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Senate panel supports NIGC on Class II rules
Friday, April 29, 2005

The National Indian Gaming Commission's controversial effort to develop new Class II regulations received a big boost from a key Senate committee this week.

Over the past year, the NIGC has been developing classification and technical standards for electronic Class II machines. Bush administration officials say the rules are needed to bring stability to the $18.5 billion Indian gaming industry but tribes say the federal government is going too far.

Sen. John McCain (R-Arizona), the chairman of the Senate Indian Affairs Committee, is siding with the NIGC. "I can't speak for the whole committee but I don't think you are on the wrong track," McCain told Hogen at a hearing on Wednesday.

"Mr. Chairman, I share that view," quickly added Sen. Byron Dorgan (D-North Dakota), the committee's vice chairman.

The support, however, doesn't mean the proposed changes are in the clear. Earlier this month, Hogen announced a delay of at least two months in order to publish the rules in the Federal Register and take public comments. Two hearings that had been scheduled to discuss the issue were canceled.

The move came in light of a technical lawsuit two tribes filed against the NIGC. The Confederated Salish and Kootenai Tribes of Montana and the Santa Rosa Rancheria of California say the agency's process for developing the rules violates a federal law that governs advisory committees. The case is moving forward in federal court in Washington, D.C.

More significantly, the rules are the subject of dissent within the administration. While the NIGC is attempting to respond to court decisions favoring tribes and their use of technologically-enhanced Class II machines, the Department of Justice says these machines are illegal in the absence of a tribal-state compact required for Class III games like slot machines.

"The manufacturers of gaming equipment have attempted to use creative engineering and graphic design to blur the lines between these classes," testified Tom Heffelfinger, the U.S. Attorney for Minnesota and the chair of DOJ's Native American Issues subcommittee.

"Certainty is what is needed," he said.

DOJ's stance drew fire from Charles Colombe, the president of the Rosebud Sioux Tribe of South Dakota and the treasurer of the National Indian Gaming Association. "Justice's opinions have been thoroughly trounced in a number of federal courts, I think each and every time," he noted. "There must be some respect for what federal courts do. We certainly in Indian Country have to respect the outcome."

Norman DesRosiers, the longtime gaming commissioner for the Viejas Band of Kumeyaay Indians in California, also weighed in on the controversy. He criticized the Heffelfinger's statement that technology has "blurred" the distinction between Class II games like bingo and Class III games.

"Technology has enhanced it," DesRosiers testified. "The package ... that you visually see on the floor, granted, resembles a slot machine. That's where it ends. It's not at all blurry to those of us who know how slot machines work."

McCain's response strongly supported Justice's view that electronic aids to bingo push the game into the Class III realm. "Being one of the authors of the legislation, we envisioned Class II to be the standard bingo game, the standard pull tab -- not an electronic device that closely resembles a slot machine," he said.

"I believe it has been blurred by technology and I am going to try to act, and this committee [will] act, so that there is a distinction," he added.

The committee attempted to clarify the issue during the 108th Congress but ran into opposition not from tribes but from state governments who would benefit if more games are considered Class III because they could then attempt to take revenues from these machines under a tribal-state compact.

Retired Sen. Ben Nighthorse Cambpell (R-Colorado), the former chairman, sponsored a bill to put the NIGC more in line with the court decisions. It is unlikely this provision would resurface given McCain's comments at the hearing.

Relevant Documents:
Testimony: Oversight Hearing Before the Senate Committee on Indian Affairs on the Regulation of Indian Gaming (April 27, 2005)

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