[Federal Register Volume 87, Number 200 (Tuesday, October 18, 2022)]
[Rules and Regulations]
[Pages 62984-62987]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-21948]


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DEPARTMENT OF THE INTERIOR

National Indian Gaming Commission

25 CFR Part 518

RIN 3141-AA72


Self-Regulation of Class II Gaming

AGENCY: National Indian Gaming Commission, Department of the Interior.

[[Page 62985]]


ACTION: Final rule.

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SUMMARY: The National Indian Gaming Commission (NIGC) is amending its 
regulations regarding self-regulation of Class II gaming under the 
Indian Gaming Regulatory Act. The amendment revises the regulations to 
address an ambiguity in the petitioning process and clarifies the 
Office of Self-Regulation's (OSR) role once the Commission issues a 
certificate. Notably, the amendment: Clarifies the NIGC may issue a 
final decision on issuing a certificate within 30 days instead of after 
30 days; removes the requirement that the director of the OSR must be a 
Commissioner; enumerates the OSR is the correct party to receive 
notifications of material changes from self-regulated tribes; expands 
the deadline for tribes to report material changes to the OSR from 
three business days to 10 business days; clarifies the OSR will be the 
office to make any recommendations to revoke a certificate of self-
regulation before the Commission; and clarifies that, in any revocation 
proceeding, the OSR has the burden to show just cause for the 
revocation and carry that burden by a preponderance of the evidence.

DATES: Effective November 17, 2022.

FOR FURTHER INFORMATION CONTACT: Michael Hoenig, National Indian Gaming 
Commission; 1849 C Street NW, MS 1621, Washington, DC 20240. Telephone: 
(202) 632-7003.

SUPPLEMENTARY INFORMATION:

I. Background

    The Indian Gaming Regulatory Act (IGRA or Act), Public Law 100-497, 
25 U.S.C. 2701 et seq., was signed into law on October 17, 1988. The 
Act establishes the National Indian Gaming Commission (NIGC or 
Commission) and sets out a comprehensive framework for the regulation 
of gaming on Indian lands.
    On January 31, 2012, the Commission published a notice of proposed 
rulemaking to promulgate part 518, the procedures controlling self-
regulation. 77 FR 4714 (Jan. 31, 2012). Once promulgated, part 518 
established the procedures for the Commission and the OSR to, among 
other things, receive, evaluate, recommend, issue, deny, or revoke a 
certificate of self-regulation. On September 1, 2013, after initial 
publication, the Commission enacted minor revisions to part 518 to 
amend certain timelines and an incorrect section heading and reference 
to IGRA. 78 FR 37114 (Sept. 1, 2013).

II. Development of the Proposed Rule

    On June 9, 2021, the National Indian Gaming Commission sent a 
Notice of Consultation announcing that the Agency intended to consult 
on a number of topics, including proposed changes to the procedures 
controlling self-regulation. Prior to consultation, the Commission 
released proposed discussion drafts of the regulations for review. The 
proposed amendments are intended to improve the Agency's efficiency in 
evaluating petitions for self-regulation, reduce the time it takes to 
obtain a certificate of self-regulation, and clarify the Office of 
Self-Regulation's functions.
    The Commission held two virtual consultation sessions in September 
and one virtual consultation in October of 2021 to receive tribal input 
on any proposed changes. After considering the comments received from 
the public and through tribal consultations, the Commission published a 
notice of proposed rulemaking on April 7, 2022, 87 FR 20351. The notice 
of proposed rulemaking indicated that comments were due on or before 
June 6, 2022. On June 16, 2022, 87 FR 36280, the NIGC announced the 
reopening of the comment period until June 23, 2022.
    The Commission reviewed all of the public's comments and now adopts 
these changes, which it believes will improve the self-regulation 
process.

III. Review of Public Comments

    The Commission received the following comments in response to the 
notice of proposed rulemaking.
    Comment: Several commenters approved of the change that clarified 
the Commission may issue a final determination for a certificate of 
self-regulation within 30 days if no hearing is requested, as the prior 
language was ambiguous and potentially left open an indefinite time 
period for a determination.
    Response: The Commission appreciates the comment and has left the 
language in the final rule.
    Comment: Several commenters approved of the change from three to 
ten business days for tribes to notify the OSR of material changes.
    Response: The Commission appreciates the comment and has left the 
language in the final rule.
    Comment: Several commenters approved that placing the burden of 
proof on the OSR in revocation hearings.
    Response: The Commission appreciates these comments and has left 
the language in the final rule.
    Comment: A commenter stated that procedural questions were left 
unanswered for Sec.  518.7(f), specifically (1) to whom should the 
notice be directed, (2) what restrictions exist to who may send a 
notice, and (3) the contents of the notice and what it must include.
    Response: The Commission appreciates the comment and intends to 
provide clarity on these and other process questions. It does not wish, 
however, to codify a process that may change in the future. The 
Commission intends to publish guidance for administrative and 
procedural matters on its website where it can be updated as needed.
    Comment: Numerous commenters expressed concern with the reporting 
requirements in Sec.  518.11 and commented that there were unanswered 
questions as to what needs to be reported.
    Response: The Commission appreciates the comments, and notes that 
the only proposed change to the rule pertained to the office the Tribe 
or Tribal Gaming Regulatory Authority reports such information. The 
Commission believes the scope of what needs to be detailed is 
sufficiently covered by the reference to Sec.  518.5, which does 
specify criteria that will be considered by the Commission when 
deciding to grant a certificate of self-regulation, as well as the 
examples given in Sec.  518.11. To the extent that additional guidance 
or detail is needed, the Commission will include such information in 
future bulletins.
    Comment: Several commenters expressed concern that if a 
Commissioner is appointed the head of the OSR they would be the 
proponent of any case to revoke a certificate before the Commission and 
also voting on the revocation. The commenters stated that this would 
create an insurmountable conflict of interest.
    Response: The Commission has changed the rule to no longer require 
that a Commissioner serve as the head of the OSR. That being said, 
there is nothing to prohibit the Commission from appointing a 
Commissioner to lead the office, and the Commission disagrees with the 
commenter's assertion that a Commissioner serving as head of the OSR 
would create a conflict of interest. It is not a violation of due 
process for the Commissioners to serve both investigatory and 
adjudicatory functions. The United State Supreme Court held as much in 
the case Withrow v. Larkin, 421 U.S. 35, 51-52 (1975), following the 
cases that rejected the idea that the combination (of) judging (and) 
investigating functions is a denial of due process. The Court further 
stated there is a presumption of honesty and

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integrity in those serving as adjudicators. Moreover, the NIGC is 
familiar with such a structure and the dual role of investigator and 
adjudicator comes from IGRA itself. Section 2706 of IGRA tasks the 
Commission with investigatory and inspection powers, while section 2713 
requires the Commission to hear any appeals of a civil fine or closure 
order issues by the Chairman. The Commission has long worked under such 
a structure. For example, the Chairman makes a determination on a 
gaming ordinance and also sits on the panel if it is appealed. And 
although there is a presumption of fairness, the NIGC nevertheless has 
policies and procedures in place to ensure a fair decision on all 
appeals and investigations.
    Comment: A commenter requested that if a commissioner is appointed 
as Director of OSR that they recuse themselves from participating as a 
Commissioner of NIGC in revocation hearings for due process concerns.
    Response: The Commission declines to adopt this suggestion for the 
same reason as above.
    Comment: Several comments were outside the scope of the rulemaking 
and related generally to the self-regulation process, the lack of 
guidance and the inability of more tribes to participate in the self-
regulation process.
    Response: The Commission appreciates these comments and will take 
them into consideration for future guidance or amendments to the rule.

IV. Regulatory Matters

Regulatory Flexibility Act

    The rule will not have a significant impact on a substantial number 
of small entities as defined under the Regulatory Flexibility Act, 5 
U.S.C. 601, et seq. Moreover, Indian tribes are not considered small 
entities for the purposes of the Regulatory Flexibility Act.

Small Business Regulatory Enforcement Fairness Act

    The rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. The rule does not have an 
effect on the economy of $100 million or more. The rule will not cause 
a major increase in costs or prices for consumers, individual 
industries, Federal, State, local government agencies or geographic 
regions. Nor will the rule have a significant adverse effect on 
competition, employment, investment, productivity, innovation, or the 
ability of the enterprises to compete with foreign based enterprises.

Unfunded Mandate Reform Act

    The Commission, as an independent regulatory agency, is exempt from 
compliance with the Unfunded Mandates Reform Act, 2 U.S.C. 1502(1); 2 
U.S.C. 658(1).

Takings

    In accordance with Executive Order 12630, the Commission has 
determined that the rule does not have significant takings 
implications. A takings implication assessment is not required.

Civil Justice Reform

    In accordance with Executive Order 12988, the Commission has 
determined that the rule does not unduly burden the judicial system and 
meets the requirements of section 3(a) and 3(b)(2) of the order.

National Environmental Policy Act

    The Commission has determined that the rule does not constitute a 
major Federal action significantly affecting the quality of the human 
environment and that no detailed statement is required pursuant to the 
National Environmental Policy Act of 1969, 42 U.S.C. 4321, et seq.

Paperwork Reduction Act

    The information collection requirements contained in this rule were 
previously approved by the Office of Management and Budget (OMB) as 
required by 44 U.S.C. 3501 et seq. and assigned OMB Control Number 
3141-0003.

Tribal Consultation

    The National Indian Gaming Commission is committed to fulfilling 
its tribal consultation obligations--whether directed by statute or 
administrative action such as Executive Order (E.O.) 13175 
(Consultation and Coordination with Indian Tribal Governments)--by 
adhering to the consultation framework described in its Consultation 
Policy published July 15, 2013. The NIGC consultation policy specifies 
that it will consult with tribes on Commission Actions with Tribal 
Implications, which is defined as: Any Commission regulation, 
rulemaking, policy, guidance, legislative proposal, or operational 
activity 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.
    Pursuant to this policy, on June 9, 2021, the National Indian 
Gaming Commission sent a Notice of Consultation announcing that the 
Agency intended to consult on a number of topics, including proposed 
changes to the self-regulation process.

List of Subjects in 25 CFR Part 518

    Gambling, Indian--lands, Indian--tribal government, Reporting and 
recordkeeping requirements.

    Therefore, for reasons stated in the preamble, 25 CFR part 518 is 
amended as follows:

PART 518--SELF-REGULATION OF CLASS II GAMING

0
1. The authority citation for part 518 is revised to read as follows:

    Authority: 25 U.S.C. 2706(b)(10); 25 U.S.C. 2710(c).


0
2. Revise Sec.  518.2 to read as follows:


Sec.  518.2  Who will administer the self-regulation program for the 
Commission?

    The self-regulation program will be administered by the Office of 
Self-Regulation. The Chair shall appoint a Director to administer the 
Office of Self-Regulation.

0
3. Revise Sec.  518.5(b) introductory text to read as follows:


Sec.  518.5  What criteria must a tribe meet to receive a certificate 
of self-regulation?

* * * * *
    (b) A tribe may illustrate that it has met the criteria listed in 
paragraph (a) of this section by addressing factors such as those 
listed in paragraphs (b)(1) through (9) of this section. The list of 
factors is not all-inclusive; other factors not listed here may also be 
addressed and considered.
* * * * *

0
4. Revise Sec.  518.7(f) to read as follows:


Sec.  518.7  What process will the Commission use to review and certify 
petitions?

* * * * *
    (f) The Commission shall issue a final determination within 30 days 
after issuance of its preliminary findings if the tribe has informed 
the Commission in writing that the tribe does not request a hearing or 
within 30 days after the conclusion of a hearing, if one is held. The 
decision of the Commission to approve or deny a petition shall be a 
final agency action.
* * * * *

0
5. Revise Sec.  518.11 to read as follows:


Sec.  518.11  Does a tribe that holds a certificate of self-regulation 
have a continuing duty to advise the Commission of any additional 
information?

    Yes. A tribe that holds a certificate of self-regulation has a 
continuing duty to

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advise the Office of Self-Regulation within 10 business days of any 
changes in circumstances that are material to the approval criteria in 
Sec.  518.5 and may reasonably cause the Commission to review and 
revoke the tribe's certificate of self-regulation. Failure to do so is 
grounds for revocation of a certificate of self-regulation. Such 
circumstances may include, but are not limited to, a change of primary 
regulatory official; financial instability; or any other factors that 
are material to the decision to grant a certificate of self-regulation.

0
4. Revise Sec. Sec.  518.13 and 518.14 to read as follows:


Sec.  518.13  When may the Commission revoke a certificate of self-
regulation?

    If the Office of Self-Regulation determines that the tribe no 
longer meets or did not comply with the eligibility criteria of Sec.  
518.3, the approval criteria of Sec.  518.5, the requirements of Sec.  
518.10, or the requirements of Sec.  518.11, the Office of Self-
Regulation shall prepare a written recommendation to the Commission and 
deliver a copy of the recommendation to the tribe. The Office of Self-
Regulation's recommendation shall state the reasons for the 
recommendation and shall advice the tribe of its right to a hearing 
under part 584 of this chapter or right to appeal under part 585 of 
this chapter. The Commission may, after an opportunity for a hearing, 
revoke a certificate of self-regulation by a majority vote of its 
members if it determines that the tribe no longer meets the eligibility 
criteria of Sec.  518.3, the approval criteria of Sec.  518.5, the 
requirements of Sec.  518.10 or the requirements of Sec.  518.11.


Sec.  518.14  May a tribe request a hearing on the Commission's 
proposal to revoke its certificate of self-regulation?

    Yes. A tribe may request a hearing regarding the Office of Self-
Regulation's recommendation that the Commission revoke a certificate of 
self-regulation. Such a request shall be filed with the Commission 
pursuant to part 584 of this chapter. Failure to request a hearing 
within the time provided by part 584 of this chapter shall constitute a 
waiver of the right to a hearing. At any hearing where the Commission 
considers revoking a certificate, the Office of Self-Regulation bears 
the burden of proof to support its recommendation by a preponderance of 
the evidence. The decision to revoke a certificate is a final agency 
action and is appealable to Federal District Court pursuant to 25 
U.S.C. 2714.

    Dated: September 27, 2022.
E. Sequoyah Simermeyer,
Chairman.
Jeannie Hovland,
Vice Chair.
[FR Doc. 2022-21948 Filed 10-17-22; 8:45 am]
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