[Congressional Record (Bound Edition), Volume 152 (2006), Part 18]
[Senate]
[Pages 23587-23588]
[From the U.S. Government Publishing Office, www.gpo.gov]




                       INDIAN GAMING LEGISLATION

 Mr. McCAIN. The 109th Congress ends with many missed 
opportunities, and among them is the opportunity to enact necessary 
amendments to the Indian Gaming Regulatory Act, IGRA. IGRA has not been 
significantly amended since its enactment in 1988, almost 20 years ago. 
When IGRA was enacted, Indian gaming was a $200 million dollar 
industry. Today, the industry earns $23 billion a year. The industry is 
no longer just bingo; instead, the lion's share of revenue--at least 80 
percent--is generated by what IGRA calls class III gaming; that is, 
slot machines and other ``Las Vegas'' style casino games. This 
explosive and unanticipated growth in Indian gaming has created a 
changed environment that cries out for modifications in the law. Yet 
Members of this body have blocked getting needed legislation passed. 
They have done so at the cost of good public policy.
  During the 2 years that I have served as chairman and Senator Dorgan 
has served as vice chairman of the Committee on Indian Affairs, we held 
seven hearings on Indian gaming. After four of those hearings and based 
on testimony received, in November 2005, we introduced S. 2078. After 
the bill's introduction, we held three more hearings to continue 
oversight over the Indian gaming industry. These hearings revealed, 
among other things, that a court decision had decimated the Federal 
regulatory agency's authority and that, meanwhile, new large Indian 
casinos were threatening to appear in all areas of the country. Based 
on the hearings and responses from interested parties, I offered a 
substitute amendment, which was successfully reported out of committee 
with bipartisan support. However, when we sought unanimous consent for 
passage of the bill, holds were placed on it. These holds were placed 
by Senators with concerns that the bill was not restrictive enough and 
by those who thought it too restrictive. Understandably, these concerns 
were mostly prompted by constituent interests. We then worked in a 
bipartisan effort to modify the bill to answer our colleagues' concerns 
while balancing the need to provide real oversight over the industry. 
Some of our Members' constituents, however, simply do not want Federal 
oversight. Some took the position that there must be no change in IGRA 
because opening up IGRA would send a signal that Indian gaming was not 
perfect and no one was to speak that truth. It seems that these people 
assumed that ignoring the problems is a better policy than confronting 
them.
  And there are problems. Through S. 2078, I sought to confront these 
problems while at the same time honoring the rights of Indian tribes to 
conduct gaming, a right guaranteed by the Supreme Court in the 
California v. Cabazon decision. I will continue to believe that 
effective regulation--including effective Federal regulation--of Indian 
gaming is critical to tribes' continued success.
  A critical problem we have left unsolved is the hole left in 
regulation of class III gaming; that is, slots and other casino games. 
On August 24, 2005, the U.S. District Court for the District of 
Columbia issued its decision in Colorado River Indian Tribes v. NIGC, 
``CRIT'', ruling that the National Indian Gaming Commission, NIGC, did 
not have jurisdiction to issue class III Minimum Internal Controls 
Standards,

[[Page 23588]]

MICS. That ruling was upheld by the U.S. Court of Appeals for the 
District of Columbia in October of this year.
  Until the court's decision, the NIGC had been regulating class III 
gaming through MICS since 1999. The regulations applied both to class 
II gaming--that is, bingo and games similar to bingo--and to class 
III--gaming including slot machines and table games--which represents 
the source of four-fifths of all revenue in Indian gaming. Following 
the CRIT decision, however, tribes have increasingly challenged NIGC's 
authority to issue or enforce the MICS over class III gaming. This 
leaves Federal oversight only over class II gaming, which is a small--
and with increasing numbers of States entering into compacts, a 
diminishing--source of Indian gaming revenue. It leaves class III 
regulation up to the terms of the compacts negotiated between tribes 
and States. But States' roles in regulating and enforcing class III 
regulation varies widely among State-tribal compacts. While some States 
take a rigorous role in regulation, many simply do not have the 
expertise or resources to regulate Indian casino games. These States 
have typically relied on NIGC to provide regulations. As a result of 
the CRIT decision, however, tribes are increasingly refusing to allow 
for NIGC access to or oversight of their gaming facilities. These 
tribes are, in effect, now free to regulate themselves.
  I do not believe that self-regulation without oversight is real 
regulation. By failing to enact legislation that overturns the CRIT 
decision, we have left the lion's share of a huge industry in its own 
hands. This is not a small matter. Indian gaming in 2006 is a 
nationwide industry. More than 220 tribes operate gaming facilities 
throughout the United States, from Connecticut to California. Indian 
gaming is no longer simple bingo parlors on rural Indian reservations. 
For a nationwide industry that generated $23 billion dollars a year and 
is growing, uniform Federal standards are necessary and vigorous 
enforcement of those standards are imperative to making sure that the 
money that customers put into Indian gaming machines finds its way 
safely from the casinos to the tribal governments, which through IGRA 
are directed to use the money to strengthen the social and economic 
fabric of their tribes. The failure of this Senate to pass this bill 
will leave Indian gaming radically less protected than it was before 
the 109th Congress convened and the CRIT decision was issued. What we 
have now is the triumph of individual self-interests over the public 
good and it sorrows me to leave Indian gaming in that condition.
  Failure to pass this bill also leaves a well-documented hole in 
Federal oversight of gaming contracts. While the NIGC has told us that 
management contracts are not the only source of overreaching by 
contractors, we have left the agency with the authority to approve or 
disapprove only management contracts. Similarly, while we all know that 
Indian gaming is spreading beyond the confines of reservations, by not 
passing this bill, we have also failed to amend IGRA to limit ``off-
reservation'' gaming and the growth of casinos where local people could 
never have foreseen their arrival. In 1988, when we first enacted IGRA, 
we provided a general prohibition against conducting gaming on land 
acquired after 1988; in the interest of fairness, several exceptions to 
this ban were provided. Unfortunately, exploitation of these 
exceptions, not anticipated in 1988, has led to a burgeoning practice 
by unscrupulous developers seeking to profit off Indian tribes 
desperate for economic development.
  S. 2078 would have eliminated the ability of tribes to establish 
casinos outside of their reservations and provided a process whereby 
local communities can voice their concerns regarding impacts of casino 
development. Finally, it would have prevented attempts to create 
reservation land, specifically for casinos, through so-called land 
claims unless Congress actually approved legislation to that effect.
  It is my hope that the next Congress will leave Indian gaming better 
regulated and more responsive to present-day realities than this 
Congress has left it. This is my hope for tribal members, who depend on 
honestly tracked revenue from gaming establishments for their 
government services. This is my hope for local communities who are 
facing the prospect of huge casinos in their hometowns where they could 
never have anticipated them. I am hopeful that we will choose to put 
the good of the American people above special interests.

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