WASHINGTON – The National Indian Gaming Association has asked President Barack Obama to appoint a new chairman to the National Indian Gaming Commission immediately, and stop the current commission from publishing proposed revisions to gaming regulations until the new official is in place.
In a letter to the president, the association said the commission violates government-to-government consultation rules and is revising gaming machine regulations that are “ill-advised” because they would impose huge and unnecessary compliance costs on tribal gaming operations, and “overreaching” because they exceed the NIGC’s statutory authority.
The association asked Obama and Interior Secretary Ken Salazar to immediately replace NIGC Chairman Philip Hogen, who “is holding out for almost five years past his original term,” and appoint a new commissioner to fill a seat that has been vacant for years. The chairman’s position requires a presidential nominee approved by the Senate.
A draft of the letter and a memo concerning the issues was sent to NIGA’s 184 members. The nonprofit represents Indian nations, organizations and businesses engaged in tribal gaming enterprises, and acts as an educational, legislative and public policy resource for tribes, policymakers and the public on Indian gaming issues and tribal community development.
This is NIGA’s second request for a new chairman. NIGA members voted unanimously in April on a resolution calling for Hogen’s “immediate resignation,” and seeking the president’s action to “ensure that the National Indian Gaming Commission follows the rules and regulations governing federal agencies.”
“The fact is that Phil Hogen refuses to acknowledge that the former president put out a presidential order that no new regulations were to be issued and President Obama’s chief of staff extended the order until the regulations could be reviewed by President Obama’s newly appointed administrators. Those guys (at NIGC) are out of control,” said J.R. Matthews, Quapaw Tribe of Oklahoma vice chairman and NIGA treasurer.
NIGC did not respond to requests for comment.
The association’s letter was sparked by a meeting Matthews attended in early August at the Poarch Creek Reservation in Alabama at which the commission reviewed proposed revisions to gaming machine regulations with its Tribal Advisory Committee, known as MTAC. The “M” stands for Minimum Internal Controls Standard, the set of regulations the committee was formed to review.
Tribal members were neither informed of nor invited to the meeting, Matthews said. Indeed, the lack of participation and meaningful consultation is one if the biggest beefs tribal leaders have with NIGC.
“If you take a look at the history of how NIGC has promulgated regulations and other things, Phil does these things in a very controlled and thoughtful way in that he will publish regulations in December right as Congress goes into recess, or right before Thanksgiving or Christmas so everybody’s tied up in other things,” Matthews said.
He said NIGC’s consultation meetings violate federal directives. “They come to regional meetings. They walk in and say, ‘Do you have any questions about what we’ve been doing?’ They give us 20, 30, 45 minutes to talk with them and take a photo with them, and they call it ‘consultation.’ There’s nothing meaningful about any of these meetings. They are not laid out as government-to-government consultations.”
Matthews said NIGA intends to fight the proposed regulations.
“If this thing moves forward we’re going to end up in litigation and then we’re going to have amendments to some very poorly written regulations.”
NIGA members have joined the call to seek new NIGC leadership.
Barbara Kyser-Collier, Quapaw Tribal Gaming Agency director, has written to Obama seeking “urgent action” in appointing a new NIGC chairman.
Under Hogen’s leadership the commission “persists” in revising regulations that the courts have ruled to be beyond the commission’s authority, Kyser-Collier wrote. She cited the landmark Colorado River Indian Tribe’s case, known as the CRIT decision, in which the Court of Appeals for the District of Columbia Circuit in 2006 upheld a lower court decision that NIGC has limited authority under IGRA to issue regulations related to Class III gaming.
The proposed rules discussed at the Alabama meeting would again extend NIGC’s authority beyond its statutory limits, Kyser-Collier wrote.
For example, NIGC has inserted into the proposed MICS a technical standard that would require a jackpot payout be validated by the backroom accounting system. This would require a type of technology that is usually patented in a manufacturer’s gaming system, requiring the gaming operation either to have that particular manufacturer’s system or to pay the manufacturer a royalty fee to use its proprietary technology.
“The NIGC characterizes these potential regulations as ‘internal control standards,’ when in fact they constitute product standards. A most important danger is that such rules could favor certain manufacturers and drive tribal costs higher,” Kyser-Collier said.
Matthews estimated it would cost Oklahoma casinos alone more than $100 million to meet that particular standard, which could wipe out smaller Indian gaming operations completely.
Kyser-Collier compared NIGC’s current efforts to the firestorm of controversy surrounding Hogen’s previous efforts to draw “a bright line” between Class II and Class III gaming by establishing “classification standards” that potentially would have wiped out Class II gaming.
“It is beyond understanding that a federal agency established to protect tribal gaming as a source of revenue for tribal governmental services and functions, in fact, would persist in efforts to disseminate regulations that will inflict financial damage to Native American tribes,” Kyser-Collier said.
Matthews and Kyser-Collier objected to the NIGC staff members’ disregard for the etiquette of public meetings, such as referring to tribal leaders attending the meeting as “the peanut gallery,” calling individuals by first name instead of their tribal titles, and texting while tribal leaders addressed the commission.
“It was horrible,” Matthews said.
Kyser-Collier and Matthews described the NIGC’s interaction with the Tribal Advisory Committee as “disrespectful and inexcusable.”
NIGC has set a “meeting rule” whereby the commission can have its legal and technical experts at the table, but committee members, who represent around 230 tribal governments, cannot.
Matthews said he worried the NIGC would “run over” the committee members.
“They can state their objections and everything, but when NIGC finally publishes these rules it’s going to say it met with MTAC, and MTAC is going to be held up as co-conspirators, pretty much.”
