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McCain proposes major amendments to IGRA
Wednesday, November 30, 2005

Sen. John McCain (R-Arizona) has proposed a sweeping set of amendments to the Indian Gaming Regulatory Act despite pleas from tribal leaders not to reopen the law.

On November 18, McCain introduced the S.2078, the Indian Gaming Regulatory Act Amendments of 2005. In a floor statement, he said the tribal casino industry, which has grown by leaps and bounds over the past 17 years, is due for some changes.

"When IGRA was enacted in 1988, Indian gaming was a $200 million dollar industry," said McCain, the chairman of the Senate Indian Affairs Committee. "Today, the industry earns $19 billion a year and is spread throughout the nation. The amendments reflect the need to re-evaluate what constitutes appropriate regulation of this vastly changed enterprise."

The most significant amendment restricts off-reservation gaming. The bill bars tribes from moving across state lines to open a casino, a practice that has become controversial even though no tribe has successful in doing so.

The bill also adds a new test to determine whether a tribe can conduct gaming on newly-acquired lands. The Interior Department must find that a tribe "temporal, cultural, and geographic nexus" to the land in question before taking it into trust.

"These amendments to IGRA will put an end to the most troublesome of these proposals by eliminating the authority of the Secretary to take land into trust off-reservation pursuant to the so-called 'two-part determination'" process, McCain said.

Another significant amendment comes in response to a federal court decision that found the National Indian Gaming Commission lacks the authority to issue and enforce regulations for Class III gaming, a lucrative class that includes slot machines and table games. In a landmark ruling, a judge said IGRA left that role to tribes and states through the compacting process.

Although the NIGC says the ruling only applies to the tribe that initiated the litigation, McCain is moving to overturn it. A provision ensures that the agency has the power to issue "regulations addressing minimum internal control standards for class II gaming and class III gaming activities."

"This amendment makes clear that NIGC continues to have the authority it has exercised until now to issue and enforce MICS, including the ability to inspect facilities and audit premises in order to assure compliance," McCain said.

Finally, the bill gives greater latitude to the NIGC to look into the management of tribal casinos. Under current law, the agency has the authority to review management contracts but tribes have instead entered into consulting contracts to get around the lengthy review process.

The amendments would allow the NIGC to review all types of gaming contracts, development agreements and revenue-sharing deals. The bill adds the definition of "gaming-related contract" and "gaming-related contractor" to IGRA in order to address some of the business practices that have arisen in recent years.

"Protecting the integrity of Indian gaming also requires that the NIGC's authority to review manager contracts be expanded," McCain said. "IGRA originally identified only one kind of contract that was subject to NIGC approval: management contracts. History has shown, however, that in order to avoid NIGC review, some contracts have been fashioned as 'consulting' contracts or 'development' contracts, i.e., something other than 'management'' contracts that require NIGC review."

Tribal and Indian gaming leaders are extremely wary of reopening IGRA out of fear their rights will be adversely affected. At hearings this past spring and summer, they warned of putting more power in the hands of the federal government -- which has not always lived up to its obligations to Indian Country or provided adequate resources.

"I have no objection to state regulators or federal regulators watching me, coming on our premises, looking at what we're doing and letting me know whether we're in compliance or not," said Norman DesRosiers, the longtime gaming commissioner for the Viejas Band of Kumeyaay Indians, at a hearing in April. "I would just be very cautious of where we go with any contemplated future legislation."

McCain and other lawmakers have sought to amend IGRA for several years. But their efforts have not succeeded, due to lobbying from tribes and the National Indian Gaming Association, and objections from state governments, whose interests are often at odds with those of Indian Country.

NIGA had called on McCain to introduce any proposed changes as a draft discussion bill. Rep. Richard Pombo (R-California), the chairman of the House Resources Committee has done so with his IGRA amendments but McCain did not follow suit.

McCain also left out a provision sought by NIGA and tribal leaders: a fix to the 1996 U.S. Supreme Court decision in Seminole Tribe v. Florida. The decision allows states to impose increasing demands on Indian gaming, tribal and federal officials have said.

But McCain included a special provision to apply to the Mississippi Band of Choctaw Indians, a wealthy tribe whose gaming enterprise paid for the services of Jack Abramoff, a lobbyist whose activities have spawned a major federal probe. The bill rescinds a 1999 appropriations rider that exempted "self-regulated tribes such as the Mississippi Band of Choctaw" from IGRA.

Get the Bill:
Indian Gaming Regulatory Act Amendments of 2005 (S.2078)

Relevant Documents:
McCain Floor Statement (November 18, 2005)

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