
jurisdiction--establishing a new and higher bar.
While Carcieri initially divided Indian Country into two classes of
Tribes, the Patchak and Big Lagoon decisions hold potential to threaten
the existing trust lands of ALL tribal governments.
For five years, Indian Country has worked with Congress to enact a
legislative fix that would take this issue out of the hands of the
federal courts and restore certainty to the sovereign status of Indian
lands. However, we've encountered obstacles from folks who view
Carcieri as an Indian gaming issue. These distortions ignore the fact
that the Carcieri case involved a housing development for tribal
elders, not a gaming project. Indian gaming remains subject to IGRA,
and off-reservation gaming is subject to that act and the regulations
put in place by Interior. None of this involves the land-into-trust
process under the Indian Reorganization Act. Instead, Carcieri is about
jobs, cultural preservation and securing a land base to improve Indian
housing, education, health care and other basic tribal government
services for our citizens.
Conclusion
As the Cabazon Court acknowledged, Indian gaming is Indian self-
determination. Native Nations, as separate governments acknowledged in
the Constitution, began using contemporary Indian gaming to generate
revenue to provide for the basic needs of tribal communities. Congress
enacted IGRA in part to foster and strengthen these actions. While IGRA
has its shortfalls, overall the Act's first twenty-five years have
delivered on its stated goals of strengthening tribal governments and
empowering Indian communities. For our part, tribal governments
nationwide have committed significant resources to protecting these
gains by maintaining a strong, seamless, and comprehensive system of
regulation. Much of the credit for this success goes to the tribal
leaders who make the decision to spend more than $422 million each year
to regulate their operations, and to the thousands of men and women who
are day-to-day front line regulators of Indian gaming operations.
Indian gaming is one tool that is helping tribal governments
overcome social and economic ills resulting from decades of injustice.
However, Indian gaming can't do it alone and Indian Country can't do it
alone.
Over the next twenty-five years, Indian gaming will face changes
and constant challenges. To anticipate those changes and meet those
challenges, Indian Country will rely on a strong partnership with this
Committee, Congress and the Administration to ensure that the goals of
IGRA continue to meet its stated intent of strengthening tribal
governments and a means of achieving tribal economic self-sufficiency.
Working together, we will make a brighter future for Indian country.
Our children should expect nothing less than our best efforts to
provide safe, healthy tribal homelands.
Additional testimony
The National Indian Gaming Association offers this supplemental
statement for the record of the Senate Indian Affairs Committee
Oversight Hearing on July 23rd, 2014, ``Indian Gaming: The Next 25
Years.''
As an initial matter and on behalf of the 184 member Tribes of the
National Indian Gaming Association, I express my full support of the
testimony provided by the The Honorable A.T. Stafne, Chairman,
Assiniboine & Sioux Tribes of the Fort Peck Indian Reservation. As an
organization, our mission is to defend Tribal Sovereignty and promote
Tribal economic self-sufficiency. We join Chairman Stafne in his call
for Congress and Federal Agencies to ensure that Indian Gaming serves
and fulfills the purposes of IGRA for all of Indian Country. Indian
Gaming is a proven, meaningful source of revenue that strengthens
tribal economies and aids in our Tribal Nations' pursuit of self-
sufficiency and strong, effective tribal government. Chairman Stafne is
correct that the Supreme Court's Seminole decision and the Ninth
Circuit's Rumsey decision have upended these promises for many tribes,
particularly in states that refuse to negotiate gaming compacts. Since
I have been Chairman, one of NIGA's priorities has been to ensure that
all tribes, if they choose, can use Indian gaming as a tool to
strengthen their communities.
We believe that Congress intended for Tribes to have the ability to
enforce the obligation of state governments to negotiate gaming
compacts in good faith. With this option gone due to the Seminole
decision, the Interior Department must exercise its authority under
IGRA and invoke Secretarial procedures where necessary to ensure that
all Tribes can pursue their economic destiny. Further, we agree with
Chairman Stafne that Congress did not intend for IGRA to limit a
tribes' choice of games to offer on its reservation. The Rumsey
decision continues to prevent many tribes from obtaining economic
independence through gaming as a result of this limitation. Congress
and the Department of Interior, as well as the Department of Justice,
must make it clear in their policy statements and regulations that IGRA
is not a limiting statute, but rather, a forward looking law that
balances the public policy interests of states in regulating gaming
within their borders, with the sovereign authority of Tribes within
their reservation boundaries. These limitations infringe on the
sovereign authority of tribes such as those in Montana and prevent them
from reaching their full economic potential.
The Strength and Resiliency of Indian Gaming
In his testimony before the Senate Committee on Indian Affairs,
Secretary Kevin Washburn remarked that Indian Gaming revenues have
``plateaued'' and ``flat-lined,'' especially as compared to the growing
commercial gaming industry. The National Indian Gaming Association
would like to set the record straight in that regard. All the current
economic indicators demonstrate that Indian Gaming is strong, tribal
governments have maintained their market share during the ``Great
Recession,'' and Indian Gaming will continue to grow as the Nation's
economy improves. In 2008, the United States suffered its worst
recession since 1929. The National Bureau of Economic Research (NBER)
dates the beginning of the recession as December 2007. According to the
Department of Labor, roughly 8.7 million jobs were shed from February
2008 to February 2010, and GDP contracted by 5.1 percent. Unemployment
rose from 4.7 percent in November 2007 to peak at 10 percent in October
of 2009.
In 2007 Commercial Gaming Revenue was at an all-time high of $37.52
billion. Indian Gaming revenue at that time was $26.1 Billion. Over the
next two years during the worst of the recession, Commercial gaming
dropped to $34.28 while Indian Gaming rose to $26.5 billion. Commercial
gaming has not yet regained its pre-recession revenue high of $37.52
billion and it currently holds slightly below at $37.34 billion--
despite the fact that an additional five states, Maryland, West
Virginia, Ohio, Maine and Kansas, have legalized or expanded to
commercial gaming since 2007.
Meanwhile, Indian gaming has shown remarkably consistent growth
from 2009's Gross Gaming Revenue of $26.5 billion to July 2014's just
released revenue numbers of $28.0 billion. Thus, it is inexact for
Secretary Washburn to compare commercial gaming's recent increase with
Indian Gaming's revenue results these past five years. Further, it is
wrong to conclude that Indian Gaming revenues have ``plateaued.''
It is undisputed that Indian gaming was a decisive factor in
helping many regions survive the Recession. Indian gaming continued to
create jobs and keep people employed in one of the toughest times in
American history. In hundreds of local jurisdictions throughout the
United States, Indian gaming revenues and charitable donations from
tribal governments saved 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.
Indian gaming's strength is the diversity of offerings at our
operations: world class gaming, A-list entertainment, five star
restaurants, and a destination/cultural experience that is unmatched
worldwide. Despite decades of federal policies that sought to force the
assimilation and decimation of American Indian cultures, our people,
our language, our food and our ways of life have persevered. As Senator
Heitkamp noted, many tribal governments use our gaming operations as
both a gathering place for the community and a place to teach visitors
about our history and culture. Further, many states highlight our
Tribal gaming operations during their summer tourism promotions.
In addition, Indian gaming is Indian Self-Determination. Indian
gaming revenues are 100 percent devoted to helping rebuild tribal
communities. Our revenue goes to fund health care, education, housing,
transportation, elder care, language revitalization, job training, and
much more.
We acknowledge that our industry will face challenges in the coming
years. We have consistently faced and defeated similar challenges
nearly every year of the first 25 years under IGRA. However, our
industry remains strong, and our strength is helping fuel this Nation's
economic recovery. From the first act of self-determination and
sovereignty that opened the first Indian bingo hall, all we have ever
asked is to be treated fairly.
While I acknowledge that one purpose of the Assistant Secretary's
testimony is to urge tribal government economic diversification, I
submit that Indian Country has worked--within available means--to
diversify our economies, support tribal entrepreneurship, and encourage
Native citizens to stay and work on our Indian homelands. However, the
facts and data do not add up to support his conclusion that Indian
gaming is done growing.
Moving forward through the next 25 years under IGRA, we will need a
strong partnership with the Committee, Congress, and the Administration
to ensure a level playing field that will help create opportunities for
Native communities throughout Indian Country. I urge the Assistant
Secretary to work with Congress and tribal leaders nationwide to remove
the many federal barriers to economic development and diversification
on Indian lands, and equally important--to ensure that all Indian
tribes are afforded the sovereign choice to conduct gaming on their
lands as Congress originally intended under IGRA.
Chairman Tester and Members of the Committee I again thank you for
this opportunity to testify today. I am prepared to answer any
questions you have.
The Chairman. Thank you for your testimony, Ernie. Your
grandmother would probably be a pretty strong supporter of my
language immersion bill.
Mr. Stevens. Yes, sir.
The Chairman. I am going to start with you, Chairman
Stafne. Some tribes that haven't had success negotiating
compacts with States have moved forward with Class 2 gaming.
Has Fort Peck examined whether a Class 2 gaming facility would
be feasible for your reservation?
Mr. Stafne. Chairman Tester, yes, we have. We have done a
study. With the population we have, we do not track that many
people around there. I might add, Montana is surrounded by four
States, and every one of those States has Class 3 gaming: North
Dakota, South Dakota, Wyoming and Idaho. And to the north,
Canada also has gambling. So people are not coming to Montana
to gamble. There just are not enough people in Montana to visit
us. If they are going to visit to go gambling, they are going
to where they can win big bucks.
The Chairman. My dad used to describe Highway 2 as a direct
route between Seattle and Chicago, and Highway 2 goes right
through your neck of the woods. Unfortunately, from a people
standpoint, or maybe not unfortunately, the interstate was
routed through the southern part of the State. Have you been
able to do, and I don't know that you have, I am just curious,
have you been able to do any studies to see if there is the
traffic going through Highway 2 or is it your belief that a
Class 3 facility would actually attract people to come there
that normally would not?
Mr. Stafne. That is the tribal executive board, the
governing body believes, they have sponsored studies, not one,
but more than one study, and they have all come up with the
same results. Other tribes have come, and offered to build
casinos. And they have done studies. And not one has built a
casino yet.
The Chairman. Okay. Chief Hicks, gaming operations have
made a huge impact on your community. You spent most of your
testimony talking about that. Can you talk about the unmet
needs that still exist, where you are heading, to address some
of the issues and potentially using gaming and tourism money
for those?
Mr. Hicks. I would say, of course, living in the mountains
of western North Carolina, our demographics are quite tough.
One of the things that we have worked hard on from an
environmental perspective, also to make sure that we have
allowed for the growth is, we are in the process of upgrading
our wastewater treatment facility. Of course, that makes a
difference in a lot of ways. Historically we have been single
home septic tanks. So now we are trying to tie in all these
fingers around our communities into this wastewater system. We
just recently upgraded our water treatment facility.
So as we look at the opportunities in Cherokee, both
service and economic, we know this has to be a priority.
I think the other thing is just to make sure that we
continue to find the necessary technology to make sure that we
stay ahead of the game related to diabetes and other health
traumas that we have in Cherokee. We put a lot of effort into
making sure that we have diabetes clinics, wound care clinics
in place to address the needs of our people.
The Chairman. Thank you. I would just say thank you for the
work you have done. I think a lot of this really brings up
another issue, and that is the general exclusion issue from the
IRS we need to deal with. Thank you.
Ernie, Secretary Washburn talked about how tribal gaming
revenues have plateaued. I understand for the first time
commercial gaming growth has exceeded tribal gaming. I don't
know if that is true or not. But we have heard about casinos in
Atlantic City closing. Do you think we have reached the point
of market saturation, that we could see actually a decline over
the next 25 years? What is your perspective? What does your
crystal ball say?
Mr. Stevens. I don't think I agree with the Assistant
Secretary. I do that carefully, because he is a good friend.
But I think we have to be prepared to deal with those kinds of
challenges, so to that extent I think advocacy related to that
may be accurate. But in our world, in Indian Country, with the
great recession that has come about, it is like, welcome to our
world. Indian Country has always had to deal with these kinds
of challenges and we continue to do so.
The Chairman. So in your testimony you talked about gaming
being a job creator, creating 650,000 direct and indirect jobs.
We just heard Chief Hicks talk about building water systems and
sewer systems. Are those kinds of jobs in the 650,000? Give me
an idea what you are talking about.
Mr. Stevens. Yes, we definitely expand those numbers into
indirect employment.
The Chairman. Do you have any idea how many of those jobs
are filled by tribal folks and how many by non?
Mr. Stevens. We batted that around a little bit today and
we really don't have the accurate number. I think we are close
to half. It is about 50-50. But I don't have that accurate
number with me today.
The Chairman. Senator Barrasso.
Senator Barrasso. Thank you, Mr. Chairman.
Chief Hicks, I want to start with you. We talked about the
ACE Initiative, Assistance, Compliance, Enforcement, technical
assistance to tribes, tribal gaming regulators. We heard that
there are 341 training events that occurred over the last two
years, almost 5,000 participants attending and trained. Can you
explain how this initiative has reduced criminal activity and
improved the integrity of Indian gaming?
Mr. Hicks. I will tell you that we have had a gaming
commission in place since our inception. One of the things we
have done is try and stay ahead of the curve. We have over 60
sworn officers in Cherokee. Of course, that is an additional
expense that we felt we had to incur. So as you look at the
entire structure of the regulatory bodies, we felt that of
course the more training we could get the better off we would
be.
When you have cash systems, people are going to test the
systems. I guess as a regulatory body, the best thing we can do
is make sure we have controls in place to catch as soon as
possible if these type of things happen. But again, we try and
stay ahead of the curve.
Senator Barrasso. It sounds like you are fully engaged. Do
you think this is a program that is useful across the board?
Mr. Hicks. I think without question. More training, whether
it is officers, whether it is the regulatory body itself, and
the commission, any time we can provide additional training it
is going to benefit the operation of the tribe.
Senator Barrasso. Chairman Stafne, any additional thoughts
on that?
Mr. Stafne. Well, we certainly would like to have that
problem, where we had, or I wouldn't consider it a problem, a
benefit really.
Senator Barrasso. You see value in the process?
Mr. Stafne. Yes, absolutely.
Senator Barrasso. Good. Chairman Stevens, any additional
thoughts on the whole ACE Initiative?
Mr. Stevens. Regulation?
Senator Barrasso. The Initiative itself, the ACE
Initiative, in terms of it is actually helping to reduce
criminal activity. Obviously in North Carolina they are staying
ahead of the curve. What are you seeing kind of across the
Country?
Mr. Stevens. Yes, absolutely. We even would go further to
discuss the tribal gaming regulators training, that NIGA does
on a regular basis throughout the Country. In addition to that,
we have auditor training in different types of elements to help
prepare our tribes for this.
We also have a national organization. I believe the last
time I testified I brought the chairman of that, Mr. Rocky
Papsadora, with me. National Tribal Gaming Protection Network,
they kind of come together national and regional folk working
together. We really feel like we continue to monitor.
Now, we are not perfect. You read on occasion that we have
different types of operations that exist in gaming. But that is
what these national networks are about, to be able to identify.
Most of those people have been put in prison as far as I know.
Certainly if you bend the rules or anything happens in Indian
gaming, you either lose your license or lose your job or both.
Senator Barrasso. I agree with Chief Hicks, people will try
to test systems, will try to find ways around them. Anything we
can do through additional training, additional information and
working with more participants and more training sessions I
think is probably going to be very helpful. Thank you.
Mr. Stevens. Yes, sir, Mr. Vice Chairman, and that is kind
of our national network, Tribal Gaming Protection Network, that
is what we are talking about, constantly keeping each other
abreast on a national and regional level, so that we are to be
on top of this. And again, it is the regulators and folk
talking and networking.
Senator Barrasso. Thank you. Thank you, Mr. Chairman.
The Chairman. Thank you, Vice Chair Barrasso. I want to
thank this panel for their testimony. I think that both the
panels before and the one coming up too, it is an opportunity
to look at the Indian Gaming Act over the last 25 years and see
where we have been and try to predict where we are going. I
want to say to the leaders, thank you for your proactive
leadership and your hard work on your respective reservations.
To Ernie, thank you very much for your leadership on the
regulatory end. So we thank you very, very much.
With that, we are going to get our final panel up today. I
thank everybody for hanging in there. This has been a long
hearing, but it is an important issue. We are going to deal
with an issue now that is reasonably State-specific, although
it could have impacts on other States.
Our final panel today, I want to welcome President Diane
Enos of the Salt River Reservation; Mayor Jerry Weiers of the
city of Glendale, and Chairman Ned Norris of the Tohono O'odham
Nation. I want to thank all of you for being here, and just say
that we touched on this when the two Congressmen were here.
This is a simple issue in some ways but it is a much more
complicated issue in others. So we just want to say thank you.
We look forward to your testimony.
As with the previous panels, and I would ask you this, to
try to hang with us. I have been pretty flexible with the time
and I will probably stay flexible with you. But the closer you
can keep it to five minutes, the better off we are going to be.
Your full written testimony is going to be a part of the
record. And there will be questions after this panel and there
will be also written questions that we will be able to present
for the record, as the record will be open for another couple
of weeks after we adjourn today.
So once again, Diane, thank you for being here. Mayor
Weiers, thank you for being here. Ned, thank you for being
here. And we will start with President Enos with her testimony.
You may begin.
STATEMENT OF HON. DIANE ENOS, PRESIDENT, SALT RIVER PIMA-
MARICOPA INDIAN COMMUNITY
Ms. Enos. Mr. Chairman and members of the Committee, thank
you for the opportunity to testify.
For 20 years, Arizona Indian gaming has been stable and
successful. But today we face a crisis: off-reservation gaming.
The Tohono O'odham Nation wants a casino 150 miles from its
government center on 54 acres that is within my tribe's
original 1879 reservation. I am sorry to have to say this, this
is a problem that only Congress can fix. We cannot fix it
without your help. Congressional action on H.R. 1410 is the
only remaining recourse for the tribes and voters of Arizona.
So I am here today to ask that you swiftly enact this
legislation. The bill is a measured and appropriate solution to
a horrendous predicament. Beginning in 1999, 17 Arizona tribes
came together to begin renegotiating our expiring gaming
compacts. I was on council at the time. We had a real
challenge. The State insisted on a single compact for all
tribes that reduced the allowable number of casinos and
restricted casinos from being opened in urban areas.
It was tough negotiating. Tribal leaders met more than 85
times. We met with the State more than 35 times. Our
relationships solidified as meetings lasted late into the
night, some lasting several days.
Once we agreed on the compact, Arizona voters had to
approve it. Tribes, including TO, contributed more than $23
million to the campaign. We worked tirelessly with the
governor's office, speaking on television and radio, giving
interviews, buying ads, distributing voter pamphlets.
The major thrust of the campaign was to promise voters
there would be limited gaming or ``no additional casinos in the
Phoenix metro area.'' We repeated this promise over and over
for two reasons. Number one, we believed in it. The governor
had demanded the four Phoenix metro tribes, Salt River, Ak
Chin, Gila River and Fort McDowell each give up their right to
operate an additional casino under the compacts then in effect.
So we gave up those rights to ensure that all tribes in
Arizona could continue to benefit from the gaming exclusivity.
That was the goal of our fight.
The second reason was because through polling, tribes knew
this promise would help convince voters to approve the compact,
which they barely did on election day, 50.9 percent. The day
after the vote, Tohono's chairman was quoted in the Tucson
paper as saying, ``To us this is a major victory. We stayed
together, we stay united.'' We now know that this was not true.
Our partners in this effort, the same people we fought
alongside day in and day out, had been working behind our backs
and behind the backs of Arizona voters the entire time.
Documents recently disclosed by Tohono reveal that they
were acting secretly to buy casino land in metro Phoenix as
early as March 2001. A full year and a half before voters
approved the compacts. And at the very same time, the tribes
and the State were promising voters that there would be no
additional casinos in the Phoenix metro area.
They made a calculated choice to keep their plans secret
for years from other tribes and to violate our promise to
voters. They looked us in the face and lied. They broke faith
with us and the voters of Arizona. Now even our existing
establishments are in jeopardy as corporate gaming interests
point to this deception to justify opening up Arizona to
commercial gaming, like Montana.
This deception will also impact the State-tribal compact
renewal in 2027. That is why, Mr. Chairman, many Arizona
tribes, cities, the State and city of Glendale, are fighting so
hard to oppose the Glendale casino. We want to ensure that our
word is good and that tribes in Arizona and across the Country
can continue to benefit from the economic engine of IGRA.
There remains poverty and great need for services in all
Arizona tribes. The loss of gaming revenue would be
devastating.
With me today are over 25 elected officials from tribes and
Phoenix metro cities. We reluctantly come to Congress to fix a
problem caused by Tohono's decision to violate our promise to
voters. Our attempts to persuade the tribe have failed and the
courts are powerless to remedy Tohono's fraud and
misrepresentation, because they chose to raise sovereign
immunity. The Keep the Promise Act simply conforms tribal
behavior to tribal promises. It doesn't change Indian gaming.
It doesn't create precedent. And it doesn't amend the Gila Bend
Act. It protects Arizona Indian gaming.
If you believe that government integrity matters, move the
bill out of this Committee. Thank you. I am happy to take
questions.
[The prepared statement of Ms. Enos follows:]
Prepared Statement of Hon. Diane Enos, President, Salt River Pima-
Maricopa Indian Community
Executive Summary
The Salt River Pima-Maricopa Indian Community (``Community'')
thanks the Committee for scheduling this hearing on the future of
Indian gaming. For over twenty years Arizona Indian gaming has been
stable, predictable, and successful. However, sadly, the future of
Indian gaming in Arizona does not look good. It is threatened by the
actions of one tribe. H.R. 1410, the ``Keep the Promise Act,'' which is
pending before the Committee, will help protect Indian gaming in
Arizona. We respectfully urge the Committee to pass it.
Briefly, except for horse racing and the State's lottery, Tribes in
Arizona have been the exclusive operators of class III gaming since the
first compacts were signed in 1993. But our tribal gaming exclusivity
has always been at risk. During the past twenty years, non-Indian
companies in Arizona, and many from out-of-state, have consistently
tried to open up the State to commercial gaming. Our Tribes, often in
collaboration with others, have fought against these attempts, at
enormous financial cost and expenditure of other resources. But now
more than ever before, our tribal gaming exclusivity is jeopardized
from within, because one Tribe has requested that the Department of the
Interior take land into trust for the purpose of opening a casino off-
reservation in the Phoenix-metro area.
The Tohono O'odham Nation (``Tohono O'odham'' or ``Tohono''), who
enjoys a 2.8 million acre reservation bordering Mexico and Tucson, has
sought to use a 1986 federal law to mandate that the Department of the
Interior add 54 acres in the Phoenix-metro area to its reservation so
that it can operate a casino more than 150 miles from its government
headquarters. This 54 acre parcel is outside Tohono's aboriginal
territory, and it is within my Tribe's original 1879 reservation
boundaries. Today, the parcel has a 2,000-student public high school
across the street, and over 30,000 people live within two miles.
The Keep the Promise Act is a bipartisan bill that was introduced
in the House of Representatives on April 9, 2013. The bill was
sponsored by Representative Trent Franks (R-AZ) and is also cosponsored
by Representatives Ann Kirkpatrick (D-AZ), David Schweikert (R-AZ),
Paul Gosar (R-AZ), Matt Salmon (R-AZ), Dan Kildee (D-MI), Ed Pastor (D-
AZ), Jared Huffman (D-CA), and John Conyers, Jr. (D-MI). H.R. 1410
would ensure that the promise made by Arizona tribes--that there would
be no additional casinos in the Phoenix metropolitan area for the
duration of the existing gaming compacts--is kept. The bill prohibits
all Class II and Class III gaming within that specifically defined area
on lands taken into trust after April 9, 2013. The gaming prohibition
would sunset on January 1, 2027, when existing compacts will begin to
expire and when all Arizona tribes will need to negotiate new compacts
with the State. It would be proper at that point for Tohono O'odham or
any other Arizona tribe to negotiate for the right to build additional
casinos in the Phoenix metropolitan area. On September 17, 2013, H.R.
1410 was passed by the House of Representatives by a voice vote. The
bill has been pending in the Senate Committee on Indian Affairs since
that time without any action.
We understand the hesitation among some Senators to advance H.R.
1410 because of the perception that it pertains to a local intertribal
dispute in Arizona, but this is not true. In addition to the twelve
tribes that have spoken against Tohono O'odham's proposal, the majority
of Phoenix area municipalities, the Chairman of the Maricopa County
Board of Supervisors, and the State of Arizona, itself, are also
opposed to the project. Although the reaction of some Senators to the
bill has been to sit back and allow H.R. 1410 to languish in Committee,
inaction will hurt numerous tribes in Arizona while only benefitting
one, the Tohono O'odham. Failure to act is picking a side and it is
picking the side that knowingly took actions to conceal the truth and
hurt other tribes.
The Department of the Interior concluded on July 3, 2014 that the
1986 Gila Bend Reservation Lands Replacement Act required it to take
the parcel into trust for Tohono. And the courts have held that
sovereign immunity bars recourse even though evidence supports claims
that Tohono induced the State of Arizona and Arizona tribes to enter
into a compact based on false promises. This leaves Congress as the
only venue for justice. The bottom line is that Congress' failure to
act will result in substantial injustice to Arizona tribes and local
communities who will suddenly have to worry about whether Tohono will
be opening a casino in their neighborhood. Arizona is a microcosm for
the broader efforts of some Tribes to twist laws to pursue off-
reservation casinos without regard to other tribes, local communities,
and existing tribal-state compacts and agreements. The limits in the
Indian Gaming Regulatory Act are rapidly becoming irrelevant. Examples
are becoming more common around Indian Country and Tohono's actions
will become a blueprint for other Tribes to follow if they succeed with
their scheme. Inaction on H.R. 1410 will signal that Congress is
unwilling to address a metastasizing problem that has arisen due to
manipulation of Federal laws, including the Indian Gaming Regulatory
Act. A failure to act on H.R. 1410 would amount to a Congressional
rubber stamping of actions that were designed to circumvent the law
regardless of the collateral damage to other Tribes and promises made.
This plan by the Tohono O'odham of building an additional casino in
the Phoenix-metro area directly violates promises that it made, that
other Arizona tribes made, and that the Governor of Arizona made to
citizens who approved our compacts in November 2002. The public
dissemination of the promise began on February 20, 2002, when Arizona
Governor Hull issued a news release announcing to the public and media
that the model compact she and 17 Tribes had negotiated for two and a
half years--if it were approved--would ensure that there would be ``no
additional casinos allowed in the Phoenix metropolitan area.'' This
promise was then repeated by elected Tribal leaders, including
Tohono's, other Tribal representatives, and representatives of the
State, both verbally and in writing, in the Arizona legislature, in
television, radio and print media, and in public over the ensuing nine
month initiative campaign that ended when Arizona citizens narrowly
approved the model compact.
It is all the more alarming that Tohono O'odham has claimed a right
under a 1986 federal law to operate up to four additional casinos on
county islands in the Phoenix-metro area. This 1986 law, known as the
Gila Bend Act, provided financial compensation to the Tohono O'odham
for lands that were flooded by an Army Corps of Engineers project and
allowed Tohono to buy replacement lands. The Gila Bend Act was passed
before Congress enacted the Indian Gaming Regulatory Act but Tohono
O'odham argues that the 1986 law mandates the Department of the
Interior to take lands into trust for gaming without any questions
asked. Also troubling is the fact, unknown until recently, that Tohono
was secretly taking actions to open a casino in the Phoenix-metro area
at the same time it and 16 other Arizona Tribes were conducting compact
negotiations and while they were promising citizens there would be ``no
additional casinos in the Phoenix metropolitan area'' under the
compacts. Tribes made these promises specifically to convince voters to
approve the model compact, which voters barely did by a very slim 50.9
percent to 49.1 percent margin.
If Congress now permits an additional tribal casino in the Phoenix-
metro area in violation of the promises Tribes made to Arizona voters,
in the public's eye Tribes will lose their integrity and the moral high
ground. And we believe it will be virtually impossible to protect our
tribal gaming exclusivity and stop non-Indian companies from obtaining
authority to conduct commercial gaming. This would harm all Tribes and
put many Tribal casinos out of business.
These efforts of Tohono O'odham also will destroy our unique
compact structure that allows non-gaming Tribes to receive gaming
revenue from more urban gaming tribes. The compact we negotiated sets
limits on the amount of gaming machines each Tribe can operate. While
the compact sets limits on the number of gaming machines, a Tribe may
increase the number of machines by negotiating an agreement with a non-
gaming Tribe. Under such agreements, the gaming Tribe may operate more
gaming machines in exchange for making substantial periodic payments to
the non-gaming Tribe, which often has no market to operate even a small
casino.
It is important to understand that under one provision of our
compact, commonly called the ``poison pill'' provision, if the Arizona
legislature uses the broken promises to justify permitting non-Indians
to operate gaming, all limits on the number of gaming machines come
off. At that point, there will absolutely be no reason for a gaming
Tribe to buy additional machine rights from a non-gaming Tribe.
Arizona's non-gaming Tribes will lose their substantial revenue
streams. Yet, Tohono would benefit from this collapse because, as it
claims, it can hand-pick the locations of its four metropolitan casinos
and it would have no limit on the number of gaming machines it can
operate in those four casinos.
Twelve Arizona Tribes have gone on record as formally opposing
Tohono's plans for an additional casino in the Phoenix-metro area. Nine
of these Tribes support H.R. 1410.
The State of Arizona filed litigation against Tohono O'odham,
alleging that the Tribe acted fraudulently during the 1999-2002 compact
negotiations, misrepresented facts, and made promises to the State
regarding the location of its fourth casino which the State relied on
to its detriment. In response to these claims, Tohono asserted that it
did not have to defend the claims in court because it was insulated by
the doctrine of tribal sovereign immunity. The court agreed and
dismissed all three claims, but not because they lacked merit. In fact,
the court stated that the evidence actually appeared to support the
State's promissory estoppel claim.
Undeterred, Tohono O'odham has requested that the Secretary of the
Interior take the 54-acre parcel in the Phoenix-metro area into trust.
Twenty days ago, on July 3, 2014, the Department of the Interior
determined that the 1986 federal law mandated it to acquire the parcel
into trust and create a new Indian reservation in the Phoenix-metro
area and within my Tribe's former reservation boundaries. We are
unaware of any situation where the Department of the Interior has
approved the creation of a reservation within another Tribe's former
reservation boundaries. This is a disturbing policy, which establishes
a precedent that will open the door for other Tribes to pursue similar
strategies, and undermine the sovereignty of those Tribes whose
ancestral lands are once again taken from us.
Tohono claims that in passing the 1986 federal law, the United
States `agreed' that Tohono can operate casinos on land it acquires
under that law. Tohono claims H.R. 1410 would violate that agreement.
Not so. Tohono's actions to conceal its true intentions and activities
regarding gaming in the Phoenix-metro area, and its involvement in
making, paying for the promotion and publication of, and not objecting
to the promises made by all Tribal leaders to voters that there would
be ``no additional casinos in the Phoenix-metro area,'' must be held to
have unilaterally modified any such agreement.
To protect our tribal gaming exclusivity and the unique compact
structure that allows non-gaming Tribes to receive substantial gaming
revenue, and to protect Phoenix-metro cities from having additional and
unwanted casino-reservations sprouting up on county islands within
their boundaries, the Senate must pass H.R. 1410, the ``Keep the
Promise Act of 2013.''
I. H.R. 1410
H.R. 1410 would bring some common sense to this situation and
clarify that no tribe may conduct gaming on lands taken into trust
after April 9th, 2013, as was promised by the Arizona Tribes. H.R. 1410
would not amend any federal law. The bill would not take any lands away
from Tohono O'odham, nor will it prevent any lands from going into
trust. The bill will simply prohibit tribes from breaking the promises
repeatedly made to voters--that there would be ``no additional casinos
in the Phoenix metropolitan area'' during the term of the current
compacts.
H.R. 1410 keeps the promises that the tribes of Arizona made to the
State of Arizona and the voters that there would be ``no additional
casinos in the Phoenix-metro area'' for the duration of the voter-
approved gaming compacts. In our view, H.R. 1410 ratifies the agreement
that the State and tribes of Arizona reached when they established a
limited structure of Indian gaming in Arizona. Importantly, this bill
does not amend federal law, it does not target any specific tribe, nor
does it prevent Tohono from placing land into trust. H.R. 1410 is
limited in geographic scope to the Phoenix metropolitan area, it
applies uniformly to all Arizona tribes, including Salt River, and
applies only until the expiration of the current negotiated compacts.
As we near the end of our current compacts in about 2026, all
interested parties within Arizona can negotiate what gaming structure
should exist in the State. Clarifying legislation like H.R. 1410 is
extremely common in Indian Country. Congress routinely includes various
restrictions on legislation involving Indian land, particularly gaming.
For instance, it is not unusual for Congress to revisit existing
statutes to clarify the party's intent, so long as the legislation is
narrowly tailored. \1\ This is a proper and necessary role for
Congress.
---------------------------------------------------------------------------
\1\ See e.g., the Rhode Island Indian Claims Settlement Act,
ratifying an agreement between the State of Rhode Island and the
Narragansett Tribe, and settling the Tribe's land claims, was enacted
in 1978 without a provision regarding gaming. 25 U.S.C. 1701 et seq.
Congress subsequently amended the Rhode Island Indian Claims Settlement
in 1996 to explicitly prohibit gaming pursuant to IGRA. See 25 U.S.C.
1708(b) (``For purposes of the Indian Gaming Regulatory Act (25 U.S.C.
2701 et seq.), settlement lands shall not be treated as Indian
lands''). See also, the Colorado River Indian Reservation Boundary
Correction Act, to clarify or rectify the boundary of the Tribe's
reservation while also including a provision prohibiting gaming (``Land
taken into trust under this Act shall neither be considered to have
been taken into trust for gaming nor be used for gaming (as that term
is used in the Indian Gaming Regulatory Act (25 U.S.C. 2701 et
seq.)''), Pub. L. 109-47 (Aug. 2, 2005); Congress passed legislation to
waive application of the Indian Self-Determination and Education
Assistance Act to a parcel of land that had been deeded to the Siletz
Tribe and Grand Ronde Tribe in 2002 but also included a gaming
prohibition provision (``Class II gaming and class III gaming under the
Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.) shall not be
conducted on the parcel described in subsection (a)'') Pub. L. 110-78
(Aug. 13, 2007); Congress clarified the Mashantucket Pequot Settlement
Fund, 25 U.S.C. 1757a to provide for extension of leases of the
Tribe's land but provided that ``No entity may conduct any gaming
activity (within the meaning of section 4 of the Indian Gaming
Regulatory Act (25 U.S.C. 2703)) pursuant to a claim of inherent
authority or any Federal law (including the Indian Gaming Regulatory
Act (25 U.S.C. 2701 et seq) and any regulations promulgated by the
Secretary of the Interior or the National Indian Gaming Commission
pursuant to that Act) on any land that is leased with an option to
renew the lease in accordance with this section.''), Pub. L. 110-228
(May 8, 2008); Congress passed the Indian Pueblo Cultural Center
Clarification Act which amended Public Law 95-232 to repeal the
restriction on treating certain lands held in trust for the Indian
Pueblos as Indian Country with the explicit clarification that although
it was Indian Country it could not be used for gaming (``Gaming, as
defined and regulated by the Indian Gaming Regulatory Act (25 U.S.C.
2701 et seq.), shall be prohibited on land held in trust pursuant to
subsection (b).'') Pub. L. 111-354 (Jan. 4, 2011).
---------------------------------------------------------------------------
This continues to be a consistent practice of Congress and is one
that the Department of the Interior has vocally supported in the past.
This Congress alone, there have been two bills (H.R. 2388 and H.R. 507)
that passed both chambers and would place lands in trust on behalf of
Tribes while simultaneously prohibiting the benefitting Tribes from
using the lands for gaming. H.R. 2388, which will place Federal land in
trust for the benefit of the Shingle Springs Band of Miwok Indians
stipulates that ``class II and class III gaming under the Indian Gaming
Regulatory Act (25 U.S.C. 2701 et seq.) shall not be permitted at any
time on the land taken into trust.'' The Department of the Interior
testified in support of the bill despite its prohibition on gaming.
Both chambers have also passed H.R. 507, the Pascua Yaqui Tribe Trust
Land Transfer Act, which would place Federal land into trust for the
benefit of the Pascua Yaqui Tribe. Although the bill has no relevance
to gaming, it stipulates that, ``The Tribe may not conduct gaming
activities on the lands held in trust under this Act, as a matter of
claimed inherent authority, or under the authority of any federal law,
including the Indian Gaming Regulatory Act (25 U.S.C. 2701 et seq.)
or under any regulations thereunder promulgated by the Secretary or the
National Indian Gaming Commission.''
Beyond these two bills which will likely be signed into law by the
President in the coming days or weeks, there have been numerous other
bills introduced in this Congress that also restrict or prohibit the
ability of Tribes to game on trust land. \2\ Perhaps the most shocking
example of legislation restricting the right of a Tribe to game is the
Lumbee Recognition Act, which has been introduced as S. 1132 and H.R.
1803 in the Senate and House of Representatives, respectively. This
bill, which would restore federal recognition to the Lumbee Tribe after
being terminated by an Act of Congress in the 1950's, only partially
restores the rights of the Tribe. The legislation includes a gaming
prohibition which provides that ``The tribe may not conduct gaming
activities as a matter of claimed inherent authority or under the
authority of any Federal law, including the Indian Gaming Regulatory
Act (25 U.S.C. 2701 et seq.) or under any regulations thereunder
promulgated by the Secretary or the National Indian Gaming
Commission.'' Furthermore, Department of the Interior Assistant
Secretary-Indian Affairs Kevin Washburn testified in support of the
Lumbee Recognition Act and even noted the gaming prohibition in his
testimony. This is one of two bills that would provide federal
recognition while simultaneously creating a class of Tribes whose
inherent right to game has been extinguished. \3\
---------------------------------------------------------------------------
\2\ See H.R. 931, a bill to amend the Siletz Tribe Indian
Restoration Act with the caveat that ``any real property taken into
trust. . . . shall not be eligible, or used, for any gaming activity
carried out under the Indian Gaming Regulatory Act (25 U.S.C. 2701 et
seq.)''; H.R. 841, a bill to make technical corrections to the Grand
Ronde Reservation Act but stipulating that no acquisitions made under
the Act will be eligible for gaming unless they are located within a
very narrow geographic area; H.R. 3313, the Santa Ynez Band of Chumash
Mission Indians Land Transfer Act of 2013, which would authorize the
acquisition of trust land for the benefit of the Santa Ynez Band of
Chumash Mission Indians but explicitly prohibits the Tribe's right to
game on those lands ``(1) as a matter of claimed inherent authority; or
(2) under any Federal law, including the Indian Gaming Regulatory Act.
. . .''; S. 2465, the Albuquerque Indian School Land Transfer Act,
which would require the transfer of four parcels of Federal land in
trust for the benefit of the nineteen (19) Indian Pueblos in the State
of New Mexico while noting that the lands cannot be used for gaming;
and H.R. 1225, the Samish Indian Homelands Act of 2013, which would
direct the Secretary of the Interior to place certain lands into trust
for the Samish Indian Nation while providing that ``the Tribe may not
conduct on any land taken into trust pursuant to this act any gaming
activities (1) as a matter of claimed inherent authority; or (2) under
any Federal law (including the Indian Gaming Regulatory Act (25 U.S.C.
2701 et seq.) (including any regulations promulgated by the Secretary
or the National Indian Gaming Commission pursuant to that Act)).''
\3\ The other bill is the Thomasina E. Jordan Indian Tribes of
Virginia Federal Recognition Act of 2013 (S. 1074 and H.R. 2190), which
would provide federal recognition to a number of Virginia tribes but
not allow those tribes to game.
---------------------------------------------------------------------------
Accordingly, any arguments that the H.R. 1410 creates dangerous
precedent are wrong and inconsistent with common Congressional
practice, and the Department's recent positions.
The Community supports H.R. 1410 because it is narrow in scope,
does not impact tribal sovereignty and is the simplest solution to this
current threat to Indian gaming in Arizona. This legislation makes
express what had been the common understanding of the parties that
negotiated the existing gaming compacts in Arizona.
II. The ``Prop 202'' Promises and Tohono's Secret Plan for a Phoenix
Casino
We believe the existing tribal-state gaming compacts in Arizona to
be the model in the Indian gaming industry. The compact strikes a
precise balance between tribal, state, and federal interests; places
limits in both the number of machines and facilities; and provides
benefits to gaming and non-gaming tribes, the State, local
municipalities, and charities throughout Arizona. However, those who
benefit most from the compact are the citizens of Arizona who approved
the tribal-state compacts through a voter referendum based on the
promise of no additional casinos in the Phoenix area until 2027 and no
gaming in neighborhoods.
Prior to the passage of the voter approved ballot initiative
(``Prop 202'') which culminated in the existing Tribal-State gaming
compacts, tribal leaders held extensive negotiations on an acceptable
framework for all tribes. Negotiations with the State were preceded by
16 tribal leaders, including Tohono's, signing an Agreement in
Principle to make a good faith effort to maintain a collaborative
relationship in compact renegotiations.
Specifically, in the Agreement in Principle Tohono's Chairman and
other Tribal leaders expressly agreed ``to make a good faith effort to
develop and maintain consistent positions regarding the terms and
issues at issue with the State of Arizona in compact negotiations.''
Further, Tohono's Chairman, on behalf of his Tribe, expressly agreed to
``make a good faith effort to notify other Tribal Leaders if they
believe that they cannot abide by this Agreement or that they must take
positions or actions inconsistent with those of the other Tribal
Leaders.''
Tribes negotiated in good faith with each other (or so we thought
at the time) to craft a model tribal-state gaming compact that
preserved tribal exclusivity for casino gaming, greatly reduced the
number of authorized casinos in the State, allowed for larger casinos
and machine allotments with the ability to expand machine allotments
through transfer agreements with rural and non-gaming tribes.
In the negotiations, the Salt River Pima-Maricopa Indian Community
and the three other Phoenix-metro area tribes (Ak-Chin Indian
Community, Gila River Indian Community, and the Fort McDowell Yavapai
Nation) each had to give up their rights under the compacts then in
effect to build one additional casino in the Phoenix-metro area. Tohono
O'odham was aware of this concession, and knew that it was a key
concession the State of Arizona needed if negotiations were to move
forward.
However, it was only recently discovered in the State of Arizona's
litigation against Tohono, that Tohono had begun actively working to
investigate and purchase casino land in the Phoenix-metro area more
than a year and a half before the conclusion of compact negotiations
and approval of the tribal-state compacts by the voters. In light of
Tohono's commitment to notify other Tribes if they would ``take
positions or actions inconsistent with those of the other Tribal
Leaders,'' it was a profound shock for the State of Arizona and the 16
other Tribes who negotiated the compact with Tohono to discover that
Tohono had strategically acted to open a Phoenix-metro casino while
each of the four Phoenix-metro Tribes were giving up our rights to
operate another casino, and while the Tribes and State were promising
voters that there would be ``no additional casinos in the Phoenix-metro
area.''
The brief chronology below highlights some (but not all) examples
of when the so-called ``Prop 202'' promises and related statements were
made, and outlines some (but not all) of Tohono's behind-the-scenes
activities during compact negotiations to secretly secure casino land
in the Phoenix-metro area.
NOTE: The Tohono activities shown in italics below were not
known by any of the 16 other Tribes who participated in the
negotiations nor by the State until the facts were recently
disclosed in the course of the State's litigation against
Tohono. The activities shown in regular type were known to all
negotiating Tribes and the State.
1999--Compact negotiations began. Sixteen Tribes, including Tohono,
signed the Agreement in Principle under which each Tribe agreed to
``make a good-faith effort to notify other Tribal Leaders if they
believe that they cannot abide by this Agreement or that they must take
positions or actions inconsistent with those of the other Tribal
Leaders.''
March 15, 2001--Representatives of a corporation owned and created
by Tohono O'odham under tribal law, named Vi-ikam Doag Industries
(``VDI''), an entity tasked with locating land in the Phoenix-metro
area for the Tohono casino, met and notes of the meeting reflect they
discussed the ``possibility of doing a casino'' and that they were
``interested in buying a piece of land and putting a casino on it.''
March 18, 2001--VDI corporate representatives met with Mr. Curry,
Tohono O'odham's Assistant Attorney General and its lead compact
negotiator. VDI notes of that meeting show discussion included ``gaming
compact-unsure what will happen.'' The notes also disclosed a plan to
``put in a shell company--need to keep it quiet especially when
negotiations on compact at stake.''
June 26, 2001--VDI meeting with Tohono San Lucy District Council
was tape recorded and transcript shows discussion focused on ``casino
on the west end of Phoenix.'' ``[W]e didn't want to publicize that
because of the confidentiality.'' The project was ``a confidential
issue'', that Tohono representatives were ``holding it as confidential,
because we don't want, you know, people to know we are seriously
considering this.'' If the information about the secret casino plan
leaked out, ``there's going to be a lot of resistance from, you know,
the general public.''
February 20, 2002--The State of Arizona and 17 Tribes reach
agreement on major terms of the new compact. The new compact would
require that each Phoenix-metro tribe (Gila River, Fort McDowell, Salt
River, and Ak-Chin) to give up its right under the then-existing
compacts to operate one additional casino, so there would be no more
than seven casinos in Phoenix metro area. (In 2002, there were only
seven casinos operating in the Phoenix-metro area). At this time the 17
Tribes and the Arizona Indian Gaming Association (AIGA) began efforts
to get the Arizona legislature to approve the negotiated compact. On
February 20, 2002, Governor Hull issued a news release advising the
public and media that the ``Major points in the [negotiated] agreement
include. . .Number of casinos. . .No additional casinos allowed in the
Phoenix metropolitan area and one additional casino in the Tucson
area.''
February 20, 2002--The Arizona Republic reported that under the
compact negotiated between the State and Tribes, ``[m]etro Phoenix will
see no new casinos; the number is frozen at seven.''
February 21, 2002--The Arizona Republic again reported that under
the negotiated compact ``metro Phoenix will see no new casinos.''
February 21, 2002--A spokesperson for the State, Christa Severns,
announced on radio that under the new compact, ``we're not going to see
any more [casino] facilities in the Phoenix area.''
February 22, 2002--The Arizona Republic in an editorial stated that
under the compact ``Phoenix metro area would be limited to seven
casinos, the number currently in operation.''
February 27, 2002--Steve Hart, the State's primary negotiator and
Director of the State's Department of Gaming, and David LaSarte, the
Executive Director of the Arizona Indian Gaming Association, appeared
together on Phoenix public television. Hart stated that the number of
casinos in the Phoenix area ``is seven today and for the length of this
Compact, 20 years, that's the number of casinos that will be in the-
kind of greater Phoenix metro area.''
March 7, 2002--An article in the Arizona Republic reported that
David LaSarte, Executive Director of the Arizona Indian Gaming
Association, ``pointed out that the agreement freezes the number of
casinos in the metro Phoenix area at seven.''
March 11, 2002--Tohono's San Lucy District and its corporation,
VDI, sign a ``Confidentiality Agreement'' with a realtor hired to find
suitable casino land in the Phoenix-metro area.
March 18, 2002--The Tucson Citizen ran an editorial by David
LaSarte, Executive Director of the Arizona Indian Gaming Association,
which reported that under the compacts, ``No additional casinos could
be built in the Phoenix area.''
March 28, 2002--The Tucson Weekly reported that under the compact
negotiated between the 17 Tribes and the State, ``there would be no
more casinos allowed in the Phoenix metro area.''
March 28, 2002--Officers in Tohono's corporation, VDI, met and
meeting notes reflect discussion about ``West [Phoenix is] not covered
with casino, . . . .the Nation wants to have another casino . . ..We
may be the only game in town.''
April 2, 2002--The Arizona Republic reported on the negotiated
compact. ``[T]he accord [Governor] Hull negotiated also would keep the
number of Phoenix-area casinos at the current seven . . .''
April 8, 2002 -David LaSarte, Executive Director of the Arizona
Indian Gaming Association, testified before the Arizona legislature on
behalf of the Association and said that one of the ``most important
items within the agreement include[s] the limitation of facilities in
the Phoenix-metro area to the current number [that is, seven] and
allows the possibility for only one additional facility in Tucson.''
April 13, 2002--VDI meeting transcript reflects discussion
included, ``And the Tucson market is saturated . . .But , you know,
again, there's nothing on the west end of Phoenix.''
April 19, 2002--Arizona Governor Hull wrote a letter to State
Senate President Randall Gnant, in which Governor Hull reported that
under the legislative bill approving the negotiated compact, ``there
will be no additional [casino] facilities in the Phoenix metropolitan
area . . .''
April 25, 2002--Arizona Governor Hull wrote an editorial published
in the Arizona Republic in which she stated that under the negotiated
compact, ``Phoenix will keep the same number of casinos . . .''
June 10, 2002--VDI internal email states ``yesterday at the Task
Force meeting we discussed the West Phx Property [and] it was
understood that VDI can proceed with the escrow, . . .[but] the
decision is not final until the studies are completed.''
June 19, 2002--VDI meeting transcript discloses further discussion
about Tohono's secret Phoenix casino project--``this is kind of a
confidential deal.'' Few people know about it ``because, again, it's
limited because of the confidentiality situation.''
August 22, 2002--VDI meeting minutes discuss the purpose of the
meeting was to update Board members who did not attend ``yesterday's
meeting with the [Nation's] Gaming Board, the Commerce Committee, TON
Chairman, Investment Committee Chairperson and the Treasurer. The
[State of Arizona] governor wants to reduce the total numbers of
casinos; every Tribe had one casino taken away except TON . . .''
August 22, 2002--VDI meeting transcript shows discussion; ``Because
if that's going to be the position of the State, they don't want any
more casinos around the Phoenix area, then they're going to fight it .
. .Which is why we really want to wait until the initiative passes
before it gets out.''
The 17 Tribes and the Arizona Indian Gaming Association (AIGA)
continued their political campaign seeking Arizona voter approval of
the negotiated compact in Prop 202. AIGA published and widely
distributed a campaign pamphlet for voters entitled ``Answers to Common
Questions,'' which stated that ``major funding'' for the voter pamphlet
was provided by Tohono O'odham and three other tribes. Tohono O'odham
contributed approximately $1.8 million in support of the campaign and
was listed as a supporter of the Prop 202 campaign materials. The voter
pamphlet, paid for in part by Tohono, explained to voters:
``Q. Does Prop 202 limit the number of tribal casinos in
Arizona?
A. Yes. In fact, Prop 202 reduces the number of authorized
gaming facilities on tribal land, and limits the number and
proximity of facilities each tribe may operate. Under Prop 202,
there will be no additional facilities authorized in Phoenix,
and only one additional facility permitted in Tucson.''
September 4, 2002--Tohono's corporation, VDI, received a casino
Feasibility Report from their California gaming consultant who had
secretly inspected all seven existing Phoenix-metro area casinos. The
Report recommended that the Tohono casino not be ``located.further west
that the Glendale area'' because it ``would attract two to three times
more volume'' than other possible west Phoenix sites.
September 14, 2002--The Arizona Republic ran an article that
included a statement by Arizona Governor Hull that ``[v]oting `yes' on
Proposition 202 ensures that no new casinos will be built in the
Phoenix metropolitan area . . .for at least 23 years.''
September 19, 2002--VDI meeting transcript reflects alarm about a
possible leak of information. ``So there is some type of information
going out or a leak.'' Discussion emphasized that possible leaks about
the secret plan are ``still a concern out there, especially prior to
the propositions coming up for election . . .So we just need to be
careful about, you know, things getting out and spoiling it.''
The official Secretary of State's Voter Guide for the November 5,
2002 General Election provided arguments for and against adoption of
Proposition 202. Arizona Governor Hull urged approval of Proposition
202, explaining to voters:
``Voting `yes' on Proposition 202 ensures that no new casinos
will be built in the Phoenix metropolitan area and only one in
the Tucson area for at least 23 years. Proposition 202 keeps
gaming on Indian Reservations and does not allow it to move
into our neighborhoods.''
In the Voter Guide, Arizona Attorney General Janet Napolitano also
argued for approval of Proposition 202, stating: ``Most Arizonans
believe casino gaming should be limited to reservations. I agree . . .
[Prop 202] also prevents the introduction of casino gaming, such as
slot machines, by private operators into our neighborhoods.''
September 25, 2002--According to an Arizona Department of Gaming
Memorandum dated October 2, 2002, a Town Hall meeting was held in
Tucson moderated by a representative from Governor Hull's office. The
purpose of the meeting was to discuss the pros and cons of the gaming
propositions on the ballot. According to the Memorandum, current Tohono
O'odham Chairman, Mr. Ned Norris, represented the Tohono O'odham
Nation. The Memorandum recounts that ``Mr. Norris said that 201 [a
competing ballot proposition] will open gaming into cities and that the
citizens of Arizona have, repeatedly over the years, expressed their
desire to keep gaming on the reservation.''
September 29, 2002--The Arizona Republic reported that Proposition
202 ``stipulates that no more casinos could be built in Maricopa
County.''
October 22, 2002--The Arizona Republic ran an unsigned editorial
stating that Proposition 202 ``would not allow any new casinos to be
built in the metropolitan Phoenix area.''
October 23, 2002--The Arizona Republic ran an article reporting
that Proposition 202 ``would not permit any new casinos in Maricopa
County.''
October 25, 2002--VDI meeting transcript shows discussion about the
secret casino plan and that ``we are . . .a week and a half, two weeks
away from the vote . . .And you know, assuming that it is [Prop] 202
that passes, then, you now, we'll proceed in how we need to make that
project develop.''
October 28, 2002--David LaSarte, Executive Director of the Arizona
Indian Gaming Association, appeared on television and stated that
``They [the 17 Tribes Coalition] voluntarily made it so that there will
be no new casinos in Phoenix.''
October 29, 2002--VDI notes of a meeting with Tohono San Lucy
District Council, attended by Mr. Curry, Tohono Assistant Attorney
General and its lead compact negotiator, reflect, ``Hold off until the
election is over.'' Transcript continues, ``again, you know,
propositions are about to be voted on November 5th . . .[W]e have been
told, you know, that this information should be held in confidence,
because they are concerned regarding information leaking out.''
November 5, 2002--Arizona voters narrowly approved Proposition 202
by a vote of 50.9 percent to 49.1 percent. Between November 1999 and
December 2002, Arizona Tribes met privately over 85 times on compact
negotiations and the voter campaign. During the same period, Tribes had
over 35 meetings with the State regarding compact negotiations and the
voter campaign.
November 6, 2002--An Article published by the Tucson Citizen
reported that Prop 202 was approved by the voters. Tohono O'odham
Nation Chairman at the time, Edward Manuel, who signed the 1999
Agreement in Principle among Tribes, was quoted as saying: ``To us,
this is a major victory. We stayed together. We stayed united. We will
try to keep working on that to keep the unity together.''
December 4, 2002--One month after voters approved Proposition 202,
Tohono O'odham signed its new compact.
February 10, 2003--Transcript of VDI's meeting shows discussion
regarding the new compact: ``[T]he compact has been signed, and so
there are no more real concerns that might jeopardize our chances on
this discussion. So I think they're ready to move forward.''
February 21, 2003--VDI memorandum to Tohono's San Lucy District
Council: ``Due to the push by the Commerce Committee, Gaming Authority,
and the Nation to move forward with the West Phoenix Project, we felt
the need to provide a written update now . . .TOGA [Gaming Authority],
Commerce Committee, and the Chairman made a very big commitment to move
and push this project as quickly as we can so that we do not miss out
on the opportunity.''
February 23, 2003--VDI Minutes reflect discussion of possibly using
the Gila Bend Act to acquire land and build a casino in the Phoenix-
metro area, ``but politically we might have problems. If we decide to,
we need to put in escrow and it needs to be kept confidential for the
time being.'' VDI meeting transcript reflects this discussion: ``I just
hope too that, in terms of the political (inaudible) that's going to be
coming, that some of the metro tribes over there don't come back and
jump on us too . . .Might Gila River or Salt River indicate that it's a
violation of the 202 (inaudible) metro area [inaudible]? . . .Well
that's what I said in terms of the political impact, is that even- even
those metro tribes, particularly those three that are right there,
might--might say something. But that's a big question mark. That's
all.''
March 12, 2003--Tohono created a shell corporation in the State of
Delaware in order to secretly buy land for a Phoenix-metro area casino.
August 21, 2003- Tohono's Delaware shell corporation bought the 54-
acre parcel in the Phoenix-metro area.
In January 2009, Tohono announced its intentions and filed its
application to acquire the 54-acre Phoenix-metro parcel in trust as a
reservation. Upon hearing of Tohono O'odham's plans to open a casino in
the Phoenix-metro area, many Arizona Tribes who for several years had
negotiated the compact with Tohono signed letters and passed
resolutions formally opposing the plan, including the (1) Ak-Chin
Indian Community, (2) Fort McDowell Yavapai Nation, (3) Gila River
Indian Community, (4) San Carlos Apache Tribe, (5) Tonto Apache Tribe,
(6) White Mountain Apache Tribe, (7) Salt River Pima-Maricopa Indian
Community, (8) Pueblo of Zuni, (9) Hualapai Tribe, (10) Cocopah Tribe,
(11) Quechan Tribe, and the (12) Yavapai-Apache Nation. The reasons
given by all these tribes was that Tohono's plans violated the promises
made by Tribes to Arizona voters in Prop 202 and threatened tribes'
exclusive right to operate casinos in the state.
On April 29, 2011, the member Tribes of the Arizona Indian Gaming
Association passed a formal Resolution reaffirming the Tribes'
Proposition 202 promises. Predictably, Tohono voted against the
Resolution.
Then, on June 29, 2011, in the State's litigation against Tohono
O'odham, Tohono filed an Answer in court which admitted that in the
midst of the Prop 202 campaign conducted by the 17 Tribes including
Tohono O'odham--a campaign for approval of a compact that would require
other Tribes to reduce the potential number of casinos in the Phoenix
metro area--Tohono was simultaneously trying to buy Phoenix-metro land
for a casino. Tohono O'odham also admitted that various parties
``characterized the provisions of Proposition 202 requiring most tribes
to give up the right to one gaming facility as `no additional
facilities authorized in Phoenix, and only one additional facility
permitted in Tucson' and that Tohono O'odham did not contradict those
statements.'' Tohono admitted ``that it participated in the
negotiations that led to Proposition 202, supported Proposition 202,
and entered into a new compact in 2002 after the voters approved
Proposition 202.'' Finally, Tohono admitted ``that in 2002 it was
considering the possibility of acquiring property in the Phoenix
metropolitan area for gaming purposes; that it did not disclose that it
was considering such an acquisition; and that it had no obligation to
make such a disclosure'' to other Tribes, to the State, or to the
voters.
Tohono Chairman Norris has not denied, because he could not, that
the 17 tribe coalition had made promises directly to the Arizona voters
that there would be ``no additional casinos in the Phoenix metropolitan
area.'' Remarkably, when confronted, his response to some of these
Tribes was, ``those are just words on a publicity pamphlet.'' As
children, one of the most fundamental and important lessons we all
learned from our parents was, ``keep your promises.'' This principle
has been taught for millennia. ``Never promise more than you can
perform.'' (Publius Syrus, First Century B. C., Maxim 528). Dishonesty
finds no haven, even in publicity pamphlets.
It is not an easy thing to talk about a lack of ``good faith'', and
we do so reluctantly. However, we ask the Senate to act on H.R. 1410,
so that in future years, we will not have to look back and say to our
children that ``we should have done something.''
III. Commercial Gambling Interests Have Long Opposed Tribal Gaming
Exclusivity in Arizona
Commercial gambling interests have worked to get authorization
through legislative action or an Initiative to conduct commercial
gaming in Arizona since the first tribal compacts were signed in 1993.
Due to the concerted and persistent efforts of Arizona Tribes, these
efforts have failed to date. If Congress fails to act to stop Tohono's
effort to open a casino and, as a result, Tribes are viewed by the
Legislature or public as breaking the promise that there would be ``no
additional casinos in the Phoenix-metro area,'' Tribes very likely will
not be able to defeat efforts to open up the State to commercial
gaming. Tribes would no longer have exclusivity, and all Tribes, both
gaming and non-gaming would be significantly harmed.
To get a sense of this on-going threat to our Tribal gaming
exclusivity, we highlight below a brief snapshot of the recent activity
targeted to bringing commercial gaming to Arizona off of reservations.
Article, Racino: A key budget option for the Arizona
Legislature, J. Heiler, July 21, 2009
Article, OpEd, Senator Steve Pierce: Boosting Arizona's
Economy, How Racinos Could Save Our State, S. Pierce, May 12,
2011
Editorial, Racinos Could Bring Much-Needed Revenue, The Daily
Courier, January 20, 2011
Editorial, Maybe Racinos Aren't Such A Bad Idea, The Paulick
Report, January 27, 2011
Application to the Arizona Secretary of State for an
Initiative Petition (to ``permit[] racetracks and private
casinos to operate in Arizona''), C. Nicholson, December 9,
2011
H.B. 2220, First Regular Session 2011, Arizona House of
Representatives, Relating to Horse and Dog Racing
Committee on Natural Resources and Rural Affairs, Arizona
State Senate, First Regular Session, Hearing scheduled for
October 30, 2013 on ``Discussion of 2002 Ballot Initiative
Proposition 202,'' (Hearing later cancelled)
S. B. 1468, Second Regular Session 2014, Arizona Senate,
Relating to Gambling
The primary organization that Arizona Tribes formed to promote
their common interests in Indian gaming is the Arizona Indian Gaming
Association (AIGA). In 2009 in response to specific threats from
commercial gaming companies, including out of state racino operators,
Arizona Tribes also formed Arizonans for Tribal Government Gaming
(ATGG). (I am currently the Chair of ATGG and on the Executive
Committee of AIGA.)
A critically important mission of both AIGA and ATGG is combatting
the efforts of commercial gaming interests, from both within the State
of Arizona and outside the State, to gain a foothold in Arizona.
Countless hours and many millions of dollars have been spent to combat
these efforts. Given Arizona's burgeoning population and particularly
the population concentration in the Phoenix metropolitan area, we know
that Arizona is a prime target for the expansion of commercial gaming.
Historically, when commercial gaming interests attempted to expand
into Arizona, they would target the Tribes' exclusivity as an argument
in favor of their expansion efforts. These arguments have never
succeeded with the Legislature or the voters because they understand
that tribal gaming on reservations was unique and limited and that the
Tribes had a well-established track record of delivering on their
promises and honoring the terms of their compacts. If the Tribes are
now viewed, due to the claims of sovereign immunity and deceit of the
Tohono O'odham, as breaking their promises and engaging in off
reservation gaming, then these arguments will gain credence and the
Tribes' exclusivity will be forever lost.
IV. The Tohono O'odham Nation's Deceit is Calculated to Break Promises
Made to the State of Arizona and the Voters of Arizona and Prop
up Their Thriving Gaming Enterprise
Tohono O'odham's actions constitute the deliberate effort of one
tribe to use deception and sovereign immunity as political tools to
make and break promises for pecuniary benefit. The Tohono O'odham
Nation already has very successful gaming enterprise. Tohono O'odham
maintains two casinos in the Tucson metropolitan area and an additional
casino in Why, Arizona. Additionally, under the current gaming Compact,
Tohono O'odham is allowed to develop a fourth casino on their existing
reservation lands, including in the Tucson metropolitan area. H.R. 1410
would not impact the Tribe's existing three casinos or impact its
ability to develop a fourth casino on its existing reservation or on
its aboriginal lands.
Tohono O'odham's success in gaming goes back to early 1992, when
the State of Arizona and certain Arizona tribes, including Tohono
O'odham were at a standoff regarding Indian gaming in the State. To
overcome legal challenges and political opposition, the tribes
repeatedly made statements that no gaming could occur outside of
existing reservations without the concurrence of the Governor. During
Federal District Court mediation with the State in 1993, Tohono O'odham
submitted a document, ``Comparison of Compact Proposals,'' which argued
that the State of Arizona's insistence on compact provisions requiring
the Governor's concurrence for any off-reservation gaming was
unnecessary because ``existing federal law requires the Governor's
concurrence. This is adequate protection to the State and local
interests.'' Tohono O'odham Nation's Comparison of Compact Proposals at
11, No 93-0001 PHX (D. Ariz. Jan. 19, 1993). In a brazenly calculated
reversal, Tohono O'odham now claims that a legal loophole allows it to
unilaterally pursue a casino off existing reservation lands without the
concurrence of the Governor of Arizona or any input from any of the
local communities.
Further, on June 8, 1993, tribal representatives met with staff for
the State legislature and provided a handout entitled ``After Acquired
Lands,'' which stated that ``[a]nother exception to the prohibition of
gaming on after acquired lands is when the lands are taken into trust
as part of a settlement of a land claim. This will not effect [sic]
Arizona because aboriginal land claims in Arizona have already been
settled pursuant to the Indians Claims Commission Act of 1946.'' The
handout was distributed on behalf of all tribes present, including
Tohono O'odham. Once State officials had received these assurances, the
Governor of Arizona entered into gaming compacts with the tribes to
allow tribal gaming in Arizona.
Tohono O'odham has also asserted, through its attorneys, its right
to open all four of its authorized casinos in the Phoenix metropolitan
area on land acquired under the Gila Bend Act. These brazen contentions
demonstrate that Tohono O'odham intends to repeat its pattern of
deception wherever advantageous, and will do so regardless of the
promises made or the toll on all other Arizona tribes. This deliberate
policy of deceit, which is calculated to avoid court review, leaves
Congress as the only forum that can protect the promises made to the
people of Arizona.
V. Congress is the Only Institution that Can Provide Accountability on
this Matter
Tohono O'odham made the calculated decision of using sovereign
immunity as a shield to preclude any review of its deceitful actions
during the compact negotiations and Prop 202 campaigns of the early
2000's. While Tohono tells members of Congress to let the court address
this matter, in court, Tohono argues that the court does not have the
jurisdiction to review its actions. Definitive action by Congress is
therefore necessary to resolve, once and for all, the intent of the
Arizona gaming compacts and more importantly, preserve the deal that
was struck in 2002.
The State of Arizona filed a complaint in federal court against
Tohono O'odham in 2011 alleging that Tohono ``had a secret plan at the
time it was negotiating the Compact to build a gaming facility in the
Phoenix metropolitan area., notwithstanding its contrary
representations'' to the State and the public. These ``representations
induced the State to enter into the Compact, and the State would not
have signed the Compact had it known of the Nation's plans.'' In
another claim, the State alleged that the Nation ``materially and
fraudulently misrepresented that it had no plans.to open a gaming
facility in the Phoenix metropolitan area,'' and that the ``State's
assent to the Compact was induced by the Nation's misrepresentations
and intentional failures to disclose material facts.''
The Tohono O'odham raised tribal sovereign immunity and completely
avoided scrutiny of legal claims filed by the State of Arizona that
Tohono acted with fraud in negotiating its gaming compact,
misrepresented facts during the negotiations, and made promises
intending that the State rely on them to its detriment. Due to
sovereign immunity, the federal court dismissed the fraud,
misrepresentation and promissory estoppel claims, even though the court
stated that ``Plaintiffs' evidence would appear to support a claim for
promissory estoppel [but] it is barred by sovereign immunity.''
On May 27, 2014, the U.S. Supreme Court decided a remarkably
similar case, Michigan v. Bay Mills Indian Community. The Court, in a 5
to 4 decision, ruled that the Bay Mills Tribe could assert tribal
sovereign immunity and avoid claims filed by the State of Michigan that
the Tribe's off-reservation casino was illegal. The Court repeated
several times that it was up to Congress to fix the problem of a tribe
asserting sovereign immunity to avoid legal claims by a State regarding
illegal gaming:
``The Constitution grants Congress powers we have consistently
described as plenary and exclusive to legislate in respect to
Indian tribes . . . Thus, unless and until Congress acts, the
tribes retain their historic sovereign authority.''
``Our precedents . . .had established a broad principle, from
which we thought it improper suddenly to start carving out
exceptions. Rather, we opted to defer to Congress about whether
to abrogate tribal sovereign immunity for off-reservation
commercial conduct.''
``Congress exercises primary authority in this area and
remains free to alter what we have done . . .''
``[I]t is fundamentally Congress' job, not ours, to determine
whether or how to limit tribal immunity.''
''[W]e decline to revisit our case law, and choose instead to
defer to Congress.''
Opinion at 5, 7, 16, 17, and 21 (internal citations and quotations
omitted).
More succinctly, Justice Scalia dissented and wrote:
In Kiowa Tribe of Okla. V. Manufacturing Technologies, Inc.,
523 U.S. 751 (1998), this Court expanded the judge-invented
doctrine of tribal sovereign immunity to cover off-reservation
commercial activities. I concurred in that decision. . . . I am
now convinced that Kiowa was wrongly decided; that, in the
intervening 16 years, its error has grown more glaringly
obvious. . . . Rather than insist that Congress clean up a mess
that I helped make, I would overrule Kiowa. . . .
While the co-sponsors of H.R. 1410 and the Arizona tribes who
support it, must reluctantly be critical of Tohono's conduct here, it
is hard to avoid the fact that Tohono has, from the outset, repeatedly
thwarted the normal process for obtaining federal approval of Indian
gaming, and used sovereign immunity as a shield to insulate it from the
State's claims against it for fraud in the inducement, material
misrepresentation, and promissory estoppel. Enactment of H.R. 1410
would in no way abrogate Tohono's sovereign immunity. That facet of its
tribal sovereignty will likely remain intact in any current litigation
surrounding this issue. Any circumstance where a court would find that
immunity to have been abrogated would not arise because of the Keep the
Promise Act. Passage of H.R. 1410 would obviate the need for the State
to continue its suit against Tohono and might result in dismissal of
their claims but this would not result from any repeal of sovereign
immunity pursuant to the Keep the Promise Act. In fact, the intent of
H.R. 1410 is to address the issues underlying the fraud,
misrepresentation, and promissory estoppel claims without piercing
Tohono's immunity. However, as the branch of the Federal government
with plenary power over Indian affairs, it is well within Congress'
authority to enact this legislation. It is the merits of these claims
that the Keep the Promise Act is seeking to address and Congress is the
only institution that can provide accountability in this matter.
VI. Conclusion
The Salt River Pima-Maricopa Indian Community urges Congress to
pass H.R. 1410. It is needed to reaffirm the promise that the tribes of
Arizona made to each other, the State of Arizona and voters that there
would be ``no additional casinos in the Phoenix metropolitan area'' for
the duration of the existing compacts. The clarification does not
interfere with Tohono O'odham's desire to have land taken into trust.
It upholds the status quo in Arizona and does not adversely affect any
tribe. Without this bill, the other Arizona Tribes will suffer because
the current gaming compact structure will absolutely be compromised. We
support this legislation.
The Chairman. Thank you, President Enos, for your
testimony. I appreciate it very much.
Mr. Weiers. the floor is yours.
STATEMENT OF HON. JERRY WEIERS, MAYOR, CITY OF GLENDALE,
ARIZONA
Mr. Weiers. Thank you, and good afternoon Chairman Tester
and all the members of the Committee.
I am here today to discuss the proposed controversial
tribal casino in the city of Glendale. I will present my
council's most recent views on this project, and then also my
personal request for swift action on H.R. 1410, the Keep the
Promise Act.
My name is Jerry Weiers, I was born in Deadwood, South
Dakota. My family moved to Arizona when I was just eight years
old. I am the Mayor of the city of Glendale, a city of 232,000
people, which is the 72nd largest city in the United States.
Before becoming Glendale's mayor, I served in the Arizona
legislature for eight years.
I supported the Arizona Proposition 202 in 2002, the Bell
Initiative, which gave tribes the exclusive right to conduct
gaming, but limited casinos to tribal reservations. One key
aspect of the initiative was that there would be no additional
casinos in the Phoenix area.
As a Glendale resident, this was the primary factor in my
support for that proposition. My wife and I chose to live in
Glendale in part because it was not near any of the large
Phoenix area casinos. We believed the initiative preserved our
neighborhood as it was.
Like many Glendale residents, I was blindsided when the
Tohono O'odham Nation announced in January 2009 that it was
going to create a reservation and build a Las Vegas style
casino on a 54-acre county island within our city limits. This
announcement came seven years after the voters approved the
Bell Initiative, which we thought prohibited new casinos in the
area. It also came five years after Raymond Kellis High School
opened just across the street from where Tohono O'odham was
proposing to operate its casino, a site within two miles of
12,000 homes.
As you can imagine, we were mad. We are mad. The city has
been involved in two lawsuits at an enormous financial cost.
The city council passed a resolution opposing the casino
because it would hurt the interests of our residents. My wife
and I were completely shocked at what we learned while Tohono
O'odham and other tribes were telling voters that there would
be no additional casinos in the Phoenix area, Tohono O'odham
was actively looking to purchase casino land in Glendale.
Moreover, they knew what they were doing was wrong. The tribe
went to great lengths to keep their plans secret from other
tribes, local governments and voters.
The deceit did not stop there. Tohono O'odham had already
purchased its Glendale land when the school district announced
plans to build a new Kellis High school just across the street.
Tohono O'odham watched us build the school while continuing to
keep its casino plans secret and said nothing. We never thought
our children would be across the street from a Las Vegas style
casino.
My city has been in chaos for the past five years and the
Federal Government seems unwilling to help us. Last week, after
the Interior Department decision to take the Tohono O'odham's
land into trust, the city council voted four to three to repeal
our 2009 resolution opposing the casino, and passed a new
resolution. This new resolution says that Glendale does not
object to the trust land being utilized for gaming.
President Kennedy once said, let us never negotiate out of
fear. Well, with few choices left, a slim majority of my
council felt that we had to come to the bargaining table with
the TO. Our choice was not ideal, continue to fight and hope
for action from this body, or give into this casino being
forced on us. It is frustrating to be a city of our size and
have no choice on a casino proposed by a tribal government that
is more than 100 miles away.
It is important to note that Glendale may not be the only
city impacted. Our sister cities know that unless Congress
acts, they may be next. There are over 200 other county islands
in the Phoenix metropolitan area. And Tohono O'odham attorneys
have said that the tribe has the right to close its existing
three casinos and open them on these county islands.
We are a test case, but it is the start of a very slippery
slope. If Congress does not act, the entire Phoenix area should
be prepared for more off-reservation casinos.
As a former State legislator, I know that if gaming happens
in Glendale, there will be a strong effort in the Arizona
legislature to authorize non-Indian gaming in the State. That
will have a devastating effect on all of our tribes. Even if
the State legislative effort to authorize non-Indian gaming is
not successful, these compacts are only valid for another dozen
years. At that time, tribes will have to go back to the voters
and after what we have experienced, I can't say I would blame
the voters for questioning agreements of the past.
That is why I urge this Committee to approve H.R. 1410, so
that it may be quickly adopted by the Senate. The bill is not
about holding one tribe back, but preserving its much-needed
economic development tool for all of Arizona's tribes.
Thank you once again for the opportunity to testify. I am
happy to answer any questions that you may have, sir.
[The prepared statement of Mayor Weiers follows:]
Prepared Statement of Hon. Jerry Weiers, Mayor, City of Glendale,
Arizona
Good afternoon Chairman Tester and members of the Committee. I am
here today to discuss a proposed and controversial tribal casino in the
City of Glendale. I will present my Council's most recent views on this
project, and also my personal request for swift action on H.R. 1410,
the Keep the Promise Act.
My name is Jerry Weiers. I was born in Deadwood, South Dakota and
my family moved to Arizona when I was 8 years old. I am the Mayor of
Glendale, a city of 232,000 and the 72nd largest city in the country.
Before becoming Glendale's Mayor, I served in the Arizona Legislature
for eight years.
I supported Arizona Proposition 202, the 2002 ballot initiative
which gave tribes the exclusive right to conduct gaming, but limited
casinos to tribal reservations. One key aspect of the initiative was
there would be no additional casinos in the Phoenix area.
As a Glendale resident, this was a primary factor in my support for
the Proposition. My wife and I chose to live in Glendale in part
because it was not near any of the large Phoenix area casinos, and we
believed the initiative preserved our neighborhood as it was.
Like many Glendale residents, I was blindsided when the Tohono
O'odham Nation, who I will refer to respectfully as T.O., announced in
January 2009 that it was going to establish a reservation and build a
Las Vegas-style casino on a 54-acre county island within our City. This
announcement came seven years after the voters approved the ballot
initiative which we thought prohibited new casinos in the area. It also
came five years after Raymond Kellis high school opened across the
street from where T.O. is proposing to operate its casino, a site
within two miles of 12,000 homes.
As you can imagine, we were mad. The City has been involved in two
lawsuits, at an enormous financial cost. The City Council passed a
resolution opposing the casino because it would hurt the interests of
our residents.
My wife and I were completely shocked at what we learned. While
T.O. and the other tribes were telling the voters that there would be
no additional casinos in the Phoenix area, T.O. was actively looking to
purchase casino land in Glendale. Moreover, they knew what they were
doing was wrong. The Tribe went to great lengths to keep their plans
secret from the other tribes, local governments and voters.
The deceit did not stop there. T.O. had already purchased its
Glendale land when the school district announced plans to build the new
Kellis High School across the street. T.O. watched us build the school
while continuing to keep its casino plans secret and said nothing. We
never thought our children would be across the street from a Las Vegas-
style casino.
My City has been in chaos for the past five years, and the federal
government seems unwilling to help us. Last week, after the Interior
Department's decision to take T.O.'s land into trust, the City Council
voted 4-3 to repeal our 2009 resolution opposing the casino and passed
a new resolution. This new resolution says that Glendale ``does not
object to the Trust Land being utilized for gaming.'' President Kennedy
once said, ``Let us never negotiate out of fear.'' Well, with few
choices left, a slim majority of my Council felt that we had to come to
the bargaining table with T.O. Our choice was not ideal: continue to
fight and hope for action from this body, or give in to this casino
being forced on us. It is frustrating to be a city of our size and have
no voice on a casino proposed by a tribal government more than a
hundred miles away.
It is important to note that Glendale may not be the only city
impacted. Our sister cities know that unless Congress acts, they may be
next. There are over 200 other county islands in the Phoenix
metropolitan area. And, T.O. attorneys have said the Tribe has the
right to close its existing three casinos and open them on these county
islands. We are a test case, but it is the start of a very slippery
slope. If Congress does not act, the entire Phoenix area should be
prepared for more off-reservation casinos.
As a former State legislator, I know that if gaming happens in
Glendale, there will be a strong effort in the Arizona Legislature to
authorize non-Indian gaming in the State. And that will have a
devastating effect on all Tribes.
And even if the state legislative effort to authorize non-Indian
gaming is unsuccessful, these compacts are only valid for another dozen
years. At that time, the tribes will have to go back to the voters.
After what we have experienced, I can't say I'd blame voters for
questioning agreements of the past.
That is why I urge this Committee to approve H.R. 1410 so that it
may be quickly adopted by the Senate. The bill is not about holding one
tribe back, but preserving this much needed economic development tool
for all Arizona tribes.
Thank you once again for the opportunity to testify today, and I am
happy to answer any questions the Committee may have.
Attachment
The Chairman. Mayor Weiers, thank you for your testimony.
Chairman Norris, you have the floor.
STATEMENT OF HON. NED NORRIS, JR., CHAIRMAN, TOHONO O'ODHAM
NATION OF ARIZONA
Mr. Norris. Thank you. Mr. Chairman, members of the
Committee, my name is Ned Norris, Jr. I am chairman of the
Tohono O'odham Nation. I am here today representing the
nation's more than 32,000 members.
Since time immemorial, the nation and its members have
lived in southern and central Arizona. Our reservation is
composed of several non-contiguous areas in Pima, Pinal, and
Maricopa counties. Most of our reservation land is located in
remote, isolated areas and our population is one of the poorest
in the United States, with average individual incomes of just
over $8,000.
In the 1960s, the Corps of Engineers built a dam to protect
nearby non-Indian commercial farms. The dam backed up and
flooding destroyed nearly 10,000 acres of our Gila Bend
Reservation land in a fertile area of Maricopa County, ruining
homes, farms and our local church. Our elders recall the
desecration of their cemetery as a result of flooding. Tribal
members were forced to move onto a small, 40-acre parcel of
land known as San Lucy Village where today they crowd into
small houses and live well below the poverty line.
In 1986, Congress enacted the Gila Bend Act to compensate
the nation for its losses. Pursuant to the Act, the nation
settled our legal claims and gave up nearly 10,000 acres of our
reservation land and water rights. In return, we have the right
to acquire replacement reservation land without any conditions
on future use. We acquired replacement land in the West Valley
in Maricopa County and the Department of Interior took it into
trust. Four West Valley cities, Peoria, Tolleson, Surprise and
now the city of Glendale, have taken formal positions of
support for the nation's project and against H.R. 1410. I am
honored to be joined today by Mayor Barrett of Peoria and
council members Sherwood and Chavira from Glendale.
We are respectful of rights of individuals, like Mayor
Weiers, to express their personal opinions regarding the
nation's project. However, official, formal positions of the
communities in the West Valley could not be more clear. They
support the project. Undaunted by this local support, opponents
of the nation's project have pushed H.R. 1410, a bill that
would undo a nearly 30-year old land and water rights
settlement agreement, all in order to protect the interests of
a few East Valley gaming tribes. Proponents of H.R. 1410
asserted a wide range of legal claims to block the nation's
project. But a Federal court has now explicitly confirmed that
the Arizona gaming compact that the nation, the State and all
tribes explicitly signed, provides that the nation has the
right to conduct gaming on this property.
The court roundly rejected interpretations of the compact
advanced by proponents of H.R. 1410, calling them ``entirely
unreasonable.''
Mr. Chairman, this is the third time in five years I have
had to testify before Congress in defense of the nation's
rights. The nation has complied with the letter of every
applicable law, and has gracefully answered every allegation,
no matter how ridiculous or how offensive, in every lawsuit and
in every congressional hearing. But the millions of dollars the
nation has been forced to spend defending its rights would have
been better spent to build houses for our elderly, pay for
college tuition for our children and bolster our Head Start
programs.
Honorable Chairman of the Committee and members of the
Committee, the nation respectfully requests that you put an end
to this self-serving, mean-spirited, multi-million dollar
lobbying campaign against our people and stop this piece of
19th century throwback legislation. We ask that you see this
legislation for what it is: the first time in the modern era in
which Congress would unilaterally renege on the solemn promises
made by the United States in an Indian land and water rights
settlement.
This project is fully in line with IGRA Section 20, equal
footing exceptions, and would benefit the nation, local
communities and the State of Arizona for the next 25 years and
beyond.
I thank you for your time. The nation is happy to answer
any questions.
[The prepared statement of Mr. Norris follows:]
Prepared Statement of Hon. Ned Norris, Jr., Chairman, Tohono O'odham
Nation
My name is Ned Norris, Jr. I am the elected Chairman of the Tohono
O'odham Nation. The Nation is a federally recognized tribe with more
than 32,000 members. Our people have lived since time immemorial in
southern Arizona where our several non-contiguous reservation lands--
including our West Valley Reservation in Maricopa County--are located.
I thank the Committee for giving the Nation an opportunity to testify
today.
The United States' Promise to the Nation
Within my lifetime, the United States Corps of Engineers built a
dam to protect large, commercially-owned farms near the Nation's Gila
Bend Indian Reservation, which at the time encompassed nearly 10,000
acres of prime agricultural land in Maricopa County. That dam caused
perpetual flooding of our reservation, ruining homes, individually- and
tribally-run farms, and our local church. I often have listened to
elders describe how their cemetery was desecrated as the result of the
flooding. These are not easy stories to tell, and these are wounds that
have not yet healed.
All of the residents of this nearly 10,000-acre reservation were
forced to move onto a small 40-acre parcel of non-flooded land known as
San Lucy Village. Our San Lucy tribal members continue to live there
well below the poverty line with multiple families crammed into small
HUD houses. Despite these hardships, they live there still because the
Gila Bend Indian Reservation is their homeland.
The Corps of Engineers flooded the Nation's Gila Bend Indian
Reservation even though it had no authority from Congress, and
certainly no consent from the Nation, to do so. The destruction caused
by the flooding effected an unconstitutional taking of the Nation's
federally-protected property rights, and an unconscionable breach of
trust by our federal trustee. Looking for a solution and a way to avoid
litigation over the matter, Congress instructed the Department of the
Interior to search for replacement lands with comparable agricultural
potential (including comparable senior water rights). After several
years of looking for available lands within a 100-mile radius of the
destroyed reservation, Interior ultimately reported to Congress that
there was no way to replace the Nation's destroyed lands with new
agricultural lands. H.R. Rep. 99-851 at 6 (1986).
As an alternative way to compensate the Nation for its losses and
for the Corps' wrongdoing, Congress enacted federal legislation in 1986
in which the United States promised that if the Nation relinquished its
considerable legal claims against the United States, relinquished its
considerable water rights (which in 1986 were estimated to be worth
$100 million), and relinquished its title to nearly all of the Gila
Bend Indian Reservation, the United States would in return acquire a
limited amount of replacement trust land for the Nation in Maricopa,
Pima or Pinal Counties (where our other reservation areas are located).
That statute, the Gila Bend Indian Reservation Lands Replacement Act
(Pub. L. 99-503) (``1986 Gila Bend Act'') promised that the Nation
would be able to use its replacement lands as a ``Federal Indian
Reservation for all purposes''. Id. 6(d) (emphasis added). Under this
legislation, which the Department of the Interior has described as
``akin to a treaty,'' Tohono O'odham Nation v. Acting Phoenix Area
Director, Bureau of Indian Affairs, 22 IBIA 220, 233 (1992), the United
States also agreed to pay the Nation $30 million. I want to be clear
that $30 million was only a small fraction of the actual value of our
relinquished land and water rights--the primary way in which the United
States compensated the Nation was through its promise that the Nation
would have a right to acquire replacement land that would have the same
legal status as the destroyed land.
Relying on the United States' promise in the 1986 Gila Bend Act
that we could acquire new land that would be treated as a reservation
for all purposes, in 1987 the Nation executed a settlement agreement
with the United States by which the Nation gave up its right to sue the
United States and relinquished its rights to the land and water of the
destroyed Gila Bend Reservation.
The Nation's Reservation in the West Valley
The Nation acquired unincorporated Maricopa County land that is
located in the ``West Valley'' (a broad area west of the City of
Phoenix), which is about 49 miles from the Gila Bend Reservation, and
which lies between the cities of Glendale and Peoria. The land we
purchased in the West Valley meets the strict requirements set forth in
the 1986 Gila Bend Act, which limits the location and the amount of
land the Nation may acquire as replacement trust land. Because the
federal courts and the Department of the Interior agreed that our West
Valley land met these strict statutory requirements, the Department of
the Interior completed its congressionally-imposed duty to acquire the
land in trust, and it is now part of the Tohono O'odham Reservation.
Letter of Kevin Washburn, Assistant Secretary--Indian Affairs, United
States Department of the Interior, to Ned Norris Jr., Chairman, Tohono
O'odham Nation (July 3, 2014) (``Decision Letter'').
The tribes pushing for passage of H.R. 1410 made a series of
arguments as to why the Nation's West Valley land did not meet the
requirements of the 1986 Gila Bend Act, but every one of these
arguments has been rejected by the federal courts and by the Department
of the Interior, the agency with the most relevant expertise on these
matters. For more information about how and why the Nation's West
Valley land meets the requirements imposed by Congress in the 1986 Gila
Bend Act, please see the following:
1. Memorandum of the Field Solicitor, Phoenix Field Office Re:
Proposed Acquisition of Land for Gaming Purposes by Tohono
O'odham Nation (February 10, 1992);
2. Memorandum of the Field Solicitor, Phoenix Area Office Re:
Acquisition of 134.88 Acres by Tohono O'odham Nation Pursuant
to P.L. 99-503 (April 30, 2009);
3. Letter of Larry Echo Hawk, Assistant Secretary--Indian
Affairs, United States Department of the Interior, to Ned
Norris Jr., Chairman, Tohono O'odham Nation (July 23, 2010);
4. Gila River Indian Community v. United States, 776 F.Supp.2d
977 (2011); Tohono O'odham Nation v. City of Glendale, 253 P.3d
632 (Ariz. App. 2011);
5. Tohono O'odham Nation v. City of Glendale, 2011 WL 2650205
(D. Ariz. 2011);
6. Gila River Indian Community v. United States, 729 F.3d 1139
(9th Cir. 2013);
7. Arizona et al. v. Tohono O'odham Nation, 944 F.Supp.2d 748
(D. Ariz. 2013);
8. Letter of Kevin Washburn, Assistant Secretary--Indian
Affairs, United States Department of the Interior, to Ned
Norris Jr., Chairman, Tohono O'odham Nation (July 3, 2014).
The ``Shell Purchase''
The Nation's opponents make much of the fact that the Nation
acquired its West Valley Resort property through a wholly-owned
separate corporate entity called Rainier Resources. But this is
standard business practice for large land purchases--fundamentally, it
is ``just good business sense.'' H.R. 2938, ``Gila Bend Indian
Reservation Lands Replacement Clarification Act'': Hearing Before the
H. Subcomm. On Indian and Alaska Native Affairs, 112 Cong. 8 (2011)
(statement of Rep. McClintock (RCA)). Indeed, as Rep. McClintock noted,
when Walt Disney acquired the land for his development project without
revealing that he was the purchaser, it was in no small part to ensure
that the price for the land would not be artificially inflated by the
sellers. Similarly, it is common practice in the Phoenix metropolitan
area for large land purchases to be made through holding companies.
See, for example, local land acquisitions by the Church of Jesus Christ
of Latter Day Saints. J. Craig Anderson, LDS purchases Maricopa land
from builders, Arizona Republic, Nov. 2, 2008 (available at http://
www.azcentral.com/arizonarepublic/business/articles/2008/11/02/
20081102bizmormonland1102. html). The Nation's government would have
ill-served our people if we had not taken the same precautions to
ensure that we could acquire our land at fair market value.
The proponents of H.R. 1410 continue to harp on how the Nation
originally purchased the land, and continue to ignore the clear record
of the Nation's genuine efforts to reach out to, and work with, local
West Valley governments and civic organizations as the Nation began to
move forward with having the land taken into trust. I respectfully
request that the Committee take careful note of the written testimony
provided by the West Valley cities of Glendale, Peoria, Tolleson, and
Surprise to better understand the integrity and sincerity with which
the Nation has worked with the local community to create an economic
development project that will be good not just for the Tohono O'odham
Nation, but also for our neighboring communities. It is also important
to note that this is precisely what Congress intended in drafting the
1986 Gila Bend Act. As the Department stated in its Decision Letter,
the Act's terms ``protects the status quo for Arizona municipalities,
ensuring that their incorporated lands and the zoning, taxation, and
other regulatory schemes that they have enacted are not altered under
the Act by the Nation.'' Decision Letter at 9.
Under the 1986 Gila Bend Act, the West Valley Reservation is a
``Federal Indian Reservation For All Purposes''--Including
Gaming
As I mentioned before, the 1986 Gila Bend Act requires that the
Nation's West Valley reservation be treated as ``a Federal Indian
Reservation for all purposes''. Pub. L. 99-503, 6(d). This means,
among other things, that the land will have the same legal status as
the Gila Bend Reservation land that was destroyed. The tribes that are
trying to prevent the Nation from using its West Valley Reservation for
gaming like to tell everyone that there is no way Congress could have
foreseen that the Nation would use its settlement land for gaming. But
that is not true. To begin with, Congress explicitly declared its
intent to ``facilitate replacement of reservation lands with lands
suitable for sustained economic use which is not principally farming.''
Id. 2(4) (emphasis added). As the Department of the Interior noted in
its Decision Letter, ``Congress envisioned that Nation land could be in
close proximity to other local governments..Reading the Gila Bend Act
as [Gila River and Salt River] propose potentially hinders a key goal
of the Act--promoting the Nation's economic self-sufficiency in areas
that are not rural.'' Decision Letter at 9-10.
The Nation's Gila Bend Act became law two years prior to the
enactment of the Indian Gaming Regulatory Act (IGRA) and the
restrictions on gaming on newly acquired trust lands that it imposed.
In 1986, when the Gila Bend Act was passed, Indian gaming was legal on
all reservation lands, and in fact, the Nation itself was operating a
gaming business on another part of its Reservation in 1986. It is not
plausible that in 1986 Congress would have had no inkling that the
Nation's new reservation land could be used for gaming.
Indeed, before IGRA was enacted in 1988, if Congress wanted to
prevent a tribe from gaming on newly acquired lands, it had to do it
with specific legislative language; otherwise there simply were no
limitations on the location of Indian gaming operations. See, e.g., the
Florida Indian Land Claims Gila Bend Act of 1982, Pub. L. 97-399 (Dec.
31, 1982), the Ysleta del Sur Pueblo Restoration Act, Pub. L. 100-89,
Tit. I (Aug. 18, 1987) and the Alabama and Coushatta Indian Tribes of
Texas Restoration Act, Pub. L. 100-89 Tit. II (Aug. 18, 1987). In each
of those pre-IGRA statutes, Congress explicitly restricted or banned
gaming on new trust land acquired by those tribes. If Congress had
intended to impose a similar restriction on the Nation, it would have
had to do so explicitly in the 1986 Gila Bend Act--but it did not. Just
as importantly, the Nation most certainly never agreed to such a
condition, and no such condition exists in the 1987 settlement
agreement signed by the Nation and the United States.
Further, IGRA itself includes a carve out from its restrictions on
gaming on newly acquired trust lands that specifically protects the
gaming-eligibility of lands--like our West Valley Reservation--that
have been acquired as part of a land claim settlement. IGRA Section
20(b)(1)(B)(i) specifically states that IGRA's ban on gaming on newly
acquired lands ``will not apply when . . . lands are taken into trust
as part of . . . a settlement of a land claim''. It is important to
note also that some of the same legislators who crafted the 1986 Gila
Bend Act (Senator DeConcini and then- Congressman John McCain) also
crafted the Indian Gaming Regulatory Act.
A Federal Court Held That 1986 Gila Bend Act Lands Can Be Used For
Gaming
In 2011, the two wealthy East Valley tribes pushing for enactment
of H.R. 1410--the Gila River Indian Community and the Salt River Pima-
Maricopa Indian Community--together with the State of Arizona filed
suit in the U.S. District Court for the District of Arizona to
challenge the eligibility of the Nation's West Valley land for gaming.
On May 7 and June 25, 2013, following a lengthy and voluminous
discovery process, the court held that the Nation's West Valley Resort
property was acquired under the ``settlement of a land claim'' and
``qualifies for gaming'' under both the Indian Gaming Regulatory Act
and the tribal-state gaming compact. Arizona v. Tohono O'odham Nation,
944 F.Supp. 2d, 748, 756 (D. Ariz. 2013).
Contrary to the arguments made by proponents of H.R. 1410, the
district court concluded that ``gaming on [the West Valley reservation]
is expressly permitted by the federal statute that authorizes Indian
gaming [IGRA],'' id. at 754 (emphasis added), and that the West Valley
reservation falls within IGRA's ``settlement of a land claim''
provision, id. at 755-56. The Court explained that ``[t]he extensive
flooding caused by the federal government's dam gave rise to claims by
the Nation for a trespass severe enough to constitute an unlawful
taking,'' which ``by definition interfered with the Nation's title to
and possession of its land.'' Id. at 756. Moreover, the Gila Bend Act
``specifically required the Nation'' to waive claims against the
government stemming from the flooding, and ``[t]his is a classic
settlement.'' Id. Accordingly, the West Valley reservation ``qualifies
for gaming under IGRA.'' Id. The district court's decision was fully
consistent with an opinion from the Department of the Interior's Office
of the Solicitor which had confirmed as far back as 1992 that land
acquired under the 1986 Settlement Act could be used for gaming.
A Federal Court Has Rejected The Claim That The Nation Agreed Not To
Game In The Phoenix Area
In its decision, the district court also rejected on the merits
plaintiffs' claim that the tribalstate gaming compact barred the Nation
from gaming on its West Valley reservation and their alternative claim
that--even if the compact did not reflect it--the Nation had separately
agreed not to game in the Phoenix area.
During the litigation, the Nation provided plaintiffs, including
Gila River and Salt River, with voluminous discovery--requiring the
Nation to expend enormous time and resources--into all aspects of the
``negotiation of the Compact, the parties' intent and understanding,
and the Proposition 202 campaign'' leading to the voters' endorsement
of the compact. Arizona v. Tohono O'odham Nation, 944 F. Supp. 2d at
761. The district court carefully reviewed all the evidence plaintiffs
submitted and held that there was no way that a supposed promise not to
game in Phoenix would have been omitted from the compact. To the
contrary, the district court concluded that, even taking all of
plaintiffs' evidence into account, the language of the tribal-state
gaming compact simply was not reasonably susceptible to plaintiffs'
interpretation. Indeed, plaintiffs' interpretation of the compact was
``entirely unreasonable'': ``[N]o reasonable reading of the Compact
could lead a person to conclude that it prohibited new casinos in the
Phoenix area.'' Id. at 768. The court further found that the Nation's
plans do not violate any covenants of ``good faith and fair dealing.''
Id.
Gila River and Salt River tried to backstop their IGRA and tribal-
state compact arguments by also claiming that the Nation made a back-
room, side-bar promise--a ``gentlemen's agreement''--that it would not
conduct gaming in the greater Phoenix area. The district court soundly
rejected that argument as well--and not simply on sovereign immunity
grounds as opponents like to claim. Most devastating to Gila River and
Salt River's arguments was that section 25 of the very Compact that
each Arizona tribe individually signed with the State explicitly
provides that ``This Compact contains the entire agreement of the
parties with respect to the matters covered by this Compact and no
other statement, agreement, or promise made by any party, officer, or
agent of any party shall be valid or binding.'' (emphasis added). In
other words, the parties agreed in the compact that the words of the
compact would trump any supposed ``side-bar'' promises and that such
promises would have no effect. Id. at 770-74. Accordingly, because
``[t]he fully integrated compact discharges any unwritten
understandings,'' Id. at 774, plaintiffs' claims seeking to enforce a
promise that is not in the compact were foreclosed on their merits.
There is no basis whatsoever for Congress to overturn the district
court's carefully considered conclusions at the behest of the losing
litigants.
What makes Plaintiffs' litigation claims even more disturbing is
that in the evidentiary discovery which took place as the result of
their lawsuit, it became clear that representatives of the Gila River
Indian Community, the Salt River Pima Maricopa Indian Community, and
the State all were aware of the Nation's rights to conduct gaming on
its settlement lands during the negotiations that led up to the signing
of the 2003 gaming compacts. Most notably, during a July 15 1992
meeting, the Nation explicitly informed gaming negotiators for the
State of its position that land acquired under the 1986 Gila Bend Act
would be eligible for gaming. These officials did not object; however,
and as the district court noted, the Nation presented evidence that,
during later compact negotiations, ``some State legislators attempted
to . . . exclude all gaming on after-acquired lands precisely to avoid
gaming on noncontiguous reservation land such as the [Nation's]
Glendale-area land.'' Id. at 767. Later, during the mid-1990s, a
representative of the Nation similarly informed the former president of
the Salt River Pima-Maricopa Indian Community (and key 2002 compact
negotiator) of the 1986 Gila Bend Act and the Nation's right to conduct
gaming on land acquired under the Nation's settlement act. Arizona et
al. v. Tohono O'odham Nation, CV11-0296-PHX-DGC, Antone Dep. at 76 (5/
24/12). And in 2001, the Governor of the Gila River Indian Community
and one of the Gila River Indian Community's compact negotiators were
presented with a copy of a tribal council resolution from the Nation
describing the Nation's rights under this legislation. Resolution No.
01-031 (2001).
Interior Opposes H.R. 1410, and it Opposed Predecessor Bill H.R. 2938
In hearings before the House Natural Resources Committee, the
Department of the Interior twice testified that the Nation's proposed
development is lawful under IGRA. On October 4, 2011 the Department
testified on H.R. 2938, the predecessor bill to H.R. 1410, as follows:
The Department opposes H.R. 2938.
Congress was clear when it originally enacted the Gila Bend
Act in 1986, where it stated that replacement lands ``shall be
deemed to be a Federal Indian Reservation for all purposes.''
By this language, Congress intended that the Nation shall be
permitted to use replacement lands as any other tribe would use
its own reservation trust lands.
H.R. 2938 could also alter established law that prohibits
gaming, authorized under the Indian Gaming Regulatory Act
(IGRA), on lands acquired by the Secretary into trust for the
benefit of an Indian tribe after October 17, 1988, except in
certain circumstances. The effect of this legislation would be
to add a tribe-specific and site-specific limitation to IGRA's
prohibition. The process for determining whether lands qualify
for an exception to this prohibition is firmly established.
Testimony of Paula Hart, Director, Office of Indian Gaming, United
States Department of the Interior, Before the Subcommittee on Indian
and Alaska Native Affairs, Committee on Natural Resources, U.S. House
of Representatives (October 4, 2011) (emphasis added). Following the
introduction of H.R. 1410 in the current Congress, the Department again
testified in opposition to the bill, noting that it ``has a similar
effect'' as H.R. 2938:
H.R. 1410, would negatively impact the Nation's ``all
purposes'' use of selected lands under the Gila Bend [1986
Settlement] Act by limiting the Nation's ability to conduct
Class II and Class III gaming on such selected lands.
H.R. 1410 would specifically impact the Gila Bend [1986
Settlement] Act by imposing additional restrictions beyond
those agreed upon by the United States and the Tohono O'odham
Nation 25 years ago. The Department cannot support legislation
that specifically impacts an agreement so long after the fact.
Testimony of Michael Black, Director, Bureau of Indian Affairs,
United States Department of the Interior, Before the Subcommittee on
Indian and Alaska Native Affairs, Committee on Natural Resources, U.S.
House of Representatives (May 16, 2013).
In sum, the Department of the Interior consistently has recognized
that H.R. 1410, like its predecessor H.R. 2938, contravenes the 1986
Gila Bend Act's (and the 1987 Settlement Agreement's) express terms,
which require the United States to hold in trust and treat as
reservation land ``for all purposes'' the Nation's West Valley
Reservation land.
The Nation's Takings and Breach of Trust Claims Against the United
States if H.R. 1410 is Enacted
Fifth Amendment Takings Claim. The United States Constitution
provides that private property may not be ``taken for public use,
without just compensation.'' See, U.S. Const., amend. V; Penn Central
Transp. Co. v. City of New York, 438 U.S. 104, 124 (1978). H.R. 1410
would take away the Nation's court-confirmed right to use its West
Valley Reservation for gaming related economic development. See, Forest
County Potawatomi Cmty. of Wis. v. Doyle, 828 F. Supp. 1401, 1408 (W.D.
Wis. 1993) (Indian tribe had a property interest in the right to game
under its Tribal-State compact). By interfering with the Nation's
investment-backed expectations that it can conduct gaming under its
tribal-state compact and thereby causing substantial economic harm to
the Nation, H.R. 1410 would qualify as a taking requiring just
compensation. Enactment of H.R. 1410 exposes taxpayers to liability for
substantial damages.
Breach of Contract. The Nation's 1986 Gila Bend Act provided that,
in return for waiving its claims against the United States and giving
up title to its land and water rights on the Gila Bend Reservation, the
Nation could acquire replacement lands in unincorporated Maricopa,
Pima, or Pinal Counties that would be treated as a reservation ``for
all purposes,'' including gaming. In 1987, the Nation entered into a
settlement agreement with the United States in which it did indeed
relinquish its claims and its land and water rights in consideration
for the United States' promises in the 1986 Gila Bend Act. H.R. 1410
breaches that agreement. It is settled law that when the United States
enters into a contract, its rights and duties under the contract are
governed by the same law applicable to contracts between private
individuals. United States v. Winstar Corp., 518 U.S. 839, 895 (1996).
Accordingly, if H.R. 1410 is enacted into law, the Nation can sue the
United States for breach of this 1987 agreement. What is more, damages
for this breach would likely be substantial, given that the lost future
profits from the Nation's planned gaming facility during the term of
the compact would amount to hundreds of millions of dollars, if not
more.
The Nation is a Large Tribe with an Impoverished Membership
The Nation has more than 32,000 members, many of whom live in
remote and isolated areas on the Nation's reservation in southern
Arizona. Because of our location, economic development and self-
sufficiency have been, and continue to be, an ongoing struggle. In
addition, the Nation's main reservation borders 75 miles of the
international boundary with Mexico, which creates significant
additional expense for the Nation in dealing with border-related
security, illegal immigration and drug trafficking--expenses that are
unique to the Nation, exceed $ 3 million annually, and are not
reimbursed by the federal government.
In 2009, although it was not required, the Nation submitted to
Interior with its West Valley land fee-to-trust application a Report on
the Nation's significant unmet economic needs entitled ``The State of
the Tohono O'odham Nation: a Review of Socioeconomic Conditions and
Change by the Taylor Policy Group.'' As noted in the Taylor Report,
while the Nation's existing gaming operations have had some positive
effects for the Nation, providing employment and additional services
and programs for members funded by gaming revenue, given the size of
the Nation's membership, the Nation's needs are still significantly
underserved. The Report, as well as more recent census data, shows very
clearly that the Nation continues to lag far behind both non-Indian
populations and other Arizona tribes in terms of income, life
expectancy, education, quality housing, and stable family households.
For example, the average income per capita for members on the Nation is
a little over $8,000, far behind that of average Americans (less than a
third of the average American income), and well below the average
incomes of other Indians in Arizona and across the United States.
Forty-six percent of the Nation's families live below the poverty line,
and 31 percent live in overcrowded (more than one occupant per room)
homes. Rates of violent crime are high and continue to increase. Forty-
four percent of the Nation's children drop out before completing high
school; only about fourteen percent of the Nation's members have more
than a ninth-grade education, and only eight percent have an
associate's degree or higher.
In short, we continue to face great challenges in achieving
economic self-sufficiency, and as federal grants and funding available
to Tribal nations continue to shrink, the challenges only increase. We
need a way to provide for our government and our people, without
relying on the federal government. The West Valley project is a major
component of our strategy for achieving economic independence, which
also will benefit the surrounding communities.
The Assault on the Nation Must End
This is the third time in five years I have had to testify before
Congress in defense of the Nation's right to have its West Valley
property taken into trust and its right to use that land for gaming-
related economic development. The Nation's right is based on the
promises the United States made in the 1986 Gila Bend Act and in the
1987 Settlement Agreement. The Nation's right is based on the
commitments the State made to the Nation in the arms' length
negotiations which led to our tribal-state gaming compact. The Nation's
right is based on the clear provisions of the Indian Gaming Regulatory
Act. And the Nation's right is based on the United States' fundamental
and solemn obligation to act in good faith, as our trustee, to
implement these laws as they are written.
The Nation is respectful of the rights of tribal and state
governments to have differing views of the law, and of all parties'
right to access the federal courts to ensure that the laws are being
properly implemented. At every juncture during the five and a half
years since the Nation announced its plans, the Nation has done
everything within its power to ensure that it has complied with the
letter of every applicable law. The Nation has consistently articulated
its support for and faith in the judicial process, and it has
gracefully tolerated answering every allegation, no matter how
ridiculous or how offensive, in every lawsuit and in every
congressional hearing.
But with all due respect, the millions and millions of dollars the
Nation has been forced to spend to patiently defend its rights would
instead have been better spent to build houses for our elderly, pay for
college tuition for our children, and bolster our Head Start programs.
If two wealthy East Valley tribes had not embarked on this convoluted
market-protection campaign, the Nation already would be employing
thousands of people from the local community and from the Nation, and
already would be generating revenue that could be deployed to assist
the people of San Lucy Village and the rest of the Nation's membership.
Chairman Tester, Vice Chairman Barrasso, and Honorable Members of
the Committee, the Nation is begging you once and for all to put an end
to the self-dealing, mean-spirited, multi-million dollar lobbying
campaign against the Nation by bringing an end to any further
consideration of this monstrous piece of nineteenth-century throw back
legislation. We ask that you see this legislation for what it is--the
first time in the modern era in which Congress would unilaterally
renege on the solemn promises made by the United States in an Indian
land and water rights settlement.
My people suffered a real and devastating harm when our Gila Bend
Reservation was destroyed. We are asking you to help us, finally, be
able to close this chapter of our history with the United States, and
to allow us to move forward to heal those wounds and help our people,
as we have a right to do under current law, and as the United States
has a moral obligation to help us do.
I thank you for your time today. The Nation is happy to answer any
questions.
The Chairman. Thank you for your testimony. I want to thank
you all for your testimony. I can feel the emotion up here. So
I would just ask, I am going to ask two questions. I am going
to ask one of Diane and ask one of Ned.
Number one, Diane, this question, you just heard Chairman
Norris say that this would be the first time that there would
be unilateral reneging on a promise. You are Native American. I
want to know what your thoughts are on that statement.
Ms. Enos. It is ironic that the Tohono O'odham talks about
reneging on a promise. Because that is what they did when they
sat down with us all those days and years of working with us.
The promises that they violated, there was first an agreement
in principle where we all signed a document agreeing to put our
trust in each other, recognizing the sovereignty of each tribe
but yet also requiring each tribe that signed that document, if
you have an interest that is different from the group, the
coalition of 17 tribes, you must tell us.
They didn't tell us. The real tragedy here today, Senator
Tester, is all of this could have been avoided. All the
millions that Chairman Norris talks about, all the times we
have to travel and all these tribal leaders here, these city
leaders that are having to come here to lobby for help, all of
this could have been avoided if they had just told us during
those negotiations, if they had just told us what their
intentions were instead of doing this behind closed doors and
keeping it secret. Not only from tribes, but the governor and
the voters of Arizona. All of this could have been avoided. As
a Native American, you asked me that.
The Chairman. Just to clarify, if, if, if it goes the
Tohono O'odham's way, you do not believe that this would have
negative impacts on Native Americans moving forward?
Ms. Enos. The State will open up to statewide gaming, as I
said in my testimony. They are waiting. They are looking.
The Chairman. Chairman Norris, claims have been made that
the Tohono O'odham promised not to open up a facility when 202
was being debated and sold and voted upon. Can you tell me if
that is true or false?
Mr. Norris. Mr. Chairman, thank you for the question. We
are not here to relitigate the arguments that the opposition
has already raised in front of a Federal judge. The Federal
court has already ruled on every single legal challenge that
the opposition has raised on this issue. The Federal courts
have already ruled that there were no promises made. The
Federal courts have already ruled that there was never any
agreement. The Federal courts have already ruled that we will
not violate the current compact. And many other decisions as
well.
The Chairman. All right. And just to recap, Mayor Weiers,
you are opposed to the gaming that is going to happen in your
city, but the city council voted four to three to support the
gaming. Is that accurate?
Mr. Weiers. That is accurate in the sense, Mr. Chairman,
the fact that our council has been split on this issue for
years. And just recently, one council member switched his vote.
I guess my point I would like to make is, should one person
make a difference for the entire State and affect all the
Native American tribes we have in Arizona. I think not.
The Chairman. We thank you.
And I just want to thank you for bringing this issue
forward. It is very complex. I will tell you--excuse me for
just a second--I am sitting here listening to the arguments
made vacillating back and forth as you make the arguments. It
is not as clear-cut, as Senator McCain said when this thing
started, some of the most complex issues are issues that deal
with Native Americans. If you consider the history and where we
have been and where we are going, and as we talk about language
and we talk about taking care of folks with education and
housing and police protection and water resources, these are
important issues if you are living it. And you guys are living
it. And we have a lot of leaders in this audience that are
living it. I can just tell you, it is very difficult.
With that, we will allow you to say something. Go ahead.
Ms. Enos. Contrary to what Chairman Norris has asserted,
the court had to dismiss the charges that the State of Arizona
filed against Tohono O'odham of fraud, misrepresentation and
promissory estoppel because they raised sovereign immunity
defense.
The Chairman. Okay. What we need to do as a Committee is do
our due diligence on all these issues.
So we thank you all. Getting back to the issue of Indian
gaming, it has done some really good stuff for the folks who
have been able to take advantage of it. And for the folks who
can't take advantage of it, we have to figure out ways that we
can allow them to take advantage of that or other opportunities
to get some resources to be able to deal with the issues that
are so real in Indian Country.
This hearing will remain open for two weeks. I would
encourage all the stakeholders, and there were a lot of them
that stood up here a minute ago, those folks and others, to
submit written statements for the records. Because these are
important issues as we move forward and determine a path for
Indian gaming.
This hearing is adjourned. Thank you all.
[Whereupon, at 5:34 p.m., the hearing was adjourned.]
A P P E N D I X
Prepared Statement of Hon. Sherry J. Counts, Chairwoman, Hualapai Tribe
On behalf of the Hualapai Tribe, I thank Chairman Tester, Vice-
Chairman Barrasso and the Senate Committee on Indian Affairs for
hosting this oversight hearing on Indian Gaming. I am Sherry J. Counts,
Chairwoman of the Hualapai Tribe.
Before we get into the details of Indian gaming in Arizona, I'd
like to share some details about the Hualapai people in Arizona. We are
a federally recognized tribe and our lands are located in rural
northwestern Arizona along the Grand Canyon and the Colorado River
between Kingman, Arizona and Seligman, Arizona on Route 66. Our tribal
membership includes about 2,300 members with approximately 1,300
residing within the Hualapai Reservation. The Hualapai are historically
hunters and gatherers. Our history and includes a dramatic alteration
of our lifestyle due to a period of forceful removal from our ancestral
lands that ended with our return to reduced land base altered by gold
seekers, an influx of ranchers and, later the construction of the
railroad through our land.
Despite our remote location, tourism, ranching and arts and crafts
drive our local economy. We use our geographical location to offer
hunting and river rafting, along with tours of the Grand Canyon. We
receive some federal funding and gaming has provided us additional
revenue to supplant dwindling funding.
We do not operate our own casino but have an executed gaming
compact with the state of Arizona. Early in the Arizona's Indian gaming
growth period, the Hualapai Tribe did operate a small casino;
unfortunately we were forced to cease operations soon after opening.
The uniqueness and remoteness of our location could not support a
traditional gaming establishment. We could not compete with the
amenities of nearby Nevada gaming establishments and individuals
visiting our community do not seek gambling adventures, rather they
come to absorb the natural beauty of the Grand Canyon, river rafting or
hunting.
Despite our unsuccessful attempt at gaming in rural northwestern
Arizona, gaming in the metropolitan areas of Phoenix and Tucson
thrived. Casino growth in the metropolitan areas could not keep up with
demand. The tribes and the Governor's office worked on a negotiated
compact that included limits on facilities, limits numbers of machines
for each tribe and limits on the number of machines per facility.
Despite all the negotiations the decision to implement these compacts
eventually became a decision of Arizona voters. Ultimately, the voters
approved the negotiated terms and the result was limited gaming with
tribes the exclusive providers of gaming in Arizona. Gaming was
intentionally limited in the number of facilities per tribe and growth
was intentionally tied to the growth in Arizona's population. This
responsible growth was designed to prevent an explosion of casinos in
Arizona and a market flood. For example and more specifically, when the
tribes in the metropolitan areas were in need of additional machines,
the solution was to allow the tribes in remote locations, like Hualapai
to lease their machine allocations to the tribes with facilities that
had the demand for the slot machines. It was and remains, for the most
part, a win-win solution. Tribes wanting additional machines were able
to increase the number of machines in their establishments and tribes
without casino operations and in geographical locations that could not
support a casino establishment were able to lease their machine
allocation to realize some revenue. The Hualpai are one of five Arizona
tribes who lease machines to other tribes. These tribes are commonly
referred to as the ``non-gaming tribes''. Although the revenue we
receive is less than the revenue earned by the tribes operating the
machines, we do not bear the same financial risk as the tribes
operating casinos.
This system of leasing worked well for at implementation in 2003
and for the first population increase in 2008. However, as expected,
Arizona gaming has arrived at the point where tribes with casinos have
reached the maximum number of machines allowed in their respective
facilities under the Arizona-Tribal gaming compacts; eliminating the
need to lease additional machines from non-gaming tribes. Now, the non-
gaming tribes are in the position of being phased out of the market.
Once our existing lease agreements expire or if terminated by the
leasing tribe, the Hualapai Tribe will no longer receive gaming machine
lease proceeds, a substantial loss of revenue for our community.
Gaming and our partnerships have been beneficial to the Hualapai
people. Our gaming revenues are used for basic subsistence needs for
our members: infrastructure development, buildings for our tribal
departments such as a Cultural Center, Head Start, Health Building,
Boys & Girls Club and a Youth Detention Center. Gaming revenue helps us
provide our members with emergency food and shelter assistance, utility
payments, vision care, and medical assistance when Indian Health
Service is insufficient, and to provide basic necessities for our
elders, including the simple act of providing wood to keep homes warm
in the winter. We've utilized our gaming revenue to adjust to the cuts
to federal funding we have received in the past. Planning for the
future, we also set aside a portion of our gaming income for
scholarships to assist tribal members pursuing higher educational
opportunities.
Despite our successes in Arizona, we currently face challenges. In
Arizona, tribal nations are the exclusive providers of gaming,
excluding horse and dog racing and some minor forms of gaming such as
the state lottery and charitable bingo. Each and every year, the
exclusivity to provide gaming in Arizona is challenged, either by
commercial gaming interests or by Racino enthusiasts who seem to look
to slot machines to save a diminishing horse and dog racing industry.
We generally work our way through these challenges every year through
our shared efforts and membership in the Arizona Indian Gaming
Association. Unfortunately, there is one issue that stands as a
significant challenge in Arizona. The effects are current and will
reach beyond the next 25 years of gaming. The matter has the potential
to change gaming in Arizona and perhaps Indian gaming across the
nation. I am referring to the West Valley Resort, a destination style
gaming facility proposed to be constructed by the Tohono O'odham
Nation. While the Hualapai Tribe generally does not object to economic
development opportunities for any tribal community, the proposed West
Valley Resort is troubling for multiple reasons. First, as mentioned
previously, when the tribes in Arizona could not finalize a compact
with the Arizona Governor's Office we took the issue of gaming to the
voters. The tribes made several concessions to assure that gaming
growth in Arizona is limited and responsible. Every tribe, including
the Hualapai Tribe agreed to relinquish at least one gaming facility
allocation. Everyone agreed except the Tohono O'odham Nation. We
promised the people of Arizona that the number of casinos in the
Phoenix metropolitan area would be limited in number. What we didn't
know is at the time we were working together for the common goal of
developing a gaming compact to benefit all Arizona tribes, the Tohono
O'odham Nation, although at the same negotiating table was, at the same
time, planning to construct another other gaming facility in the
Phoenix metropolitan area. In our opinion, the West Valley Resort would
be contrary to the limit on casinos in the Phoenix metropolitan area.
Thus, violating our promise to the voters of Arizona. The Hualapai
Tribe understands the parcel of Glendale land purchased by the Tohono
O'odham must be used for economic development purposes by virtue of the
restrictions outlined in a settlement act and the Hualapai Tribe has no
objection to use of the land for economic development generally.
However, the Hualapai Tribe objects to use of the land for gaming
purposes. It is our concern that use of this land for a casino, as
planned will disrupt the delicate balance of Arizona Indian gaming as
represented in our gaming compacts. While there are issues that need
resolution within the compact, gaming in Arizona is generally a win-win
for everyone. The Hualapai Tribe already faces the challenge of being
pushed from the market due to a decline in the market for leasing
machines and the Tohono O'odham Nation project potentially escalates
our dismissal from gaming.
Second, the land in the Glendale area, which will become trust land
for the Tohono O'odham Nation is not their ancestral land. Rather, the
land is the ancestral land of the Salt River Pima-Maricopa and the Gila
River Indian Community. It is extremely difficult for the Hualapai to
watch the ancestral lands of one tribe be declared the trust lands of
another tribe that has virtually no ties to the area. It is counter-
intuitive. Further, the language of the settlement act opens the door
for the Tohono O'odham Nation to purchase other parcels in three
central Arizona counties, perhaps not ancestral lands for the Tohono
O'odham and construct another casino. It sets a dangerous precedent and
takes Indian gaming down a slippery slope.
Finally, although the land will be trust land, there is concern
over the public perception regarding the resort and its impact on the
off-reservation casino debate. There is much criticism regarding
alleged, ``reservation shopping''; tribes previously deemed
``terminated'' seeking federal recognition, looking for suitable
property, an application to place land into trust and the development
of a casino on the property. If the West Valley Resort is constructed,
due to the intricacies of the situation, the entire situation lends
credibility to the complaints about reservation shopping, which, in
turn, has the potential to negatively impact tribes across the country.
Arizona tribes will be forced to discuss these issues in great
detail while working on the next gaming compacts. We will need to amend
the structure of our gaming so that it continues to be a win-win for
every tribe with a gaming compact as well as the citizens of Arizona. I
remain hopeful that we will do this and continue to move into the
future.
Looking forward toward the next 25 years will require tribes to be
cognizant of changes in technology, the industry and the demographics
of the client base. Tribes will need to be flexible and aware of
changes in technology. More specifically, we will need to have a
detailed discussion regarding Internet or on-line gaming. Although
Internet gaming is illegal in Arizona and prohibited by our current
Tribal-State gaming compacts, this issue will need to be thoroughly
vetted, analyzed and reviewed. There are jurisdictions pursuing this
option and who will continue to pursue this option, thus changing the
market demographics completely. While Internet or on-line gaming may
present opportunities for tribes in rural locations such as the
Hualapai to participate in the gaming industry in a different way,
there are so many variables that need to be considered, including,
complex issues relating to jurisdiction and regulation.
The continued attempts by the commercial gaming industry and the
racing industry to merge as ``racinos'' using a ``something for all''
appeal needs further evaluation. At a minimum, the issue deserves a
detailed evaluation of the proponents' claims that the gaming industry
will breathe new life into the racing industry.
More and more jurisdictions look to gaming as a fail-safe way to
raise revenue in a time of shrinking economies. The American Gaming
Association's annual report brags on the increased revenue in the areas
of the country with commercial gaming enterprises. The American Gaming
Association also claims that only approximately 8 percent of gaming
revenues are retained as profit for casino operators with the remainder
invested in the local communities in the form of taxes, jobs and other
benefits. While jurisdictions that are new to gaming enjoy the benefits
of an influx of new money, there are other jurisdictions struggling
with a loss of revenue as gamblers take their money to new facilities.
Essentially, the same dollar is spent, just in different gaming
establishments. As the Hualapai discovered, gaming is not a fail-safe
industry. It is not a ``build it and they will come'' environment.
Rather, like every other industry, there are many factors to consider.
Gaming can no longer be considered as the answer to struggling budgets,
regardless of the jurisdiction.
I look forward to working with Arizona tribes and Indian country
for the continued development and protection of our gaming industry.
Indian gaming supports the development, subsistence and growth of
Indian communities and tribal people. I ask that you keep these aspects
in mind when evaluating Indian gaming generally. There are details that
need work, but the overall industry has been and continues to be
beneficial to our communities.
On behalf of the Hualapai People, I wish to thank the Committee for
allowing me to share the Hualapai Tribe's position on this issue.
______
Prepared Statement of Matthew Cate, Executive Director, California
State Association of Counties
Dear Chairman Tester and Vice Chairman Barrasso:
On behalf of the California State Association of Counties (CSAC), I
am pleased to submit this statement for the record in conjunction with
the Committee's July 23, 2014 oversight hearing on Indian gaming.
Founded in 1895, CSAC is the unified voice on behalf of all 58 of
California's counties. The primary purpose of the association is to
represent county government before the California Legislature,
administrative agencies, and the federal government.
At the outset, I would like to express CSAC's gratitude for having
had the recent opportunity to appear before your Committee to provide
our perspective on the significance of the U.S. Supreme Court's
Carcieri v. Salazar decision and to convey the need for Congress to
approve comprehensive reforms in the fee-to-trust process.
Incidentally, we believe that these critically important issues should
be a part of the Committee's discussion as it relates to the future of
Indian gaming.
As CSAC has consistently stated in previous congressional
testimony, statements, and correspondence, our association supports the
rights of Indian tribes to self-governance and recognizes the need for
tribes to preserve their heritage and to pursue economic self-reliance.
At the same time, CSAC believes that existing federal laws and
regulations fail to adequately serve the interests of tribes and local
governments alike. In particular, the Department of the Interior's fee-
to-trust process, as authorized by Section 5 of the Indian
Reorganization Act (IRA), lacks adequate standards and has led to
significant, and in many cases, unnecessary conflict and mutual
distrust of the federal decisionmaking system for trust lands.
In keeping with our association's goal of continuing to serve as a
constructive voice in the Indian affairs policy arena, we are pleased
to provide you with our views and recommendations on Indian gaming and
related issues. As always, we stand ready to work with the Committee in
an effort to promote and advance policies that balance the needs and
objectives of county and tribal governments.
Indian Gaming in California--Past, Present and Future
The subject matter of the Committee's hearing, entitled ``Indian
Gaming; the Next 25 Years,'' is of unique importance to California and
its 58 counties. With more federally recognized tribes and Indian
gaming establishments than any other state, California--along with its
local governments and communities--is disproportionately impacted by
tribal gaming. As the industry grows, California will continue to face
significant policy challenges, making it essential for Congress to play
an active oversight role in this important matter.
The Past--Even before the 1988 enactment of the Indian Gaming
Regulatory Act (IGRA), counties in California were experiencing impacts
in rural areas from Indian gaming facilities. These establishments were
places where bingo was the primary commercial enterprise in support of
tribal economic self-reliance. The impacts on local communities were
not significant in large part because the facilities where Indian bingo
was played were modest in size and did not attract large numbers of
patrons.
Following the enactment of IGRA, however, the impacts to counties
from Indian gaming establishments increased with the arrival of larger
facilities. Even so, the impacts to local communities from these gaming
operations were generally manageable, except in certain instances.
Beginning with the 1999 signing of the State's Tribal Gaming
Compacts with 69 tribes and the passage of Propositions 5 and 1A
(legalizing Indian gaming in California), the ensuing rapid expansion
of tribal gaming has had profound impacts beyond the boundaries of
reservation lands. The result has been a myriad of significant
economic, social, environmental, health, safety, and other community
impacts.
The Present--Today, California has a total of 109 federally
recognized tribes operating 71 gaming facilities. These establishments
generate more than 25 percent of the nearly $30 billion in annual
nationwide Indian gaming revenues.
While some of the Tribal-State Gaming Compacts in California
require tribes to enter into agreements with county governments
regarding the mitigation of off-reservation impacts--as well as impose
binding ``baseball style'' arbitration on the tribe and county if they
cannot agree on the terms of an agreement--not all of the compacts
adequately address the impacts of development and/or provide meaningful
and enforceable mechanisms to prevent or mitigate impacts. In such
cases, county governments must shoulder the burden of addressing the
impacts associated with tribal development projects.
The California experience has also made clear that particularly
large casino facilities have impacts beyond the immediate jurisdiction
in which they operate. Attracting many thousands of patrons per day,
larger facilities in California cause traffic impacts throughout a
local transportation system. Similarly, traffic accidents, crime, and
other problems associated with gaming are not isolated to a casino site
but may increase in surrounding communities.
The Future--Both the number of Indian casinos and the revenue
generated by California's Indian gaming industry has grown in recent
years and is expected to continue to grow into the future. Despite what
appears to be a relatively saturated market, a number of tribes are
currently seeking to build off-reservation casinos or, in some cases,
expand existing gaming facilities. While certain projects are supported
locally, others face strong resistance, including opposition from
county boards of supervisors.
Moreover, and in addition to the state's 109 federally recognized
tribes, California currently has 81 tribal groups petitioning for
federal acknowledgment (which represents roughly one-quarter of all
petitioners nationwide). Of these 81 petitions, 68 are active. Although
presumably not all of the state's tribal groups will ultimately be
successful in gaining federal recognition--nor would all likely pursue
gaming--the sheer number of groups seeking recognition and the
possibility of new casino operations illustrates the potential for
Indian gaming to become even more pervasive in California.
Of further relevance to this discussion is the Department of the
Interior's newly proposed revisions to the Federal acknowledgment
process (Procedures for Establishing That an American Indian Group
Exists as an Indian Tribe, 25 CFR Part 83, BIA-2013-0007, RIN 1076-
AF18). Pursuant to the Proposed Rule, California petitioners would
generally have a much easier path to Federal acknowledgment due to a
series of changes in the criteria that the Department uses to evaluate
petitions. According to a recent study, \1\ the rule would result in as
many as 34 newly recognized Indian tribes in California and could lead
to the development of 22 new casinos throughout the state.
---------------------------------------------------------------------------
\1\ Michael L. Lawson, Ph.D., California Indian Petitioners and the
Proposed Revisions of the Federal Acknowledgment Regulations (July
2014).
---------------------------------------------------------------------------
While the aforementioned study notes that existing casinos in
California are largely located outside of urban areas, the tribes that
could potentially gain recognition may be located in urbanized areas,
including the counties of Los Angeles, Orange, San Mateo, Santa Clara,
and Ventura. The proposed regulations also would impact acknowledgement
petitions in coastal areas such as Monterey, San Luis Obispo, Santa
Cruz, and San Benito, and in central and northern California counties
such as Kern, Mariposa, Nevada, Plumas, Shasta, and Trinity.
With over 70 gaming facilities already in operation, additional
gaming applications pending, and the potential for the aforementioned
rule changes to result in the recognition of new Indian tribes and the
development of additional casinos, it is clear that California will
continue to be heavily impacted by Indian gaming well into the future.
Current Laws and Regulations
As previously stated, current laws, regulations, and administrative
procedures fail to meet the legitimate needs of tribes and counties. In
particular, the Bureau of Indian Affairs' fee-to-trust process--as
authorized by the IRA and governed by the Department of the Interior's
Part 151 regulations--is flawed and in need of a comprehensive
overhaul.
In CSAC's view, the fundamental problem with the trust land
acquisition process--for gaming or non-gaming-related purposes--is that
Congress has not set standards under the IRA by which any delegated
trust land authority would be applied by BIA. Section 5 of the Act
reads as follows: ``The Secretary of the Interior is hereby authorized
in his discretion, to acquire [by various means] any interest in lands,
water rights, or surface rights to lands, within or without
reservations . . . for the purpose of providing land to Indians.'' 25
U.S.C. 465.
The aforementioned general and undefined congressional guidance has
resulted in a trust land process that fails to meaningfully include
legitimate interests, provide adequate transparency to the public, or
demonstrate fundamental balance in trust land decisions. The
unsatisfactory process has created significant controversy, serious
conflicts between tribes and states, counties and local governments--
including litigation costly to all parties--and broad distrust of the
fairness of the system.
One of CSAC's central concerns with the current process is the
severely limited role that state and local governments play. The
implications of losing jurisdiction over local lands are very
significant, including the loss of tax base, loss of planning and
zoning authority, and the loss of environmental and other regulatory
power. Yet, state, county and local governments are afforded limited,
and often late, notice of a pending trust land application, and, under
the current regulations, are asked to provide comments on two narrow
issues only: (1) potential jurisdictional conflicts; and, (2) loss of
tax revenues.
Moreover, the notice that local governments receive typically does
not include the actual fee-to-trust application and often does not
indicate how the applicant tribe intends to use the land. Further, in
some cases, tribes have proposed a trust acquisition without
identifying a use for the land; in other cases, tribes have identified
a non-intensive, mundane use, only to change the use to heavy economic
development, such as gaming or energy projects, soon after the land is
acquired in trust.
Local governments also are often forced to resort to Freedom of
Information Act (FOIA) requests to ascertain if a petition for an
Indian lands determination--a key step in the process for a parcel of
land to qualify for gaming--has been filed in their jurisdiction.
Because many tribal land acquisitions ultimately will be used for
economic development purposes--including gaming activities--there are
often significant unmitigated impacts to the surrounding community,
including environmental and economic impacts. Unfortunately, current
law does not provide any incentive for tribes and affected local
governments to enter into agreements for the mitigation of off-
reservation impacts.
While the Department of the Interior understands the increased
impacts and conflicts inherent in recent trust land decisions, it has
not crafted regulations that strike a reasonable balance between tribes
seeking new trust lands and the states and local governments
experiencing unacceptable impacts. Indeed, the current notification
process embodied in the Part 151 regulations is, in practice,
insufficient and falls far short of providing local governments with
the level of detail needed to adequately respond to proposed trust land
acquisitions. Accordingly, a legislative effort is necessary to meet
the fundamental interests of both tribes and local governments.
While the IRA provides the Secretary of the Interior with the
authority to take land into trust for the benefit of Indian tribes,
IGRA provides the framework for tribes to conduct gaming on trust land.
Under IGRA, casino-style gaming is authorized on lands located within
or contiguous to the boundaries of a tribe's reservation as it existed
on October 17, 1988 (the date of IGRA's enactment).
Although IGRA prohibits gaming on land taken into trust after the
aforementioned date, the Act authorizes several notable exceptions to
the prohibition, including cases in which the Secretary determines that
gaming on newly acquired lands would be in the best interest of the
tribe--as well as not detrimental to the surrounding community--and the
governor concurs in the Secretary's determination (IGRA's two-part
test). Additionally, post-1988 gaming acquisitions are allowed if the
land is part of the initial reservation of a newly acknowledged tribe,
or in cases in which a tribe is restored to federal recognition.
In California, many tribes pursue trust land under IGRA's
``restored land'' exception. This allows a tribe to circumvent the
Act's two-part determination process, which empowers a state to manage
the location and growth of gaming. The opportunities under IGRA also
have been a primary factor driving many tribal groups in California to
seek federal recognition.
Further, tribes have more aggressively sought lands that are of
substantially greater value to state and local governments, even when
distant from the tribe's existing reservation, because such locations
are far more marketable for various economic purposes. The result has
been increasing conflict between tribes and state and local
governments.
In California, approximately 45 applications from tribes to take
land into trust consisting of more than 10,000 acres of land have been
submitted since 2011. California's unique cultural history and
geography, and the fact that there are over 100 federally-recognized
tribes in the state, contributes to the fact that no two land-into-
trust applications are alike.
The Need for Intergovernmental Agreements
To follow are examples of tribes and counties forging cooperative
agreements by working on a government-to-government basis on issues of
common concern to both parties, not just gaming-related issues. These
examples underscore the need for federal law to incentivize and
facilitate intergovernmental cooperation.
Examples of Successful Tribal-County Partnerships--In Yolo County,
the Yocha Dehe Wintun Nation and the County have a strong working
relationship and have entered into an agreement whereby the tribe
provides mitigation payments to the County for the off-reservation
impacts associated with the tribe's casino expansion and hotel project.
The agreement also expressly states that a purpose of the agreement is
to strengthen the government-to-government relationship between the
County and the Tribe.
In Sonoma County, an intergovernmental mitigation agreement between
the County and the Federated Indians of the Graton Rancheria, which was
approved by the Board of Supervisors, includes provisions for recurring
mitigation payments to the County for law enforcement and fire and
emergency management services, among other things. Similarly, the
Madera County Board of Supervisors unanimously approved a comprehensive
MOU between the County and the North Fork Rancheria to fund police,
fire, and emergency services. The agreement also establishes new
tribal/community foundations to invest in local charitable causes,
education, and economic development.
In southern California, San Diego County has a history of tribes
working with the San Diego County Sheriff to ensure adequate law
enforcement services in areas where casinos are operating. In addition,
San Diego County has entered into agreements with four tribes to
address the road impacts created by casino projects. Further, a
comprehensive agreement was reached with the Santa Ysabel Tribe
pursuant to the 2003 Compact with the State of California.
Humboldt, Placer, and Colusa Counties and tribal governments have
agreed similarly on law enforcement-related issues. Humboldt County
also has reached agreements with tribes on a court facility/sub-
station, a library, road improvements, and on a cooperative approach to
seeking federal assistance to increase water levels in nearby rivers.
The agreements in each of the above counties were achieved only
through positive and constructive discussions between tribal and county
leaders. It was through these discussions that each government gained a
better appreciation of the needs and concerns of the other government.
Not only did these discussions result in enforceable agreements for
addressing specific impacts, but enhanced respect and a renewed
partnership also emerged, to the betterment of both governments, and
tribal and local community members.
Examples of Conflict--Although many successful working
relationships have been forged between counties and tribes, CSAC
remains concerned that many tribal development projects lead to
significant unmitigated impacts to the surrounding community, including
environmental and economic impacts. In fact, there are recent examples
of tribal governments not complying with the requirements of the IGRA
or the 1999 Compacts. In Mendocino County, a tribe built and operated a
Class III gaming casino for years without the requisite compact between
the tribe and the governor. In Sonoma County, a tribe demolished a
hilltop to build and operate a tent casino that the local Fire Marshal
determined lacked the necessary ingress and egress for fire safety.
In San Diego County, there have been impacts to neighboring water
wells that appear to be directly related to a tribe's construction and
use of its water well to irrigate a newly constructed golf course
adjoining its casino. Additionally, several other tribal casino
projects have advanced without the tribe providing mitigation for the
significant traffic impacts caused by those projects.
CSAC Policy Recommendations to the Committee
CSAC's primary federal Indian gaming principle is that when tribes
are permitted to engage in gaming activities under federal law,
judicially enforceable agreements between counties and tribal
governments must be in place. Such agreements should fully mitigate
local impacts from a tribal government's business activities and fully
identify the governmental services to be provided by the county to that
tribe.
When tribes reach local intergovernmental agreements to address
jurisdiction and environmental impacts of gaming or other development,
the tribe, local government, and surrounding community benefit. In such
cases, tribes should have a streamlined fee-to-trust process.
Accordingly, the federal legal framework should encourage tribes to
reach intergovernmental agreements by reducing the threshold for
demonstrating need when mitigation agreements are in place.
If a tribe and jurisdictional local government fail to reach an
agreement, federal law should require the Secretary to ensure that the
interests of the tribe and the local government are balanced in the
fee-to-trust process. This should be done by requiring the Secretary to
determine, after consulting with appropriate state and local officials,
that the proposed land acquisition would not be detrimental to the
surrounding community. Additionally, the Secretary should be required
to determine that tribes have taken necessary steps to ensure that
jurisdictional conflicts and impacts have been mitigated. Once these
requirements have been satisfied, the Secretary would be authorized to
approve the tribe's development.
In sum, and in light of the long-standing deficiencies in the
Indian fee-to-trust system, we urge the Committee to do the following:
Approve legislation that would restore the Secretary of the
Interior's authority to take land into trust for all Indian
tribes. This action would address Indian Country's long-
standing call to fix the inequities caused by the Carcieri
decision. CSAC agrees that this inequity must be fixed;
AND
Include as part of the Carcieri fix long-overdue,
comprehensive reforms in the fee-to-trust process in order to
address the inequities and flaws in the current trust land
system, including provisions that incentivize local mitigation
agreements. This would ensure that the legitimate needs and
interests of both local governments and tribes are fairly
balanced. Likewise, any potential amendments to IGRA also
should provide an incentive for tribes and counties to engage
in government-to-government discussions.
CSAC believes that it is essential for Congress to embrace the
aforementioned principles as part of the same legislative package. To
do one without the other would perpetuate an unfair and unbalanced
system. CSAC's comprehensive fee-to-trust reform proposal seeks to
create a trust land process that promotes and protects the interests of
tribes and local governments.
Thank you for considering our views regarding this very important
matter.
______
Prepared Statement of Hon. Ruben Balderas, President, Fort McDowell
Yavapai Nation
______
Prepared Statement of Gregory Mendoza, Governor, Gila River Indian
Community
Chairman Tester, Vice Chairman Barrasso and members of the
Committee, I want to thank you for considering the written testimony of
the Gila River Indian Community regarding H.R. 1410, the Keep the
Promise Act of 2013. By prohibiting gaming on tribal lands acquired in
trust status after April 9, 2013 within the Phoenix metropolitan area
until January 1, 2027 this bill maintains the commitments and promises
that were relied upon during negotiations of the current gaming
compacts for the duration of those compacts, which begin to expire in
late 2026. Enactment of this overwhelmingly bipartisan legislation is
critical to protecting the existing gaming compacts and system of
tribal gaming in Arizona. It must be clearly understood that the bill
does not prohibit Indian gaming on the lands beyond the sunset date of
January 1, 2027 and does not prevent lands from being taken into trust
status for Indian tribes.
The Arizona Republic, the largest newspaper in Arizona, summed up
the current situation well when it indicated that support for an
additional tribal casino in the Phoenix metropolitan area came down to
one question: ``Just how cool are you with being lied to?'' \1\ That is
the question that many Arizonans are contemplating as the Tohono
O'odham Nation (TON) tries to build a casino far outside its aboriginal
territory and within the Phoenix metropolitan area. The question is
important because the voters of Arizona authorized a system of gaming
in 2002 when the tribes essentially obtained a legal monopoly on gaming
in the State, a monopoly that has benefited all Indian tribes in the
State, gaming and non-gaming. But in return, the voters wanted to set a
hard cap of seven casinos that would be in the Phoenix metropolitan and
no more, which was the number of casinos in existence at that time.
Additionally, the voters wanted certainty about the potential
proliferation of gaming, and thought that they had achieved that
certainty by limiting gaming to Indian tribes on Indian reservations as
they existed at the time of their vote in 2002 and not allow casinos to
expand into non-tribal neighborhoods, such as Glendale.
---------------------------------------------------------------------------
\1\ Doug MacEachern, Tohono O'odhams were gaming state over casino
all along, Arizona Republic, Apr. 2, 2013.
---------------------------------------------------------------------------
The voters and State leadership thought that they got what they
wanted when they supported Proposition 202 over two other gaming
propositions on the ballot in 2002. But seven years later, in 2009, TON
announced that it had purchased lands pursuant to a 1986 law in
Glendale (a Phoenix suburb) and planned to build a casino on land
located across the street from Kellis High School, a public high school
that opened in 2004--two years after the voters approved Proposition
202 and thought tribal gaming would be restricted to the tribal
reservation areas that they would have been aware of at the time.
As explained more fully below, Congress is the only entity that is
properly suited to resolve this matter, in part because Congress
created the situation and because the courts have been thwarted from
being able to adjudicate the merits of the essential claims at issue.
To be clear, no one is trying to prevent TON from acquiring
replacement lands pursuant to the 1986 Gila Bend Indian Reservation
Lands Replacement Act (``Gila Bend Act''), Pub. L. 99-503. \2\ However,
TON should not be able to utilize the 1986 law to violate the
commitments and promises relied upon during the negotiations of the
existing gaming compacts in Arizona.
---------------------------------------------------------------------------
\2\ The Community would prefer that TON's replacement lands be
within the aboriginal territory of TON. In the context of remains and
cultural resources TON has respected the aboriginal boundaries of its
sister tribes as we have respected is aboriginal boundaries. But in the
context of gaming that respect is clearly lacking.
---------------------------------------------------------------------------
Contrary to the testimony of TON, H.R. 1410 does not create
liability for the United States and does not affect pending litigation.
Indeed, H.R. 1410 was narrowly crafted to preserve promises made during
the negotiation of the existing tribal-state compact and to clarify
them in a manner that is consistent with federal law but does not
pierce TON's sovereign immunity. Furthermore, H.R. 1410 would not
create liability for the United States or constitute an unlawful taking
that would trigger constitutional protection because it is well within
Congress' plenary power over Indian affairs to defend and protect the
promises that tribes publicly make to obtain gaming. There is no Fifth
Amendment right for tribes to violate their own promises on which other
tribes and the State have relied. The Fifth Amendment does not curtail
Congress's authority to protect the compacting process from broken
promises and misrepresentations. To suggest otherwise is disingenuous.
Instead, H.R. 1410 is about preserving the spirit of the existing
gaming compacts, and holding tribes, including TON, to their word that
was relied upon when negotiating the existing framework of tribal
gaming in Arizona. Several rural and poor tribes and other Phoenix
metropolitan area tribes support H.R. 1410, as do the Governor, State
legislature, and numerous cities and towns in the Phoenix area.
H.R. 1410 Does Not Create Liability for the United States
Opponents to H.R. 1410 contend that the bill would subject the
United States to a Fifth Amendment Takings Claim. This objection is
premised on notion that when Arizona tribes obtained IGRA compacts by
promising not to attempt to use those compacts to locate any additional
casinos in the Phoenix area, the Fifth Amendment somehow protects their
right to violate that very promise. This could not be further from the
truth. It should go without saying that Congress does not abrogate
gaming compacts or affect a Fifth Amendment taking when it defends and
protects the promises tribes made publicly to obtain the compacts.
Neither gaming compacts nor the Gila Bend Act include an inherent right
to profit from States' and tribes' detrimental reliance on a tribe's
promises during the compacting process. Simply put, there is no Fifth
Amendment right for tribes to commit fraud and then benefit from the
fraud. The Fifth Amendment does not limit Congress' authority to
preserve the integrity of IGRA's compact process from illegality.
Nonetheless, TON argues that H.R. 1410 will give rise to a
successful takings claim against the United States, a claim that the
Assistant Secretary was not willing to embrace during his responses to
the Committee's questions during the hearing. Such a claim would argue
that H.R. 1410 constituted ``regulatory taking'' by depriving TON of an
economic use of its land and interfering with an investment-backed
expectation. As a threshold matter, the Fifth Amendment's Taking Clause
generally applies to federal actions that affect Indian property rights
formally recognized by Congress. See generally 1-5 Cohen's Handbook of
Federal Indian Law 5.04[2][c]. However, the Supreme Court's opinion
in Penn Central Transportation Co. v. City of New York, 438 U.S. 104
(1978), established a multifactor analysis for courts to consider when
weighing a regulatory taking claim. The Penn Central test has spawned
different categories of regulatory takings but it is highly unlikely
that TON could successfully argue that H.R. 1410 fits into any one of
these.
Penn Central requires an ad hoc factual inquiry based on three
factors: (1) ```the character of the governmental action'''; (2)
``[t]he economic impact of the regulation on the claimant''; and (3)
``the extent to which the regulation has interfered with distinct
investment-backed expectations.'' Lingle v. Chevron U.S.A. Inc., 544
U.S. 538-539 (alteration in original (quoting Penn Central, 438 U.S. at
124). Mindful of Justice Holmes's oft-cited admonition that
``[g]overnment hardly could go on if to some extent values incident to
property could not be diminished without paying for every such change
in the general law[,]'' Mahon, 260 U.S. at 413, courts historically
have applied Penn Central's inquiry stringently.
First, the character of the governmental action that would give
rise to TON's taking claim would likely weigh against an
unconstitutional taking. H.R. 1410 was narrowly crafted so TON may
still use the Glendale Parcel for commercial gain or otherwise, even if
it cannot immediately operate Class II or III gaming activities on the
property. The proximity of the Glendale Parcel to the Arizona Cardinals
stadium will allow TON to pursue a wide variety of lucrative economic
development activities that will bring significant revenue. Viewed from
that perspective, the legislation is more akin to a zoning regulation
restricting a particular land use, which tends to withstand a Takings
Clause challenge. See generally Village of Euclid v. Ambler Realty Co.,
272 U.S. 365 (1926).
Moreover, here Congress is effectively regulating gambling in the
public interest. The Supreme Court has long recognized the regulation
of gambling to be a traditional exercise of police power. See Lawton v.
Steele, 152 U.S. 133, 136 (1894). And under a much older Takings Clause
regime, it has held that ```acts done in the proper exercise of
governmental powers, and not directly encroaching upon private
property, though these consequences may impair its use,' do not
constitute a taking within the meaning of the constitutional provision,
or entitle the owner of such property to compensation from the state or
its agents, or give him any right of action.'' Mugler v. Kansas, 123
U.S. 623 (1887) (discussing prohibition of alcohol). It is of great
consequence for purposes of this analysis that Congress has already
placed substantial limits on Indian gaming unless done in accordance
with the IGRA. If allowing gaming pursuant only to IGRA's strictures is
Congress's baseline approach, then H.R. 1410 is consistent with that
public policy insofar as it closes a loophole in IGRA that is only
available to TON through its bad faith negotiations with other parties.
Second, the economic impact of the regulation would clearly be
significant but Supreme Court decisions have ``long established that
mere diminution in the value of property, however serious, is
insufficient to demonstrate a taking.'' Concrete Pipe & Products of
Cal., Inc. v. Construction Laborers Pension Trust for S. Cal., 508 U.S.
602, 645 (1993). Indeed, the Supreme Court has noted that a diminution
in property value as high as 75 percent or even 92.5 percent may not be
a sufficiently serious impact. Id. at 645. Because the Glendale Parcel
can be put to a range of other profitable uses, a court may well give
less weight to the impact of precluding Class II and III gaming
activities. It is also relevant to this analysis that H.R. 1410 is
temporally limited so any economic impact on TON's ability to use the
Glendale Parcel for gaming would terminate on January 1, 2027 when all
Arizona tribal-state compacts will need to be re-negotiated. Further,
H.R. 1410 would not prevent TON from developing a fourth casino
anywhere outside of the Phoenix metropolitan area. These points
illustrate how the Keep the Promise Act was drafted to avoid a
permanent impairment of any economic development opportunities,
including gaming, so any action challenging the Keep the Promises Act
would likely fail to demonstrate a credible Takings Claim.
Third, it is unlikely that TON will be able to establish that its
investment-backed expectations rise above a ``unilateral expectation or
an abstract need,'' which would be critical to establishing a Takings
Claim. Ruckelshaus v. Monsanto Co., 467 U.S. 986, 1005 (1984) (citation
and quotation marks omitted). Several courts have recognized that
gambling is a highly regulated industry and that it is difficult to
hold reasonable investment-backed expectations in light of that
regulation. See, e.g., Holliday Amusement Co. of Charleston, Inc. v.
South Carolina, 493 F.3d 404, 411 (4th Cir. 2007) (holding no taking of
slot machine property where South Carolina banned video poker after 25
years of allowing it because ``Plaintiff's participation in a
traditionally regulated industry greatly diminishes the weight of his
alleged investment-backed expectations''); Hawkeye Commodity
Promotions, Inc. v. Vilsack, 486 F.3d 430, 442 (8th Cir. 2007) (holding
multi-million ``devastating economic impact'' of ban on TouchPlay
machines to be ``discounted'' by ``heavily regulated nature of gambling
in Iowa). TON was well aware of the inherent riskiness of gaming
ventures when they purchased the Glendale Parcel. This is likely why
the parcel was purchased and kept secret until a more favorable
political environment improved the likelihood of success for their
scheme. The attenuated timeline of this project epitomizes the highly
speculative nature of gaming projects.
Again, it would be difficult for TON to argue that IGRA and the
2002 Compact guarantee a right to game on the Glendale Parcel. The Gila
Bend Act and its corresponding settlement agreement did not give TON a
right to violate its own subsequent promises in the compacting process.
The Gila Bend Act is silent with respect to gaming and it was also
enacted two years before IGRA. Further, no one can make the credible
argument that by regulating Las Vegas style gaming and making it
subject to the Tribal-State compacting process, that IGRA constituted a
breach of contract or a taking of federally recognized tribes' inherent
right to game on tribal lands. Congress could preclude Indian gaming
altogether and has already enacted IGRA to establish that tribal gaming
is permissible only ``if the gaming activity is not specifically
prohibited by Federal law,'' 25 U.S.C. 2701(5), and it contains
several restrictions as to the location of gaming facilitates. All of
that at least arguably puts tribes on notice that Congress may at any
time enact additional restrictions on tribal gaming. Moreover, the 2002
Compact--which was negotiated between the Tribes and the State of
Arizona--could not estop Congress from altering IGRA. Cf. Sioux Nation,
448 U.S. at 410-411 (affirming Congress's power to abrogate treaties
with tribes). Simply put, ``[t]he pendulum of politics swings
periodically between restriction and permission in such matters [as
gambling], and prudent investors understand the risk.'' Holliday
Amusement, 493 F.3d at 411. Nothing in the Gila Bend Act bestowed any
absolute right to locate a casino on Indian lands in Phoenix--much less
did it enshrine a right to violate promises TON and other tribes later
made in pursuit of IGRA compacts with Arizona in 1993 and 2002. IGRA,
not the Gila Bend Act, defines the boundaries of Indian gaming
authority, and just as Congress enacted limitations on such gaming in
IGRA, it can legislatively protect the IGRA compacting process from the
corrosive and profoundly destabilizing effect of unkept promises made
to obtain a compact.
In sum, there are considerable arguments against the viability of a
Takings Clause challenge to H.R. 1410 that stem from the narrow scope
of the legislation, arguments that the Assistant Secretary seemed to
tacitly acknowledge when he responded to the Committee's inquiries on
the issue. The limited nature of the government's restriction, the
continued economic viability of the Glendale Parcel, and the highly
regulated nature of gaming present significant barriers to a regulatory
taking claim.
H.R. 1410 Would Not Impact Pending Litigation
TON likes to tell Members of Congress to let the ongoing litigation
run its course before taking any action on this matter. However, TON
fails to tell those very same Members that the courts are unable to
adjudicate the essential claims in this matter because TON refuses to
waive its sovereign immunity. Thus, H.R. 1410 would not interfere with
ongoing litigation and Congress is the only entity that can resolve
this issue.
Two lawsuits were brought after TON announced its intention to
acquire lands into trust for an off-reservation casino in 2009. One
lawsuit challenges the TON's ability to have the lands taken into trust
status as an Indian reservation, and that lawsuit is near completion.
The other lawsuit alleges that TON wrongfully induced the relevant
parties to enter into the compact and is violating the compact. While
the courts have been able to review certain claims with respect to the
express terms contained within the gaming compact, the courts have been
thwarted by TON from addressing the claims of fraud, misrepresentation,
or promissory estoppel because TON asserted tribal sovereign immunity
with respect to those claims. Tribal sovereign immunity is a legal
doctrine providing that Indian tribes are immune from judicial
proceedings without their consent or Congressional waiver. Congress
waived tribes' sovereign immunity in IGRA with respect to claims for
violations of a compact once the compact is signed, but IGRA does not
waive a tribe's sovereign immunity for actions that occurred prior to
the signing of the compact. Since TON refused to waive its sovereign
immunity with respect to the claims of fraud, misrepresentation and
promissory estoppel, which occurred prior to the signing of the
compact, the court was unable to consider those claims. No one would
expect a gaming compact to anticipate the need to waive sovereign
immunity because a party would intend to commit fraud and
misrepresentation, or wrongfully induce conduct. This is especially
true here because Arizona tribes, including TON, signed an ``Agreement
In Principle'' where tribes agreed to negotiate in good faith with one
another. Sadly, the 2027 Arizona compacts may need to include very
broad waivers of sovereign immunity as a result of the actions of TON
here.
It is these claims that the courts have dismissed that H.R. 1410
seeks to remedy. And, in its May 7, 2013 order the Federal District
Court for the District of Arizona found that although evidence appears
to support the promissory estoppel claim against TON, the court had to
dismiss the claim also because of TON's sovereign immunity. \3\
Promissory estoppel is where one party makes a promise and a second
party acts in reasonable and detrimental reliance on that promise. In
that instance, a court would normally be able to enforce the promise
that was relied on regardless of whether it was expressly stated in a
contract. That's exactly what happened in this matter. TON made
representations that there would be no additional casinos in the
Phoenix area and the State and other tribes and voters relied on TON's
representations in deciding to give up rights to additional casinos and
gaming machines, approve Proposition 202, and sign the compacts
approved by the voters. It is critical that TON's false promises
preceded execution of its compact with the State of Arizona and fell
outside of IGRA's waiver of sovereign immunity. Neither IGRA nor any
other law governing fair business practices anticipates fraudulent
conduct among contracting parties. TON has exploited the fundamental
assumption of propriety in business practices and shielded judicial
review of its conduct by refusing to waive sovereign immunity.
---------------------------------------------------------------------------
\3\ State of Ariz. v. Tohono O'odham Nation,, slip op. at 26-27 (D.
Ariz. May 7, 2013).
---------------------------------------------------------------------------
TON argues that it is unreasonable to expect it to waive its
sovereign immunity for what its chairman referred to as frivolous
claims. To the contrary, it is precisely because those claims would
expose the wrongful conduct that TON must use sovereign immunity as a
shield. And, while it is common for tribes to grant limited waivers of
sovereign immunity, particularly for commercial reasons such as
casinos, it is hard to imagine waivers that would have expressly
envisioned duplicitous conduct grounded in fraud as part of a gaming
compact; perhaps the State will require such waivers of all Arizona
Indian Tribes in the 2027 compacts in order to safeguard against future
conduct of this sort by TON. In the end, waiving sovereign immunity is
a political decision, and one that we respect. However, it is
disingenuous for TON to refuse to waive its sovereign immunity in court
in order to prevent resolution of certain claims and then argue that
Congress should not resolve these same claims because they are being
addressed in litigation.
H.R. 1410 comes at a critical time for tribal sovereignty and
Indian gaming. In May, the Supreme Court issued its opinion in Michigan
v. Bay Mills, 134 S.Ct. 2024 (2014). The Court, in a 5 to 4 decision,
ruled that the Bay Mills Tribe could assert tribal sovereign immunity
and avoid claims filed by the State of Michigan that sought to close
what it claimed was an illegal off-reservation in Vanderbilt, Michigan.
The Court stated at five different points in its opinion that Congress
and not courts are the proper venue to resolve issues where sovereign
immunity has frustrated efforts to bring justice to parties that cannot
maintain suit against tribes. Perhaps most disturbingly, Justice
Scalia, who voted in favor of several Supreme Court decisions which
cemented the doctrine of tribal sovereign immunity, explicitly stated
in his dissenting opinion in Bay Mills that those votes in support of
sovereign immunity were wrong and that he ``would overrule'' tribal
sovereign immunity. Although Bay Mills was certainly a victory for
Indian Country, it also put a spotlight on the fragile state of tribal
sovereign immunity and the fact that the Supreme Court is one vote from
limiting its application or eliminating it altogether. Simply put,
controversial gaming projects such as those proposed by Bay Mills and
TON manipulated the federal approval process to avoid legitimate state
and tribal concerns and have used sovereign immunity as a shield to
protect illegal or fraudulent activity. From this perspective, H.R.
1410 is good policy for Indian Country because it will address a narrow
set of facts where one tribe is recklessly exploiting sovereign
immunity that if not addressed by Congress could later be cited as the
reason the Supreme Court changes its mind and decides to abrogate
sovereign immunity.
There remain certain issues that are pending in litigation, but
those issues are not related to the claims of fraud, misrepresentation
and promissory estoppel. H.R. 1410 is intended to not impact any
pending court case, but rather to address the issues that the court has
determined that it is unable to resolve. More, the Department of the
Interior has also indicated that it cannot resolve the claims of fraud,
misrepresentation and promissory estoppel. Thus, Congress and H.R. 1410
is the only entity capable of resolving this issue and addresses issues
that courts are unable to review.
Thank you for holding the July 23, 2014 hearing and allowing
Congressman Raul Grijalva, Congressman Paul Gosar, Mayor Jerry Weiers,
Chairman Ned Norriss and President Diane Enos to testify on H.R. 1410.
Now that this bill has been heard by the Senate Committee on Indian
Affairs we respectfully request prompt consideration.
______
Prepared Statement of Rex Tilousi, Chairman, Havasupai Tribal Council
______
Prepared Statement of Hon. Ben Shelly, President, Navajo Nation
______
Joint Prepared Statement of Steven Andrew Light, Ph.D. and Kathryn R.L.
Rand, J.D., Co-Directors, Institute for the Study of Tribal Gaming Law
and Policy
We thank Chairman Tester, Vice Chairman Barrasso, and the members
of the U.S. Senate Committee on Indian Affairs, including Senators John
Hoeven and Heidi Heitkamp of North Dakota, our university's home state,
for this opportunity to comment on the future of Indian gaming
following the Committee's July 23, 2014 oversight hearing on Indian
gaming's next 25 years.
We co-direct the Institute for the Study of Tribal Gaming Law and
Policy at the University of North Dakota, providing legal and policy
analysis and advancing research and understanding of Indian gaming. Our
comments and recommendations here are informed by 18 years of
collaborative research and interaction with those involved with Indian
gaming.
We welcome this opportunity to contribute our views on the current
state of Indian gaming after its first 25 years of regulation pursuant
to the Indian Gaming Regulatory Act of 1988 (IGRA), \1\ and the chance
to identify key issues that will shape its next 25 years.
---------------------------------------------------------------------------
\1\ 25 U.S.C. 2701-2721.
---------------------------------------------------------------------------
At the July 23 hearing, Chairman Tester articulated many of the
most important dimensions of how we understand Indian gaming now:
Tribal gaming has come a long way in the 25 years since IGRA
was enacted. While not a cure-all for many serious challenges
facing Indian Country, gaming has provided numerous benefits to
the communities who operate successful facilities. These are
sophisticated operations, often employing significant numbers
of tribal members and non-Indians in their communities. Tribal
sovereignty and self-governance are important issues for me and
for this Committee. While gaming is not the answer for every
tribe, all tribal nations have the right to determine the best
possible future for their people.
At the same hearing, Senator John McCain, one of IGRA's original
architects, observed:
I'm proud to say that Indian gaming stands today as a proven
economic driver that empowers over 240 gaming tribes across the
nation to pursue the principles of Indian self-determination
and tribal self-governance.
To build upon Chairman Tester's and Senator McCain's remarks, we
concur that Indian gaming--
has changed considerably in 25 years, both in ways that were
contemplated in 1988 and ways that could not have been
anticipated;
has advanced its policy goals to benefit tribal and non-
tribal communities;
has not solved for all of the socioeconomic and other
challenges facing many tribes;
is an important expression of tribes' sovereign authority to
determine their own futures as a reflection of self-
determination and self-governance; and
is but one part of a fully realized tribal economic
development and diversification strategy.
Indian gaming generally continues to meet its policy goals. While
IGRA is not without its compromises, challenges, and costs, some of
which were unforeseen in 1988, tribal gaming writ large is working for
American Indian tribes and people as an extension of their sovereignty.
Its benefits extend to non-tribal governments and communities, as well
as to state governments and commercial entities, which in most cases
have been willing participants in and beneficiaries of the Indian
gaming industry.
Yet despite its successes, Indian gaming, as the Chairman observed,
has not been a ``cure-all'' for joblessness, poverty, inadequate
healthcare or housing, or other significant challenges that still beset
many Indian tribes. Indian gaming's next 25 years should incorporate a
stronger commitment to achieving diversified tribal economic
development and enhanced socioeconomic infrastructure at least on par
with non-tribal communities.
And, as the Committee's July 23, 2014 oversight hearing revealed,
controversy continues to surround tribal gaming, particularly in the
area of so-called ``off-reservation'' gaming (or, more accurately,
gaming on newly acquired trust lands removed from a tribe's existing
reservation). Indian gaming's next 25 years need to resolve legal
uncertainty and political divisiveness through informed and responsible
policymaking. As the Chairman concluded the hearing, what is required
is ``due diligence on all these issues.''
We believe the major immediate challenges of Indian gaming's next
25 years revolve around gaming on newly acquired trust lands, the
advent of online and mobile gaming, and leveraging gaming toward
economic development and diversification. We recommend a set of policy
guideposts--an Indian Gaming Ethic--to guide legislative solutions to
these challenges.
I. The Indian Gaming Ethic
As is extensively documented, the $27.9 billon Indian gaming
industry continues to create jobs, generate revenue for tribal, state,
and local economies, reshape the landscape of tribal intergovernmental
relations and political influence, and transform reservation life.
The Federal Government's trust obligation to tribes in the body of
federal Indian law and policy, as well as IGRA's recognition of tribal
sovereignty, provide a set of accepted and largely appropriate policy
and regulatory structures to tribes and states. \2\ By virtually every
measure, tribal gaming policy has been an enormous success. The primary
metrics are those established by Congress in IGRA's stated policy
goals, including promoting tribal economic development, self-
sufficiency, and strong tribal self-government; providing sound
regulation to shield tribes from organized crime and corruption;
assuring gaming integrity; and ensuring tribes are the primary
beneficiaries of gaming. \3\
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\2\ Yet IGRA also is understood as a set of political compromises
that also compromise tribal sovereignty. See STEVEN ANDREW LIGHT &
KATHRYN R.L. RAND, INDIAN GAMING AND TRIBAL SOVEREIGNTY: THE CASINO
COMPROMISE (University Press of Kansas, 2005).
\3\ 25 U.S.C. 2701. On the relative success in achieving these
goals, see generally KATHRYN R.L. RAND & STEVEN ANDREW LIGHT, INDIAN
GAMING LAW AND POLICY, 2d ed. (Carolina Academic Press, 2014).
---------------------------------------------------------------------------
This success in part is due to the fact that Indian gaming is
subject to a unique and complex federal regulatory scheme, involving
layers of federal, state, and tribal regulation. In the first 25 years
since Congress enacted IGRA, the National Indian Gaming Commission
(NIGC) and the federal Secretary of the Interior have promulgated
extensive and detailed regulations, while states have used the
compacting process to tailor regulatory provisions to local needs.
IGRA largely also created the terms for the politics of Indian
gaming in its first 25 years. Tribal-state compacting, revenue-sharing
agreements, and gaming on newly acquired lands are primary examples. A
recent major shift in oversight by the political branches is the move
from evaluating whether tribal gaming enterprises comply with
applicable law and regulation to advance IGRA's policy goals to asking
whether tribal gaming itself is a desirable political outcome. In
short, the law and policy of Indian gaming has grown only more complex
since IGRA's passage.
In light of these legal and political developments, we have
advocated for an ``Indian Gaming Ethic'' to guide federal, state, and
tribal policymaking in the area of legalized gambling. As an extension
of IGRA's policy goals, this Indian Gaming Ethic incorporates three
ideals:
1. Protection of, respect for, and responsible exercise of
tribal sovereignty;
2. Promotion of tribal economic development, self-sufficiency,
and strong tribal governments; and
3. Incorporation of a general understanding of Indian gaming as
a means to serve tribes, tribal members, and tribal values, and
contribute positively to the surrounding community. \4\
---------------------------------------------------------------------------
\4\ See Kathryn R.L. Rand & Steven Andrew Light, Indian Gaming on
the Internet: How the Indian Gaming Ethic Should Guide Tribes'
Assessment of the Online Gaming Market, 15 GAMING LAW REVIEW &
ECONOMICS 11 (2011): 681-91.
The Indian Gaming Ethic encourages Congress, states, and tribes to
consider the impact of any proposed legal, regulatory, or policy
reforms on tribal sovereignty and tribes' gaming operations,
particularly for tribes that continue to experience high levels of
poverty and unemployment.
Recommendations
1. Any proposed amendment to IGRA or new legislation pertaining to
Indian Country that would touch on Indian gaming should be informed by
IGRA's policy goals and the Indian Gaming Ethic. The Ethic captures
IGRA's intent and incorporates by extension tribal sovereignty as a
necessary driver of federal law and policy outcomes affecting tribes.
2. The 2015 Government Accountability Office (GAO) report and
similar initiatives on Indian gaming should be informed by IGRA's
policy goals and the Indian Gaming Ethic. The Ethic can frame
methodological design, data gathering, and policy evaluation in ways
that capture the full picture of Indian gaming's socioeconomic impacts,
and cast any cost-benefit analysis against the backdrop of tribal
interests, tribal culture, and tribal sovereignty.
II. Gaming on Newly Acquired Lands
The first fundamental challenge in Indian gaming's next 25 years is
gaming on newly acquired lands. \5\ IGRA expressly contemplates gaming
on land newly taken into trust by the U.S. Federal Government for the
benefit of tribes under a limited number of exceptions to IGRA's
general prohibition against gaming on newly acquired lands. The
greatest opportunity for continued industry expansion, especially for
tribes with rural reservations--at least in terms of ``Indian gaming''
as IGRA contemplates it, in brick-and-mortar casinos--is via these
statutory exceptions. Yet although some perceive otherwise, the facts
bear out that in Indian gaming's first 25 years, this provision simply
has not resulted in any significant expansion of tribal gaming removed
from tribal communities: most tribal casinos are on pre-existing
reservation lands. Nevertheless, for the last decade, gaming by tribes
on newly acquired lands, including so-called ``off-reservation''
gaming, has been a political, legal, and regulatory lightning rod.
---------------------------------------------------------------------------
\5\ 25 U.S.C. 2719.
---------------------------------------------------------------------------
This controversy will escalate, for four major reasons:
the tribal gaming industry has matured to a saturation
point, and existing reservation gaming cannot continue to
expand;
following successful federal acknowledgment, newly
recognized tribes will continue to petition for land to be
taken into trust;
state and local governments will continue to court new
tribal gaming operations on land on which they see it
advantageous; and
the U.S. Supreme Court has complicated matters significantly
through recent land-into-trust decisions, a situation that will
continue in the absence of a congressional ``fix.''
In recent years, market saturation on or near reservations, recent
federal acknowledgment of tribal groups, and fluctuating U.S.
Department of Interior interpretation of policy or procedure have led
tribal governments to partner with commercial, local, and state
interests in pursuit of gaming on newly acquired trust lands. Tribes in
California, Massachusetts, and Michigan are at the forefront of recent
controversies throughout the U.S. concerning federal determinations on
land-into-trust for gaming purposes or Section 2719 ``best interests''
determinations under IGRA.
Complicating the environment for off-reservation gaming are
landmark U.S. Supreme Court decisions in Carcieri v. Salazar and Match-
E-Be-Nash-She-Wish Band of Pottawatomi Indians v. Patchak. \6\ The
Court cast doubt on the ability of the Secretary of the Interior to
take land into trust for tribes not federally recognized as of 1934,
when the Indian Reorganization Act (IRA) was passed, and opened the
doors to individual legal challenges to Interior Department trust land
acquisitions for six years after they occur. The Court's actions have
thrown into flux a gamut of issues related to off-reservation gaming,
including land acquisition; tribal acknowledgment; sovereign immunity;
casino financing and other operational prerequisites; and the status of
existing casinos that came about following federal land-into-trust
determinations.
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\6\ 555 U.S. 379 (2009); 567 U.S._, 132 S. Ct. 2199 (2012).
---------------------------------------------------------------------------
In addition to the Carcieri and Patchak decisions, gaming on newly
acquired lands is contingent on the Interior Department's stance on
federal land-into-trust process for gaming purposes, and federal
interpretation of state and local actions, such as the Bureau of Indian
Affairs' 2012 rejection of the novel compact agreement for a $500
million casino between the recently acknowledged Mashpee Wampanoag
Tribe and the Commonwealth of Massachusetts.
Recommendations
1. Congress should enact a Carcieri ``fix.'' Legally, a clean
Carcieri ``fix'' plainly is needed. The solution is straightforward
from a textual and legal perspective.
2. Short of a clean ``fix,'' Congress should engage in limited law
reform. Politically, a clean fix may be impossible so long as the land-
into-trust process is perceived as the gateway to the unwelcome
proliferation of casinos. Federal legislation to curtail ``off-
reservation'' gaming will impact all tribes, not just those in areas
where local communities are unsupportive. As we have argued elsewhere,
there are presently in place numerous legal controls over gaming on
newly acquired lands. \7\ If there are pockets of controversy, IGRA's
provisions-particularly the tribal-state compact requirement for
casino-style gaming-allow states to tailor solutions to local problems.
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\7\ See Kathryn R.L. Rand & Steven Andrew Light, How Congress Can
and Should ``Fix'' the Indian Gaming Regulatory Act: Recommendations
for Law and Policy Reform, 13 VIRGINIA JOURNAL OF SOCIAL POLICY & THE
LAW. 11 (2006): 396-473.
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III. Online and Mobile Gaming
The second fundamental challenge for Indian gaming in the next 25
years is the advent of online and mobile gambling. It is only a matter
of time before this becomes the next wave of legalized gambling in the
United States. Brick-and-mortar casinos are the lifeblood of tribal
gaming as it has developed pursuant to IGRA, and among their most
obvious impacts is job creation. While land-based casinos will remain
the heart of the Indian gaming industry for most tribes, the lingering
effects of the Great Recession and recent casino closures in Atlantic
City demonstrate their relative vulnerability to macroeconomic forces
and local market fluctuation.
Moreover, the gambling market is poised for fundamental change.
Aside from the ubiquitous Internet, the reality is that we all have
powerful, interlinked personal computers in our pockets and purses.
Despite existing law effectively barring online gaming, and ongoing
reluctance at the federal level to legalize poker or other games, there
simply is no turning back on technological advances that continue to
transform the prospects and demand for online and mobile gaming
worldwide. Internet and mobile games have boomed on servers outside the
U.S., and effectively have penetrated U.S. markets. The defining
characteristics of Internet and mobile services include their
unparalleled ability to cross virtual and physical borders, the
difficulty of and public wariness regarding government regulation of
personal privacy and behavior, and the pervasive integration of online
and mobile services into all aspects of modern life. Because there is a
seemingly insatiable global appetite for gambling--whether legal or
illicit--and most everyone's desire to be wired is ever-expanding, the
fit between the Internet and gaming is near-perfect.
In the absence of federal legislation, it is no surprise that
California, Delaware, Florida, Nevada, New Jersey, and at least a dozen
more states have considered legalizing online poker or casino-style
gaming. Delaware was first out of the gates, with Nevada and New Jersey
close behind. This trend will not abate. Some assumed that Congress
would preempt the field with federal legislation, especially as bills
to legalize online poker have been introduced in multiple sessions. Yet
these efforts did not find serious traction in Congress until 2012,
with attempts to legalize Internet poker and also to recognize a tribal
role through the separate Tribal Online Gaming Act (TOGA). \8\ However,
in the face of political and commercial opposition, neither the TOGA
nor other federal online gaming legislation has moved forward.
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\8\ Tribal Online Gaming Act of 2012, S. _, Discussion Draft, 112th
Cong. 2d. Sess. (2012), available at http://www.indian.senate.gov/
sites/default/files/upload/files/TOGA-Sec-by-Sec-final.pdf (last
visited Mar. 26, 2014). For our take on the TOGA, see Kathryn R.L. Rand
& Steven Andrew Light, Statement for the Record Before the U.S. Senate
Committee on Indian Affairs (July 26, 2012), http://www.gpo.gov/fdsys/
pkg/CHRG-112shrg78446/html/CHRG-112shrg78446.htm (last visited Mar. 26,
2014). For a discussion of other policy issues related to tribal online
gaming, see Rand & Light, Indian Gaming on the Internet.
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Like states, tribes are not standing still. The Alturas Indian
Rancheria Tribe in rural California, seeking to launch the first tribal
online gaming effort, the Cheyenne & Arapaho Tribes in Oklahoma,
developing a site catering to gamblers outside the U.S., and the Lac du
Flambeau Band of Lake Superior Chippewa in Wisconsin, working on ``fun-
play'' online gaming and seeking other partners through the Tribal
Internet Gaming Alliance, are among those tribes pushing the online
gaming envelope. \9\
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\9\ Pamela M. Prah, ``Tribes, States Eye Multibillion-dollar Online
Gaming,'' USA Today, Dec. 11, 2013, http://www.usatoday.com/story/news/
nation/2013/12/11/indian-tribes-states-eye-online-gambling/3986473/
(last visited Mar. 26, 2014).
---------------------------------------------------------------------------
Recommendations
1. Congress should legalize online and mobile gaming. The existing
and potential online and mobile gaming markets are too large, too
fluid, and too under-regulated for the federal, state, or tribal
governments to ignore. The question today is less ``Should online
gaming be legalized,'' but rather, ``By whom, when, and how?'' There
are abundant forces-political, legal, economic, commercial-that suggest
the answer to the first question is ``Soon, if not yesterday'' and as
for the second, if Congress doesn't act quickly, then states will--with
tribes fast on their heels. Because this is a national issue and a
matter of interstate commerce, federal legislation and regulation are
needed.
2. Federal legislation should explicitly authorize Tribal Online
Gaming by incorporating IGRA's policy goals and the Indian Gaming
Ethic. Elsewhere, we have analyzed whether the legalization of Internet
gaming would help or hurt Indian gaming. \10\ The question, we believe,
revolves less around whether tribes should favor legalization of online
and mobile gaming and more on the level of legalization. Whether large
or small, the potential erosion of tribal market share in an online
gaming environment simply needs to be anticipated, acknowledged, and
managed. For some tribes--and perhaps for the majority that operate
gaming-failure of brick-and-mortar casinos could be devastating to
fragile economies and struggling communities. Federal legislation is
the best way to ensure consistency with IGRA, protect tribes' existing
gaming operations (and thus, for many tribes, protect their relatively
fragile economies), and preserve tribal sovereignty.
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\10\ Rand & Light, Indian Gaming on the Internet.
IV. Tribal Economic Development and Diversification
The third major challenge for Indian gaming in the next 25 years is
tribal economic development and diversification beyond the casino. In
the last decade, many tribes have sought to leverage the experience,
expertise, and revenue from tribal gaming enterprises to advance
broader economic development and diversification strategies. Tribes are
pursuing long-term, multi-million-dollar investments in business
ventures ranging from light manufacturing to banking. This move is
essential, as the tribal gaming market has saturated, is increasingly
subject to political scrutiny, and faces the disruptive prospect of
online and mobile gaming.
Yet gaming remains the centerpiece of many tribes' economies, and
their diversification efforts often focus on the hospitality sector
complementing gaming operations, including hotels, golf courses, gas
stations, RV parks, and chain restaurants. Even tribes with only
modestly successful gaming enterprises are able to use gaming revenue
to invest in other businesses. In our home state of North Dakota, for
example, the Turtle Mountain Band of Chippewa has operated a metal
fabrication manufacturing company, and data services and information
technology enterprises--along with its Sky Dancer Casino & Resort,
which features a buffet and snack bar, a 200-room hotel, and event
center--all on the tribe's reservation in rural North Dakota.
Altogether, the Turtle Mountain Band provides over a thousand jobs in
the area, over 400 of them at the casino.
Although tribes plainly will seek to stabilize and grow reservation
economies as well as strengthen tribal governments and tribal
sovereignty through diverse economic ventures, it appears that the
continued relative profitability of tribal gaming enterprises will keep
Indian gaming a staple of many tribal economies for the foreseeable
future. Yet for tribes to ameliorate the socioeconomic challenges that
face them, they must diversify.
Recommendations
1. Congress should continue to facilitate tribal economic
development through gaming, the centerpiece of IGRA's policy goals.
Strong tribal economies are essential to the wellbeing of Indian
people, and gaming continues to be a critical economic driver for many
tribes, particularly the most impoverished. As we have stated
elsewhere, Indian gaming will have fulfilled Congress's intent in
enacting IGRA when all gaming tribes have--
stable, diversified economies to support thriving
reservation communities far into the future;
steady median household income, employment, and poverty
levels in line with surrounding communities or the national
baseline, and
well funded and staffed government agencies and services
that are able to meet tribal members' needs. \11\
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\11\ Rand & Light, How Congress Can and Should ``Fix'' the Indian
Gaming Regulatory Act, 472-73.
Until these aspirations are met, Congress should be exceedingly
cautious about curtailing tribes' ability to use gaming as an economic
driver for their communities.
2. Congress should facilitate tribal economic diversification. We
support recent efforts, such as those of Representative Suzan DelBene
in introducing the Indian Country Economic Revitalization Act, \12\ to
explore how federal legislation could promote sustainable and
diversified tribal economies. Congress also could facilitate federal
executive initiatives with the direct involvement of tribal leadership
to encourage tribal economic and infrastructure development, provide
technical assistance in federal-tribal partnerships, and ease the use
of federal data on tribal economic development initiatives. The current
goals of the White House Council on Native American Affairs clearly are
steps in the right direction. \13\
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\12\ H.R. 4699.
\13\ See Press Release, White House, ``Fact Sheet: Strengthening
Tribal Communities Through Education and Economic Development'' (June
13, 2014), http://www.whitehouse.gov/the-press-office/2014/06/13/fact-
sheet-strengthening-tribal-communities-through-education-and-econom
(last visited Aug. 1, 2014).
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The Federal Government's trust responsibility to tribes should
encompass the promotion of economic development and diversification,
such that whether or not Indian gaming exists in 25 years--or in what
form--tribal governments are economically self-sufficient and able to
meet all tribal members' needs.
We thank the Committee for its consideration of this statement at
an important juncture for Indian gaming. We would be happy to answer
any questions or elaborate on the suggestions we offer here, and to
address any other issues related to Indian gaming's next 25 years that
the Committee deems pertinent.
______
Prepared Statement of Hon. Terry Rambler, Chairman, San Carlos Apache
Tribe
______
Prepared Statement of Hon. Keeny Escalanti Sr., President, Fort Yuma
Quechan Indian Nation
______
______
Response to Written Questions Submitted by Hon. Jon Tester to
Hon. Kevin Washburn
Question 1. How many fee-to-trust applications for gaming purposes
are currently pending review by the Department?
Answer. As of November 7, 2014, there are 19 fee-to-trust
applications for gaming purposes under review by the Department. Six of
these applications are under review by the Office of Indian Gaming,
with the rest under review by the BIA regional offices.
Question 1a. Have any of these applications been pending for more
than a year without initiation of NEPA review? If so, why has the
Department not initiated formal review of these applications?
Answer. Of the 19 pending applications, only the Coquille Indian
Tribe has a pending application to acquire land in trust for which the
NEPA review process has not been initiated. The draft Notice of Intent
to prepare an Environmental Impact Statement is currently under review
by the Department.
______
Response to Written Questions Submitted by Hon. John McCain to
Hon. Kevin Washburn
As you are aware, the Indian Gaming Regulatory Act (IGRA) generally
prohibits gaming on lands acquired in trust after October 17, 1988,
subject to several exceptions. One exception, known as the
``Secretarial Determination'' or ``two-part determination,'' permits a
tribe to conduct gaming on lands acquired in trust after 1988 where the
Secretary determines: 1) that a gaming establishment on newly acquired
lands would be in the best interest of the Indian tribe and its
members, and 2) that gaming on the newly acquired lands would not be
detrimental to the surrounding community. See 25 U.S.C. 2719(b)(1)(A)
and 25 C.F.R. 292.13. The Department of the Interior has limited the
definition of a surrounding community to include only those cities,
towns, counties and Indian tribes within 25 miles of the proposed
casino. 25 C.F.R. 292.2.
Concerns have been raised by impacted surrounding communities that
the BIA does not adequately consider the impact that new off-
reservation casinos will have to their communities.
In light of the above, please inform the Committee as to:
Question 1. Whether any of the gaming applications under 25 U.S.C.
2719(b)(1)(A) and/or 25 C.F.R. 292.13 have been denied since 1988
because the gaming on the newly acquired land would be detrimental to
the surrounding community;
Answer. Since 1988, one application has been denied because gaming
on the newly acquired land would be detrimental to the surrounding
community (a joint application for Hudson, Wisconsin, submitted by the
Sokaogon Chippewa Community, Lac Courte Oreilles Band of Lake Superior
Chippewa Indians of Wisconsin, and the Red Cliff Band of Lake Superior
Chippewa Indians of Wisconsin). In that case, our decision was vacated
under a court-approved settlement agreement and the application was
revised by the tribes. The Secretary eventually issued a favorable two-
part determination, but the governor refused to concur, which is
required under a two-part determination, with the Secretary's decision.
Since the regulations, 25 C.F.R. 292, became effective in August
of 2008, no applications have been denied on this basis because
applicant tribes have typically applied only after securing the support
of local governments through a referendum, or an inter-governmental
agreement to mitigate detrimental impacts, or both.
Question 2. What factors does Interior analyze when considering
whether gaming on newly acquired land would be detrimental to the
surrounding community?
Answer. The Department of the Interior considers the following
factors when considering whether gaming on newly acquired land would be
detrimental to the surrounding community:
Information regarding environmental impacts, and plans for
mitigating adverse impacts including an Environmental
Assessment (EA), an Environmental Impact Statement (EIS), or
other information required by the National Environmental Policy
Act (NEPA).
The anticipated impacts on the social structure,
infrastructure, services, housing, community character, and
land use patterns of the surrounding community.
The anticipated impacts on the economic development, income,
and employment of the surrounding community.
The anticipated costs of impacts to surrounding community
and identification of sources of revenue to mitigate them.
The anticipated cost, if any, to the surrounding community
of treatment programs for compulsive gambling attributable to
the proposed gaming establishment.
If a nearby Indian tribe has a significant historical
connection to the land, then the impact on that tribe's
traditional cultural connection to the land.
Any other information that may provide a basis for a Secretarial
Determination whether the proposed gaming establishment would or would
not be detrimental to the surrounding community, including memoranda of
understanding and inter-governmental agreements with affected local
governments
Question 3. Since 1988, which lands taken into trust by the
Interior are not for gaming purposes but were subsequently used for
gaming purposes?
Answer. Since 1988, the Department has taken land into trust for
tribes across the country. Section 20 of IGRA, 25 U.S.C. 2719,
establishes criteria regarding whether gaming may occur on lands
acquired in trust after 1988. For example, land acquired in trust after
1988 that is within, or contiguous to, the boundaries of an Indian
reservation is eligible for gaming. 25 U.S.C. 2719 (a)(1). Similarly,
lands taken into trust in Oklahoma and within the boundaries of a
tribe's former reservation are eligible for gaming. 25 U.S.C. 2719
(a)(2)(A). It is possible that trust lands within a reservation or a
former reservation in Oklahoma were taken into trust after 1988 for
purposes other than gaming but were subsequently used for gaming
purposes.
Off-reservation lands taken into trust after 1988 would also need
to comply with IGRA before such lands could be used for gaming. For
example, the Keweenaw Bay Indian Community in Michigan acquired land in
trust after 1988 for purposes other than gaming. Before the Keweenaw
Bay Indian Community conducted gaming on the parcel, it submitted a
gaming application under IGRA's ``two-part determination'' exception to
conduct gaming on those lands
The Department does not track how tribes use trust land unless and
until Federal action is requested concerning the use of the land. The
National Indian Gaming Commission (NIGC) may have additional
information about other instances due to its regulatory authority over
Indian gaming.