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NIGC delays rules for Class II casino machines
Tuesday, April 5, 2005

Amid tribal opposition, a lawsuit and concerns from the Department of Justice, the National Indian Gaming Commission on Friday announced a delay in its controversial casino game regulations.

The NIGC has proposed changes to the way certain casino games, including bingo, are defined in an attempt to bring stability to the $18 billion tribal casino industry. The agency has been holding public hearings on the new rules throughout the country.

But two upcoming hearings will be postponed in order to publish the proposal in the Federal Register and accept public comment. NIGC Chairman Phil Hogen said the shift in schedule will cause a delay of at least two months in the rule-making process.

"We will schedule hearings during that period but not until after interested parties have had the opportunity to read and study the proposal," Hogen, a Bush administration appointee, said in a statement.

The decision represents a setback for Hogen and the Republican-appointed commission. Hogen wanted to finalize the classification and technical standards for Class II games before his term ends in December of this year. The terms of the other two commissioners -- Nelson Western, a former state regulator, and Chuck Choney, a former FBI agent -- also end at that time.

But the delay is a boost to tribes who challenged the proposed rules. In a letter last month, the National Indian Gaming Association, the largest tribal casino lobby, cited "NIGC's lack of responsiveness to tribal concerns"in a bid to urge a delay in the process.

The campaign came on the heels of a lawsuit filed by two tribes. The Confederated Salish and Kootenai Tribes of Montana and the Santa Rosa Rancheria of California sought a court order to block the publication of the proposed rules in the Federal Register.

The lawsuit was technical in nature and was based a federal law that governs advisory committees, like the Tribal Advisory Committee created by NIGC to assist in the drafting of the Class II rules. According to NIGA's letter, "NIGC has not kept minutes of the meetings, TAC members are providing technical advice and not representing their tribal governments, and TAC members are not tribal leaders."

Tribes also have substantive concerns about the effort. They say the proposed rules will hinder technological advances that have turned Class II machines into a lucrative market for tribes in Oklahoma and Florida, and that tribes will lose leverage in negotiations with states over Class III machines, which can only be operated under a compact.

"Indian gaming was built on bingo," Hogen acknowledged in March before the National Congress of American Indians winter session in Washington, D.C. "Class II gaming is extremely important to tribes."

Tribes aren't the only source of concern about the Class II project. Last month, the Department of Justice said the rules could allow tribes to operate games that might otherwise be considered Class III machines, an argument echoed in a slew of casino game lawsuits DOJ has lost in recent years.

During the Clinton administration, the NIGC sought to address the lawsuits by making a minor change to the Class II rules affecting technological aids. But the change did not stop tribes and gaming manufacturers from going to court over how the machines are classified.

The new effort is a much more expansive one. Hogen and the NIGC have published, informally, a series of working drafts covering minute details of Class II machines.

"This is where we start to disagree," Teresa Poust, who served on the NIGC during the Clinton administration and backed the minor change, said at a California tribal conference in January. She said the drafts contain standards and rules that have no basis in law.

"Even if you're not presently conducting Class II, and you don't hope to, you need it to protect your Class III and you need it to protect the other tribes who need it now," she said.

Relevant Links:
National Indian Gaming Commission - http://www.nigc.gov
National Indian Gaming Association - http://www.indiangaming.org