[Senate Hearing 115-150]
[From the U.S. Government Publishing Office]





                                                        S. Hrg. 115-150

                    DOUBLING DOWN ON INDIAN GAMING: 
EXAMINING NEW ISSUES AND OPPORTUNITIES FOR SUCCESS IN THE NEXT 30 YEARS

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

                                HEARING

                               before the

                      COMMITTEE ON INDIAN AFFAIRS
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 4, 2017

                               __________

         Printed for the use of the Committee on Indian Affairs








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                      COMMITTEE ON INDIAN AFFAIRS

                  JOHN HOEVEN, North Dakota, Chairman
                  TOM UDALL, New Mexico, Vice Chairman
JOHN BARRASSO, Wyoming               MARIA CANTWELL, Washington
JOHN McCAIN, Arizona                 JON TESTER, Montana,
LISA MURKOWSKI, Alaska               AL FRANKEN, Minnesota
JAMES LANKFORD, Oklahoma             BRIAN SCHATZ, Hawaii
STEVE DAINES, Montana                HEIDI HEITKAMP, North Dakota
MIKE CRAPO, Idaho                    CATHERINE CORTEZ MASTO, Nevada
JERRY MORAN, Kansas
     T. Michael Andrews, Majority Staff Director and Chief Counsel
       Jennifer Romero, Minority Staff Director and Chief Counsel
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
       
                            C O N T E N T S

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                                                                   Page
Hearing held on October 4, 2017..................................     1
Statement of Senator Cantwell....................................     3
Statement of Senator Heitkamp....................................    19
Statement of Senator Hoeven......................................     1
Statement of Senator Udall.......................................     2

                               Witnesses

Chaudhuri, Hon. Jonodev Osceola, Chairman, National Indian Gaming 
  Commission.....................................................     4
    Prepared statement...........................................     6
Escalanti, Hon. Keeny, President, Fort Yuma Quechan Indian Tribe.    23
    Prepared statement...........................................    24
Forsman, Hon. Leonard, Chairman, Suquamish Tribe.................    31
    Prepared statement...........................................    33
Frank, Hon. Harold ``Gus'', Chairman, Forest County Potawatomi 
  Community......................................................    27
    Prepared statement...........................................    29
Stevens, Jr., Ernest L., Chairman, National Indian Gaming 
  Association....................................................    36
    Prepared statement...........................................    38
Tahsuda, III, John, Principal Deputy Assistant Secretary, Indian 
  Affairs, U.S. Department of the Interior.......................    12
    Prepared statement...........................................    14

                                Appendix

Allen, Hon. W. Ron, Tribal Chairman/CEO, Jamestown S'Klallam 
  Tribe, prepared statement......................................    55
Cowan. Klint A., Shareholder, Fellers Snider, prepared statement.    58
Response to written questions submitted by Hon. Jerry Moran to 
  Hon. Jonodev Osceola Chaudhuri.................................    59
Response to written questions submitted by Hon. Tom Udall to John 
  Tahsuda III....................................................    61

 
                    DOUBLING DOWN ON INDIAN GAMING: 
                       EXAMINING NEW ISSUES AND 
             OPPORTUNITIES FOR SUCCESS IN THE NEXT 30 YEARS

                              ----------                              


                       WEDNESDAY, OCTOBER 4, 2017


                                       U.S. Senate,
                               Committee on Indian Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:45 p.m. in room 
216, Hart Senate Office Building, Hon. John Hoeven, 
Chairman of the Committee, presiding.

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

    The Chairman. Good afternoon. We will call this hearing to 
order.
    Today, the Committee will examine new issues and 
opportunities in Indian gaming.
    The tribal gaming industry has changed significantly since 
President Reagan signed the Indian Gaming Regulatory Act into 
law. The National Indian Gaming Commission recently announced 
that tribal gaming brought in $31.2 billion in gross gaming 
revenue for 2016, the largest amount in the history of Indian 
gaming. This is critical funding for essential and necessary 
tribal government services.
    On July 22, 2015, the Committee last held an oversight 
hearing which involved the GAO study on Indian gaming 
regulation. Today, cyber security hacks, human trafficking, 
safety and security take the headlines at Indian gaming 
facilities. For example, in 2015, nearly 85,000 customers' 
personal data was compromised at the Firekeepers Casino in 
Battle Creek, Michigan as hackers accessed customer credit and 
debit card information.
    Just last week, at the Committee hearing on human 
trafficking, witnesses noted that these despicable activities 
occurred at Indian casinos. For example, in my home State of 
North Dakota, the U.S. Attorney's office successfully 
prosecuted an adult predator who had been running a sex 
trafficking operation out of the Four Bears Casino in New Town, 
North Dakota.
    This individual was sentenced to 45 years in prison or sex 
trafficking, sexual abuse and drug trafficking. In an interview 
with investigators, one of the victims disclosed that she had 
been sold for sex multiple times at the Four Bears Casino.
    I look forward to hearing from our witnesses on how these 
types of threats and criminal activities are prevented or 
addressed, as well as other new issues and opportunities in the 
tribal gaming industry.
    Before turning to the witnesses, I would again ask the Vice 
Chairman for his opening statement.

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

    Senator Udall. Thank you, Chairman Hoeven. Thank you for 
holding today's oversight hearing to discuss Indian gaming.
    Before I address today's agenda, I want to convey my grief 
and sadness of the mass shooting that occurred in Las Vegas on 
Sunday night. My heart goes out to all the victims and their 
families. I know many tribal members were in Las Vegas on that 
night to attend a global gaming expo. My thoughts and prayers 
are with all the victims of this terrible and inexcusable 
tragedy.
    For today's hearing, I hope that we recognize the 
achievements of the Indian Gaming Regulatory Act and also look 
ahead to the challenges confronting tribes that must compete in 
a constantly evolving economy with emerging technologies in the 
industry. Importantly, we must look ahead for future 
opportunities for tribes. We have seen Indian gaming make great 
impacts for tribes in the 29 years since Congress IGRA. I am 
honored to serve alongside one of the architects of that Act, 
Senator John McCain.
    Senator McCain worked with my uncle, Mo Udall, who led the 
legislative effort on the House side. Together, they ushered in 
a new era for tribal self determination with a law that 
continues to provide economic opportunities to Indian Country 
that, prior to its passage, were unimaginable.
    Senator McCain and Uncle Mo's efforts to pass this landmark 
legislation were a true showing of bipartisanship, one we need 
to see more of today.
    Indian gaming has stood the test of time as a proven 
economic driver. Consider this, when Congress passed IGRA in 
1988, gaming revenues were measured by the tens of millions. 
Nearly 30 years later, revenues are over $31 billion. Tribal 
enterprises can have a transformative effect by promoting 
tribal self sufficiency and strong tribal governments.
    As Chairman Forsman of the Suquamish Tribe, will testify, 
the revenue flowing from gaming activities not only creates 
jobs and stimulates tribal economy, but also goes a long way to 
supplement the massive shortfalls left by the Federal 
Government's failure to appropriate adequate funding to meet 
Indian Country's needs. Unlike commercial casinos that generate 
revenue for shareholders, gaming revenue provides essential 
government services for tribal citizens, services like housing, 
health care, education, public safety and general social 
services.
    The benefits of Indian gaming also go beyond reservation 
boundaries. According to the National Indian Gaming 
Association, tribal gaming has created nearly 700,000 jobs and 
generated more than $10 billion in revenue for Federal, State 
and local governments in 2015 alone.
    Gaming revenue also supports tribal economic sovereignty. I 
have seen firsthand the impacts of gaming for the 15 tribes in 
New Mexico that operate gaming facilities. Tribes use gaming 
revenues to leverage and invest in new and diversified 
businesses from hotels to wineries. Tribes are launching and 
acquiring enterprises and industries that run the gamut from 
technology and advanced manufacturing to commercial real 
estate.
    This durable economic cycle from gaming generated seed 
money to the diversified economic portfolios and strengthened 
tribal governments is one that we should look to help, not 
hinder.
    While the benefits of gaming revenue to tribal governments 
are significant and have been the key to revitalizing some 
tribal economies, it is not the panacea for all. In fact, most 
tribes are not gaming tribes. Of the 567 federally-recognized 
Indian tribes, only 246 operate gaming facilities. Of those 
facilities, fewer still generate enough revenue to 
significantly reduce poverty rates in Indian Country that go 
beyond the national average.
    There is still much work to be done to truly achieve tribal 
self determination and sufficiency. Indian gaming is certainly 
not the end of the story. What does the future of Indian gaming 
and IGRA hold? What is the next chapter?
    I look forward to hearing how our witnesses answer those 
questions. It is clear to me that we, in Congress, must 
continue to work towards IGRA's goals, to foster tribal 
economic development, tribal self sufficiency and strong tribal 
governments.
    Thank you, Mr. Chairman. I look forward to today's 
testimony.
    The Chairman. Thank you, Vice Chairman Udall.
    I, too, want to express my concern and prayers for all 
impacted by the terrible tragedy in Las Vegas.
    I would also turn to Senator Cantwell for any opening 
statement she might have.

               STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. Thank you, Mr. Chairman. Thank you for 
the opportunity.
    I want to say that I want to introduce the second panel and 
Chairman Forsman from the Suquamish Tribe. He has been the 
chairman since 2005 and has overseen, as my colleague just 
said, some economic and cultural revitalization of that tribe. 
We so appreciate him being here to testify today.
    Under his leadership, it has grown as mentioned in the 
Ranking Member's testimony, as a vital employer in the region, 
gaming, seafood, construction, retail, entertainment. We 
appreciate the diversification. He is also an archeologist by 
training and was appointed by the last Administration as a 
tribal representative to our Advisory Council on Historic 
Preservation.
    Last year, I had the privilege of being there as he was 
sworn in as the first Native American to serve on that Advisory 
Council as Vice Chairman. This past September, he was elected 
to the Affiliated Tribes of the Northwest which represents 57 
different tribes from Alaska to California, Idaho, Nevada, 
Montana, Oregon and Washington. I know we will hear a lot from 
him on the second panel.
    Thank you for allowing me to say a few words about him as 
we move through our witnesses today.
    The Chairman. Thank you, Senator.
    On our first panel, we will hear from The Honorable Jonodev 
Osceola Chaudhuri, Chairman, National Indian Gaming Commission 
in Washington, D.C. and also from Mr. John Tahsuda, Principal 
Deputy Assistant Secretary, Indian Affairs, U.S. Department of 
the Interior.
    Please proceed.

STATEMENT OF HON. JONODEV OSCEOLA CHAUDHURI, CHAIRMAN, NATIONAL 
                    INDIAN GAMING COMMISSION

    Mr. Chaudhuri. Thank you, Chairman Hoeven, Vice Chairman 
Udall and members of the Committee, for inviting me to testify 
today. It is an honor to appear before you as Chairman of the 
National Indian Gaming Commission.
    [Greeting in Native tongue.]
    Mr. Chaudhuri. Greetings and may Creator bless us today and 
Muscogee Creek.
    All of the NIGC's hearts were broken on Sunday by the 
pointless, monstrous, mass shooting in Las Vegas. I cannot 
begin to comprehend the pain felt by the victims' families and 
loved ones. Along with the sorrow we felt, I think we also 
shared a feeling of anger toward the cowardice of the act and 
the desire to do anything we can to help.
    Many of us were on the Las Vegas strip to attend the G2E 
Conference, as were many, many people in the Indian gaming and 
global gaming communities. We immediately reached out to our 
partners to offer logistical support. I, myself, just returned 
from Las Vegas and many of my teammates are still there.
    When I was originally drafting this testimony, I was 
prepared to talk about the NIGC's proactive approach to 
regulation, about how we strive to not wait for potential 
problems to become crises but instead, look for areas of 
opportunity that allow us, within our statutory authorities, to 
leverage our relationships to bolster public safety and protect 
tribal interests.
    I planned on discussing how the strong regulatory footing 
and sophisticated security infrastructure of Indian gaming 
present excellent opportunities to proactively attack safety 
and security risks, even where such risks are not unique to or 
especially prevalent in Indian Country.
    Among the areas of opportunity we have identified, I 
planned to discuss our anti-human trafficking efforts under the 
leadership of our Vice Chair, Kathryn Isom-Clause, our IT 
vulnerability assessments created under the leadership of our 
technology director, Travis Waldo, that mitigate cyber security 
threats, and our active shooter training which, under the 
leadership of our training manager, Steve Brewer, represents an 
excellent partnership between the NIGC and DHS.
    However, in light of recent horrific events in Las Vegas, 
our efforts feel less a success and more a mere drop in the 
ocean of what needs to be done. That said, narrow as our Indian 
gaming lane may be, the NIGC, as do all agencies, can and must 
focus on what we can and must do to make all of us safer within 
our respective missions.
    This is our regulatory philosophy: proactive performance of 
our regulatory duties without unnecessarily inhibiting the 
entrepreneurial spirit of tribes. Details of our agency 
activity, our commitment to tribal consultation and our core 
initiatives are outlined in my written testimony.
    As today's hearing is on issues and opportunities for the 
future, however, I think it is appropriate to reflect upon 
lessons learned since the Cabazon decision, and indeed, lessons 
learned from the history of Federal Indian policy. As 
regulators of the Indian gaming industry, the NIGC is uniquely 
situated to share our observations gleaned over the last 30 
years. In that vein, let me discuss some 30,000 foot points.
    Special care must be taken to ensure any future legislation 
or regulation related to IGRA that impacts gaming such as those 
related to taking land into trust or those that alter Federal 
responsibilities to tribes builds on the success of Indian 
gaming and provides ample flexibility for tribes to continue to 
strengthen their governments, including through the rebuilding 
of economically viable land bases.
    As a general matter, I stress that we must be mindful of 
unintended consequences. Rather than evaluate any proposed 
revision or potential improvement to IGRA in a vacuum, I would 
encourage the Committee to test each idea against the backdrop 
of foundational principles of longstanding Federal Indian 
policy.
    These foundational principles include: sound Federal 
policies of tribal self determination; respect for inherent 
tribal sovereignty; the adherence to and upholding of Federal 
trust responsibilities flowing from the United States' special 
relationship with tribal Nations and the flexibility of land 
policy to account for the diverse histories and land bases of 
the 567 federally-recognized tribes.
    No one-size-fits-all approach will work in the pursuit of 
tribal economic development, self sufficiency and strong tribal 
governments--principal goals of Federal policy that IGRA 
explicitly and wisely recognizes.
    Looking to the future, IGRA's purpose remains as relevant 
as ever. As regulators of Indian gaming, we recognize the 
overall success of Indian gaming, both in terms of regulation 
and economic impact. We also recognize that success is due, in 
large part, to IGRA's acknowledgement of tribes as primary 
regulators and primary beneficiaries of their operations and 
the previously mentioned foundational principles.
    We believe an adherence to these principles as good policy 
and must be central in any forward looking discussions. We also 
note that Indian Country has uniformly made clear that the 
issues caused by the Seminole decision must be addressed before 
any amendments to IGRA are considered.
    As Chairman, I stand ready to make available the expertise 
of the NIGC to weigh in on any IGRA-related matters. I 
appreciate dialogue on what improvements, if any, should be 
considered to strengthen the legal framework within which 
Indian gaming operates.
    Thank you for the opportunity to address this Committee. I 
am happy to answer any questions you may have.
    [The prepared statement of Mr. Chaudhuri follows:]

    Prepared Statement of Hon. Jonodev Osceola Chaudhuri, Chairman, 
                   National Indian Gaming Commission
I. Introduction
    Thank you Chairman Hoeven, Vice Chairman Udall, and members of the 
Committee for inviting me to testify today. It is an honor to appear 
before you as Chairman of the National Indian Gaming Commission.
    Today I will provide an overview of the evolution of Indian gaming; 
the current state of the industry and our responsive initiatives; as 
well as some thoughts on the future of Indian gaming.
II. Evolution of Indian Gaming
    Tribal gaming, as we think of it today, dates back to the 1970s 
when a number of Indian tribes established bingo operations as a means 
of raising revenue to fund tribal government operations and realize the 
goals of tribal self-determination.
    The California vs. Cabazon Band of Mission Indians decision 
affirmed a tribe's right to regulate gaming on tribal lands. In that 
case, the United States Supreme Court recognized that a tribe may 
engage in gaming if it is located within a state that permits such 
gaming for any purpose by any person, organization, or entity. The 
Court also found the tribal and federal interests supporting gambling--
tribal self-determination and economic self-sufficiency--preempted the 
state interest in regulating gaming. The Court emphasized the 
compelling need in Indian Country for economic development and that the 
gaming operations were a major source of employment.
    Soon after the Cabazon decision, Congress took up the issue of 
tribal gaming and conducted a series of hearings, ultimately 
culminating in the passage of the Indian Gaming Regulatory Act of 1988. 
In addition to providing a statutory basis for gaming on Indian lands, 
the Act incorporates the very same reasons the Court identified in 
Cabazon as compelling: to promote economic development, self-
sufficiency, and strong tribal governments. The tribes' role as primary 
regulators and primary beneficiaries, as well as their sovereign right 
to pursue gaming on their lands, was left intact, with general 
regulatory oversight at the federal level to be provided by the newly 
created National Indian Gaming Commission.
    The NIGC has several specific responsibilities that it carries out 
pursuant to IGRA, including approving tribal gaming ordinances and 
management contracts with third parties and reviewing tribal gaming 
license decisions. We are funded entirely by fees paid by tribal gaming 
operations, and the current fee rate is at its lowest adopted amount 
since 2010. Our regulatory role is carried out at the NIGC's 
headquarters, located in Washington, D.C., and our seven regional 
offices located in: Portland, OR; Sacramento; Phoenix; St. Paul; Tulsa; 
Oklahoma City; and Washington, D.C. The NIGC's region offices house 
NIGC staff in the Compliance Division, making it possible to develop a 
strong working relationship with tribal gaming authorities, be 
accessible, and have regular contact with tribes at their gaming 
locations.
    The NIGC is committed to fulfilling its tribal consultation 
obligations by adhering to the consultation framework described in the 
Tribal Consultation Policy. The Commission has committed to consulting 
with tribes before taking any action that may have a substantial direct 
effect on an Indian tribe on matters including, but not limited to, the 
ability of an Indian tribe to regulate its Indian gaming, an Indian 
tribe's formal relationship with the Commission, or the consideration 
of the Commission's trust responsibilities to Indian tribes. In fact, 
the Commission just completed a series of five consultations on a 
variety of matters, and will be engaging in another consultation at the 
end of October.
III. State of the Industry
    Indian gaming is conducted in 28 states by 246 of the 567 federally 
recognized tribes. When the NIGC began tracking industry-wide gross 
gaming revenues in 1997, Indian gaming generated approximately $7.4 
billion. In the years since, the industry has grown tremendously, with 
gross revenues for fiscal year 2016 reaching $31.2 billion. Gross 
revenue, though, does not include the costs of running a casino, 
including debt service. In other words, 31.2 billion, while an 
impressive number, does not equate to revenues making it to tribes. 
And, although one of the purposes of IGRA is to promote tribal self-
sufficiency, gaming revenues do not supplant other federal programs, 
services, and obligations, but rather allow tribes to generate jobs and 
revenue which enable tribal governments to provide fundamental services 
to their communities. Many tribes have used gaming profits to fund 
education, improve health and elder care, enhance police and fire 
departments, build houses and roads, develop environmental programs, 
launch commercial ventures, and buy lands.
A. Success
    The NIGC takes seriously its role in safeguarding the integrity of 
Indian gaming. Through IGRA, Indian gaming continues to support tribal 
economic development, self-sufficiency, and strong tribal governments. 
Indian gaming has an undeniable impact on Indian Country programs, 
services, and infrastructure affecting the lives of millions of Native 
peoples and citizens of local communities. Across the board, Indian 
gaming has infused tribal program budgets with crucial funding and has 
allowed tribes to provide vital services to their members.
1. Economic and Community Impact
    Small and medium tribal gaming operations (those earning less than 
$25 million in gross gaming revenues) drive much of the industry, 
making up 57 percent of all gaming operations. Indian gaming has been a 
lifeline for these communities, supplementing funding the federal 
government provides. And, although tribal gaming varies in size and 
revenue, even the smallest gaming operations derive benefits from the 
industry, including much needed jobs for tribal and local community 
members. Gaming has also served as a catalyst for tribes to diversify 
their economic portfolios and has led to success in industries that 
were initially not available to them. Through these economic successes, 
tribes have been able to direct funding to other important tribal 
priorities such as healthcare, education, and infrastructure.
    Tribes have always been the architects of their own success in the 
industry. As expertise and experience have developed, more and more 
tribes are looking beyond their own facilities to the tribal gaming 
landscape as a whole. The Indian gaming industry has provided a 
powerful platform for tribes to share their expansive knowledge, 
enhancing inter-tribal relations and further bolstering the well-being 
of Indian Country at large.
    Indian gaming has an undeniably positive impact on local and state 
economies. It provides opportunities in some of the most economically 
depressed areas in the country. Indian gaming allows tribes to create 
and support thousands of direct and indirect jobs, to make charitable 
contributions, and to support local emergency services, truly impacting 
many lives. Its role in Indian Country as well as in surrounding 
communities cannot be overstated.
2. Regulatory Framework
    IGRA's framework--with tribes as the primary regulators--works. 
Tribes themselves have the greatest interest in protecting their 
resources and their communities. It is a testament to the leadership of 
tribal governments, the regulators, and the work of their dedicated 
employees that the Indian gaming industry has continued to maintain 
security and stability. NIGC support includes working with tribal 
governments and their employees to ensure they have the tools necessary 
to protect their assets and the integrity of the industry through 
diligent, professional oversight and enforcement.
    The NIGC remains strongly committed to upholding the statutory 
authority and responsibilities outlined in IGRA. We carry out these 
responsibilities through a comprehensive compliance approach and do not 
take lightly the crippling effects that closure of a casino could have 
on a tribe and the surrounding communities. Before the Chair takes an 
enforcement action, we work with tribes and our regulatory partners to 
address areas of concern using a variety of tools outlined in the 
visual below. It is worth noting that the majority of tribes achieve 
compliance voluntarily. This is reflective of the good work and sound 
partnerships the NIGC has with tribes and regulators on the ground.




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    We approach our regulatory role through a multi-faceted 
comprehensive compliance approach of technical assistance, training, 
and enforcement. And, with the assistance of Indian Country through 
consultation, we focus on regularly improving the effectiveness of our 
regulations. Fiscal Year 2016 has proven to be a robust year of 
engagement with Indian country.
    Below is a list highlighting some of our fiscal year 2016 
regulatory activities:

    599 Site Visits
    474 audit statement reviews
    226,857 FBI fingerprint and name checks
    185 Surveillance Reviews
    314 Tribal Licensing issuance reviews
    6 Internal Control Assessments (ICA)
    2 Internal Audit Reviews
    33 trainings events to 1,662 participants
    18 IT Vulnerability Assessments (ITVA)

3. NIGC Initiatives
    The NIGC stresses strong partnerships and consistent communication 
with tribal gaming operations to achieve compliance with IGRA. The 
Commission works with tribes to ensure they have the tools necessary to 
effectively regulate their operations and meet IGRA's requirements. 
With its statutory mission in mind, the NIGC has focused on four 
initiatives, which comprise the Agency's strategic plan.
    Through our initiatives, we have been able to protect the integrity 
of Indian gaming, expand outreach, and develop new services that 
support gaming operations and its staff.

    Protecting against anything that amounts to gamesmanship on the 
backs of tribes

    The Commission is committed to preventing non-tribal government 
interests from manipulating relationships to benefit themselves to the 
detriment of tribal gaming operations. Ensuring tribes are the primary 
beneficiaries of their gaming activities lies within the core mission 
of the NIGC, and preventing ``gamesmanship'' underpins all of the 
Agency's activities. A recent example of protecting against 
gamesmanship is outlined in a settlement agreement I entered into with 
the Cheyenne and Arapaho Tribes of Oklahoma on April 11, 2017. After 
identifying, self-reporting, and providing documentation of potential 
gamesmanship involving a casino parking lot to the NIGC, the Tribes and 
NIGC entered into a settlement agreement acknowledging that there was 
sufficient evidence to support an enforcement action for misuse of 
gaming revenue and violation of the sole proprietary interest 
requirement.

    Staying ahead of the technology curve

    The Commission created its first technology division which has 
spearheaded numerous projects, including providing technical assistance 
to tribes to better evaluate and manage their security and 
technological vulnerabilities. As part of this initiative, the NIGC 
offers no-cost IT vulnerability assessments (ITVAs) for tribes and 
tribal regulators, which provide a tribal gaming facility with a 
vulnerability analysis of its IT system. An ITVA is a high level tool 
that assists a tribe's IT security posture relative to its gaming 
systems and provides a solid base-line for internal mitigation of any 
risk found and assists in justifying funding for third-party 
assistance. In fiscal year 2017, the NIGC has conducted 19 ITVAs.
    IT vulnerability assessment testing consists of two types of tests: 
external and internal. The external test provides an overview of 
security vulnerabilities, which are visible from outside the gaming 
system network. The scan takes into account all security layers on the 
network between the scanner machine and the target system. The internal 
network test provides an overview of vulnerabilities, which are visible 
from the local network, taking into account host-based security 
controls on the target system.
    The technology division is also leading the Commission's 
consideration of regulatory updates to better address mobile gaming 
devices. Mobile gaming devices are handheld electronic devices that 
allow casino patrons to play anywhere within the casino or potentially 
other locations within a tribe's gaming eligible lands, such as 
restaurants and hotels.

    Developing effective rural outreach to smaller gaming 
establishments in rural areas

    The focus of the Commission's Rural Outreach Initiative is to 
develop an effective and responsive program to support tribes with 
small, rural gaming operations whose needs are unique from larger 
tribal gaming operations near cities. Regional staff manages the 
initiative and engages in direct outreach. Budget and staff constraints 
can make attending training away from the workplace difficult. Due to 
this, the Commission has added virtual training sessions to its 
Regional Training Courses to benefit rural gaming operations that 
cannot always attend in person. Through the initiative, the NIGC is 
increasing its communications and enhancing its regulatory partnerships 
with tribes with small rural gaming operations.

    Supporting a strong workforce both within NIGC and among regulatory 
partners

    The Commission has enhanced regional trainings to include more 
hands-on learning and is leveraging technology to receive feedback. The 
NIGC training program seeks to improve the content and style of its 
training courses and is currently revising all of its training 
materials. For 2017, the NIGC training program has developed a two-day 
workshop for internal audit and internal controls development. 
Additionally, the NIGC has developed training to assist tribes in 
recognizing ``gamesmanship''. The NIGC's new classes are designed to 
provide ``how-to,'' hands-on learning with real-life scenarios, 
exercises and examples, and shared best practices. Ideally, tribal 
leadership, tribal regulators, and operators will not only better 
understand the regulations but will have the tools necessary to 
effectively measure and maintain compliance in their operations.
    The agency also recognized that due to operational demands and 
staffing size, attending Regional training courses may be difficult for 
some tribes. In fiscal year 2017, virtual training was introduced, 
allowing participants to register for select courses broadcast live 
from the regional training location. This interactive approach allows 
participants to ask presenters questions and actively engage in group 
discussions and breakouts. The NIGC is also in the early stages of 
rolling out a learning management system, which will provide on-line 
training courses and webinar-type training to tribal leadership, gaming 
commissioners, regulators, and operators. In 2016, the NIGC instituted 
knowledge reviews in certain audit related classes. The knowledge 
reviews seek to test the participant on how well they have learned the 
material and assist the NIGC in determining the efficacy of its 
training. The testing is done after the class is completed, and then 
repeated ninety days later.
4. Regulatory Review
    As part of any regulatory agencies' obligation to maintain the 
effectiveness of its regulations, the Commission is contemplating 
changes to its regulations.

    Draft Guidance on the Class III Minimum Internal Control Standards

    The NIGC's Class III Minimum Internal Controls Standards (MICS) 
were promulgated in 1999 and last substantively revised in 2005. In 
2006, the D.C. Circuit Court of Appeals held that NIGC lacked authority 
to enforce or promulgate these regulations. Since that time, the Class 
III MICS have remained unaltered in the federal register, but not 
enforced by the Agency. Technology has advanced rapidly, making some 
standards obsolete and introducing new areas of risk not contemplated 
by the outdated standards. In addition, tribal-state compacts--even 
those entered into since 2006--continue to adopt NIGC Class III MICS by 
reference. Recognizing the industry's need for updated standards, and 
after consultation with tribes, the Commission is developing updated, 
non-binding guidance for Class III MICS and a proposed rule that will 
address the outdated standards still remaining in the regulations.

    Management Contract Regulations and Procedures

    Pursuant to IGRA, Indian tribes may enter into management contracts 
for the operation and management of their gaming activity subject to 
the approval of the NIGC Chair. The Agency's regulations govern the 
review and approval of management contracts, including background 
investigations of entities and individuals with an interest in the 
management contract. These regulations are intended to protect the 
integrity of the Indian gaming industry and ensure that the tribe is 
the primary beneficiary of its gaming operation. The Commission 
recently consulted with tribes and sought industry feedback on any 
recommended changes to our regulations and procedures that may improve 
the NIGC's efficiency in processing management agreements and 
background investigations. Comments are being reviewed to determine 
next steps.
    As part of its review of the management contract process, the 
Commission recently streamlined its National Environmental Policy Act 
(NEPA) process by creating a Categorical Exclusion for management 
contracts that do not include new construction. With the categorical 
exclusion in place, most contracts to manage existing facilities and 
most contract renewals will not be required to go through the time 
consuming and expensive process of obtaining an Environmental 
Assessment or Environmental Impact Statement. The Agency recognizes and 
supports the important environmental protections that NEPA provides. 
However, in the case of most management contracts, there simply are no 
environmental implications that are brought to bear by a new person or 
company taking over the day-to-day management of a casino. And, where 
construction is part of the agreement, the categorical exclusion will 
not be applied and the NEPA process will proceed as normal.
    Fees
    The Commission is considering amending the language of our fee 
regulations to improve the fee rate analysis and to allow publication 
of the rate to coincide with the completion of our budget for the 
fiscal year and the annual release of the industry's Gross Gaming 
Revenue. Additionally, we anticipate this amendment would reduce the 
margin of error for fee calculations as the rate would be set only once 
within a fiscal year.

    25 C.F.R. Part 547 Class II Gaming Systems

    The NIGC initially implemented Technical Standards in 2008 
requiring that before a Class II gaming system may be placed on the 
floor and offered to the public for play, it must be submitted to an 
independent gaming laboratory which would test the system against the 
Technical Standards.
    It was recognized by tribes, the industry, and NIGC that 
implementation of the Technical Standards would come at a financial 
cost to tribes. Of particular concern however, was the potential 
financial burden on bringing gaming systems that had already been 
manufactured and/or put into play--and ``compliant'' with applicable 
law in the absence of the Technical Standards--into compliance with the 
new 2008 rule. Thus, to reduce that cost, the NIGC provided that gaming 
systems manufactured prior to issuance of the standards in 2008 could 
be certified to an alternate minimum standard, but made fully compliant 
or removed from the gaming floor within five years. In 2012, that 
``sunset provision'' was extended another five years, to November 10, 
2018. After extensive internal review of the technical standards and 
consultation with the industry, the Commission determined that it was 
appropriate to remove this deadline, provided that such systems are 
subject to additional annual review by tribal gaming regulators and 
with certain records and information regarding that review to be made 
available to the NIGC. The Commission carefully considered comments 
received on the issue and published a Notice of Proposed Rulemaking in 
the Federal Register on September 28, 2017.
5. Developing Partnerships to Stamp Out Human Trafficking
    The NIGC had forged partnerships to enhance its proactive 
regulatory approach to educate and provide resources to combat human 
trafficking. While the NIGC is not aware of any data suggesting human 
trafficking is any more rampant in Indian gaming than any other large 
commercial activity with heavy customer movement, we recognize the 
industry's strong regulatory structure that provides the agency an area 
of opportunity to support broader efforts to stamp out human 
trafficking. Beginning in January 2017, the Agency's forward-looking 
approach allowed the Commission to partner with the Bureau of Indian 
Affairs, the Department of Homeland Security, the Department of 
Justice, the National Human Trafficking Hotline and other federal and 
non-profit organizations to provide engagement, tools and resources at 
our regional training conferences.
B. Challenges
    While Indian gaming continues to be successful, it is not without 
its challenges. To that end, NIGC receives input from tribes and 
stakeholders through consultation efforts, daily interactions, site 
visits, and by observing the work of other agencies supporting Indian 
Country.
    As we see the tremendous growth of the Indian gaming industry, it 
is more important than ever to not lose sight of the policies 
underlying IGRA. Indian gaming, while potentially lucrative, is a 
governmental activity, not a mere commercial enterprise. This simple 
idea is sometimes forgotten, but crucial when discussing Indian gaming. 
IGRA requires that gaming revenues are owned by, and benefit, the 
entire tribe rather than any particular individual; tribes may only use 
net revenues from their IGRA gaming for five limited governmental 
purposes.
    Related to the misperception that IGRA gaming is a commercial, 
rather than a governmental, endeavor is the notion that gaming on 
Indian lands not within the narrow limitations of reservation 
boundaries is somehow inconsistent with IGRA. The narrative of ``off-
reservation gaming'' has the potential to distract from the underlying 
principle behind Indian gaming--that Indian gaming development is an 
expression of a tribe's sovereignty and desire to provide governmental 
services to its people. Gaming on Indian lands, which can include 
reservation, trust, and restricted fee land, is what IGRA contemplates. 
That being said, the NIGC understands concerns may arise when a tribe 
decides to open a casino on a particular parcel of land. As a 
regulatory agency, however, our role is limited to ensuring gaming 
takes place on eligible Indian lands. And, although the definition of 
Indian lands includes reservation land, it also includes non-
reservation trust and restricted fee lands over which the tribe 
exercises governmental power. While IGRA also prohibits gaming on trust 
lands acquired by tribes after 1988, it does provide for measured 
flexibility allowing for gaming on eligible Indian lands, besides 
reservation lands, in clear recognition of the diversity of histories 
and land bases in Indian country. This flexibility supports the goals 
of tribal economic development and strong tribal governments (through 
the rebuilding of land bases) and is consistent with the principal 
goals set forth in its findings.
IV. Thoughts on the Future
    IGRA's purpose remains as relevant as ever for the future of Indian 
gaming, with its inevitable technological evolution and expansion. The 
policies of IGRA have provided tribes with the support, guidance, and 
protection to develop a healthy, robust gaming industry. The NIGC will 
continue to adapt to industry advancements and work to ensure a well-
regulated gaming industry that supports tribal economic development, 
tribal self-sufficiency, and strong tribal governments. The NIGC is 
unique in its expertise and great working relationships with tribal 
regulators and operations. Any new technology or advancement in gaming 
such as i-gaming, fantasy sports, or mobile gaming will have a learning 
curve, but the NIGC's knowledgeable and dedicated staff is up to the 
task of addressing those issues without undermining the intent of IGRA.
    The success of the Indian gaming industry is due in large part to 
the expertise tribes have developed in running and regulating their 
operations. The Commission believes any potential legislation related 
to gaming must include tribes and provide a level playing field of 
opportunity for Indian country. Potential legislation addressing new 
gaming markets, such as Internet gaming or the increased availability 
of sports betting, etc., must include dialogue with State, industry, 
and other stakeholders in considering regulatory structures for 
emerging markets and IGRA's foundational principle of supporting tribal 
economic development, self-sufficiency, and strong tribal governments 
must be the primary guide. The federal government's special 
relationship with tribes is a bedrock of federal law and policy. IGRA's 
tribal self-determination principles have resulted in the integrity and 
economic success of Indian gaming thus far, and should inform future 
dialogue regarding national gaming policy. Congress can ensure that the 
benefits of Indian gaming are preserved and not lost in an on-line 
environment in which a handful of first-to-market interests dominate.
    Although technologic advancements and the face of gaming is very 
much on everyone's minds as IGRA approaches its thirtieth anniversary, 
we must also be mindful of other aspects of the Act. For example, we at 
the NIGC have repeatedly heard from Tribes that the issue created by 
the United States Supreme Court case, Seminole Tribe of Florida v. 
Florida must be addressed. In that case, the United States Supreme 
Court concluded that in IGRA, Congress did not waive States' immunity 
from suit by Indian Tribes. Thus, tribes are unable sue states for 
failing to negotiate compacts in good faith, thus shifting the balance 
of power in tribal-state compact negotiations to states. We agree that 
without a Seminole fix, the intended parity between Class III tribal 
gaming and commercial gaming may further deteriorate. And, as with any 
proposed legislation or new developments with Indian gaming, NIGC 
stands ready to work with Congress, tribes, and other stakeholders to 
uphold the foundational principles of IGRA.
    With any changes to IGRA, though, special care must be taken to 
ensure any future legislation or regulation related to IGRA that 
impacts gaming such as those related to taking land into trust or that 
alter federal responsibilities to tribes, builds on the success of 
Indian gaming and provides ample flexibility for tribes to continue to 
strengthen their governments, including through the rebuilding of 
economically-viable land bases. As a general matter, I stress that we 
must be mindful of unintended consequences. Some of the most disastrous 
federal policies from the perspective of tribal nations were the 
product of the good intentions of purported advocates of Native 
peoples. IGRA, however, does not fall into that category. And rather 
than evaluate any proposed revision or potential improvement to IGRA in 
a vacuum, I would encourage the Committee to test each idea against a 
backdrop of the foundational principles of longstanding federal Indian 
policy.
    As regulators of Indian gaming, we recognize the overall success of 
Indian gaming over the last 30 years, both in terms of regulation and 
economic impact. We also recognize that that success is due in large 
part to IGRA's acknowledgment of the tribes' sovereign right to pursue 
gaming on their lands, its preservation of their role as primary 
regulators and primary beneficiaries of their operations, and its 
protection of varied avenues to allow tribes with diverse histories, 
land bases, and capacities to pursue gaming. We believe an adherence to 
these self-determination principles and flexibility that accounts for 
historic realities is good policy and must be central in any forward-
looking discussions. As Chairman, I stand ready to make available the 
expertise of the NIGC to weigh-in on any IGRA-related matters, and I 
appreciate dialogue on what improvements, if any, should be considered 
to strengthen the legal framework within which Indian gaming operates.
V. Conclusion
    In the nearly 30 years since the Indian Gaming Regulatory Act was 
passed, the Indian gaming industry has grown, matured, and evolved in 
ways that almost no one could have predicted at the time. And while 
that growth is due primarily to the ingenuity and hard work of the 
tribal communities that built the industry, it has occurred in the 
context of a piece of legislation that was enacted with core goals in 
mind--to promote tribal economic development, tribal self-sufficiency, 
and strong tribal governments. The NIGC takes seriously its role to 
regulate the Indian gaming industry to ensure these goals are achieved. 
These efforts in conjunction with IGRA's sound principles will continue 
guiding Indian gaming into a bright and prosperous future.

    The Chairman. Thank you.
    Mr. Tahsuda.

       STATEMENT OF JOHN TAHSUDA, III, PRINCIPAL DEPUTY 
           ASSISTANT SECRETARY, INDIAN AFFAIRS, U.S. 
                   DEPARTMENT OF THE INTERIOR

    Mr. Tahsuda. Good afternoon, Chairman Hoeven, Vice Chairman 
Udall and members of the Committee.
    My name is John Tahsuda and I am the Acting Assistant 
Secretary for Indian Affairs at the Department of the Interior. 
Thank you for the opportunity to testify before this Committee 
on the department's role in Indian gaming. You have my full 
written testimony. I will offer some more brief oral remarks.
    The passage of the Indian Gaming Regulatory Act, IGRA, 
provided a means of promoting tribal economic development, self 
sufficiency and strong tribal governments through well 
regulated gaming. Indian gaming has resulted in considerable 
financial resources for a wide range of tribal services and 
programs from education and housing to law enforcement and 
health care and has bolstered jobs in local and tribal 
communities.
    That said, the Department is mindful that while gaming has 
great potential to improve economic conditions for tribal and 
non-tribal communities, it could also introduce new 
complications to communities, including drain on local 
resources, increased traffic, visitation and crime, such as 
drugs and prostitution.
    The Department, under Secretary Zinke's leadership, firmly 
believes there needs to be thoughtful and thorough 
consideration of all factors relating to gaming applications. 
Given our commitment to being a good neighbor and steward, we 
believe local voices must have a fair opportunity to provide 
insight and input into these decisions.
    That is why an in-depth and balanced consideration of all 
factors will be at the core of the department's decision-making 
process for any off-reservation gaming or land-into-trust 
applications. We will closely adhere to the law when reviewing 
tribal gaming matters as detailed in IGRA, but also plan to put 
more emphasis on all of the applicable criteria.
    No single criteria by itself will be considered dispositive 
in these intricate proposals. Nor will local communities be 
denied an opportunity to voice their concerns. We are committed 
to striking a balance between differing interests which we 
fully recognize are prevalent in these matters while following 
the provisions of the law.
    In addition to being more thoughtful when considering 
gaming and fee-to-trust proposals, Interior is also committed 
to providing tribes realistic expectations during the formal 
review process. For instance, in the case of off-reservation 
land into trust efforts, the commitment of time and resources 
required can be exorbitant, particularly if that proposal is 
denied.
    Therefore, we believe it is important to be upfront about 
proposals that may not be acceptable and, as a result, we are 
considering changes to our land-into-trust process to provide 
feedback earlier in the process.
    The Department does recognize that equities may be 
different for restored and landless tribes when it comes to 
off-reservation gaming and land-into-trust proposals. Interior 
is committed to reviewing all the factors and seeking broad 
input in its decision-making process for these applications.
    In conclusion, the Department is committed to being 
thorough and balanced in our considerations for both trust land 
acquisitions and gaming proposals. We will closely adhere to 
the law when reviewing these matters, putting emphasis on all 
the applicable criteria and ensuring that local communities 
will not be denied an opportunity to voice concerns.
    I, along with our team at Interior, welcome the opportunity 
to work with this Committee and Congress on Indian gaming 
matters, recognizing the plenary authority Congress holds in 
all tribal matters.
    Thank you for the opportunity to testify today. I am 
pleased to answer any questions you may have.
    [The prepared statement of Mr. Tahsuda follows:]

  Prepared Statement of John Tahsuda, III, Principal Deputy Assistant 
       Secretary, Indian Affairs, U.S. Department of the Interior
    Good afternoon Chairman Hoeven, Vice Chairman Udall, and Members of 
the Committee. My name is John Tahsuda and I am the Acting Assistant 
Secretary for Indian Affairs at the Department of the Interior 
(Department or Interior). Thank you for the opportunity to testify 
before this Committee on the Department's role in Indian gaming.
    The framework for Indian gaming both on and off reservation was 
established by Congress with the passage of the Indian Gaming 
Regulatory Act (IGRA) [Pub.L. 100-497, 25 U.S.C.  2701 et seq.] in 
1988. The regulatory scheme codified into law assigns the Department 
certain responsibilities for regulating gaming on Indian lands. As laid 
out in IGRA, 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. Under IGRA, Interior reviews and 
determines whether to approve tribal-state gaming compacts and fee-to-
trust applications for gaming.
    The passage of IGRA serves as recognition on behalf of Congress 
that well-regulated gaming provided a means of promoting tribal 
economic development, self-sufficiency, and strong tribal governments. 
Indian gaming has resulted in considerable financial resources for a 
wide range of tribal services and programs, from education and housing 
to law enforcement and health care, and has bolstered jobs in local and 
tribal communities.
    That said, the Department is mindful that, while gaming has great 
potential to improve economic conditions for tribal and non-tribal 
communities, it can also introduce new complications to communities, 
including a drain on local resources, increased traffic, visitation, 
and crime, such as drugs and prostitution. The Department, under 
Secretary Zinke's leadership, firmly believes there needs to be a 
thoughtful and thorough consideration of all factors relating to gaming 
applications. Given our commitment to being a good neighbor and 
steward, we believe local voices must have a fair opportunity to 
provide insight and input into these decisions.
    This emphasis on a balanced process is also critical for the 
acquisition of trust lands located off reservation, which the 
Department firmly believes should move forward in tandem with federal 
consideration of tribal gaming. The Department previously testified 
during the 115th Congress about its role in the fee-to-trust process, 
which can be further complicated by the prospect of off reservation 
gaming. Off-reservation lands that are acquired through the Fee-to-
Trust process have the potential to raise jurisdictional uncertainties 
in local communities, as well as complicating land-use planning and the 
provision of services. Moreover, non-Indian communities may experience 
tax revenue consequences if payments in lieu of taxes are not agreed 
upon. Ultimately, the Department has received comments that taking land 
located off reservation into trust for gaming can introduce economic or 
other conditions that can have significant impacts on the immediate and 
surrounding communities. As a result, the Department's off-reservation 
trust regulations require particular attention to issues of 
jurisdiction and taxation.
    Off-reservation trust acquisitions also raise the possibility that 
a tribe may initiate gaming operations once the land is held in trust 
by the federal government, even though that was not in the original 
plan. This matter continues to complicate and isolate some communities 
near these facilities. In those instances, local communities that may 
have offered support or participated in the process could now need to 
engage in a new public input process.
    Collectively, this is why an in-depth and balanced consideration of 
all factors will be at the core of the Department's decisionmaking 
process for any off reservation gaming or land into trust applications. 
The Department will closely adhere to the law when reviewing tribal 
gaming matters as detailed in IGRA, but also plans to put more emphasis 
on all of the applicable criteria. No single criteria by itself will be 
considered dispositive in these intricate proposals, nor will local 
communities be denied an opportunity to voice their concerns. We are 
committed to striking a balance between differing interests, which we 
fully recognize are prevalent in these matters, while following the 
provisions of the law.
    In addition to being more thoughtful when considering gaming and 
fee-to-trust proposals, Interior is also committed to providing tribes 
realistic expectations during the formal review process. For instance, 
in the case of off reservation land into trust efforts, the commitment 
of time and resources required can be exorbitant, particularly if that 
proposal is denied. Therefore, we believe it is important to be upfront 
about proposals that may not be acceptable. As a result, we are 
considering changes to our land-into-trust process [25 CFR  151] to 
provide feedback earlier in the process.
    The Department recognizes that the equities may be different for 
restored tribes and landless tribes when it comes to off reservation 
gaming and land into trust proposals. For example, the Department is 
currently reviewing the Shawnee Tribe of Oklahoma's fee-to-trust. The 
Shawnee are a landless tribe and, given the unavailability of land in 
close proximity to its members, the Tribe elected to explore other 
alternatives. They have worked closely in collaboration with other 
Oklahoma tribes, the Governor of Oklahoma, the local community, and a 
number of Members of the Congressional delegation to identify and 
secure a potential location. While a decision on that acquisition is 
pending with the Department, Interior is committed to reviewing all 
factors and seeking broad input in its decision making.
    As this Committee looks ahead at the next thirty years of Indian 
gaming, the Department sees an opportunity to think strategically about 
its own role. Our commitment is to be thorough and balanced in our 
considerations for both trust land acquisitions and gaming proposals. 
The Department will closely adhere to the law when reviewing these 
matters, putting emphasis on all the applicable criteria and ensuring 
that local communities will not be denied an opportunity to voice 
concerns. The Department welcomes the opportunity to work with this 
Committee and the Congress on Indian gaming matters, recognizing the 
plenary authority Congress holds in all tribal matters. If there is 
interest in further discussing these issues, we stand ready and able to 
work with you.
    This concludes my written statement. Thank you for the opportunity 
to testify today and I am pleased to answer any questions you may have.

    The Chairman. Thank you to you both.
    I am going to begin with Chairman Chaudhuri.
    In 2015, this Committee held an oversight hearing to 
receive testimony on the GAO report, Indian Gaming, Regulation 
and Oversight by the Federal Government, States and Tribes. 
More recently, the GAO confirmed that as of December 2016, the 
NIGC has yet to comply with all of their recommendations 
outlined in that report.
    Would you please give us an update, Chairman, as to where 
you are with the GAO recommendations from that report?
    Mr. Chaudhuri. Thank you, Chairman.
    As we mentioned at that time, we absolutely welcomed GAO's 
inquiry. We also welcomed their ongoing work with us to 
identify areas of opportunity for us to improve our services.
    We were actually ahead of GAO in some of the 
recommendations regarding some of the knowledge reviews that we 
are in the process of implementing to tie our trainings to 
actual efficacy of our regulatory approach. Those knowledge 
reviews, frankly, came from discussions between our staff and 
members of the Committee.
    I am actually thankful for some of the work that 
collectively we are doing together to make sure we are having 
the most efficient trainings possible.
    The GAO mentioned a few areas of opportunity. One in 
particular was working to have deadlines attached when we tried 
to provide technical assistance to tribes identified as having 
compliance issues. Since the GAO report, we have put firm 
deadlines into each and every letter of concern and awareness 
that we provided to our regulatory partners.
    We have also instituted metrics tracking with our 
trainings. That again flows from the GAO report and our 
discussions with the Committee.
    Finally, we are actively involved in measuring our ability 
to provide resources to facilities with some of the most 
challenging capacity issues. Those all relate to the GAO's 
recommendations.
    As a final note, outreach was part of GAO's report. I am 
pleased to say in our last attempt to provide clarity to the 
industry involving trying to develop non-binding Class III mix 
in light of the CRIT decision, we have made special efforts to 
reach out to our State partners to loop them in on our draft 
language.
    We are sensitive to GAO's findings, but I do want to say 
the overall thrust of GAO's report was that the industry 
overall was healthy and the regulatory structure overall was 
strong. There were, of course, recommendations, as there are 
with any report, but we very much appreciated the overall 
thrust of the report.
    The Chairman. You do not anticipate any problem meeting the 
recommendations they made in the report?
    Mr. Chaudhuri. None whatsoever.
    The Chairman. Thank you.
    Last month, the Securities and Exchange Commission 
acknowledged that it had been hacked. Under the previous 
Administration, the Office of Personnel Management, as you will 
recall, exposed millions of Federal employees' personal 
information to cyber criminals.
    My question is, what is the Commission doing to ensure that 
the critical information tribes report to you is secure and 
have you been subject to any type of software or cyber security 
breaches?
    Mr. Chaudhuri. Thank you Chairman, cyber security is a 
concern for the gaming industry as it is for all industries and 
governmental agencies. This is the age we live in. There is one 
report that said if you leave an unsecured device exposed to 
the Internet, you are guaranteed not just dozens, not just 
hundreds, but potentially thousands of attacks in a short 
amount of time if you do not have sufficient firewalls and 
safety measures in place. This is the reality of the arena in 
which we live.
    Recognizing that and recognizing our role as supporting our 
regulatory partners, each tribe having its own regulatory body, 
we have looked at our internal capabilities to figure out where 
we can be of the most help. Through our recently created 
technology division to stay ahead of the technology curve, I 
think we developed a pretty innovative approach to this 
challenge.
    We developed what are called IT vulnerability assessments 
by which we will go to any tribe that requests it and perform a 
360 review of cyber vulnerabilities for that tribe. This is a 
relatively new program but since starting, I have some numbers 
here that are pretty good.
    Since starting, this is a year and a half old, the program 
has hit the ball out of the park and 19 ITVAs were performed 
this year alone. There is a waiting list now, not a long 
waiting list but it has been very well received in Indian 
Country.
    We need to distinguish between cyber vulnerabilities and 
cyber compromises. Cyber attacks are always ongoing. I 
mentioned the idea about an unprotected system. All the time 
there are cyber attacks.
    In terms of cyber compromises, fortunately because of the 
work of tribal regulators with supportive agencies such as 
ours, examples of actual cyber compromises are relatively few 
and far between.
    The Chairman. That is encouraging to hear.
    I am going to a little bit more time hoping to get this 
done in one round. I will provide the same courtesy to my 
fellow Senators. I think that might save having to have two 
rounds because we do have a vote at 3:15 p.m.
    For Secretary Tahsuda, the Indian Gaming Regulatory Act is 
a delicate balance between Federal, State and tribal interests. 
Your written testimony indicated that evaluating off-
reservation gaming and land into trust, in doing so, the 
department was ``committed to striking a balance between 
differing interests which we fully recognize are prevalent in 
these matters while following the provisions of the law.''
    Can you explain how you intend to strike that balance in 
terms of your application for these compacts?
    Mr. Tahsuda. When we say considering all the factors, I 
think that includes both if there is a compact under 
consideration as well as land and the consideration of factors 
there and in consideration of the factors under the land 
decision as well.
    Some of those overlap but we believe that in the past, 
there have been times when greater consideration has been given 
to one set of factors over others. Our commitment is to weigh 
all the relevant factors and come to a fair and balanced 
conclusion based on the totality of the factors.
    The Chairman. Do you intend to utilize a commutability 
standard for off-reservation acquisitions for gaming?
    Mr. Tahsuda. When it comes to land into trust, we are 
required by our regulations to consider the distance from the 
reservation for off-reservation applications. We also are 
required by IGRA to consider the positive impacts to the tribe 
if there is going to be gaming on that land which we believe 
must mean something more than mere financial gain. Things like 
employment opportunities, ability to host cultural activities, 
and community activities in the facility should all be part of 
the considerations impacted by the distance from the 
reservation.
    The Chairman. Thank you.
    Vice Chairman Udall.
    Senator Udall. Thank you, Mr. Chairman.
    IGRA's goals of promoting tribal economic development, 
tribal self sufficiency and a strong tribal government are 
rooted in the recognition of formal government-to-government 
relations between the Federal Government and the tribes, as 
both of you know.
    Every President since Nixon has embraced those goals. 
President Clinton specifically recognized the Federal 
Government's responsibility to coordinate and consult with 
tribal governments by issuing Executive Order 13175. President 
Bush issued a memorandum supporting that Executive Order as did 
President Obama.
    For Assistant Secretary Tahsuda, will President Trump issue 
any Executive Memorandum or Guidance that continues the 
important commitments contained in Executive Order 13175?
    Mr. Tahsuda. I cannot answer that question. I think that is 
in the President's prerogative. What I do know is that he and 
Secretary Zinke have impressed upon us that we are to be guided 
by respect for tribal sovereignty. We have in place our 
consultation policies and we closely follow those and fully 
intend to do that through the future.
    Senator Udall. Can I have your commitment that you, as the 
highest ranking political appointee in Indian Affairs at 
Interior, that you will ensure meaningful tribal consultations 
occur in the spirit of that Executive Order?
    Mr. Tahsuda. Yes. Our goal is to have effective 
consultation with the tribes so that we can provide better 
outcomes as we perform our services to the tribes.
    Senator Udall. We would like it in writing at any point if 
you decide to issue an Executive Order on that and be notified 
of that.
    Mr. Tahsuda. Certainly, Senator.
    Senator Udall. Thank you.
    I was hoping both of you would shed some light on IGRA's 
intent regarding parity between tribes and States in 
negotiating compacts. Do you think that balance is tipping in 
any way that the law did not intend?
    Mr. Chaudhuri. Thank you, Vice Chairman.
    In terms of the balance and thorough approach, I would say 
a couple things. First of all, IGRA is specifically intended to 
benefit Indian tribes for the Federal policy purposes set forth 
in IGRA of strong tribal governments, self sufficiency, and 
economic development. It is legislation specifically intended 
to benefit tribes.
    Furthermore, in terms of considering balancing 
considerations, there is a long recognized special relationship 
between the Federal Government and tribal nations as recognized 
in the long history of Federal case law, as well as the 
congressional record.
    Prior to IGRA, the Cabazon decision acknowledged the 
tribes' inherent authority to regulate their own gaming 
activities. IGRA, in many ways, can only be described as an 
infringement on the inherent authority of tribes to regulate 
their own activities. It was an infringement that brought with 
it a very special balancing of various interests, State 
interests and tribal interests but it protected tribal 
sovereignty to ensure that if that balance was ever tilted too 
far in one direction, for instance, where a State were not to 
negotiate in good faith with a tribe, a tribe would have 
recourse to restore that balance. That recourse would be 
litigating over the State's actions and negotiations, 
litigating over good faith.
    That balance was changed dramatically by the Seminole 
decision so that the carefully crafted balance of sovereign 
interests that IGRA sought to establish has forever since been 
impacted. I think Indian Country has been very clear and very 
thankful for today's discussion if any potential changes to 
IGRA are on the table, and restoring the balance that IGRA 
established between States and tribes needs to be the first 
point of discussion. Indian Country's perspective on that 
matter, given IGRA's intent, appears reasonable.
    Senator Udall. Mr. Secretary, your thoughts on that?
    Mr. Tahsuda. It is my understanding, I was not here at the 
time, but Congress is the one that sought to achieve a balance 
through IGRA itself. That is reflected in the statute. The 
statute directs us to take certain actions, to make certain 
reviews and consider certain criteria. We do that to the best 
of our ability.
    It is true that the Supreme Court has its opportunity to 
weigh in on legislation that Congress passes and when those 
decisions affect longstanding practices held by our department, 
it does create complications for us, but it is Congress' job 
ultimately to simplify or clarify that if it feels the need to 
do that. Otherwise, it is our responsibility to apply the law 
the best we can.
    Senator Udall. As I mentioned in my opening, Indian gaming 
is an important economic engine. In New Mexico, for example the 
Pueblos of Santa Clara and the Ohkay Owingeh casinos employ 
more than 1,000 people in the Espanola Valley. The President 
has spoken at length about creating jobs and cutting red tape, 
yet Interior just released an advance notice of rulemaking that 
suggests Interior may revisit regulatory obstacles from the 
Bush years.
    Mr. Assistant Secretary, in your written testimony, you 
state that ``local voices must have a fair opportunity to 
provide insight and input in land-into-trust decisions.'' Can 
you elaborate and how do the current regulations fail in this 
regard, specifically focusing on how you believe those current 
regulations fail?
    Mr. Tahsuda. I did not intend, at least in my statement, to 
imply that our current regulations fail that. I think it is our 
belief that past actions by the department over the past few 
years did not adequately apply our regulations as they should 
have so that all the factors and criteria to be considered were 
not adequately considered. As I said earlier, some were given 
greater priority over others.
    It is our commitment to consider all the factors we are 
required to consider by the law and by our regulations and 
apply those to the factual situation in front of us.
    Senator Udall. Interior owes Indian Country no less than to 
meet in and with communities that will be hardest hit by this 
Administration's proposed changes. What is Interior's plan to 
consult with tribes on the Part 151 proposal? Does it go beyond 
ordinary APA notice or comment such as conducting regional 
consultations?
    Mr. Tahsuda. It is our intent, if we move forward with 
changing the regulations to hold a consultation schedule. We 
actually should have out within the next day or so a Dear 
Tribal Leader letter which will identify a meeting to discuss 
in broad terms what we are thinking. Then we will lay out a 
schedule of tribal consultations in different regions around 
the Country. I am happy to share that with you, Mr. Vice 
Chairman.
    Senator Udall. Thank you very much.
    The Chairman. Senator Heitkamp.

               STATEMENT OF HON. HEIDI HEITKAMP, 
                 U.S. SENATOR FROM NORTH DAKOTA

    Senator Heitkamp. Thank you, Mr. Chairman.
    If I could just take a minute to talk about an issue we had 
a hearing on last week, Mr. Chairman, I appreciate your 
response to the letter that I and other members of this 
Committee sent on human trafficking and I am glad to hear that 
the National Indian Gaming Commission is doing its job to 
educate and provide resources to combat human trafficking.
    You mentioned in your testimony that your organization is 
not aware of any data that suggests human trafficking is more 
rampant in Indian gaming than other similar industries. How do 
you think we can collect the data so that we can be better 
informed and don't you think it would be valuable to have that 
information?
    Mr. Chaudhuri. Absolutely, and we stand ready to work with 
any partners to collect data as broadly as possible. As I 
mentioned in my oral testimony, our regulation philosophy is 
one of proactive regulation. While we absolutely support the 
gathering of data that will help target effective regulatory 
action, I do not think an agency needs to wait for the data to 
come in to recognize there are opportunities to help stamp out 
human trafficking as they exist.
    In this regard, I really have to thank our Vice Chair, 
Kathryn Isom-Clause, who within the agency, has taken the 
leadership position to get each and every one of us on board to 
work with Federal partners, tribal partners, industry partners 
to do whatever we can.
    It starts with data. We are here to work with data 
collection agencies that have better tools than we do as 
regulators but that does not mean we cannot start doing what we 
can now. We are doing it through our trainings and we are doing 
it through our participation with the Tribal Gaming Protection 
Network. We have the National Indian Gaming Association here 
and the American Gaming Association is involved with that. We 
are active but data is absolutely needed.
    Senator Heitkamp. We know that events and the hospitality 
industry are particularly targets for this kind of behavior and 
criminal activity. We want to make sure all of the people 
involved in your industry, whether it is the hotel that is 
attached or people on the floor watching what is going on, are 
well trained and can recognize the signs of human trafficking, 
especially when it involves small children.
    Mr. Assistant Secretary, as we talk about combating drug 
and human trafficking and domestic violence in the context of 
gaming, I think it is extremely important that law enforcement 
has enough resources to effectively respond to these cases.
    All across our region, we are seeing more and more law 
enforcement jails, more and more detention centers being shut 
down by order of various Federal agencies. That creates a real 
void in Indian Country in terms of access to resources, 
especially as it requires cooperation given jurisdictional 
challenges and the customers of gaming associations.
    What are you doing to build more momentum for additional 
law enforcement resources both in terms of personnel and in 
terms of jail capacity?
    Mr. Tahsuda. Good question, Senator. I thought you were 
going to ask me something about gaming.
    Senator Heitkamp. I think this is about gaming. I think 
that when we are looking at the additional challenges that 
gaming brings to Indian Country, if you take an isolated 
reservation in North Dakota, you are not going to see a lot of 
people the tribal court would not have jurisdiction over. But 
once you have gambling, that hopefully is bringing more people 
who are going to enjoy the hospitality, but it has challenges.
    There are two sides to this. I just have to tell you I 
think that these are issues that are associated and could, in 
fact, be exacerbated by Indian gaming and casino gambling in 
Indian Country.
    Mr. Tahsuda. Let me do my best to answer your question and 
ask that you bear with me. I am still pretty new in the job and 
trying to get a handle on everything we are doing. I still 
receive briefings nearly every day from our various offices and 
bureaus.
    I do know that some of our staff came before you last week 
to talk about the human trafficking issue. Based on that, you 
probably have as good or better information than I do on that.
    I do know that they are actively engaged both with sort of 
the industry side, with the tribal casino folks and with tribal 
law enforcement to try to get training for them to identify 
both the related drug trafficking and the human trafficking 
issues and to help them learn to identify situations when these 
may arise whether at a tribal gaming facility, tribal 
hospitality or any other location like a truck stop. I know 
that is also a big source of concern. We are actively working 
on that.
    It is true that an activity like gaming brings a lot of 
people and traffic to an area that otherwise would not come 
there. As I referenced earlier, those are complications for the 
community they are required to deal with. To the extent 
possible, we have long been proponents of the tribes working 
cooperatively with local law enforcement, cross deputizing 
agreements to help them work through those and where 
appropriate, to bring Federal resources to those.
    Senator Heitkamp. I am out of time but I do want you to 
know that I consider the lack of law enforcement resources in 
Indian Country, especially for our gaming tribes, to be one of 
the most critical issues Indian Country is confronting.
    We have longstanding, historic socioeconomic issues we need 
to address but if people are not safe, if people are not 
protected, this has to be one of your top priorities in your 
Acting role. We do not want to waste anymore time waiting for 
someone who is not Acting. I think it is critically important 
that law enforcement be a top priority.
    Thank you, Mr. Chairman.
    Mr. Chaudhuri. Senator, if I may add one point on that. One 
of the master strokes of IGRA was preserving the tribes' place 
as the primary regulators of their gaming activity. That was 
important because of all people who have the strongest interest 
in protecting their communities, tribes have the strongest 
interest in protecting the health and welfare of their members 
as well as their patrons.
    We see our work, in terms of human trafficking, as doing 
whatever we can to support tribal regulator efforts on the 
ground. Tribes are on it. I had a conversation with my good 
friend, Jamie Hummingbird, who heads the National Tribal Gaming 
Commissioners and Regulators. We spoke about this very issue.
    Thank you so much for your attention to this very, very 
important issue.
    The Chairman. I have one final question for the Chairman. I 
am asking this on behalf of Senator Udall who had to go vote. 
He had one other question for you and a follow up question.
    The Tenth Circuit issued two opinions that affect the 
Pueblo of Pojoaque. One decision validated Part 291 which means 
that tribes in the Tenth Circuit can no longer look to Interior 
if a State decides it does not want to negotiate a compact.
    The other Tenth Circuit decision now allows States to 
regulate vendors in a way that disrupts tribal gaming 
operations.
    If Interior cannot issue secretarial procedures, what 
options do tribes have now? Does that outcome reflect IGRA's 
intent to put tribes and States on equal footing during the 
compact negotiation process?
    Mr. Chaudhuri. Thank you, Chairman, and by extension, thank 
you to the Vice Chair. I have two things very briefly.
    The compacting analysis affects Class III gaming. Class II 
gaming is always within the purview of tribal communities.
    The second point, it is a great question, especially given 
the Tenth Circuit decisions. Our role, as an agency, was to try 
to promote our statutory mission as best we could, given the 
complexities of matters on the ground with Pojoaque. In other 
words, we made sure that operations were safe, that assets were 
protected, while these matters played out.
    It raises a larger question that was alluded to in the Vice 
Chairman's previous dialogue regarding the balance between 
tribal and State interests. IGRA contemplated a very delicate 
balance between tribes and States, one in which States would 
negotiate in good faith with tribes and tribes would have 
recourse to bring an action when that good faith did not occur.
    The Seminole decision complicated that. As regulators, with 
an eye towards integrity and fairness, we cannot help but 
recognize that has created complications within the regulatory 
landscape. Seminole has created complications in terms of the 
relationship between tribes and States and it has had 
regulatory impacts.
    In terms of how that is played out with vendors, when 
tribes do not have that recourse, States are free to leverage 
their position with tribes much more freely and are becoming 
more and more creative about how to leverage those positions 
such as bringing pressure on vendors.
    The Chairman. I would like to thank both witnesses on our 
first panel. That will conclude our first panel and we will 
move to our second panel.
    Thank you.
    Mr. Chaudhuri. Thank you very much, Chairman.
    Mr. Tahsuda. Thank you, Chairman.
    The Chairman. We will proceed with the second panel. I 
would like to thank all of the witnesses.
    First, we will hear from the Honorable Keeny Escalanti, 
President, Fort Yuma Quechan Indian Tribe, Yuma, Arizona. Then 
we will hear from: the Honorable Harold ``Gus'' Frank, 
Chairman, Forest County Potawatomi, Crandon, Wisconsin; the 
Honorable Leonard Forsman, Chairman, the Suquamish Tribe, 
Suquamish, Washington; and my old horseback riding partner, 
Ernest L. Stevens, Jr., Chairman, National Indian Gaming 
Association. Thanks to all of you for being here.
    Mr. Escalanti, if you will start.

STATEMENT OF HON. KEENY ESCALANTI, PRESIDENT, FORT YUMA QUECHAN 
                          INDIAN TRIBE

    Mr. Escalanti. Good afternoon, Chairman Hoeven, Vice 
Chairman Udall and members of the Committee.
    My name is Keeny Escalanti, Sr., President of the Quechan 
Indian Tribe of the Fort Yuma Indian Reservation. I thank you 
for the opportunity to testify today on behalf of our 3,900 
members regarding benefits of gaming to our community.
    According to our creation story, our people, pronounced 
KWAT'SAN, have lived along the Colorado River near the 
confluence of the Gila River. We are well known for our 
distinct language, the Yuman, which is a native dialect of the 
Hokan. Our reservation encompasses approximately 45,000 acres 
with a land base that is located in both California and 
Arizona, which shares a border with Mexico.
    Our tribe is an agricultural community. We also rely on 
tourism and, of course, gaming to augment our economy. Our 
tribes operate two casinos, the Quechan Casino Resort located 
in Imperial County, California and Paradise Casino located in 
Yuma County, Arizona.
    The revenues derived from these two casinos have allowed 
our tribe to invest in our local community and has strengthened 
our relationship with the local government and improved the 
livelihoods of our tribal and non-tribal residents.
    The tribe signed our first gaming compact with the State of 
California in 1999 and amended it in 2006. To alleviate the 
financial hardship from the 2006 amendment, we recently 
negotiated a new compact with Governor Brown. We are grateful 
for the hard work of Governor Brown's Administration in this 
process.
    The new compact recognized the benefits of investing gaming 
revenues in the local community and acknowledges the tribe as a 
significant contributor to the local economy. Under the new 
compact, the tribe is relieved from burdensome revenue-sharing 
requirements. Now the tribe can invest gaming revenues and 
provide important programs to its tribal membership and local 
residents.
    Gaming has improved the well being of the tribe and the 
surrounding area through job creation, local investments and 
inter-government collaboration, improving the safety and 
security of the entire community.
    Gaming has created significant employment opportunities. 
For example, the Quechan Casino Resort in Imperial County, 
which has an unemployment rate of 24 percent, employs over 500 
individuals. Paradise Casino in Yuma County, which has an 
unemployment rate of 16 percent, has over 150 employees.
    In addition to job creation, gaming has allowed the tribe 
to create essential community and social services programs. For 
example, we offer scholarships and grants for post secondary 
education and vocational programs.
    We also operate a senior citizen center that offers meals, 
recreation and activities of the tribe and non-Native 
residents.
    Our tribe is especially proud of the new Ft. Yuma Health 
Care Center. Construction will be completed in March 2018. The 
new facility will be utilized jointly by the Quechan and the 
Cocopah Tribes. The facility will offer a clinic, dental and 
optical services to both tribe and non-Native residents.
    Finally, gaming has fostered strong, intergovernmental 
relationships ensuring the safety and well being of the 
surrounding communities. In California, we have a strong 
relationship with Imperial County law enforcement and the fire 
prevention agency.
    At the Federal level, we are one of only two tribes that 
has a port of entry. The Andrade Port of Entry is located on 
our reservation. Our Tribal Fish and Game Department and Tribal 
Police Department work collaboratively with the United State 
Border Patrol on issues of border protection and homeland 
security.
    Looking ahead at the next 30 years, our tribe is hopeful 
that more States will appreciate the opportunities created 
through the use of gaming revenues by rural tribes.
    I thank you for your time and will be happy to answer any 
of the Committee's questions.
    [The prepared statement of Mr. Escalanti follows:]

   Prepared Statement of Hon. Keeny Escalanti, President, Fort Yuma 
                          Quechan Indian Tribe
Introduction
    My name is Keeny Escalanti, Sr., and I serve as the President of 
the Quechan Tribe of the Fort Yuma Indian Reservation (``Tribe''). I 
would like to thank the Committee for the opportunity to share our 
perspective on how Indian gaming has furthered the Tribe's right to 
sovereignty, self-governance and self-determination and at the same 
time provided an avenue for building stronger partnerships with local 
governments and members of our local communities.
    The Fort Yuma Reservation encompasses approximately 45,000 acres 
(approximately 68.7 square miles) with a land base that is located in 
both California and Arizona, and which shares a border with Mexico. Our 
Tribal enrollment is approximately 3,900 members.
    According to our creation story, our people pronounced 
``KWAT'SAN'', have lived in the Southwest's Colorado River Valley since 
time immemorial. We are well known for our distinct language, the 
Yuman, which is a native dialect of the HOKAN Language from modern day 
California and Arizona. Our Tribe's governing body--the Tribal 
Council--consists of a President, Vice-President, and five Council 
Members at large. The President and Vice-President serve four-year 
terms and the Council Members serve two-year terms.
    Our Tribe is largely an agricultural community, driving economic 
development, in part, through the lease of thousands of acres of Tribal 
land for agricultural purposes. In addition to agriculture, our Tribe 
relies on tourism and, of course, gaming to augment our economy.
    Our rural location presents unique issues that historically we have 
struggled to address. We have limited economic opportunities as well as 
limited access to social services programs that are readily available 
and accessible to tribes in metropolitan areas. However, with gaming, 
we have witnessed an increase in the opportunities that we can offer 
not only to our Tribal members, but also to the non-native residents of 
our local communities. We have witnessed how the revenue generated from 
our gaming operations has allowed our Tribe to invest in our local 
community, thereby fortifying the partnerships the Tribe maintains with 
our local governments and improving the livelihood of non-member 
residents. We are not alone, as states are also beginning to recognize 
how tribes are becoming the strongest allies and benefactors to both 
local governments and local residents. The Tribe's new Compact with the 
State of California exemplifies this shift in thought.
Tribal-State Compacts: Recognizing the Importance of Reinvesting in 
        Local Communities
    In an effort to strengthen the Tribe's social and economic 
conditions on our reservation, the Tribe entered into gaming compacts 
with both California and Arizona pursuant to the Indian Gaming 
Regulatory Act (IGRA). Today, the Tribe operates one casino in each of 
these states.
    In California, the Tribe controls and operates the Q Casino Resort 
located near the township of Winterhaven in Imperial County, 
California. The Q is a state-of-the-art casino resort featuring 1,000 
slot machines, 15 table games, live poker, a high limits room, and 166 
resort guest rooms.
    The Tribe entered into its first compact with California in 1999, 
authorizing the operation of our first California casino. This compact 
authorized a relatively modest gaming operation consisting of up to 350 
gaming devices. Due to the success in this endeavor, the Tribe moved 
forward with a resort expansion plan, relocating from the original 
building to a new facility constructed along Interstate 8 (I-8) highway 
approximately 1 mile from the Andrade Port of Entry, also located on 
the reservation.
    To that end, in 2006, the Tribe negotiated an amendment to the 
existing 1999 compact which was signed by then California Governor Gray 
Davis (the ``2006 Amendment''). The 2006 Amendment was signed by 
Governor Arnold Schwarzenegger. This Amendment authorized the expansion 
of our California casino, permitting up to 1,100 devices. However, even 
though the 2006 Amendment authorized the operation of additional 
devices in our California casino and propelled its relocation, the 2006 
Amendment included some unfavorable revenue-sharing provisions which 
caused the Tribe financial distress. The unfavorable revenue-sharing 
provisions, coupled with the significant debt we incurred to finance 
the construction of the new casino facility, deprived our Tribe of the 
ability to provide essential services to our members and, furthermore, 
restricted any significant investment in the communities surrounding 
our reservation.
    To alleviate the financial hardship that we experienced under the 
2006 Amendment, our Tribe recently negotiated a new Tribal-State 
Compact with Governor Edmund G. Brown (``2017 Compact''). Governor 
Brown's administration worked tirelessly to finalize our new compact, 
allowing the parties to reach an agreement in August 2017, in time for 
the California Legislature to ratify the compact before the end of this 
year's legislative session. The Tribe commends and is grateful for the 
hard work exhibited by Governor Brown and his administration. We are 
pleased with the terms of our new compact, as it allows for an 
expansion of gaming devices while offering up more favorable revenue-
sharing provisions for the Tribe that will allow it to improve its 
financial status and augment services that we can provide its 
membership.
    The 2017 Compact is unique in that the State recognizes the 
benefits of reinvesting gaming revenues in the local community and 
recognizes the Tribe as a significant contributor to the local economy. 
For example, under the new provisions, the Tribe is exempt from certain 
burdensome and counterproductive state based revenue-sharing 
contributions, allowing the Tribe to reinvest their resources to 
provide programs to tribal members and local non-native residents, as 
was expressly recognized during the ratification process the Governor's 
office as well as members of the California State Legislature.
    In addition to removal of certain revenue sharing requirements, the 
2017 Compact provides credits counted against required payments to the 
State if the Tribe invests in certain local programs. For example, the 
Tribe received credits for non-gaming related capital investments and 
economic development on or off tribal trust lands, including lands 
which border the State and also for payments to support operating 
expenses and capital improvements for non-tribal governmental agencies 
or facilities operating within Imperial County. Thus, rather than 
having gaming revenue go to the State, the Tribe, which is in a much 
better position to understand the unique needs of Imperial County and 
the surrounding areas, can make a determination as to how to invest 
gaming revenue into specific County programs and economic development 
projects around its reservation.
    What is particularly striking about the 2017 Compact is that the 
State seems to recognize, particularly with rural tribes, that 
boundaries separating local, state and tribal jurisdictions become less 
relevant as residents travel long distances, often traversing state 
boundaries, in search of economic and social opportunities--those being 
scarcer in agricultural communities. The new compact recognizes that 
the Tribe's economic investments in say, Yuma, Arizona, could have a 
beneficial impact on those residents of Imperial County. For example, 
the City of Yuma offers, among other activities, the Yuma Art Center 
and Historic Yuma Theater, as well as shops, restaurants, wineries and 
breweries located in Historic Downtown Yuma; all are potentially 
investment opportunities that the Tribe wishes to pursue, and is now 
incentivized to pursue, under the more favorable provisions of the 2017 
Compact. The Tribe's economic investments in Yuma will benefit the 
residents of Imperial County because they, having limited options, 
regularly avail themselves of the opportunities and benefits Yuma has 
to offer.
    In Arizona, the Tribe owns and operates the Paradise Casino, 
located in Yuma County, Arizona. The Tribe negotiated its Tribal-State 
Compact with Arizona in 2002 (``2002 Compact''). The 2002 Compact 
authorized the operation of 566 gaming devices. Paradise Casino 
currently offers Class III gaming with 480 slot machines, restaurant, 
bars and an event center which is also used as an emergency shelter in 
those instances.
    The Tribe is currently in the process of negotiating a new compact 
with State of Arizona, and is hopeful that Arizona will also continue 
to recognize and appreciate the beneficial impact gaming revenues have 
on local rural communities.
Strengthening Bonds: Building Stronger Partnerships With Local 
        Governments and Improving Our Local Communities
    Gaming is a critically important component of the Tribe's economy. 
Indeed, gaming has directly or indirectly improved the Tribe's well-
being by nearly every measurable standard, thereby furthering the 
longstanding federal interest in promoting tribal self-determination 
and economic self-sufficiency. More broadly, gaming has also improved 
the well-being of the surrounding area--on- and off-reservation--
through job creation and local investment, as well as through providing 
the Tribe with resources to collaborate with local, state and federal 
agencies to improve the safety and security of the entire community.
    Our gaming enterprises have provided significant employment 
opportunities for both Tribal members and local community members, 
making our Tribe a significant contributor to the local economy. The 
Quechan Casino employs over 500 individuals from Imperial County, 
California, which has a relatively high 24 percent unemployment rate. 
It attracts employees from as far as Las Vegas, Nevada and San Diego, 
California. Meanwhile, the Paradise Casino in Yuma, Arizona employs 
over 150 people from Yuma County, which has an unemployment rate of 16 
percent. As the Senator sponsoring the Tribe's California Compact 
stated, ``any job is gold,'' and the Quechan Tribe is creating work 
where there was none before.
    Gaming has been instrumental in allowing the Tribe to implement 
community and social services programs for Tribal and community 
members. Educational programs, for instance, have benefited 
significantly from gaming revenues, as the Tribe is able to use those 
revenues to fund scholarships and grants for post-secondary education 
and vocational programs. The Tribe has also supplemented tribal funding 
to a program called the Alcohol Drug Abuse Prevention Program (ADAPP), 
which provides services such as individual treatment plans, clinical 
assessments, individual sessions, youth group outreach, assistance with 
special court appearances and transportation.
    The Tribe has also implemented programs designed to assist with 
elder care. The Tribe operates a Senior Center that offers meals and 
recreational activities to elderly members of the Tribe, other Native 
Americans in the community, and non-tribal members. The recreational 
activities that are offered include: Quechan language lessons, sewing, 
food demonstrations, movies, dancing, exercise classes, local field 
trips and monthly birthday celebrations. The Tribe also has an Elder 
Family Services Program, which offers a network of resources for frail 
elderly and handicapped clients. The program provides support services 
for the elderly and their families through resource referrals, 
advocacy, client transportation, case management and family counseling. 
The program works collaboratively with federal, state, county and city 
offices and includes a network of the following: Senior Nutrition; 
Social Services; Indian Health Services; One Stop for Imperial County; 
Cash Aid Assistance & Food Stamp Program; Social Security; Arizona 
Native Health Program; and Imperial County Social Services.
    Our Tribe is especially proud that we have taken initiative to 
build the Fort Yuma Health Care Center--which will be operated jointly 
with the Cocopah Indian Tribe and is scheduled to open in March 2017. 
The facility will be approximately 76,000 square feet with 22 primary 
care exam rooms. It will offer clinical, dental and optical health 
services to both tribal and non-tribal members. It also has the 
capacity to employ over 176 individuals, although increased federal 
funding will be necessary to fully staff the facility.
    Aside from these economic benefits, the Tribe has also been able to 
utilize gaming as a springboard to establish strong intergovernmental 
relationships to ensure the safety and well-being of the broader 
community. At the local level, in California, the Tribe has a strong 
relationship with Imperial County's law enforcement and fire prevention 
agencies, and the strength of that relationship is attributable to the 
parties' commitment to improving the safety and protection of the local 
community through frequent communication and financial assistance 
provided by the Tribe. Pursuant to certain Memoranda of Understanding 
(``MOUs''), the Tribe pays approximately $400,000 annually to the 
Imperial County Fire Department and $214,100 annually to the Imperial 
County Sheriff Department. Gaming is a critically important 
contributing factor to the success of this intergovernmental 
relationship, as the Tribe's ability to meet its financial obligations 
under these MOUs is dependent upon the success of its gaming 
enterprises. Again, the California Compact recognizes this symbiotic 
relationship by allowing the Tribe to credit its financial assistance 
against monies otherwise due to the State.
    At the federal level, the Tribe uses its unique location as an 
opportunity to strengthen relations and opportunities with federal 
government agencies. Our Tribe is one of only two tribes that has a 
port of entry--the Andrade Port of Entry--on our reservation. Our 
Tribal Fish and Game and Tribal Police Department works collaboratively 
with the United States Border Patrol on issues of border protection and 
homeland security. Public safety is the Tribe's highest priority 
whereas our Tribal Federal Officers work closely with Border Patrol and 
the revenue derived from our casinos may allow us to do more to further 
this compelling security interest in the future.
Conclusion
    In sum, tribal gaming revenue, when left in the tribal and 
surrounding communities, creates far more opportunities to those 
communities than it would through State-managed revenue programs. Rural 
tribes are uniquely poised to understand the needs of their communities 
and are thus in the best position to determine how to appropriately 
invest gaming revenues to address those specific needs. In looking 
ahead over the next 30 years, our Tribe is hopeful that more States 
recognize the advantages from, and opportunities created through, the 
use of gaming revenue by rural tribes--not only for tribal members, but 
also for those local rural communities.
    We thank the Committee for its consideration of these issues 
important to the Quechan Tribe and to all of Indian Country. I would be 
happy to answer any of the Committee's questions.

    Senator Udall. [Presiding.] Thank you very much, President 
Escalanti.
    I see we have been joined in the audience by President 
Begay. He represents the Navajo Nation, the biggest Indian 
tribe area wise in the Country in three States, but we claim 
him in New Mexico.
    Chairman Frank, please proceed.

STATEMENT OF HON. HAROLD ``GUS'' FRANK, CHAIRMAN, FOREST COUNTY 
                      POTAWATOMI COMMUNITY

    Mr. Frank. Thank you. Good afternoon, Chairman Hoeven, Vice 
Chairman Udall and other distinguished members of the 
Committee.
    Thank you for inviting me to speak today on behalf the 
Forest County Potawatomi Community. I am Harold ``Gus'' Frank, 
Chairman of the tribe.
    We have a diverse set of businesses that allow us to create 
opportunities for our people and local communities, including 
two casinos. The Potawatomi Business Development Corporation, 
our economic development and investment company.
    We closely follow new trends and potential threats in the 
business world. One of the greatest risks facing businesses, 
including tribal gaming, is the growth of cyber crime. All 
organizations and companies are at constant risk of cyber 
theft. Tribal operations are no different.
    Improving cyber security controls is crucial to the 
continued success of Indian gaming. The integrity and future of 
the gaming industry depends on protecting our systems. We need 
to be proactive, not reactive, when it comes to defending 
against cyber crime.
    One of our tribe's most important investments over the last 
several years has been the improvement of cyber security 
protection at our tribal casinos. Although our casinos have 
been compliant with applicable State and Federal regulations, 
we feel the need to go beyond what is required by the minimum 
standards to protect ourselves from cyber threats.
    Therefore, we hired a third party security company to audit 
our cyber security protection. Following the audit, we invested 
millions of dollars to upgrade our systems. Some of the things 
we did include: hiring a security consultant to help us improve 
our systems and processes; upgrading all credit card machines, 
ATMs and software to the latest pay card industry standards; 
purchasing security software that constantly looks for and 
addresses attacks; creating a new security director position to 
monitor and safeguard our data; improving employee knowledge of 
the risk of cyber attacks and teaching them how to spot and 
respond to attacks; and planning regular security audits to 
make sure our defenses are working while finding new ways to 
improve.
    We also have gained experience with the Potawatomi Business 
Development Corporation. One of the company's we own through 
the Development Corporation is Data Holdings, a leading data 
center located in Milwaukee.
    We store data for a wide range of companies which requires 
the businesses to be compliant with various internal control 
standards such as HIPPA and PCI standards.
    In addition to the data center, PBDC also owns Redhawk 
Network Security, a cyber security firm that monitors crime 
networks and provides security support. Running the data center 
and Redhawk has given us a valuable perspective on the level of 
protection required to protect the tribe's businesses from 
cyber threats.
    At the end of the day, in order to preserve the integrity 
of tribal gaming, our guest and our employee information must 
be protected from cyber attack. Therefore, proactive measures 
need to be taken by all tribal casinos. To assist tribes, the 
National Indian Gaming Commission should provide guidance on 
internal control standards for Class III gaming that reflects 
the threats of today. NIGC has been working on this issue and 
has asked tribes for input on the matter.
    Our gaming commission has responded by providing specific 
recommendations for NIGC to consider. With the growth of cyber 
crime, we respectfully request that NIGC take special care to 
examine controls over cyber security.
    Concerning our expertise in managing the protection of data 
for ourselves and others, we would like to offer any assistance 
we can as the NIGC updates their guidelines. Indian Country and 
regulators need to be proactive to protect against cyber crime. 
Doing so will help tribal governments ensure their long term 
success. Information security is crucial to the future of 
tribal gaming. The time to act is now.
    Thank you, Mr. Chairman and Mr. Vice Chairman, on behalf of 
the Forest County Potawatomi.
    [The prepared statement of Mr. Frank follows:]

   Prepared Statement of Hon. Harold ``Gus'' Frank, Chairman, Forest 
                      County Potawatomi Community
    Good afternoon Chairman Hoeven, Vice Chairman Udall, and other 
distinguished Members of the Committee. I am Harold Frank, Chairman of 
the Forest County Potawatomi Community (FCPC). Thank you for the 
invitation to appear before you on behalf of our Tribe. We appreciate 
the Committee's initiative in examining and preparing for the future of 
Indian Gaming.
    The FCPC are one of eight Potawatomi bands in the United States. 
Our ancestral and treaty territory homelands extend from about what is 
now northern Indiana to the northern shores of Lake Michigan, through 
present day Chicago and Milwaukee.
    Through revenues from a wide array of business interests, we have 
been fortunate enough to invest in the health, wellness, education, 
environment and future of our people. Among the diverse set of 
businesses we own are two casinos in Wisconsin and Potawatomi Business 
Development Corporation (PBDC).
    One of the FCPC's most significant and important investments in 
recent years has been the modernization and enhancement of internal 
controls regarding cybersecurity at our casinos. It seems that every 
week we hear increasingly disturbing news of cyberattacks and data 
breaches across all industries. All organizations are vulnerable to the 
theft of confidential data, including casinos.
    Improving controls related to cybersecurity is crucial to the 
future success of Indian gaming. The cost of addressing a single data 
breach has grown to around $4 million per incident. \1\ In addition to 
the financial cost of being hacked, an immeasurable impact lies in the 
shaking of consumer confidence. The integrity and future of the gaming 
industry depends on mitigating the risks posed by cyber threats.
---------------------------------------------------------------------------
    \1\ (June 15, 2016). IBM & Ponemon Institute Study: Data Breach 
Costs Rising, Now $4 million per Incident. Press Release, IBM Security. 
Retrieved from http://www.prnewswire.com/news-releases/ibm--ponemon-
institute-study-data-breach-costs-rising-now-4-million-per-incident-
300284792.html
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Cybersecurity Investments
    Our casinos have always been compliant with the National Indian 
Gaming Commission's (NIGC) regulations governing internal controls, 
which include minimum standards for the security of sensitive data. \2\ 
In fact, our tribal-state compact with Wisconsin requires that our 
minimum internal control standards (MICS) are at least as stringent as 
the Commission's regulations.
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    \2\ 25 C.F.R. Part 543. The Commission updated these regulations in 
2012 and 2013.
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    However, we recognize the wisdom of going beyond what is required 
by law in order to protect ourselves and our patrons from cyber theft. 
In these efforts, the FCPC took a large, proactive step to improve the 
level of cybersecurity protection at our casino enterprises by hiring a 
vendor to conduct a 3rd party security assessment to identify 
vulnerabilities and consult on any potential risks. Following that 
audit, our tribe invested millions of dollars to develop and implement 
sophisticated protections against cybercriminals. The overall takeaway 
was to move the network and infrastructure into high security zones 
through modernization. We added layers of security protection to 
address various threats and vulnerabilities. Some specific actions 
taken as a result of the assessment include:

    Hiring a 3rd party security consultant, to assist in 
        addressing areas of opportunity highlighted by the audit. The 
        FCPC hired a 3rd party security consultant to ensure that audit 
        takeaways were thoroughly evaluated and sufficient action taken 
        to protect from cyberattacks. The consultant has been closely 
        involved with developing standards for IT security personnel, 
        testing the efficacy of implemented controls and ensuring that 
        adequate measures are taken to protect against a breach. The 
        assistance of a 3rd party consultant has been crucial to 
        ensuring strong controls are implemented and updated.

    Upgrading credit card machines, ATMs and associated 
        software to adhere to and comply with Payment Card Industry 
        (PCI) standards. When considering industry frameworks governing 
        the protection of sensitive data, we found that the greatest 
        level of protection can be achieved by adhering to PCI 
        standards. As a result, we've invested in hardware that is 
        compliant with PCI standards and offers the highest level of 
        protection to our patrons. All credit card machines now have 
        chip readers with encryption, per PCI requirements, whether 
        they are customer facing or used by employees.

    Purchasing and implementing security monitoring software to 
        identify, isolate and address any attempts to compromise 
        company systems. Constant surveillance of company systems is 
        crucial to recognizing and foiling an attack. There are 
        numerous software-as-a-service vendors who offer products to 
        assist in this effort. Through these products, real-time 
        information is provided on attempts to breach company systems, 
        allowing security personnel to take immediate action. We ensure 
        that any vendor with which we partner is compliant with PCI 
        standards.

    Creating a new Security Director position, dedicated to 
        safeguarding information technology and sensitive data. The 
        Security Director is a position dedicated to maintaining data 
        security and will play an important role in developing the 
        orientation curriculum and administering training to new and 
        current employees. The Director will also regularly perform 
        penetration testing, hold multiple security certifications and 
        monitor sensitive company data.

    Improving new hire and current employee knowledge of the 
        risks of cyberattacks and strategies to defend against them. As 
        mentioned previously, the Security Director will play a large 
        role in improving the security IQ of new and current employees. 
        The majority of cyberattacks come through social engineering, 
        as criminals seek to identify and manipulate key people into 
        performing compromising actions or divulging confidential 
        information. Ensuring that employees are aware of the 
        strategies cybercriminals may use is an essential part of our 
        information security plan.

    Planning follow-up IT security audits with a 3rd party to 
        ensure effectiveness of newly implemented security protocols. 
        An IT security audit involves analysis of procedure 
        documentation, technical controls, personnel interview, 
        physical security reviews among any other elements that affect 
        the effectiveness of an information security program. 
        Scheduling follow-up audits ensures that recently implemented 
        protocols are working properly and are effective. Cybersecurity 
        is an ongoing concern--there is no point at which an 
        organization is done updating systems, as more sophisticated 
        attacks are constantly being developed and executed.
Experience at Potawatomi Business Development Corporation (PBDC)
    In addition to our experience operating our casinos, the Potawatomi 
Business Development Corporation (PBDC) was established in 2002 as the 
economic development and income diversification business of the FCPC.
    Under the PBDC's umbrella of companies is Data Holdings, a leading 
data center located in Milwaukee, Wisconsin. FCPC opened the $33 
million data center in May of 2013 after recognizing the growing 
importance and business opportunity of safely and securely storing 
confidential data. We wanted to be industry leaders in the data 
protection space, so developed the data center as the first wholesale, 
Tier III Enhanced facility in Milwaukee. The data center is compliant 
with Health Insurance Portability and Accountability Act (HIPAA) and 
Payment Card Industry (PCI) standards, which establish minimum controls 
for the protection of patient health data and the transmittal of credit 
card information, respectively. This experience has given us a unique 
and valuable perspective on the importance of internal control 
standards and the level of protection we should strive for in our other 
businesses, including our casinos.
    In addition to owning and operating the data center in Milwaukee, 
the PBDC also runs Redhawk Network Security, a cybersecurity firm 
providing network monitoring and device support services. Redhawk 
partners with clients to provide them with full-time security oversight 
and expertise. As part of these ongoing efforts, Redhawk has been 
developing a modular portal to perform penetration audits on client 
systems and auto-generate a vulnerability report to identify and 
address any IT security shortfalls. Our exposure to the unique demands 
and ever-changing world of cyber security from a vendor's standpoint 
has expanded and shaped our perspective of what is required to ensure 
the protection of confidential information.
Recommendation
    Among the greatest risks facing the future of Indian gaming is 
cybercrime. Proactive measures should be taken by all tribal casinos to 
safeguard valuable company and customer information. Indian gaming has 
rapidly evolving digital gaming and business systems. As these systems 
continue to grow, they are becoming ever more interconnected. In 
addition, Internet-connected fixtures are becoming more common, 
creating additional opportunities for hackers to gain access to 
networks and exploit vulnerabilities.
    Class II tribal gaming establishments are subject to updated NIGC 
regulations. However, providing guidance on recommended minimum 
internal control standards for class III gaming which reflect the 
threats of today is an important step the NIGC can take to protect 
against cybercrime and safeguard the future of Indian gaming.
    In recent years the NIGC has consulted with tribes about drafting 
voluntary guidance establishing minimum internal control standards for 
class III gaming, which were last updated in 2006. \3\ The Forest 
County Potawatomi Gaming Commission has responded to the NIGC's 
solicitation of input, encouraging the development of current and up-
to-date NIGC recommended MICS. \4\ As we stated in our past 
correspondence, the FCPC Tribal MICS are evaluated in comparison with 
class III MICS adopted by the NIGC as required by our compact with the 
state of Wisconsin. Therefore, it is in the FCPC's best interest to 
have current and up-to-date MICS. We continue to support the revision 
and updating of class III minimum internal control standards, though we 
recognize that the standards will be considered recommended guidelines 
rather than required MICS.
---------------------------------------------------------------------------
    \3\ NIGC Consultation Topics, Draft Guidance on the Class III 
Minimum Internal Control Standards, National Indian Gaming Commission, 
Updated December 12, 2016. Retrieved from https://www.nigc.gov/images/
uploads/2016-0912-12%20Consultation%20Briefing%20clean.pdf
    \4\ George, K. (Chairperson, Forest County Potawatomi Gaming 
Commission). Letter to: Stevens, T. (Chairwoman, National Indian Gaming 
Commission). February 7, 2011. Retrieved from https://www.nigc.gov/
images/uploads/Tribal%20Consultation/Regulatory%20Review%202010-2011/
ForestCountyPotawatominoicomments.pdf
---------------------------------------------------------------------------
    However, in the preparation of these guidelines, we respectfully 
request that a particular focus is given to properly updating the 
NIGC's recommended MICS regarding cybersecurity protections. 
Encouraging tribes to be proactive rather than reactive with 
cybersecurity will help protect the industry from the growing threat of 
cybercrime. Developing and encouraging a strong security infrastructure 
will help tribal organizations maintain independency and ensure long-
term success.
    Information security is an important safeguard that will protect 
tribal gaming from expanding threats in cybersecurity. Considering our 
status as the operator of major class III gaming facilities and our 
expertise in protecting and managing sensitive data for others, the 
Forest County Potawatomi Community would like to offer any assistance 
we can provide in the development of NIGC guidance regarding minimum 
internal control standards on cybersecurity for class III gaming.
    Thank you again for the opportunity to testify before the Committee 
today.

    Senator Udall. Thank you very much, Chairman Frank.
    Next, we will go to Chairman Forsman. Senator Cantwell 
speaks very highly of you. Please proceed.

  STATEMENT OF HON. LEONARD FORSMAN, CHAIRMAN, SUQUAMISH TRIBE

    Mr. Forsman. Thank you.
    Good afternoon, Chairman Hoeven, Vice Chairman Udall and 
honorable members of the Committee.
    My name is Leonard Forsman and I have the honor of serving 
as the chairman of the Suquamish Tribe. I appreciate this 
opportunity to share Suquamish's story and perspective on 
Indian gaming.
    The Suquamish Tribe resides on the 7,000 acre Port Madison 
Indian Reservation located on the shores of Puget Sound 
directly across from Seattle, Washington. We have 1,200 tribal 
citizens, about half of whom reside on the reservation.
    The Tribe is the successor of the Suquamish and the 
Duwamish people that signed the Treaty of Point Elliot in 1855, 
which created our reservation. That treaty was signed by Chief 
Seattle who is buried at the Suquamish.
    Prior to gaming, unemployment on the reservation was high, 
graduation rates were low and there were few economic 
opportunities for the tribe. We had no tax base to fund 
government programs and constantly had to find ways to make 
ends meet because of the Federal Government's chronic under 
funding of Indian programs.
    I was on the tribal council when the tribe made the 
decision to engage in gaming pursuant to IGRA. We identified a 
parcel of land that would become the future home of the 
Clearwater Casino Resort. The cost of that land was $74,000. 
Fortunately for us, we had $76,000 in our bank account. This 
decision was a bet the farm moment that has literally changed 
my peoples' future.
    The Clearwater Casino Resort and the revenue it produces 
for the tribe has allowed us to reinvest in our people and 
land. Before gaming, the tribe had very few citizens who held 
higher degrees but today, I am proud to say that we currently 
have 50 students in our higher education program.
    The tribe has been able to create robust programming for 
our elders, including housing, meals and health care. We 
provide health insurance for all of our tribal citizens and 
offer mental health and substance abuse programs.
    We operate the Chief Kitsap Academy, a culturally-centered 
middle and high school on the reservation. Gaming revenues have 
allowed us to tackle the challenges that face our people, 
including a new pilot program that is building tiny houses to 
fight homelessness.
    The tribe has been able to use our gaming revenues to 
reacquire homelands and restore critical habitat. Like many 
reservations, our reservation was allotted. In 1904, the tribe 
held just 36 acres but with our gaming revenues, we have been 
able to reacquire and place almost 1,300 acres back into trust. 
Overall, 50 percent of the reservation is now held in trust 
either by the tribe or tribal citizens.
    The tribe also operates a salmon hatchery and invests in 
rehabilitation of critical habitat which benefits the entire 
Puget Sound ecosystem.
    The Suquamish Tribe has invested our gaming revenues to 
diversify our economy. Today, we operate a seafood company, an 
8(a) construction firm, a golf course and several retail 
stores. The tribe is now the second largest private employer in 
Kitsap County. We employ 1,400 people between our government 
and government-owned enterprises. Over 70 percent of these 
employees are non-tribal and live off the reservation. All of 
these employees are paid generous wages and benefits.
    This story is similar for tribes across the State of 
Washington where combined we contribute $3.5 billion to the 
State's gross product and employ more than 27,000 
Washingtonians. Indian gaming has also allowed the Suquamish 
Tribe to take our place in the family of governments. The 
revenues we created through gaming, the jobs we produce in the 
community and the investments we have made in our neighbors 
have helped to usher in a new era in intergovernmental 
cooperation. We are at the table when important regional 
decisions are being made and our neighbors welcome our 
partnership.
    Suquamish gaming, like all Indian gaming, is inherently 
local. We will not pick up and relocate our businesses. We will 
not abandon our region. We will always be here working to make 
the regional economy better for our people and our neighbors.
    IGRA imposed a structure on Indian gaming and tribes that 
works. Indian gaming is the most heavily regulated gaming in 
the United States with three different governments overseeing 
it. The Suquamish Gaming Commission is the frontline regulator 
followed by the NIGC and Washington State Gambling Commission.
    In our experience, the three regulators have developed a 
robust expertise to work together and ensure the integrity of 
the Indian gaming industry. Any assertion that Indian gaming is 
lawless or lacks regulation is inaccurate, dangerous and 
undermines what tribes like mine have worked so hard to build.
    While the Indian Gaming Regulatory Act is not perfect, it 
is working for Indian Country. Gaming remains the cornerstone 
of Suquamish's economic revival. We are building a sustainable 
and diversified economy where our people, and the surrounding 
community have the opportunity to thrive.
    Thank you.
    [The prepared statement of Mr. Forsman follows:]

 Prepared Statement of Hon. Leonard Forsman, Chairman, Suquamish Tribe
    Good afternoon Chairman Hoeven, Vice Chairman Udall, and Members of 
the Committee. Thank you for the opportunity to testify at this 
important hearing.
    My name is Leonard Forsman and I serve as the chairman of the 
Suquamish Tribe located in Washington state. The Suquamish Tribe is a 
signatory to the Treaty of Point Elliot of 1855 and a federally 
recognized Indian tribe. The Tribe has roughly 950 enrolled citizens, 
half of whom reside on the Tribe's present day homeland on the Point 
Madison Indian Reservation, which is located just west of Seattle, WA, 
across Puget Sound.
    I am here today to testify about how tribal governmental gaming is 
working. For the Suquamish Tribe, gaming has helped to revitalize our 
government, and enable us to invest in the Suquamish people and our 
future.
    Our tribe still faces many challenges, but governmental gaming has 
brought greater tribal employment, education, economic development, and 
reacquisition of our reservation lands. As one of the largest employers 
in our region, government gaming has also given the Suquamish Tribe a 
seat at the table with our neighboring jurisdictions and governments to 
discuss shared interests and issues impacting our communities.
Tribal Background
    The name Suquamish means ``people of the clear saltwater.'' We are 
the successor to the Suquamish and Duwamish people.
    Chief Seattle signed the Treaty of Point Elliot in 1855, on behalf 
of the Suquamish and Duwamish--34 years before Washington became the 
42nd state. Our people have engaged in commerce on the shores of the 
Puget Sound since time immemorial.
    As is true with many tribes, before we opened our gaming 
operations, the Suquamish Tribe and our people had few resources and 
depended almost entirely on the United States to fund our governmental 
operations and the services we provided to our tribal citizens.
    Despite our treaty, federal policies led to the early diminishment 
of Suquamish landholdings. Beginning in 1886, nearly three-quarters of 
the reservation was allotted to individual Indians--by 1904, only 36 
acres remained in Suquamish tribal ownership, and by 1973, only 37 
percent percent of the reservation remained in trust status.
Suquamish Gaming: Robustly Regulated, Government Gaming
    Suquamish governmental gaming is subject to a complex regulatory 
scheme. Unlike statesanctioned gaming, which is subject to regulation 
by one government, under the Indian Gaming Regulatory Act (IGRA), 
Indian gaming is regulated by at least two governments, often three. 
This is substantially more regulation than any other gaming industry. 
Suquamish governmental gaming is regulated by: (1) the Suquamish Gaming 
Commission; (2) the National Indian Gaming Commission; and pursuant to 
a Class III gaming compact with the state, (3) the Washington State 
Gambling Commission.
    In addition, other regulatory bodies regularly engage with 
Suquamish gaming (FinCEN, IRS, etc.). Consistent with the policy goals 
of IGRA, this robust regulatory regime ensures that Suquamish gaming is 
shielded from organized crime and other corrupting influences, that the 
Suquamish Tribe is the primary beneficiary of Suquamish governmental 
gaming, and assures that Suquamish governmental gaming is conducted 
fairly and honestly for both the Suquamish Tribe and consumers. Each of 
the three regulating governments now have decades of experience 
regulating Indian gaming and have largely worked harmoniously to ensure 
that Suquamish governmental gaming is adequately protected, fair, and 
honest.
Suquamish Government Gaming: Investment in the Future
    The Suquamish Tribe has implemented a three-prong strategy for 
utilizing our government gaming revenues: (1) economic security for the 
Suquamish Tribe and our tribal citizens through diversification, 
investments, and employment opportunities; (2) maintaining a strong 
tribal government through the provision of programs and services to 
tribal citizens, cultural enhancement, environmental restoration, and 
reservation infrastructure; and (3) investment in the reacquisition and 
restoration of tribal homelands.
Investments in Suquamish Economic Security
    Suquamish government gaming is an investment in the Suquamish 
Tribe, our citizens, and the surrounding community. We have invested 
millions of gaming revenues into the diversification of Suquamish 
economic endeavors. Through the Tribe's business arm, Port Madison 
Enterprises, our economy has expanded beyond the hospitality industry 
to include: owning and operating a golf course, a spa, and a stand-
alone historic banquet facility. This diversification also includes 
several retail outlets on the reservation, an 8(a) construction 
company, and a seafood company that is exporting our prized tribal 
geoduck to markets around the world.
    Economic and employment opportunities on the reservation were 
almost nonexistent before Suquamish government gaming but now the 
opportunity to earn a livable wage is available to our tribal citizens 
as well as our neighbors. In addition, these investments also provide a 
pathway for career advancement, which has a cascading effect throughout 
the broader community.
Investment in Strong Government
    As this Committee is well aware, the Federal Government chronically 
underfunds programs that many tribal nations rely on to provide basic 
services to their citizens. The Suquamish Tribe uses our government 
gaming revenues to supplement insufficient federal funds to ensure that 
Suquamish tribal citizens have access to basic services. This includes 
funding community health representatives, mental health and wellness 
services, and drug and alcohol abuse services. We also invest in our 
elders by providing housing, meals, and health services. And last 
month, we launched a trial project to provide temporary ``tiny homes'' 
for tribal members who otherwise would not have it and connecting them 
with services provided by the Tribe. This is a more holistic approach 
that fits with our cultural values and provides flexibility in 
responding to emergency situations.
    Suquamish government gaming revenue has contributed to our 
longstanding commitment to protecting our treaty resources. This 
includes operation of our hatcheries, habitat restoration and 
protection, fin and shellfish monitoring, and other environmental 
stewardship activities. These investments benefit the Suquamish Tribe 
and the entire Puget Sound ecosystem.
    Suquamish government gaming dollars also helps the Tribe meet our 
commitment to Suquamish youth. In 2006 the Tribe used our gaming 
revenues to partially fund the Marion Forsman- Bouchie Early Learning 
center, which provides early childhood education and child care in a 
culturally responsive environment for Suquamish and non-tribal 
community children. We also operate Chief Kitsap Academy, a culturally-
centered middle and high school on the reservation. And we are proud 
that this year more than 50 Suquamish students have enrolled in our 
higher education assistance programs, which provide aid for students 
seeking university and technical college degrees and certifications.
    Suquamish government gaming revenue helps to continue our 
connection to Suquamish history, language, and culture. We have been 
able to fund the construction of a new Suquamish Museum and the House 
of Awakened Culture, which is a community meeting facility on the 
shores of Puget Sound. Last year, we opened a community recreation 
center to foster our community and encourage healthy lifestyles. 
Suquamish government gaming revenues helped facilitate the return of 
the Old Man House property to the Tribe (the center of the Suquamish 
winter village on Agate Pass and Chief Seattle's home that was burned 
by the United States). In addition, government gaming revenues have 
helped fund other cultural activities like the annual canoe journey, 
repatriation of Suquamish remains, and other cultural education and 
preservation activities
Investment in Suquamish Homeland Restoration
    Suquamish government gaming has given the Tribe the opportunity to 
begin to restore our checkerboarded homelands. Since 1999, the Tribe 
has worked to consolidate our jurisdiction through acquisition of 
reservation fee parcels and securing trust status for those parcels (as 
well as acquiring fractional trust interests from willing sellers). The 
Tribe now owns undivided interest in 1,331 acres in tribal trust or 17 
percent of the reservation. Total trust ownership is 3,893 acres or 
just over 50 percent of the reservation.
Suquamish Governmental Gaming Has Improved the Surrounding Community
    In addition to bolstering the economic outlook for the Suquamish 
Tribe and our people, Suquamish governmental gaming has proven to be a 
valuable contributor to the local economy. After Naval Base Kitsap, the 
Suquamish Tribe is the second largest employer in Kitsap County. The 
Tribe and our enterprises employ almost 1,400 people. Over 70 percent 
of those employees are non-tribal and live off the reservation. The 
Suquamish Tribe provides our employees with generous wages and 
benefits.
    In addition, the Suquamish Tribe and our economic development 
agency annually give hundreds of thousands of dollars to non-profit 
organizations in the region. Over time this equates to millions of 
dollars into local causes and charities.
Fostering Inter-Governmental Relationships
    Prior to Suquamish government gaming, we often were ignored or 
excluded from decisionmaking in the region. I am proud that today we 
have taken our place at the table among the family of governments. The 
Suquamish Tribe now regularly engages in regional and state-wide 
partnerships to improve the lives of people living in our communities.
Tribal-State Relationships have Improved and Strengthened
    When Indian gaming began in Washington state, the tribes and the 
State were just emerging from years of litigation--and sometimes 
violence--over tribal treaty fishing rights. IGRA prompted the 
Suquamish Tribe and the State to engage on gaming issues on a 
government-to-government basis.
    In 1989, Washington and the tribes further improved their 
relationship with the inking of the Centennial Accord. Now codified 
into Washington law, the Accord sought to improve State- Tribal 
relationships by providing a framework for government-to-government 
interaction, including how state agencies, like the Washington State 
Gambling Commission, engage with the tribes.
    The improved relationship is also evident in the evolution of the 
tribal gaming compacts with the State. Despite the fact that IGRA 
intended for the tribes to be the ``primary regulators'' of gaming on 
their lands, early compacts took a ``one size fits all'' approach which 
often led to tension between the tribes and state regulators due to 
overlapping regulations. By the late 1990s, the State took a new 
approach to regulation that respected the distinct strengths and goals 
of each sovereign, and many of the gaming compacts were amended to 
reflect a changing approach to regulation.
    This transition to mutual respect in regulation has laid the 
foundation for strengthened government-to-government collaboration--in 
gaming as well as other areas of mutual interest. For example, the 
gaming compacts have laid the ground work in Washington for other 
government-to-government agreements on areas where there had been 
conflict, such as cigarettes, liquor, and fuel.
    One thing we can all likely agree on is that Indian government 
gaming has provided a strong and consistent source of revenue for 
tribes to fund their governments and immense community needs.
    Over time, the State has come to understand that what is good for 
Indian gaming is good for the State of Washington. According to a 2010 
Taylor Policy Group study, Washington Tribes (1) contribute more than 
$3.5 billion to Washington's gross state product, (2) employ more than 
27,000 Washingtonians in tribal casinos and tribal enterprises, 
including 18,000 non-tribal employees, and (3) generate $255 million in 
tax revenue for the State and local governments with taxes paid by 
suppliers and employees.
Indian Government Gaming is an American Success Story
    Indian government gaming is working for the Suquamish Tribe and is 
benefiting our neighbors in Washington state. The Tribe is making 
significant contributions to Washington's economy and our businesses 
are eminently local. The Suquamish Tribe will not pick up and leave for 
other states--we have always been here. There is no immediate need to 
change IGRA or how it operates. While gaming remains a cornerstone of 
Suquamish's economic revival, we continue to diversify our economic 
footprint in the Puget Sound region. The next thirty years are as 
unpredictable as the last thirty years since IGRA became law. But at 
Suquamish, we are building a sustainable, successful economy where our 
people, and the surrounding community have the opportunity to thrive.

    Senator Udall. Thank you very much, Chairman Forsman for 
that testimony.
    Please proceed, Chairman Stevens.

STATEMENT OF ERNEST L. STEVENS, JR., CHAIRMAN, NATIONAL INDIAN 
                       GAMING ASSOCIATION

    Mr. Stevens. Thank you, sir.
    I wanted to mention my father was the Mike Andrews of what 
was then the Senate Select Committee on Indian Affairs many 
years ago and a good friend of your Uncle Mo. I wanted to 
mention that as we start.
    Senator Udall. Thank you so much.
    Mr. Stevens. Thank you for allowing me to testify here this 
morning, Vice Chairman Udall and members of the Committee. I 
understand they have a vote.
    Before I start, I want to briefly reflect on the horrific 
shooting in Las Vegas on Sunday, Mr. Vice Chairman. I was in 
Vegas with dozens of tribal leaders there to attend the annual 
Global Gaming Expo when the shooting occurred. Our chief of 
staff was on the freeway for about two hours when that 
happened. I only rested when we could account for her being in 
her hotel room.
    Most of Sunday night and Monday morning, we spent texting 
and calling to check on our colleagues and also assuring our 
loved ones that we were safe. I was fortunate to have my wife 
with me, so I was safe. She told me to stay away from the 
windows.
    We know that at least two young ladies from Indian Country 
were harmed. One young lady from the Lummi Nation and one from 
the Salt River Tribe in Arizona both remain in serious 
condition. NCAI President Brian Cladoosby remains by the 
family's side in Las Vegas and gave a prayer at the opening of 
the G2E Conference. Our hearts go out to them and their 
families and all others afflicted.
    From Indian Country perspective, we are sadly not strangers 
to violence. To answer the violence, we are using technology 
and improving coordination with State and Federal law 
enforcement, not only on Indian lands, but in nearby 
communities.
    Our Tribal Gaming Protection Network, made up of tribal 
gaming professionals, has been in place for ten years. The TGPN 
has and will continue to provide active shooter training, 
seminars on security and surveillance, human trafficking and 
other courses on violence prevention. These trainings are 
taking place this week at G2E as we speak and through our NIGA 
Seminar Institute.
    I have just a brief word on human trafficking, Mr. Vice 
Chairman. I am a father of three grown daughters and I have 
eight granddaughters, so I am particularly concerned about the 
safety of any one of these young ladies in Indian Country.
    I assure you our gaming industry does all it can to stamp 
out this illegal and immoral activity. Indian Country will 
remain on the frontlines on these issues.
    Unlike the criminal justice system in place on Indian 
lands, the Indian gaming regulatory system is the exact 
opposite. It empowers tribes to serve as primary regulators and 
first responders. Because of the multiple surveillance cameras 
and security personnel in place, our Indian gaming operations 
are often the safest locations in tribal communities. Again, we 
can and we must do more to make our operations safe and secure 
for our citizens and visitors.
    With that, I want to thank you for this opportunity. I know 
we are here today in part to acknowledge the 30th anniversary 
of the Supreme Court's historic Cabazon and Morongo decision. 
The Cabazon court affirmed the inherent right of tribes to 
conduct gaming free of State interference.
    A little more than 30 years later, Indian gaming has 
responsibly grown into a $31 billion industry that is 
rebuilding our communities, educating a generation of new 
Native leaders and providing jobs to hundreds of thousands of 
American families. I cannot say enough about the investments 
tribes have made in education. Where 30 years ago, we relied on 
outsiders to serve as doctors, lawyers and other professionals, 
today we are educating our young leaders and they are returning 
to serve their communities.
    Just the other day, this girl did not look a day over 25 
but was actually in her early thirties, was working on my 
teeth. Believe me they need some work. I looked up and saw how 
young she was and I asked where she was from. She told me who 
her grandmother was. It was an Oneida Nation member. She was a 
very fine dentist working in the Oneida Nation Health Center. I 
am very proud of that.
    Education is one key to making sure that Indian gaming 
succeeds for the next 30 years. Another key is for Indian 
Country to continue to do our job to protect our citizens, our 
customers, our assets and the integrity of our operations.
    Last year, tribes invested $450 million on regulation, 
employing 7,000 regulators, surveillance officers, security 
personnel and others. In the midst of a revolution that has 
brought us FaceBook and Google, the tribal regulators are 
working hard to stay ahead of the technology curve.
    Safeguarding our IT infrastructure against cyber threats is 
a critical part of tribal gaming operations. We are constantly 
developing IT personnel to meet the challenges of the new 
digital world.
    Probably the most important key to our future success is 
for this Committee to begin to debate the fix to the tribal-
State compacting process that has been broken for more than two 
decades. We know this is not an easy fix but we call on your 
leadership to begin a respectful debate to craft an alternative 
method with which we can secure Indian gaming for the next 30 
years.
    Finally, Secretary Zinke has repeatedly said tribal 
sovereignty must mean something. In some cases, sovereignty 
means keeping the Federal Government out of the way by reducing 
laws and regulations. This means respecting Indian tribes just 
as other governments for the purposes of Federal labor laws.
    We thank Senator Moran and this Committee for moving the 
Tribal Labor Sovereignty Act and we look forward to working 
with you to see it signed into law. Sovereignty also means 
respecting tribal decision-making for the emerging gaming 
markets, Internet, fantasy and sports betting.
    Tribes should be free to make their own decisions to 
legalize or prohibit these new markets and that decision cannot 
be subject to veto by States. Recently, NIGA established the 
Sports Betting Working Group that is developing a more detailed 
position. I look forward to working with this Committee and 
others on policy proposals as that moves forward. We anticipate 
that group will be working by the end of the year.
    In closing, to truly succeed over the next 30 years, we 
have to work together in an open and honest dialogue. Indian 
Country, this Committee, Secretary Zinke and the entire Trump 
Administration must put our minds together to address the 
challenges of technology, compacting and these emerging markets 
so that we can build a better future for our children.
    That is where I will leave it, Mr. Vice Chairman. I am 
prepared to answer any questions. Thank you for your time.
    [The prepared statement of Mr. Stevens follows:]

Prepared Statement of Ernest L. Stevens, Jr., Chairman, National Indian 
                           Gaming Association
Introduction
    Good afternoon Chairman Hoeven, Vice Chairman Udall, and Members of 
the Committee. My name is Ernest Stevens, Jr. I am a citizen 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 appreciate this 
chance to provide our views about issues and opportunities to ensure 
the success of Indian gaming over the next 30 years.
    February 25, 2017 marked the 30-year anniversary of the U.S. 
Supreme Court's historic California v. Cabazon Band of Mission Indians 
decision, which held that state governments could not impose their 
regulatory gaming laws to stop tribal governments from engaging in 
gaming to provide jobs and economic opportunity for their communities. 
In the 30 years since Cabazon, Indian gaming has proven to be the 
single most successful economic development tool for tribal governments 
in more than two centuries.
    As this Committee examines issues and opportunities to help Indian 
gaming succeed over the next 30 years, we urge you to work with other 
Committees of jurisdiction to closely examine emerging gaming markets 
such as Internet gaming, daily fantasy sports, and sports betting. 
These activities pose both potential expansion opportunities and 
challenges to existing tribal gaming operations and tribal-state 
compact agreements. Indian Country will continue to work in partnership 
with federal and state regulators to stay ahead of the technology curve 
to protect Indian gaming revenues and the integrity of our operations. 
Finally, to help Indian Country achieve its full economic potential, we 
call on Congress to extend the respect for tribal sovereignty and the 
distinct status of Indian tribes in our federalist system to all areas 
of federal law. This means treatment of Indian tribes for purposes of 
federal labor laws, respect for tribes in the U.S. Tax Code, and direct 
federal investments to address the more than $50 billion in unmet need 
for infrastructure on Indian lands.
Native Nations In the U.S. Federalist System of Government
    As noted above, the Supreme Court's 1987 California v. Cabazon 
decision affirmed inherent rights Indian tribes, as distinct 
governments, to engage in gaming on their lands free from state 
interference--even those subject to the Termination era Public Law 83-
280. The Court acknowledged that Indian gaming was an exercise of 
tribal government self-determination and noted that gaming provides the 
sole source of governmental revenue for some tribes and is the major 
source of employment for many.
    The Cabazon Court also reasoned that tribal governments' exercise 
of sovereignty through Indian gaming aligned with the now longstanding 
federal policy supporting Indian self-determination and the goal of 
encouraging economic self-sufficiency. \1\ The Court found particularly 
persuasive statements from President Reagan's Interior Department 
supporting tribal government gaming. The Court cited the Reagan 
Interior Department's March 2, 1983 policy directive, which stated that 
the Administration would ``strongly oppose'' any proposed legislation 
that would subject tribes or tribal members to state gambling 
regulation. ``Such a proposal is inconsistent with the President's 
Indian Policy Statement of January 24, 1983.''
---------------------------------------------------------------------------
    \1\ President Nixon formally ushered in the federal policy 
supporting Indian self-determination in a Special Message to Congress 
on July 8, 1970. He stated, ``It is long past time that the Indian 
polices of the Federal government began to recognize and build upon the 
capacities and insights of the Indian people. . .. The time has come to 
break decisively with the past and to create the conditions for a new 
era in which the Indian future is determined by Indian acts and Indian 
decisions.'' (Emphasis added).
---------------------------------------------------------------------------
    President Reagan's 1983 policy statement discussed the historical 
recognition and treatment of Indian tribes as sovereigns and reaffirmed 
the then-existing federal policy supporting Indian self-government:

        When European colonial powers began to explore and colonize 
        this land, they entered into treaties with the sovereign Indian 
        nations. Our new nation continued to make treaties and to deal 
        with Indian tribes on a government-to-government basis. 
        Throughout our history, despite periods of conflict and 
        shifting national priorities, the government-to-government 
        relationship between the United States and Indian tribes has 
        endured. The Constitution, treaties, laws and court decisions 
        have consistently recognized a unique political relationship 
        between Indian tribes and the United States, which this 
        administration pledges to uphold.. The administration intends 
        to. . .remove[e] the obstacles to self-government [that] will 
        be charted by the tribes, not the Federal Government. . .Our 
        policy is to reaffirm dealing with Indian tribes on a 
        government-to-government basis and to pursue the policy of 
        self-government for Indian tribes without threatening 
        termination. . ..

        President Ronald Reagan, Statement on Indian Policy (Jan. 24, 
        1983).

    President Reagan's policy statement conforms with historical and 
foundational treatment by the United States of Indian tribes as 
separate distinct governments in our federalist system. When the United 
States formed, it acknowledged Indian tribes as sovereign governments, 
entering into hundreds of treaties with tribes to establish commerce 
and trade agreements, form alliances, and preserve the peace. In so 
doing, the U.S. followed the practice of the nations of England, 
France, and Spain. The U.S. Constitution affirmed these treaties and 
the sovereign authority of Indian tribes as separate governments. The 
Constitution's Commerce Clause also expressly provides that ``Congress 
shall have power to. . .regulate commerce with foreign nations, and 
among the several states, and with the Indian tribes.'' \2\
---------------------------------------------------------------------------
    \2\ In addition, the U.S. Constitution refers to tribal citizens in 
the Apportionment Clause, as ``Indians not taxed'', 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. The Constitution also acknowledges that treaties 
are the Supreme law of the land.
---------------------------------------------------------------------------
    Thirty years ago, the Cabazon Court also acknowledged the unique 
position of Indian tribes as separate distinct governments in the U.S. 
federalist system of government. Indian Country was encouraged to hear 
the most junior Supreme Court Justice, Neil Gorsuch, give a nod to this 
legal status during his confirmation hearings earlier this year. 
Senator Sasse asked then-Judge Gorsuch a broad question about 
federalism and the idea of separation of powers. Gorsuch replied as 
follows:

        We divide power in a way that was quite unique. Federalism. You 
        can think of separation of powers as having a horizontal axis 
        and a vertical axis. So that the federal government has certain 
        enumerated powers and authorities, and what the federal 
        government doesn't enjoy the states do, as sovereigns. In this 
        country as well, we have tribes which also bear sovereignty in 
        our part of the world, and bear recognition as such, and I'm 
        glad to have the opportunity to recognize that fact here as a 
        Westerner.

        Statement of Neil Gorsuch before the Senate Judiciary Committee 
        (March 22, 2017).

The State of Indian Gaming: 30 Years Post-Cabazon
    A handful of tribal governments in the late 1960s and early 1970s, 
tired of waiting on the United States to fulfill its treaty and trust 
obligations, took measures to rebuild their communities by opening the 
first modern Indian gaming operations. These tribal governments used 
the revenue generated from Indian gaming to fund essential tribal 
government programs, cover the federal shortfalls, and to meet the 
basic needs of their people. From this point forward, Indian tribes 
began to take their rightful and historical place alongside the federal 
and state governments, preserving tribal culture and way of life and 
caring for and protecting tribal government citizens and residents.
    Indian gaming operations were spurred by the forward-looking 
policies of Presidents Nixon and Reagan. As Tribal Governments began to 
use their gaming revenues to fund essential governmental services and 
programs and make ``Indian decisions'' as President Nixon had foreseen, 
reservation economies and opportunities began to increase. President 
Reagan's policy statements and support of tribal economic self-
sufficiency helped persuade the Cabazon Court to uphold the tribal 
government exercise of Indian gaming free of infringement from the 
states.
    After Cabazon, states and commercial gaming interests urged 
Congress to reverse the decision. 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 there had never been one proven case of 
organized criminal activity. Senate Report No. 100-446 at 5 (Aug. 3, 
1988). This Committee acknowledged that ``the interests of the states 
and of the gaming industry extended far beyond their expressed concern 
about organized crime. Their true interest was protection of their own 
games from a new source of economic competition. . .. [T]he State and 
gaming industry have always come to the table with the position that 
what is theirs is theirs and what the Tribes have is negotiable.'' Id. 
at 33 (Additional views of Senator McCain).
    Prior to the Cabazon decision, in 1984, the Interior Department's 
Deputy Assistant Secretary for Indian Affairs testified to this 
Committee that approximately 80 tribal governments were engaged in 
gaming with estimated revenues in the tens of millions. At the time, 
most tribal gaming operations were run out of temporary pop-up 
buildings or local tribal gyms. Over the past 30 years since the 
Cabazon decision, Indian gaming has responsibly grown to provide a 
steady source of governmental revenue for Indian tribes nationwide.
    In 2016, 244 tribal governments operated 484 gaming facilities in 
28 states, helping Indian gaming grow to $31.2 billion in direct 
revenues (a 4.4 percent increase over 2015) and $4.2 billion in 
ancillary revenues \3\ for a total of $35.4 billion in total revenues. 
Without question Indian gaming has been and continues to be the most 
successful tool for economic development for many Indian tribes in over 
two centuries.
---------------------------------------------------------------------------
    \3\ Ancillary revenues include hotels, food and beverage, 
entertainment, and other activities related to a tribal government's 
gaming operation.
---------------------------------------------------------------------------
    Many tribes have used Indian gaming revenue to put a new face on 
their communities. Tribal governments 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, communications systems, and so much more.
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.
    Nationwide, Indian gaming is a proven job creator. In 2016, our 
industry generated more than 310,000 direct jobs. When indirect jobs 
are included, Indian gaming employs nearly 700,000 Americans. 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 homelands, as promised in hundreds of 
treaties. These American jobs go to both Indians and non-Indians alike.
Indian Gaming Regulation
    Tribal governments realize that none of these benefits would be 
possible without a strong regulatory system to protect tribal gaming 
revenues and preserve 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. No one has a greater interest in protecting the integrity 
of Indian gaming and our assets 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.
    This comprehensive system of regulation is expensive and time 
consuming, but tribal leaders know that a successful operation relies 
on strong regulation. In 2016, tribes spent more than $449 million on 
tribal, state, and federal regulation:

    $336.5 million to fund tribal government gaming regulatory 
        agencies;

    $90.4 million to reimburse states for state regulatory 
        activities negotiated and agreed to pursuant to approved 
        tribal-state class III gaming compacts; and

    $22.2 million to fully fund the operations and activities 
        of the National Indian Gaming Commission.

    Tribal, state, and federal regulators work together to maintain the 
integrity of Indian gaming operations, the security of our patrons and 
visitors, and Indian gaming revenues. There are approximately 6,000 
tribal gaming regulators serving as the primary regulators of Indian 
gaming. \4\ The number of personnel at the state level dedicated to 
Indian gaming regulation varies from state to state, but it is 
estimated that 24 states employ nearly 1,000 regulators at the state 
level. \5\
---------------------------------------------------------------------------
    \4\  NIGC Budget Justifications and Performance Indication FY18 at 
NIGC-2; https://www.doi.gov/sites/doi.gov/files/uploads/
fy2018_nigc_budget_justification.pdf 
    \5\ At least four of the 28 states that have Indian gaming 
operations within their borders have refused to negotiate a Class III 
gaming compact with tribal governments, and thus, do not play a role in 
regulating Class II gaming.
---------------------------------------------------------------------------
    At the federal level, the NIGC employs approximately 131 regulators 
and staff in Washington, D.C. and in their various field offices. In 
addition to the NIGC, tribal governments 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.
    Today, safeguarding gaming systems and supporting IT infrastructure 
is a critical part of all tribal gaming operations. Our cybersecurity 
challenges are essentially no different than other governments and 
large businesses in that we must defend against a variety of cyber 
threats on a daily basis-malware, ransomware, external attacks on our 
networks, and potential malicious insiders. Indian gaming operations 
employ and develop skilled and qualified IT professionals to manage our 
IT environments. Many possess the same IT and security certifications 
such as Network+ and CISSP required by DOD and other Federal Agencies. 
We acknowledge the need to continually develop IT personnel to meet the 
future challenges and threats of an increasingly digital world.
    Technology also plays a major role in our capability to protect, 
detect and respond to a variety of cybersecurity events. Like other 
enterprises, our defenses also include a layered approach to protect 
networks, servers, and data. Many fundamental controls such as patch 
management, least privileged access controls, and network segmentation 
continue to be very effective at protecting systems. However, we also 
employ other technologies to enhance those protections such as 
automated vulnerability scanning processes to identify and eliminate 
security weaknesses. Tribal regulators are also utilizing next 
generation firewalls and intrusion protection systems to automatically 
detect and prevent malicious activities on the networks, as well as 
active malware detection systems and advanced threat defenses to add 
additional layers of protections to server based systems. Commercial 
24x7 security operations centers that continuously analyze logs from 
firewalls and other critical systems issue alerts whenever anomalous 
activities are detected. In addition, critical systems are continuously 
synchronized with redundant systems at hot-site locations to provide 
high availability and a supplement to traditional backups. Indian 
Country will continue to invest, adapt, and develop an increasingly 
stronger and more resilient security posture in response to the current 
and future cybersecurity threat environment.
    NIGA applauds the NIGC and Chairman Chaudhuri for establishing its 
Division of Technology and for the technical assistance that the 
Commission provides to all tribal government gaming regulators to 
identify and eliminate or reduce cybersecurity vulnerabilities. Working 
together we are staying ahead of the technology curve to sustain 
responsible growth and security of tribal gaming operations nationwide.
    Finally, in light of the horrific shooting this past Sunday night 
that involved the Mandalay Bay casino in Las Vegas, it seems 
appropriate to briefly discuss the work that tribal governments and 
regulators do to ensure the health and public safety of our patrons and 
visitors. Of the thousands of personnel dedicated to Indian gaming 
regulation, many are public safety and security officers. We cannot 
stop every random senseless act of violence, but we acknowledge that 
more can and must be done to prevent crime on Indian lands.
    Sadly, Indian Country is no stranger to violence. Through more than 
a dozen oversight hearings that led to the development of the Tribal 
Law and Order Act of 2010 (TLOA), this Committee highlighted the 
complex system of justice in place on Indian lands that has led to a 
crisis of violent crime that has persisted for decades. The Committee 
report to TLOA ``found that the divided system of justice in place on 
Indian reservations lacks coordination, accountability, and adequate 
and consistent funding.''
    Indian Country is doing our part to improve coordination and 
cooperation with state and federal law enforcement to protect our 
communities. This coordination includes cross-deputization agreements 
and special law enforcement commissions that empower officials to 
investigate and make arrests of suspects regardless of their race or 
which government's law is implicated.
    IGRA vests local tribal government regulators with the primary day-
to-day responsibility for regulating Indian gaming operations. This 
system stands in stark contrast to the failed system that continues to 
plague criminal jurisdiction in Indian country, where Native 
communities are often forced to rely on federal officials who are often 
located hundreds of miles from the Indian lands they are sworn to 
protect and serve. Despite reforms sought through TLOA, the system of 
criminal justice in Indian Country is a proven failure. We call on the 
United States to do more to provide all tribal governments with sorely 
needed resources to hire tribal justice officials, including police 
officers, court officials, detention personnel, and mental health 
counseling to prevent crime on Indian lands--as well as the equipment 
needed to do their jobs. \6\
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    \6\ Indian Country fully supports the Department of Justice FY18 
Budget, which proposes a 7 percent set aside for Indian tribes from all 
DOJ Office of Justice Programs accounts and a 5 percent set aside for 
tribes from the Crime Victims Fund to provide shelters, medical and 
mental health counseling, and other services to the far too many 
victims of crime on Indian lands.
---------------------------------------------------------------------------
    This system of comprehensive multi-layered system of regulation is 
costly has proven itself year after year. The funding, equipment, and 
personnel dedicated to Indian gaming regulation at the tribal, state, 
and Federal Government levels far outpace state and commercial gaming 
regulators. I challenge anyone to compare these numbers and resources 
to any form of gaming worldwide.
    The credit for this system goes to the tribal leaders who make the 
decisions to fund this system and to the thousands of men and women who 
have devoted their lives to protecting tribal assets and the integrity 
of our operations.
Indian Gaming: The Next 30 Years--Issues and Opportunities
Issues and Ongoing Concerns
    NIGA is confident that the next thirty years will see Indian gaming 
maintain steady responsible growth that will further empower tribal 
communities. Just as much has changed since the Supreme Court's 
historic Cabazon decision in 1987, Indian Country will continue to 
adapt, anticipate future changes, and make our own positive change to 
advance tribal sovereignty and tribal government self-sufficiency. One 
change that NIGA will continue to work for is the longstanding need to 
restore balance to the IGRA tribal-state compacting process.
Restore Balance to the Tribal--State Compacting Process
    As Congress debated IGRA in the mid-1980s, tribal-state relations 
were combative, with state governments joining forces with commercial 
gaming interests to limit or put a stop to Indian gaming through 
legislation and litigation.
    Many prominent tribal leaders opposed IGRA because of the class III 
compacting process, which required tribal governments to engage in 
negotiations with states in order to conduct Class III gaming. After 
Cabazon, many tribal leaders viewed the compacting process as a 
limitation on inherent tribal government rights to engage in Indian 
gaming free of state control affirmed in the Supreme Court's 1987 
decision.
    In addition, many tribes did not trust that state governments would 
respect their obligations to negotiate in good faith, or more 
fundamentally-negotiate. Members of this Committee shared tribal leader 
concerns. This Committee's Report on IGRA sought to alleviate these 
concerns:

        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. . .. 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. . ..

        Senate Report 100-446, at 15 (Aug. 3, 1988).

    IGRA 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 those 
instances, the agreements reached have greatly benefitted the tribal, 
state, and local governments involved.
    In a few unfortunate cases, tribal-state compact negotiations have 
yet to even take place.
    This compromise and the balance that it struck were short-lived. 
Eight years after enactment, the U.S. 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.
    In large part because of the Seminole decision, we are concerned 
that in some situations, the tribal-state compacting process is 
beginning to deteriorate. Some states are using the imbalance to abuse 
the compacting process beyond what this Committee intended. 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 agree to compact provisions 
that directly violate IGRA in the form of revenue sharing that amounts 
to nothing more than direct taxation or concessions that go beyond the 
regulation, licensing or enforcement of Indian gaming as set forth in 
IGRA. \7\
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    \7\ IGRA did not intend for Indian gaming to help balance state 
budgets or impose state laws that go beyond the enforcement of gaming-
related activities. The Act expressly prohibits states from refusing to 
enter into a compact ``based on the lack of authority to impose a tax, 
fee, charge or other assessment.'' See 25 U.S.C. 2710(d).
---------------------------------------------------------------------------
    As former Assistant Secretary for Indian Affairs, Kevin Washburn, 
stated, ``the Department reviews revenue sharing requirements in gaming 
compacts with great scrutiny.'' Revenue sharing should only be 
permitted where a state offers meaningful concessions--such as 
exclusive rights to offer gaming that provide substantial economic 
benefits to the tribe.
    To prevent any further deterioration of the tribal-state compacting 
process and to ensure that Indian gaming succeeds over the next 30 
years, we urge this Committee to begin the debate to fix this crucial 
process that has now been broken for more than two decades.
Ongoing Need for a Strong Class II Indian Gaming Industry
    In large part because of the Supreme Court's 1996 Seminole Tribe 
decision, Class II Indian gaming has grown in importance to tribal 
governments nationwide.
    Class II gaming is another aspect of Indian sovereignty that has 
undergone continuous change and challenges from state governments to 
the commercial gaming industry. Congress fully intended continuous and 
positive changes to Class II Indian gaming. IGRA and NIGC regulations 
define Class II games to include bingo and lotto, and if played in the 
same location, games similar to bingo--which can be used in connection 
with electronic, computer, or other technologic aids. Class II games 
also include nonbanking card games that State law explicitly 
authorizes, or does not explicitly prohibit, and are played legally 
anywhere in the state.
    This Committee's Report to IGRA clarifies its intent that the 
definition of class II gaming is not static, and instead must be 
flexible to enable tribal governments to employ advancements in 
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. . ..

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

    From the early 1990s to the mid-2000s, the NIGC and the Justice 
Department worked against tribal government interests to limit class II 
Indian gaming in direct conflict with the above-stated congressional 
intent. The NIGC's own economic impact review found that the 
Commission's 2007 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. \8\
---------------------------------------------------------------------------
    \8\ 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
---------------------------------------------------------------------------
    The NIGC and the Justice Department likewise engaged in a series of 
federal court cases, seeking to limit the ability of Indian tribes to 
utilize advanced technology in class II games. Federal courts uniformly 
rejected these arguments. 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 hometowns 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.

        U.S. v. 103 Electronic Gambling Devices, 223 F.3d 1091, 1101 
        (9th Cir. 2000).

    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.
    However, 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.
    Indian Country will remain vigilant to ensure 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. In recent years, the 
NIGC and Tribal regulators have worked together to strengthen all 
regulatory aspects of Indian Gaming. Indian gaming is 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 thirty years under IGRA.
Emerging Gaming Markets
    For nearly two decades, Congress has considered legislation to 
either expand or prohibit various forms of gaming in the United States. 
Most of the debate has focused on Internet gaming. However, in recent 
years, the discussion has extended to daily fantasy sports wagering and 
sports betting.
    More than 240 tribal governments have made significant investments 
in their gaming operations based in part federal laws that regulate or 
prohibit certain forms of gaming. The great majority of these tribal 
governments have entered into compacts with states that include 
exclusivity provisions, most often promises on the part of the state to 
not permit other forms of gambling within the state in return for a 
portion of the tribal government's Indian gaming revenue.
    NIGA, from an organization perspective, does not support or oppose 
these new markets. However, if Congress does act to establish or 
prohibit these emerging forms of gaming, we do ask that this Committee 
work with other committees of jurisdiction over these activities to 
first consider the impacts on Indian gaming, and work to limit impacts 
on tribal Indian gaming operations.
    While NIGA and our Member Tribes are developing a formal position 
on sports betting, our existing position on Internet gaming is 
instructive to all emerging gaming markets under consideration by 
Congress.
    NIGA's Internet gaming principles are directives from our tribal 
leadership. They are guided by and grounded in NIGA's overall mission 
to protect tribal sovereignty and to protect rights of all tribes to 
shape their economic futures. In short, NIGA and our Member Tribes are 
working to ensure that any federal legislation that authorizes a new 
form of gambling in the new United States: acknowledge that tribal 
governments have a right to legalize or prohibit the new activity--not 
subject tribal eligibility in the new market to a state government's 
decision to opt-out of the activity; provide all federally recognized 
Indian tribes with equal access to the new market; acknowledge that 
tribal government revenues generated from the new market are not 
subject to taxation, as tribal government revenues are dedicated to the 
benefit of our communities and thus are 100 percent taxed; and protect 
existing tribal government rights under tribal-state compacts and IGRA. 
This basic framework conforms with the U.S. Constitution's recognition 
of Indian tribes as separate governments as well as the federal policy 
supporting tribal government self-determination and economic self-
sufficiency.
Opportunities: Economic Development Beyond Indian Gaming
    All of Indian Country has been and continues to strive for economic 
self-sufficiency beyond Indian gaming. In my time as Chairman of NIGA, 
I have worked with our Member Tribes to encourage economic 
diversification beyond 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 Native owned 
businesses and procurement of Native-produced goods and services. 
Empowering tribal entrepreneurs and tribal government owned businesses, 
will help shape our communities and empower the next generation of 
Native leaders.
    While Indian gaming has worked well to empower tribal governments, 
provide reservation jobs and supplement basic governmental programs and 
services, 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 gaming is 
part of the answer, but we all must do more to reverse these horrific 
statistics and establish more opportunities for all residents of Indian 
Country.
    Tribal governments need help to fulfill Indian Country's full 
potential. That potential can only be achieved by reforming and 
aligning federal laws with the U.S. Constitution's acknowledgment of 
Indian tribes as separate distinct governments in the United States' 
federalist system of government. Federal laws and policies should 
follow a dual purpose of respecting Indian tribes as governments while 
also working to uphold the federal governments treaty and trust 
obligations to Indian tribes. \9\
---------------------------------------------------------------------------
    \9\ Through treaties, tribal governments ceded hundreds of millions 
of acres of tribal homelands to help build this great Nation. In 
return, the United States incurred a solemn obligation to provide for 
the education, health, public safety and general welfare of Indian 
people. President Nixon embraced these obligations in his Special 
Address to Congress in 1970 (``The special relationship between Indians 
and the Federal government is the result 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.'').
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The Tribal Labor Sovereignty Act
    One of the most prominent examples of a federal law's failure to 
acknowledge Indian tribes as governments is the National Labor 
Relations Act (NLRA).
    In 2004, the National Labor Relations Board (NLRB) reversed decades 
of its own precedent to apply the NLRA to tribal government 
enterprises. \10\ The NLRB has read the Act's governmental exemption to 
cover the U.S. federal government, states and political subdivisions 
(counties, cities, etc.), the District of Columbia, and U.S. 
territories and possessions--and commercial enterprises owned and 
operated by these entities. \11\ As a result of the NLRB's 2004 
decision, Indian tribes are the only form of government in the United 
States not exempt from the NLRA.
---------------------------------------------------------------------------
    \10\ See NLRB Opinion in Fort Apache Timber Co. and Construction 
(Oct. 19, 1976)(Holding that a tribal government owned and operated 
``commercial enterprise'' located on Indian lands is not an 
``employer'' for purposes of the NLRA).
    \11\ The NLRA was enacted in 1935 to address upheavals in private 
industry. Government employers were expressly exempted from the Act. 
Although the NLRA did not list all forms of government subject to the 
exemption, the NLRB has consistently interpreted the government 
exemption to include the District of Columbia, U.S. territories and 
possessions, and--until 2004--tribal governments.
---------------------------------------------------------------------------
    The Board reasoned that ``tribal casinos and similar businesses are 
commercial enterprises in direct competition with similar non-tribal 
businesses.'' This is a dangerous misstatement of fact that disrespects 
tribal sovereignty and ignores the economic realities facing many 
tribal governments. Tribal Laws require, and Federal Law mandates, that 
revenues generated from Indian gaming be used entirely for government 
purposes. Commercial gaming enterprises conversely are for-profit 
individually owned operations.
    With specific regard to Indian gaming, tribal casinos are wholly 
owned and operated by tribal governments. Tribal governments generally 
lack an effective tax base--Indian lands are held in trust by the U.S. 
and cannot be subjected to real estate taxation, high reservation 
unemployment makes income taxation unworkable, and restrictive Supreme 
Court rulings have severely limited tribal government sales taxes. For 
many tribal governments, Indian gaming operations, tribal timber 
operations, and other tribal government enterprises constitute the sole 
source of governmental revenue that is used to fund tribal public 
safety, education, health, housing and other essential services to 
reservation residents. Ignoring the purpose of tribal government 
enterprises subjects vital tribal government programs to shutdowns and 
work stoppages.
    Equating Indian gaming to commercial gaming also completely ignores 
the text and intent of the Indian Gaming Regulatory Act (IGRA). 
Congress imposed IGRA on Indian gaming operations to establish a system 
of federal regulation and ``to provide a means of promoting tribal 
economic development, self-sufficiency, and strong tribal 
governments.'' IGRA mandates that tribes use revenues generated from 
Indian gaming for one of five government purposes: to fund tribal 
government operations, programs, and services; to provide for the 
general welfare of the community; to promote tribal economic 
development; to donate to charitable organizations; or to fund local 
government operations.
    NIGA thanks Senator Moran and the co-sponsors of S. 63, the Tribal 
Labor Sovereignty Act, which would restore acknowledgment of Indian 
tribes as governments for purposes of the NLRA. We also thank this 
Committee for advancing the bill in February of this year.
    NIGA has made clear from the beginning that this effort to amend 
the NLRA to restore the longstanding treatment of Indian tribes as 
other forms of governments is not anti-labor. This effort is purely 
about respect for tribal sovereignty and the U.S. Constitution's 
acknowledgement of Indian tribes as separate forms of governments 
within our federalist system.
Comprehensive Tax Reform
    The U.S. Tax Code is also rife with provisions that ignore the 
federal government's treaty and trust obligation to Indian Country, the 
federal policy supporting tribal government self-determination and 
economic self-sufficiency, and the Constitution's recognition of Indian 
tribes as separate sovereigns--all to the great detriment of Indian 
Country employment and economic development.
    Federal tax policy has a significant and in most cases positive 
impact on the economies of state and local governments, and U.S. 
territories. The U.S. Tax Code provides governmental entities with 
preferred access to capital to finance infrastructure projects, 
provides tax incentives to individuals and corporations to invest in 
governmental and economic development projects. Many of these federal 
tools for governmental economic development are not available to Indian 
tribes, or require tribes to apply to state governments in order to 
receive a portion of the benefit.
    Rep. Ron Kind (D-WI) and Rep. Lynn Jenkins (R-KS) have sponsored 
H.R. 3138, the Tribal Tax and Investment Reform Act. The bill 
acknowledges that Indian tribes face historic disadvantages in 
accessing the underlying capital to build the necessary infrastructure 
for job creation, and recognizes that ``codifying tax parity with 
respect to tribal governments is consistent with Federal treaties 
recognizing the sovereignty of tribal governments.''
    H.R. 3138 seeks to establish parity for tribal governments with 
state and local governments for purposes of several provisions in the 
Tax Code, including: the issuance of tax-exempt bonds for tribal 
government projects; treatment of tribal government pensions; treatment 
of tribal government foundations and charities; and acknowledgement of 
tribal court/tribal government authorized adoptions for purposes of the 
federal tax credit for the adoption of special needs children; among 
other items.
    The enactment of these provisions will reinforce the governmental 
status of tribes, facilitate equal access to federal tax and financing 
tools enjoyed by other governmental entities, and permit tribes to make 
important investments in their own communities. We understand that a 
companion bill is under consideration in the Senate and we urge Members 
of this Committee to support that bill when it is introduced.
    I want to highlight two additional glaring examples of the Tax 
Code's lack of respect for the status of Indian tribes as governments: 
the federal New Markets Tax Credit and the Low Income Housing Tax 
Credit. While these federal programs have worked well to incentivize 
outside investment in state, local, and territorial government housing 
and economic development projects--they have fallen far short in Indian 
Country.
    For more than thirty years, the Low Income Housing Tax Credit 
program (LIHTC) has been the most significant producer of affordable 
housing in the United States. Congress enacted the LIHTC Program in 
1986 to provide the private market with greater incentives to invest in 
affordable rental housing. In 2014, the annual expense credits for the 
LIHTC program was $6.7 billion, making the program one of the largest 
corporate tax programs administered by the Federal Government.
    All 50 states, the District of Columbia, Puerto Rico, American 
Samoa, Guam, the Northern Mariana Islands, and the U.S. Virgin Islands 
receive direct LIHTC allocations, which they competitively issue to 
developers who construct, rehabilitate, or acquire rental housing for 
lower-income households. Indian tribal governments are the only 
sovereign in the United States to not receive a direct LIHTC 
allocation.
    While the Indian Housing Block Grant program and federal housing 
loan guarantee programs have worked to cut into the housing shortfalls 
in Indian Country, these programs do not meet the significant housing 
needs of Indian Country. \12\ Providing Indian Country with direct 
access to LIHTC would significantly improve the ability of Indian 
tribes to leverage capital from these existing programs and help 
address the housing shortage on Indian lands.
---------------------------------------------------------------------------
    \12\ Over 90,000 American Indian families are homeless or under-
housed. More than 30 percent of American Indian families live in 
overcrowded housing--a rate six times the national average. 
Approximately 40% of Indian Country housing is inadequate according to 
the federal definition, compared to only 6 percent nationwide. It is 
estimated that it would take approximately 33,000 housing units on 
Indian lands to alleviate overcrowding and an additional 35,000 units 
to replace existing housing in grave condition--at an approximate cost 
of $33 billion.
---------------------------------------------------------------------------
    While individual Native Americans are counted towards a state's 
population for purposes of the tax credit, the housing projects that 
stem from the credits have failed in many cases to reach Indian 
Country. The most common reason that these credits do not reach Indian 
Country is that state governments do not consider low income housing on 
Indian lands as an affordable housing priority reflected in the state's 
qualified allocation plan (QAP), or state QAPs establish criteria and 
requirements that do not exist in most rural tribal communities--making 
tribal housing project ineligible to even apply for the credit.
    As Congress moves towards comprehensive tax reform this year, we 
urge this Committee to work with the Senate Finance Committee and 
others to reform the Tax Code to acknowledge the governmental status of 
Indian tribes and align it with the federal policy supporting Indian 
tribal self-government and economic self-sufficiency.
Conclusion
    As the Cabazon Court acknowledged more than thirty years ago, 
Indian gaming is Indian self-determination. Less than 18 months later, 
Congress enacted IGRA in part to foster and strengthen these acts of 
self-determination. The Act has generally delivered on its stated goals 
of strengthening tribal governments and empowering Indian communities. 
However, the careful balance struck in IGRA's compacting process is 
broken and must be addressed to pave a path for the success of Indian 
gaming's next 30 years.
    Indian gaming is one tool that is helping tribal governments 
overcome decades of injustice. In order to meet the needs of tribal 
communities, Congress must work to empower tribes with the same tools 
that other governments are provided under our federalist system, most 
prominently respect for Indian tribes for purposes of federal labor 
laws, and tax credits and other incentives to help tribal governments 
reach their full economic potential.
    Chairman Hoeven and Members of the Committee I again thank you for 
this opportunity, and I am prepared to answer any questions.

    Senator Udall. Thank you, Chairman Stevens, very much. I 
think it was excellent that you reminded us of Cabazon because 
that is really where we started. That was a historic opinion by 
the Supreme Court. It affirmed the tribes' right to regulate 
gaming on tribal lands. The Court recognized that a tribe may 
engage in gaming if located within a State that permits such 
gaming for any purpose.
    They really recognized the economic part of this and the 
tribal self sufficiency. In that ruling, which was interesting 
to me, they preempted the State interest in regulating gaming. 
That is where we started. Then we went to IGRA and we need to 
remember that history because that was a very strong opinion by 
the U.S. Supreme Court.
    We heard the National Indian Gaming Commission testify 
about the balance between States and tribes post-Seminole. 
Chairman Stevens, in your written testimony you urged this 
Committee to explore addressing the tribal-State compact 
negotiation process. What specific recommendations do you have 
to ensure that tribes and States are on equal footing as 
intended under IGRA?
    Mr. Stevens. I think we need to rely on our Administration 
to try to find regulatory solutions for the compacting process. 
I think it is important, especially with the Pojoaque Pueblo 
and the Seneca in New York, that we move forward in a good, 
strong proactive way.
    I am glad you mentioned that original court case because we 
have always worked and moved in good faith. We hope that the 
States can continue to do that and we can build a stronger 
relationship because I think we have proven we are safe and 
secure and do a great job in Indian Country.
    Senator Udall. Thank you so much for that answer.
    I do not know if any of the other panelists want to comment 
on that question? If not, I will move on to my next question.
    [No audible response.]
    Senator Udall. Let me move on.
    This is for the entire panel. Can you describe how local 
communities benefit from tribal gaming operations whether 
through jobs or investment back into the community? Chairman 
Frank?
    Mr. Frank. Up in northern Wisconsin where our reservation 
is located, we are the number one employer in the Forest county 
area. We employ about 600 non-tribal employees out of a county 
of probably less than 10,000 people combined.
    I am proud to say that we are also a major employer in the 
City of Milwaukee. Of all our employees in the City of 
Milwaukee, about 80 percent of our employees are minorities. 
About 65 percent of those minority employees, the other 
minority group would be single mothers.
    How does it benefit the communities? I think it speaks for 
itself. The packages we have to offer our employees are second 
to none. Health care is the number one concern. I think we have 
mightily contributed to the economics of the community.
    Senator Udall. Thank you.
    Chairman Forsman.
    Mr. Forsman. I think the biggest investments we have made 
are not only in jobs and investments in local businesses, but 
it is also our intergovernmental cooperation. We have strong 
relationships with the county and the cities and with the 
State. We are very active in that in a lot of different arenas, 
habitat protection, water quality but also economic development 
and trying to manage sprawl and things like that together as we 
have more and more growth in our area. Those are some.
    We also invest a lot in local non-profits in our charitable 
contributions, as a lot of the tribes do, and are very active 
in that as well. We are really proud of being able to be one of 
those emerging and responsible governments looked upon for not 
only our vision but our values.
    Senator Udall. Thank you.
    Mr. Stevens, please.
    Mr. Stevens. Right off the top, 390,000 direct jobs in 
Indian gaming are a clear reflection, especially in the economy 
that had its ups and downs over the years. We continue to be 
not just putting Indians to work but America to work in our 
industry. If you include the indirect employment, it is well 
over 700,000 jobs, and safety, education and training and our 
service agreements that we have developed
    My father taught me. I was the stern kid that was talked to 
about taxation and how I understood sovereignty. My father 
taught me that service agreements help us all understand one 
another and help communities work together. It has been 20 
years since I listened to my father. The conference that I had 
to leave with your invitation to come here was my first 
experience over 20 years ago talking about service agreements 
and the communities working together.
    Again, I have 15 grandchildren. They go to school in a 
state-of-the-art school classroom and gymnasium. My late 
grandmother taught there into her nineties. We are doing great 
things and are a clear reflection of not just Indian Country 
but the people around us are thriving as well.
    Senator Udall. Thank you very much.
    President Escalanti, please.
    Mr. Escalanti. We too are a tribe that shares all our 
revenues derived from our casinos. For example, the tribe 
provides the local fire department with annual payments of 
$400,000 and the local enforcement agencies with an annual 
payment of $214,065.
    We also provide health insurance for our employees. We are 
a self insured type of organization that provides these health 
care benefits to our employees. We are one of the rural tribes 
that actually provides employment to the surrounding community 
as far as Vegas, San Diego, El Centro, Calexico, even across 
the border, Yuma County, so on and so forth.
    Senator Udall. Thank you very much.
    One of the things I think we should not forget, all these 
good things we have talked about. I am going to ask a bit more 
about that but we need to remember there is a Federal trust 
responsibility. There are treaties out there and the Federal 
Government needs to continue to do the good work there and 
provide the resources to your tribes and the tribes across the 
Country to make sure you can continue to improve the quality of 
life in Indian Country.
    I do not think we should ever want to hear the excuse that 
tribes are doing well with gaming, now we do not need to help 
them anymore.
    We heard today about jobs generated directly from gaming 
and the billions of dollars of revenue generated but I think we 
also need to acknowledge that gaming can serve as a catalyst 
for tribes to diversify their economic portfolios. Tribes are 
now using the gaming revenue to branch out into other business 
from cyber security like Forest County Potawatomi to hotels and 
resorts like Laguna Pueblo in my home State of New Mexico.
    This is for the entire panel. Can you discuss how your 
tribes have used gaming revenues to diversify their business 
interests?
    Mr. Forsman. In Suquamish, we have been able to diversify 
not only in our resort casino, which is becoming a regional 
destination. We are trying to attract more business from 
Seattle. We have also invested in purchasing a golf course 
which was up for tax foreclosure. This was a failing business 
and we were able to come in, purchase it and restore it to more 
of a thriving business. There are a lot of residents around 
there who are very grateful that we acquired it.
    We built a brand new clubhouse there and are actually going 
to host the Senior LPGA tournament there next year. We are 
pretty excited about that. That should be a great experience 
for us.
    We also have an 8(a) construction firm which does a lot of 
work for the tribe and also for our local military bases. We 
have a number of naval bases in our area including Sub Base 
Bangor and the Puget Sound Naval Shipyard which employs a lot 
of our people and others in that respect as well.
    We have three retail stores on our reservation that sell 
gasoline, sundries and other products including gasoline and 
liquor. We have compacts with the State which provides more 
money for our government activities.
    I think the Federal Government's investments in law 
enforcement, the courts, environmental protection and all those 
things are vital for us and I believe are some of the best 
investments and return on the dollar I think the Federal 
Government gets because the tribes use that money to perform a 
lot of different services for everyone in our community.
    Senator Udall. Chairman Frank.
    Mr. Frank. How do we use our money to invest and diversify 
our economy? If you don't mind, I have a little story to tell 
on this one. Several years ago when we were sitting as the 
executive council, a guy came in with a proposition to us about 
a business venture.
    I looked around at the executive council and said, how many 
of us have ever sat and closed a business deal? Not one of us 
had so we had no expertise on how to do business. We had an 
attorney general named Jeff Crawford who is a pretty smart 
fellow.
    He said what we need is a business development corporation. 
That is what got us going on the business development 
corporation. That corporation is assigned the task that if 
anything ever happens to gaming, we should be continuing to 
provide the services a government should provide for its 
citizens.
    We invested in many things. I am glad the chairman 
mentioned 8(a) because that is one of the things we invested 
in. We also invested in a bank. There are a number of things we 
invested in.
    All these opportunities we invested in were opportunities 
which we feel tribal members have an opportunity to work in. 
With Indian gaming, yes, we have diversified our economy and 
continue to look for new ventures and new fields to invest our 
dollars in for our citizens.
    The Chairman. [Presiding.] Mr. Stevens.
    Mr. Stevens. To tag on to Vice Chairman Udall's last 
question, thank you for your leadership, as he leaves. I just 
talked about the non-gaming tribes and the non-market tribes. I 
am glad that we continue to keep them in our hearts and our 
minds. That is our obligation. For this last question, that is 
a key component to helping those tribes. Thank you, Mr. Vice 
Chairman.
    I think economic development and individual businesses, tax 
credits, all these things are key components to helping build a 
better future for not just gaming but for all of our 
communities, tribal enterprise or individual tribal businesses.
    My daughter and son-in-law are a small business. They work 
hard at it. It is not easy to do. Where tribes and government 
can continue to support them, I don't know if it quite lies 
under the trust responsibility Senator Udall talked a little 
bit about, but I think it is in our best interest to help 
create business, not just at the tribal enterprise level, but 
for our individual tribal members.
    We worked with the National Center for American Indian 
Enterprise Development and the National Congress of American 
Indians. It is really key. I mentioned we were all in Las 
Vegas. The G2E is the biggest show in the world. That is where 
we are exchanging ideas and thoughts and creating business and 
opportunities for us to move Indian Country forward with and 
beyond gaming.
    You may have read where the Seminoles own the Hard Rock 
brand and Mohegan is working in South Korea. We really have 
those kinds of opportunities. If we can partner and help those 
other tribes build, we can do great things for the next 30 
years but we need Congress' support, we need this 
Administration's support because too many people do not 
understand Indian tribes as sovereign governments and what we 
do. The impact we have goes far beyond our reservation 
boundaries.
    We keep helping economically in the United States of 
America and our benefits go far beyond our reservation 
boundaries. I wanted to say that regarding that question.
    The Chairman. Certainly.
    Chairman Escalanti, can you discuss how the National Indian 
Gaming Commission has worked to address some of the unique 
issues in regard to rural gaming, rural tribes?
    Mr. Escalanti. Chairman Hoeven, it was just brought to my 
attention yesterday as we were meeting with the congressional 
leaders that there was a rural committee that actually can 
assist rural tribes as far as assisting them on their issues 
and concerns they had.
    I really was not aware that the National Indian Gaming had 
such a rural committee available to assist rural tribes. 
Therefore, if there are these types of offices, I really do not 
know where they are located. Most of the time, if we have an 
issue, our regulatory body or the tribal council goes directly 
to Indian Gaming headquarters with issues and concerns they 
have back at home.
    The Chairman. Chairman Frank, in your written testimony you 
discussed the need for tribes to be proactive in establishing 
measures to protect and safeguard valuable company and customer 
information.
    It appears it has been several years since your tribe 
submitted draft cyber security guidance and standards to the 
NIGC for their comments and feedback. Have you received their 
comments and feedback on that draft policy that you submitted?
    Mr. Frank. To the best of my knowledge, the answer would be 
no.
    The Chairman. So you are still looking for some follow-up 
from the NIGC on your cyber security policy?
    Mr. Frank. Yes.
    The Chairman. Chairman Stevens, how has the continued delay 
in passing the Tribal Labor Sovereignty Act impacted tribes? As 
you know, it is legislation we are working on.
    Mr. Stevens. I think it continues to impact us overall in 
our rights as governments. It is something that is very 
important to us and helps us to be able to have an even 
relationship with all other entities.
    We are probably the only government that has been subject 
to this law. I think it kind of sets us back and keeps us kind 
of treading upward. We continue to advocate that for many years 
it was always recognized, tribes as governments, in the tribal 
labor law. It is only recently that we have had to deal with 
this.
    We have been working on it for many years. Everything that 
we explain to our lawmakers clearly identifies us as 
governments, governments long before there was even the United 
States Constitution. It continues to be an uphill struggle. We 
deal with it proactively and we deal with it in a manner that 
is non-anti-labor.
    I have three uncles, maybe four, I have lost count, but 
they helped build the Mackinac Bridge, they built the Sears 
building in Chicago, New York, San Francisco, and Los Angeles. 
There is a bunch of Native people that built America, so we are 
not anti-union. We just want to be treated fairly as 
governments.
    The Chairman. Again, to all of our witnesses, to both the 
first panel and this second panel, I would like to thank you 
for being here. We appreciate your written testimony.
    Also, we will have the record open for two weeks so that 
members may submit any written follow up questions for the 
record.
    With that, thanks again not only for you being here but the 
work you are doing in Indian Country. Thank you so much.
    We are adjourned.
    [Whereupon, at 4:25 p.m., the Committee was adjourned.]

                            A P P E N D I X

Prepared Statement of Hon. W. Ron Allen, Tribal Chairman/CEO, Jamestown 
                            S'Klallam Tribe
    Chairman Hoeven, Vice-Chairman Udall and distinguished members of 
the Committee, on behalf of the Jamestown S'Klallam Tribe, I want to 
thank you for the opportunity to submit this testimony for the record. 
I am W. Ron Allen and I serve as the Tribal Chairman and CEO of the 
Jamestown S'Klallam Tribe.
    The Jamestown S'Klallam Tribe is located in northwestern Washington 
State, approximately 70 miles west of Seattle on the Olympic Peninsula. 
Our Tribal Governmental Campus encompasses an area of 13.5 acres, and 
the Tribe has an additional 265 acres in trust. We have approximately 
600 Tribal citizens.
    The name S'Klallam means ``strong people'' in Coast Salish, and I 
owe my own existence today to the strength of my ancestors, as well as, 
the current membership of our Tribe, which embodies strength and 
resilience. We live on a small amount of land in a rural location, but 
our strength comes from our ancestral homelands and waters, including 
the Puget Sound and Strait of Juan de Fuca region. Our Tribe is a 
signatory to the Point No Point Treaty of 1855 and those lands and 
waters were included in the negotiations of the Treaty as well as our 
reserved rights to hunt and fish in our usual and accustomed places. In 
order to preserve our sovereign rights and remain near our traditional 
fishing areas, our ancestors purchased these lands in 1874 so that we 
would not be displaced from our Tribal homelands.
Off-Reservation Fee to Trust Acquisitions and Indian Gaming
    The Department of the Interior (the Department) has recently issued 
an Advanced Notice of Proposed Rulemaking to amend the off-reservation 
land acquisitions by creating a new two-step process that will require 
Tribes to address numerous criteria, including gaming considerations 
that is not currently required. It is a cumbersome and expensive 
process to place lands into trust so this would be in fact doubling the 
burden on Tribes in an already burdensome system. In addition, the 
regulations are overly broad and would allow an opportunity for outside 
interests to object for any reason at all so the process could be 
dragged out for many years and cost Tribes an exorbitant amount of 
money.
    The original intent of the Indian Reorganization Act of 1934 (IRA) 
is to restore Tribal homelands. Between 1887 and 1934, a hundred 
million acres of Indian land was sold or stolen. The 1934 Act and the 
intent of the Act should be the primary consideration and criteria that 
the Department should consider for placing land into trust. The 
proposed regulations would undermine the intent of the IRA by 
empowering the State and local governments' interests at the expense of 
Tribal sovereignty. Tribes can cite numerous instances where local 
governments have taken active steps to delay and/or halt Tribal land 
acquisitions and hinder or destroy economic development opportunities.
    The Department's proposal improperly inserts gaming considerations 
into the fee to trust process as prohibited by the Indian Gaming 
Regulatory Act (IGRA). The Department does not have the necessary land 
acquisition authority to include this gaming provision in the new 
regulations. This is already covered by IGRA. It would insert gaming 
into the 151 regulations and put new hurdles into place for land into 
trust acquisitions.
    Some Tribes, like Jamestown, have small reservations and 
reservation land or adjacent land acquisitions are not always feasible. 
Local entities often see our success and try to capitalize on it by 
increasing the price of their land which essentially locks us out of 
the market. We have had a lot of success reacquiring our Tribal 
homelands for a variety of purposes, economic development and job 
creation, infrastructure development, for cultural purposes and to 
protect our sacred sites, and to secure our natural resources and 
Treaty rights. We are excellent stewards of our lands and we don't need 
other entities telling us what we can and cannot do with our property. 
We deserve the same respect that is afforded to State and local 
governments when they make land use decisions for development. The 
Department should recognize our authority and trust us to carry out our 
governmental responsibilities.
The Indian Gaming Regulatory Act and Jamestown S'Klallam Gaming
    Our treaty is not a granting of rights from the Federal government 
to the Tribe--it is an expression of sovereignty, a decision to cede 
certain rights in certain areas in exchange for the reservation of all 
inherent rights in another area. As a separate sovereign, our Tribe 
exercises substantial undiminished powers, rights, and responsibilities 
over its lands and peoples. That includes the right to exercise our 
self-governing authority to conduct gaming on our land. The Jamestown 
S'Klallam Tribe is a gaming Tribe.
    In 1987 while advocating for the passage of IGRA, Jamestown and 
seven other Tribes were also working on an initiative to restore 
relations between Indian nations and the Unites States on a government-
to-government basis. Our call for government-to-government relations 
did not represent any new assertion of Tribal rights. We were merely 
trying to reclaim the rights reserved by us and guaranteed in treaties 
with the U.S. government. The Self-Governance Demonstration Project, 
Title III amendments to P.L. 93-638, the Indian Self-Determination and 
Education Assistance Act of 1975 (ISDEAA), was that Tribally-driven 
initiative made possible through Congressional authorization and 
appropriation support. The amendments were structured to protect the 
Trust relationship of the United States to Indian people. The goal of 
the Project was to provide Indian Tribes with the tools and the 
opportunity to exercise greater control over our affairs and government 
responsibilities. As one of the original eight Self-Governance 
Demonstration Tribes in the Department, for the past 30 years Jamestown 
has administered and managed programs, activities, functions and 
services more efficiently and effectively than the Bureau of Indian 
Affairs to better address the local needs of the Tribal citizens, which 
has also benefitted the surrounding communities. In June 1989, Congress 
funded the participation of seven more Tribes in the Demonstration 
Project.
    Gaming is not a privilege that has been granted to our Tribe or, 
Indian Tribes in general. The right to conduct gaming is an inherent 
power of government. The 1987 United States Supreme Court decision in 
the Cabazon case found that Indian gaming was an exercise and 
expression of Tribal government and Self-Determination. In Cabazon, the 
Court held that State governments could not impose their regulatory 
gaming laws to stop Tribal governments from engaging in gaming 
activities. Following that decision, Congress passed the IGRA in 1988 
as a means of providing some Federal guidance on Tribal gaming. IGRA 
created the National Indian Gaming Commission (NIGC) within the 
Department, and tasked the Department with some authority to oversee 
per capita payments (for the Tribes that make those payments from 
gaming proceeds); as well as review authority for Tribal-State gaming 
compacts. Very few Tribes provide their Tribal members per capita 
payments. Jamestown does not provide per capita payments; instead, we 
invest in opportunities for our members to better their lives through 
programs that matter and make a difference--education; health; culture; 
and jobs creating economic development.
    The Department also retains authority for regulating gaming on 
certain lands acquired in trust after Cabazon, as well as approval 
authority for newly acquired and additional trust lands for gaming. But 
it must be understood that these roles for the Department were not put 
in place to create regulatory obstacles to Indian economic development. 
In each case, the intent behind the Department's role is to maximize 
the positive benefits of Indian gaming, whether it is for individual 
Tribal members, or State and Tribal governments. There are many reasons 
Tribes negotiate in good faith with states to enter into gaming 
compacts, including, to create meaningful opportunities for economic 
growth, invest in education and programs and services that promote the 
health and welfare of our Tribal citizens, create jobs and 
opportunities, assist in addressing the historic loss of Tribal 
homelands and to acquire land for economic development.
    The current Administration has vowed to thoroughly revamp the 
Federal regulatory landscape in favor of reducing burdens and 
limitations on economic development. However, some of the proposed 
regulatory changes which will in fact increase bureaucratic oversight 
and create additional burdens for Tribes, are contrary to Self-
Governance and Self-Determination, and impose barriers to economic 
development, investment, and financial self-sufficiency. Tribes have 
worked hard to encourage the Department to listen to Tribal leaders on 
how to strike the right balance. In 2016, Tribes spent more than $449 
million on Tribal, State and Federal regulations: $336.5 million to 
fund Tribal Gaming Regulatory Agencies; $90.4 million to reimburse 
states for State regulatory activities negotiated and agreed to 
pursuant to Tribal/State compacts; and $22.2 million to fully fund the 
operations and activities of the National Indian Gaming Commission.
    Tribes have a vested interest in protecting the integrity of Indian 
gaming. Tribal regulation ensures that our communities are shielded 
from organized crime and other corrupt influences that could infiltrate 
any economic development activity if left unchecked. Back in the 1990s, 
the issue of organized crime was alleged but not one case of organized 
crime has been proven on an Indian reservation. However, there are many 
factors other than gaming that have attributed to the high incidence of 
crime in many Tribal communities. The Indian Law and Order Commission, 
which was established pursuant to the Tribal Law and Order Act, found 
that a complex jurisdictional scheme, lack of coordination, 
accountability and adequate and consistent funding resources led to a 
crisis of crime on Indian reservations that have persisted for decades. 
It is misleading to equate gaming with the high incidence of crime in 
Indian country because there are many Tribes who do not have gaming 
facilities who experience high crime in their communities. In our 
community, Tribal resources and local collaboration have not only 
improved the safety and security of our Tribal citizens but also the 
surrounding local communities. We collect data and submit monthly crime 
reports to the Department that is reflective of the low incidence of 
criminal activity in our community. Tribal regulation of gaming also 
mandates that the Tribal community is the primary beneficiary of 
gaming, not some outside corporation, and that gaming is fair and 
honest.
    For my Tribe, gaming revenue provides diversification to our local 
economy, employment opportunities for Tribal and non-Tribal citizens, 
and funding to provide programs and services to our community 
including: scholarships and education funding; healthcare/programs for 
vulnerable citizens like our elders and children; cultural programs 
that support language, arts, and cultural revitalization; environmental 
restoration and preservation of our estuaries and resource habitat that 
supports our fishing industry; and, community and local infrastructure, 
including, building roads and bridges.
Facts about Indian Gaming
    It is extremely important that Congress also understands the 
national Tribal gaming picture. Not every Indian Tribe has a casino. In 
2016, approximately 244 out of 567 Federally-recognized Tribal 
Governments operated 484 gaming facilities in 28 states for a total of 
$35.4 billion in revenues. In many cases, due to geographic location 
and other limiting factors, those revenues are largely covering 
expenses, paying wages and benefits to employees, and otherwise keeping 
businesses afloat.
    First and foremost, Indian gaming, wherever it is located is about 
jobs. Many Tribes operate gaming to generate jobs for their Tribal 
citizens and local community residents. In 2016, Indian gaming 
generated more than 310,000 direct jobs and when you include indirect 
jobs nearly 700,000 Americans are employed which is attributable to 
Indian gaming. Our Tribe is one of the largest employers in our 
community, which means that a substantial benefit of our Tribe building 
a diverse economy is that all residents--Indian and non-Indian--benefit 
through jobs and local economic development business enterprises. 
Overall, up to 75 percent of the jobs in Tribal casinos go to non-
Indian employees, so the income generated by these enterprises has 
substantial spillover effects for entire regions.
    For the gaming Tribes that do generate profits, there are rules 
about how Tribes may use those funds. What I see when I travel around 
Indian Country are communities that use gaming profits to improve and 
build their infrastructures, support educational opportunities and 
social programs, decrease reliance on public and governmental programs, 
and create substantial investments in health care systems, jobs 
creation, and economic sustainability. In addition, lenders, States and 
Tribes all share in the revenue generated at gaming facilities. Gaming 
continues to be the most successful tool for economic development.
    A fundamental goal for our Tribe is achieving economic self-
sufficiency/self-reliance through opportunities that enable us to 
generate our own unrestricted revenues to address the unfulfilled 
Federal obligations and unmet needs in our community. Until we achieve 
tax parity we must rely on other sources of revenue, such as, gaming 
revenue to support critical governmental services such as police, fire, 
first responders, education, housing, and healthcare.
    In closing, gaming has allowed us to invest in our local community 
and create sustainable Tribal economies that promote economic 
development and job creation and contribute to the economic well-being 
of our Tribal citizens. It has also fortified our partnerships with 
State and local governments and allowed us to make significant 
contributions to their economies creating jobs and opportunities for 
all Americans.
    Thank you for the opportunity to submit this testimony.
                                 ______
                                 
   Prepared Statement of Klint A. Cowan. Shareholder, Fellers Snider
    Dear Mr. Chairman:
    My name is Klint A. Cowan. I am a shareholder at Fellers Snider, a 
law firm in Oklahoma City, Oklahoma. I represent Panhandle Citizens for 
Truth in Gaming, Inc., a group of Oklahoma citizens from the Oklahoma 
panhandle.
    The purpose of my testimony is to address a substantial issue 
involving my clients in relation to a proposed off-reservation casino 
in Guymon, Oklahoma for the Shawnee Tribe of Oklahoma. Currently, the 
Shawnee Tribe has an applicationl for off-reservation gaming and an 
application \1\ for a land to trust acquisition pending before the 
United States Department of the Interior (the ``Department'') in 
relation to a proposed casino site in Guymon. The Shawnee Tribe is 
located in Miami, Oklahoma, which is the extreme northeast corner of 
Oklahoma. This particular proposed casino, if approved, carries the 
substantial likelihood of detrimentally impacting the State of 
Oklahoma, as well as any state in the United States, in part, by 
setting an extremely dangerous precedent with respect to off-
reservation gaming. For this reason, as fully described below, I am 
strongly advocating that clearer guidelines are put in place that will 
ensure that both the Indian tribe and local governments and communities 
are mutually benefited by any proposed off-reservation casino to ensure 
the long-term success and sustainability of off-reservation gaming and 
the local communities in which the off-reservation casino is located.
---------------------------------------------------------------------------
    \1\ The Obama administration approved the off-reservation gaming 
application at the ``midnight hour'' on January 19, 2017. Oklahoma 
Governor Mary Fallin, despite the substantial opposition of the 
citizens in the panhandle, concurred in the 2-Part Determination on or 
about March 3, 2017. The land to trust application is currently pending 
before the Department, and the 2-Part Determination is being reviewed 
for potential reconsideration.
---------------------------------------------------------------------------
    Guymon is located in the approximate middle of the Oklahoma 
panhandle. The distance from the Shawnee Tribe's headquarters in the 
extreme northeast corner of Oklahoma to Guymon is over four hundred 
(400) miles. The Shawnee Tribe has no historical or modern connection 
to the panhandle, and no Shawnee tribal members live in the panhandle. 
The local governments and communities in the panhandle are strongly 
opposed to the proposed casino. Thirty-Eight (38) local governmental 
officials in the panhandle submitted letters of opposition to the 
Department, while only two (2) governmental officials expressed 
support. It is especially notable that the Guymon City Council formally 
voted to oppose the proposed casino, and two (2) of three (3) of the 
Texas County \2\ Commissioners sent letters of opposition. Moreover, in 
addition to numerous letters of opposition, more than two thousand 
(2,000) local citizens in the panhandle signed a petition in opposition 
to the proposed casino. \3\ In addition, the Shawnee Tribe has not 
entered into any agreements with the local governments, or even 
attempted to negotiate any such agreements, in an attempt to mitigate 
the adverse effects that a casino will have on the local government 
budgets, programs and economy.
---------------------------------------------------------------------------
    \2\ Guymon is located in Texas County, Oklahoma.
    \3\ The petition contains an extraordinary number of signatures 
given the sparse population in the panhandle area.
---------------------------------------------------------------------------
    This particular set of facts carries a very dangerous precedent for 
the State of Oklahoma, and for any state in our country. In the event 
that an off-reservation casino is approved at such a substantial 
distance from a tribe's headquarters, where the tribe has no historical 
or modern connection whatsoever to the area and the local governments 
and citizens are strongly opposed to the casino, an off-reservation 
casino could be justified in virtually any location in the United 
States. Taking the Shawnee Tribe's applications as an example, the 
Cities of Omaha, Nebraska; Shreveport, Louisiana; St. Louis, Missouri; 
and Memphis, Tennessee are closer to the Shawnee Tribe's headquarters 
than the proposed casino site in Guymon, and would conceivably be in 
play for a future casino. Much to the contrary, the Shawnee Tribe 
claims jurisdiction over land in eastern Kansas and has a gaming 
compact pending with the State of Kansas. This land seems imminently 
more suitable for off-reservation gaming, as the Tribe has a historical 
connection to the eastern Kansas area which is much closer to the 
Tribe's headquarters.
    It also must be observed that the Department has a history of 
relying on precedent to justify off-reservation gaming. For example, in 
a 2-Part Determination dated August 23, 2013, former Assistant 
Secretary--Indian Affairs Kevin Washburn approved an off-reservation 
casino for the Menominee Tribe which was approximately 162 miles from 
the tribe's governmental headquarters. Assistant Secretary Washburn 
noted that:

        ``Admittedly, allowing an off-reservation casino located more 
        than 150 miles from a reservation headquarters might not be 
        appropriate in any other state, but the Forest County 
        determination of 1990 is a very specific precedent for such an 
        action in Wisconsin.''

    The proposed Guymon casino carries the substantial likelihood of 
serving as precedent to justify an off-reservation casino virtually 
anywhere.
    Clearer guidance is necessary to foster off-reservation gaming that 
will be mutually beneficial to Indian tribes and to local governments 
and communities. The Department previously operated under a set of 
guidelines known as the ``Artman Guidelines'' \4\ which clarified 
certain regulatory limitations for land-to-trust acquisitions to ensure 
a mutually beneficial relationship between Indian tribes and local 
governments and communities. The Artman Guidelines defined an 
appropriate distance between a tribe's headquarters and the proposed 
trust acquisition land for the purposes of historical and modern 
connection and employment of tribal members. Moreover, the Artman 
Guidelines espoused that Indian tribes execute a memorandum of 
understanding with the local governments, prior to obtaining approval 
of the land-to-trust application. In this way, the Indian tribes and 
local governments would be sure to ameliorate any adverse impacts on 
the local communities in order to ensure a long-term mutually 
beneficial and sustainable relationship.
---------------------------------------------------------------------------
    \4\ The ``Artman Guidelines'' were officially known as ``Guidance 
on taking off-reservation land into trust for gaming purposes,'' dated 
January 3, 2008. Then Assistant Secretary--Indian Affairs, Carl Artman, 
issued the guidelines.
---------------------------------------------------------------------------
    Without clearer guidance limiting Indian tribes' off-reservation 
gaming activities to areas which are proximately located to the tribe's 
headquarters, to where the tribe has a historical and modern 
connection, and to where the Indian tribes and local governments and 
citizens are committed to working with each other to develop a mutually 
beneficial and longterm relationship, off-reservation gaming will not 
achieve optimal levels of success for Indian tribes and the United 
States. I strongly recommend that this Committee pursue and/or mandate 
clear guidance to ensure the long-term success and sustainability of 
off-reservation gaming.
    While I am not providing live-testimony to this Committee, I would 
certainly invite any written or verbal questions and feedback from the 
Committee members, and will make myself available through any medium 
necessary. My contact information is provided in my letterhead. Thank 
you for the opportunity to address this Committee.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Jerry Moran to 
                     Hon. Jonodev Osceola Chaudhuri
    Question 1. Mr. Chaudhuri, in 2008, the National Indian Gaming 
Commission (NIGC) promulgated technical standards governing Class II 
gaming machines to ensure their security and integrity. At the time, 
there were concerns that these particular machines were susceptible to 
security risks like hacking. Given the prevalence of such risks across 
society today, is it fair to assume that such risks have increased 
significantly since 2008? If so, how have those risks changed in recent 
years?
    Answer. As stated in the preamble to the final rule promulgated on 
October 10, 2008, the Commission developed the minimum technical 
standards ``to ensure the security and integrity of Class II games 
played with technologic aids, to ensure the auditability of the gaming 
revenue that those games earn, and to account and allow for evolving 
and new technology.'' The Commission developed the technical standards 
to provide minimum design, construction, and implementation 
requirements for Class II gaming systems while the companion internal 
control standards were developed to provide minimum controls for the 
operation of such systems, as well as the authorization, recognition, 
and recordation of gaming and gaming-related transactions. Together, 
the technical standards and internal control standards make meaningful 
the Commission's monitoring, inspection, and examination authority. 
These minimum standards further IGRA's goal of ensuring that gaming is 
conducted fairly and honestly, both by operators and by the public, 
while leaving specific implementations designed to meet these 
regulatory goals to the tribal gaming regulatory authorities and 
industry. The Commission thereby sought to build into the technical 
standards the flexibility to respond to risks that may change over time 
and to implement future technologies unforeseen and undeveloped when 
the rule was first promulgated. Finally, the technical standards 
expressly provide that they are minimum standards--tribal gaming 
regulatory authorities may add additional or more stringent 
requirements for manufacturers to implement before a Class II gaming 
system may be authorized for use by the tribal gaming operation.

    Question 2. Along these same lines, would such improved standards 
help preserve the integrity of these Class II machines by minimizing 
error and variance rates? If so, please explain further. If not, are 
you of the belief that the older technology provides the same levels of 
protection against any such errors?
    Answer. As noted above, the minimum technical standards were 
intended to leave the specific implementations of the standards to the 
tribal gaming regulatory authorities and industry. Thus, rather than 
requiring the specific use of a particular form of technology, the 
technical standards require the implementation of certain features 
which may be implemented by a wide array of technology. For example, 
the technical standards require components that store financial 
instruments and that are not operated under the control of a gaming 
operation employee ``shall be located within a secure and locked area 
or in a locked cabinet or housing that is of a robust construction 
designed to resist determined illegal entry and to protect internal 
components.'' How exactly ``robust construction'' is to be implemented 
is left to industry to develop, independent testing laboratories to 
review, and tribal gaming regulatory authorities and operations to 
authorize for use. The standard, however, is clear--assets held in 
gaming equipment are to be secure from theft and tampering.

    Question 3. Despite the noticeable need for implementing such 
security standards for Class II machines in 2008, the NIGC implemented 
a five-year ``grandfather period,'' temporarily exempting older gaming 
systems to ``avoid any potential significant economic impact'' of 
requiring immediate compliance. Another five-year period was granted 
again in 2012 and lasts through November of 2018. Given the current 
positive economic health of Indian gaming, is it fair to state that 
requiring the implementation of such standards at this time would not 
cause economic harm to either the tribes or the manufacturers? If not, 
please elaborate.
    Answer. It is important to note that the economic health of Indian 
gaming as a whole, which includes both Class II and Class III gaming, 
is not necessarily representative of the economic health of Indian 
gaming operations that would be affected by changes to the 
implementation requirements of the Class II minimum technical 
standards. When the minimum technical standards were implemented in 
2008, the Commission recognized that some existing Class II gaming 
systems did not meet all of the requirements of the technical standards 
and that requiring immediate compliance could have a significant 
economic impact. Gaming systems manufactured before the effective date 
of the Commission's minimum technical standards (2008 Systems) were 
therefore permitted to continue in operation provided that such systems 
were submitted to an independent testing laboratory and reviewed for 
compliance with standards for, among others, random number generation, 
minimum probabilities, and game software verification. Gaming systems 
manufactured after the effective date of the Commission's minimum 
technical standards are required to be submitted to a testing 
laboratory and reviewed for compliance with all applicable technical 
standards. In addition, minimum internal control standards apply 
uniformly to the operation of all Class II gaming systems, irrespective 
of manufacture date. This year, the Commission consulted extensively 
with the tribal gaming industry on the continued use of 2008 Systems 
and received many comments asserting that there was no evidence that 
such systems posed a threat to the integrity of gaming and that 
requiring their removal from play would cause significant economic harm 
to tribes. Subsequently, after conducting an internal analysis of the 
potential issues associated with the continued use of 2008 Systems, the 
Commission issued a proposed rule which allows such use provided that 
the systems are subject to additional annual review by tribal gaming 
regulatory authorities.

    Question 4. By not adopting more modern standards with regard to 
technology used in Class II machines, do we risk impeding innovation 
within the Class II gaming manufacturer community? If so, is it fair to 
say that this lack of innovation negatively impacts the tribes 
themselves as any potential gamers may stay away due to either security 
or integrity concerns?
    As noted above, the minimum technical standards were intended to 
leave the specific implementations of the standards to the tribal 
gaming regulatory authorities and industry. Thus, rather than requiring 
the specific use of a particular form of technology, the technical 
standards require the implementation of certain features which may be 
implemented by a wide array of technology. In addition, the minimum 
technical standards allow Class II gaming systems to be modified over 
time as manufacturers innovate new implementations of the required 
features. Tribes and tribal gaming regulatory authorities may also add 
additional or more stringent requirements for manufacturers to 
implement. The technical standards, in conjunction with internal 
control standards, ensure that security concerns are identified and 
mitigated, thereby meeting the goal of ensuring that Class II gaming is 
conducted fairly and honestly, both by operators and by the public.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. Tom Udall to 
                            John Tahsuda III
    Question 1. The Administration recently published an advance notice 
of proposed rulemaking \1\ indicating its intent to revise the off-
reservation land into trust process for parcels that could later be 
eligible for gaming.
---------------------------------------------------------------------------
    \1\ Off-Reservation Trust Acquisitions and Action on Trust 
Acquisition Requests, available at https://www.reginfo.gov/public/do/
eAgendaViewRule?pubId=201704&RIN=1076-AF36

    Question 1a. In the 29 years since the passage of IGRA, a governor 
concurred in a positive two part determination only 10 times. And of 
the over 1,700 successful trust acquisitions processed from 2008 to 
2014, fewer than 15 acquisitions were for gaming purposes, with even 
fewer for off-reservation gaming purposes. What is the Administration's 
impetus for revising the regulations regarding off-reservation 
acquisitions?
    Answer. As a point of clarification, the Department did not issue 
an advance notice of proposed rulemaking; rather, on October 4, 2017, 
the Department distributed a draft of possible revisions to tribal 
leaders for consultation purposes. The Department withdrew the draft 
and then sent a revised consultation schedule to tribal leaders on 
December 6, 2017, with questions for discussion at the consultation 
sessions. The purpose of the consultation is to clarify the land into 
trust process and to seek ways to save tribal resources.
    With regard to your question, the application process for taking 
land into trust for gaming purposes can be costly and time consuming, 
particularly when compared to non-gaming applications. Currently, 
tribal applicants must submit all the application information, 
including certain resource-intensive application information, before 
the Department will consider the trust application. Rather than 
requiring tribes to expend much-needed resources pursuing a trust 
acquisition with no certainty of the outcome, the Department is 
considering ways to revise the existing regulations to reduce the 
burden on tribal applicants. The Department is also open to considering 
other revisions to the regulations and the land-into-trust process and 
criteria and has requested input from tribes for their ideas.

    Question 1b. In your written testimony, you noted that gaming can 
introduce ``new complications'' to local communities, such as ``a drain 
on local resources'' due to crime. Given that IGRA and its implementing 
regulations already require Interior to conclude that an acquisition 
would not be detrimental to the surrounding community, how does 
Interior intend the new regulations to give greater consideration of 
impacts to communities than the existing requirements?
    Answer. Local communities are often in the best position to assess 
potential impacts from off-reservation gaming that would affect them. 
Off-reservation lands taken in trust can potentially create 
jurisdictional impacts in local communities, complicate land-use 
planning, and affect the provision of local services such as law 
enforcement. The Department is considering whether the regulations 
should request evidence of any cooperative efforts to mitigate impacts 
to the local community, including copies of any intergovernmental 
agreements negotiated between the Tribe and state and local 
governments, if any, or an explanation as to why no such agreements or 
efforts exist. In this way, the Department would be better able to 
determine potential impacts to the surrounding communities. In 
practice, tribal applicants often provide information about their 
cooperative agreements even though it is not specifically required by 
the existing Part 151 regulations.

    Question 1c. The Administration proposes to give greater weight to 
local concerns the further away the proposed acquisition is from the 
Tribe's reservation. This seems to be a thumb on the scales in a manner 
not intended by the statute. What is the Department's reasoning?
    Answer. Part 151 currently requires that as the distance between a 
tribe's reservation and the land to be acquired increases, the 
Secretary shall give greater scrutiny to the tribe's justification of 
anticipated benefits from the acquisition, and greater weight to 
concerns raised by state and local governments as to the acquisition's 
potential impacts on regulatory jurisdiction, real property taxes, and 
special assessments. See 25 C.F.R.  151.11(b). The Department is 
considering whether greater clarity on what factors would provide 
evidence to support a decision on the relative justifications and 
concerns would be helpful to the tribe and surrounding communities.

    Question 1d. You testified that the Department had not adequately 
applied the Part 151 regulations in the past few years. Please provide 
the specific trust acquisitions to which you referred in your testimony 
where the Department believes it had not previously considered the 
factors in an adequate manner.
    Answer. As stated in my verbal response to this question at the 
oversight hearing on October 4, 2017, ``I think that it is our [the 
Department's] belief that past actions over the years did not 
adequately apply our regulations as they should have so that all 
factors and criteria to be adequately considered were not adequately 
considered. . .some were given greater priority over others.''
    It is our commitment to consider all the factors we are required to 
consider by the law and by our regulations and apply those to the 
factual situation in front of us.

    Question 1e. We understand that the Department intends to hold 
tribal regional consultation sessions on the draft regulations. Will 
the Department conduct similar consultations once the regulations are 
formally issued? In other words, will tribes have additional 
opportunities to comment as the proposal advances toward final?
    Answer. On December 6, 2017, the Department advised tribes that it 
would be consulting on a list of questions related to the fee-to-trust 
process, and announced six consultations for January and February. The 
Department will determine next steps following those consultation 
sessions, in compliance with the Administrative Procedure Act and the 
Department's consultation policy.

    Question 1f. In the draft regulations, Interior proposes a new 
requirement that a tribe demonstrate a historic or modern connection to 
the land for off-reservation acquisitions. What is the statutory basis 
for this requirement?
    Answer. Section 5 of the Indian Reorganization Act provides the 
general authority for the Secretary to acquire land in trust for 
Tribes. The Secretary has the authority to promulgate regulations, as 
found in Part 151, to implement the statutory grant of discretionary 
authority in Section 5.
    The draft changes reflect the Department's continued interest in 
balancing tribal interests. In practice, tribal applicants often 
provide information on their historic or modern connection to the land 
even though it is not specifically required by the existing Part 151 
regulations.

    Question 1g.The last time an administration imposed a 
``commutability requirement'' like the kind reflected in Interior's 
recently circulated draft--tribes objected on the grounds that such a 
rule prejudiced tribes with reservations away from population centers 
and ignored historical facts regarding where the federal government 
created reservations. What is the Administration's response?
    Answer. The draft revisions did not impose a specific distance 
requirement in recognition that each Tribe's circumstances may differ. 
Rather, the draft revisions reflected factors, like those in the 
existing Part 151 regulations, which analyzed the anticipated benefits 
to the Tribe from the acquisition and the concerns of local 
governments.
    Question 2. The Tenth Circuit recently held that Part 291 is 
inconsistent with IGRA, leaving tribes in the 10th Circuit without 
administrative redress if a state decides it does not want to negotiate 
a compact. If Interior cannot issue Secretarial procedures, what 
options do tribes have now, given IGRA's intent to give tribes at least 
some bargaining power relative to the states during the compact 
negotiation process?
    Answer. Tribes are authorized by the ``good faith lawsuit'' 
provision of IGRA to file suit against a state that has not negotiated 
in good faith. \2\ A state may, however, raise an Eleventh Amendment 
defense to such a lawsuit which would then be dismissed due to the non-
waiver of the state's sovereign immunity. \3\ Secretarial Procedures 
promulgated pursuant to 25 C.F.R Part 291 would be a Tribe's only other 
recourse to engage in class III gaming in circuits other than the Tenth 
and Fifth. \4\ In circuits where states have refused to negotiate with 
Tribes and have invoked their Eleventh Amendment rights, Tribes retain 
the ability to conduct class II gaming on Indian lands without a 
tribal-state compact.
---------------------------------------------------------------------------
    \2\ See 25 U.S.C.  2710 (d)(7)(A)(i).
    \3\ See Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996). 
Only California has a waiver of sovereign immunity for tribal-state 
compacts.
    \4\ See Texas v. U.S., 497 F.3d 491 (5612007); and New Mexico v. 
Zinke, Nos. 14-2219 # 14-222 (10th April 21,2017).

    Question 3. As a part of the advance notice of proposed rulemaking 
referenced above, the Administration proposed a 30-day delay before 
finalizing trust acquisitions. In light of Match-E-Be-Nash-She-Wish 
Band of Pottawatomi Indians v. Patchak, in which the Supreme Court 
found that challenges to trust acquisitions are ``garden-variety 
[Administrative Procedure Act] claim[s]'' subject to a six-year statute 
of limitations and preliminary injunctions, what is the purpose of a 
30-day stay?
    Answer. As a point of clarification, the Department did not issue 
an advance notice of proposed rulemaking; rather, on October 4, 2017, 
the Department distributed a draft of revisions to tribal leaders for 
consultation purposes. The Department then sent a revised consultation 
schedule to tribal leaders on December 6, 2017, with questions for 
discussion at the consultation sessions.
    With regard to the 30-day stay that was included in the draft 
revisions distributed October 4, the Department is interested in 
tribes' input on the stay. Currently, there is no general authority for 
the executive branch to take lands out of trust. The authority to take 
trust lands out of trust status rests with Congress and potentially the 
judicial branch. The draft revisions would reinstate the 30-day waiting 
period to enable potential litigants to file during that 30-day period 
before title is transferred into trust. The 30-day waiting period is 
intended to help prevent situations where title is transferred into 
trust, and a Tribe expends resources developing that land, only to face 
protracted litigation and the possibility of having the land be taken 
out of trust.

    Question 4. When an Indian tribe and a state submit a Class III 
gaming compact or compact amendment to the Secretary for review, 
Congress authorized the Secretary to take only one of two actions: 
approve the compact amendment, or disapprove the compact amendment. If 
the Secretary fails to take either action within 45 days of submittal, 
Congress mandated that the compact or amendment will be ``considered to 
have been approved,'' a directive that is also reflected in Interior's 
regulations. Recently, the Secretary ``returned'' a compact amendment 
to the Mohegan Tribe of Connecticut and to the Mashantucket Pequot 
Tribal Nation of Connecticut, rather than taking action on it.

    Question 4a. Can you indicate where in IGRA Congress authorized the 
Secretary to ``return'' a submitted compact amendment without 
triggering IGRA's deemed approved requirement?
    Answer. The Department did not act on the proposed compact 
amendments because there was insufficient information to determine 
whether they fell within the Secretary's jurisdiction pursuant to IGRA 
and whether the Secretary had authority to approve or disapprove them.

    Question 4b. Given that the compact amendment is now deemed 
approved by operation of IGRA and its implementing regulations, when 
will the Secretary publish notice of the approval in the Federal 
Register?
    Answer. The Department did not have sufficient information to 
determine whether the proposed compact amendments fell within the 
Secretary's statutory authority pursuant to IGRA. The Department 
specifically rejected the deemed approved option, therefore there are 
no plans to publish a notice of approval in the Federal Register for 
the proposed compact amendments.

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