United States Senate
Committee on Indian Affairs
Hearing on S. 1077
"Indian Gaming Regulatory Act Amendments of 1997"
October 29, 1997
Testimony of
Great Plains Indian Gaming Association
Presented by:
Mark Fox, Chairman
Treasurer and Tribal Business Council Member, Three Affiliated Tribes
Milo Yellow Hair
Vice-President, Oglala Sioux Tribe
Chairman Campbell, Vice-Chairman Inouye, members of the Committee. Our testimony today is
intended to highlight our concerns and provide some perspective about S. 1077, the Indian
Gaming Regulatory Act Amendments of 1997, as sponsored by Senator McCain, from the
vantage point of the Tribal Nations of the upper Great Plains of our nation.
The Great Plains Indian Gaming Association (GPIGA) is a recently formed regional group of 10 gaming Tribes comprised of the Turtle Mountain Band of Chippewa, Spirit Lake Nation, Sisseton-Wapheton Sioux Tribe, Three Affiliated Tribes, Standing Rock Sioux Tribe, Rosebud Sioux Tribe, Oglala Sioux Tribe, Flandreau-Santee Sioux Tribe, Yankton Sioux Tribe, and Santee Sioux Tribe which are located within the states of North Dakota, South Dakota and Nebraska.
As an Association, our goal is to keep our member tribes informed about national, regional and
state issues that affect our gaming enterprises, to provide regional training on a quarterly basis,
and to help provide information to the public about our gaming enterprises. In so doing, we also
help provide information to the public about our Tribal Nations -- our cultures, our peoples, our
histories, our governments, and our needs. While we will discuss in more detail later what
contributions gaming revenues make for our peoples, those revenues fulfill only a tiny fraction of
the many needs our Tribal Nations have for additional resources.
While our Association is relatively new, the Tribal Nations of the Great Plains have long had a
special relationship with the United States by virtue of solemn Treaties entered into with the
United States by our ancestors more than 125 years ago. Those Treaties, which defined our
boundaries with the United States, and which under the United States Constitution should still be
the law of the land, include the Fort Laramie Treaty of 1851 and the Great Sioux Nation Treaty
of 1868. Today, the Tribal Nations which are part of our Association have more than 150,000
enrolled members and must govern over 10,000,000 trust acres. A great many of those members
are proud descendants of the signers of our sacred treaties. But our Tribal Nations are also among
the nation's poorest people. The county in which the Pine Ridge Reservation is located, home of
the Oglala Sioux Tribe, was the poorest county in the United States according to the 1990 census.
Our many members rank near or at the bottom in the U.S. in terms of life expectancy,
employment rates, economic development, and the quality and quantity of health care, housing
and education. We suffer from diabetes at several times the national average.
Our people also generally live in a very rural setting, far from populated areas, far from big cities.
Within the past fifty years, eight of the Tribal Nations within our area had their cultures torn
apart once again by the U.S. Military in the form of the U.S. Army Corps of Engineers when their
best lands were flooded by the dams of the Pick-Sloan project. New flooding this past year has
affected the Standing Rock Sioux Tribe in South Dakota and the Spirit Lake Nation at Devil's
Lake, North Dakota. And of course, our climate, with its harsh winters, is legendary.
Thus, we have looked at casino style gaming with a wary eye. As we started our gaming
enterprises, and negotiated compacts with the Governors of our rural states, we knew the
revenues gaming would generate would not go very far in meeting our needs. As revenues started
coming in, people joked: "Maybe we can have a $5 per capita annual payment", and that is not
far from the truth. Within the past two years, Tribal leaders and BIA officials estimated total
physical needs in terms of housing, education, roads, other buildings and infrastructure were
more than $2 billion in the Great Plains Region. The few million dollars a year that our casinos
generate does not even begin to put a dent in that need.
Our gaming facilities are modest. In South Dakota, no Tribe has more than 250 gaming devices.
All of our facilities are located within the boundaries of our reservations, which adds insult to
injury when those of us in South Dakota look at the gaming attractions of Deadwood located in
the heart of our sacred "Paha Sapa" - the Black Hills.
In North Dakota the number of devices is limited by the market, which, given the rural character
of the state and the adjacent Canadian provinces, still limits the number of machines, and thus
income, to a few hundred for each of the five Indian gaming facilities located on the reservations
within that state.
The revenues generated by our facilities go for a variety of things: economic development (albeit
generally on a small scale), education, emergency assistance to our members, strengthening our
Tribal governments, preserving our culture, housing assistance in small amounts and modest
health care improvements, among others. Some Tribes have been able to purchase ambulances,
or better snow removal equipment. The gaming facilities themselves are used for community
events and other meetings involving our people.
Most important for our reservations: our gaming enterprises create jobs; several hundred per
casino, and several hundred more per Tribe created by the profits from the casino. Nearly every
casino we operate is staffed largely by Tribal members, many in senior management positions.
As many as 65% of the employees were formerly on welfare or unemployment.
While these employment opportunities and the revenues from gaming are helpful, they don't
begin to satisfy our needs for more jobs, better housing, health care, education, and
infrastructure. Unemployment among our tribes has reached 75% in recent years, which means
for most Tribes in our area thousands, in some cases tens of thousands of Tribal members
without a job and depending on Federal welfare funds through the State and the Bureau of Indian
Affairs.
To regulate our casinos, each of our Tribal Governments has established a Tribal Gaming
Commission. Each Commission has the responsibility of licensing gaming employees, making
sure that the casino runs according to the Indian Gaming Regulatory Act, its regulations, the
Tribe's Gaming Ordinance and the Tribal-State gaming compact, thus making sure that criminal
elements do not infiltrate the management of our gaming enterprises. In addition, each of our
respective states, under our compacts, monitors our activities, including performing further
background checks on our employees, thus making doubly sure that criminal elements do not
gain a foothold in the Dakotas. Our Gaming Commissions also help establish and monitor the
use of minimum internal control standards, so that we can more easily detect loss of revenue.
Each of our Tribal Gaming Commissions is funded with hard earned revenue from our casinos,
virtually all with budgets in six figures. That means just the Tribal Nations of our Association,
with very modest incomes, spend more on regulation of their enterprises than the $1 million
Congress appropriates annually for the National Indian Gaming Commission! In addition, the
Tribal Nations pay the States for the regulatory requirements outlined in the Tribal-State gaming
compacts, which to date are in excess of $250,000 annually.
The Tribal-State gaming compacts in North and South Dakota are for a term of years. In North
Dakota, the term is ten years, which is up in the year 2002, and in South Dakota, the terms of the
compacts vary, but all are shorter than 10 years. Our compacts are not in any way indefinite, as
either party can request to renegotiate the compact at the point of its renewal. That, indeed, is
what is now happening in South Dakota with our present Governor.
Discussion of S. 1077
These last points bring us to some of our concerns about S. 1077.
Our Tribal Nations have followed for some time the various debates and negotiation efforts
relating to the predecessors of S. 1077 in the 103rd and 104th Congresses. Sometimes, our Tribal
leaders have believed that the debates did not affect our interests, because we already have
compacts and most of us were not generally fighting our respective states about our right to
conduct Class III, or casino style, gaming. In South Dakota, for example, in addition to
Deadwood, the state already has video lottery machines in nearly every bar and North Dakota
was one of the first states to introduce charitable gaming, including pull tabs and blackjack.
However, recent events have begun to change that view. First, we know now that legislation in
Congress can affect our activities and affect our bottom line by costing us more for regulation of
our activities. A bill has been introduced to increase dramatically the funding for the National
Indian Gaming Commission, along with an amendment to the Interior Appropriations bill to do
the same thing. For the first time, the revenue of tribes from Class III, or casino style gaming,
would be essentially taxed by the Federal government to provide for increased funding for
regulation activities, although it is not clear how this would benefit our casinos.
Second, we know that at least a part of IGRA has been declared unconstitutional early in 1996 by
the U.S. Supreme Court in the Seminole v. Florida case, which takes away our right to sue the state in the event of a dispute over obtaining, or even possibly renewing, our Tribal-State
compacts. We realize that one solution to the Seminole situation is a legislative one.
S. 1077 primarily does one thing: it increases regulation of our facilities, by replacing the present
National Indian Gaming Commission with the Federal Indian Gaming Regulatory Commission
and by requiring the new Commission to establish certain minimum standards for Indian gaming
operations. The member Tribal Nations of the Great Plains Indian Gaming Association are not at
all certain that the case has been made that increased regulation of our facilities is necessary or
that it would in any way enhance our operations. We do know that it would cost us more money,
dollars that we desperately need to help our people.
We are already creating, through the help of such organizations as the National Indian Gaming
Association (NIGA), a set of minimum internal control standards the equal of any used by
Nevada or New Jersey gaming operations. We are not afraid of regulating ourselves, just as any
state regulates gaming operations it conducts, such as lotteries. We each have too much invested
to see our gaming enterprises taken over by organized crime or other criminal elements, and we
do everything in our power to make sure that such elements are not a part of our operations.
Can we improve our operations? Certainly we can, but we believe we have access to the
expertise to do so without relying on a Washington based bureaucracy. As stated, we certainly
have the incentive to do so because improvements to our operations help us serve our Tribal
members better by increasing revenues. That is one of the reasons our Association was formed,
to make sure that we are provided the training we need to keep our operations running according
to the law.
Further, S. 1077 does not do anything to remedy the Seminole decision, rather, it leaves intact the
mechanism for compact formation that is already part of the law. We understand some
representations that have been made to us that this bill has been offered, in part, for discussion
purposes. However, without a remedy for Seminole being put forward in the bill, it is difficult to
determine where the discussion about remedying Seminole should start, especially because the
Secretary of Interior still has not issued the long-awaited regulations for compact formation
where a state fails to negotiate in good faith with a particular tribe about establishing a gaming
compact.
You might ask whether Seminole actually affects us, since we already have compacts in place,
each with its own form of a renewal clause. As each of our Tribal Nations that conducts gaming
goes through, or approaches, the renewal of our compacts, the possible impact of the Seminole decision becomes clearer. For some of our Tribes, the Tribal-State gaming compacts require new
negotiations before a new compact period can begin. For others, the State can demand new
negotiations before the renewal of the compact, although if that happens, it is unclear whether the
compact remains in effect if the negotiations continue past the renewal date of the compact.
In either of the above cases, and even in the case where the Tribe requests to renegotiate the
compact, it is unclear, after Seminole, what remedies a Tribe might have if the State refuses to
negotiate, or renegotiate, in good faith. While we would hope that existing dispute resolution
mechanisms contained within the compacts could be used to good effect, there is no guarantee
that a state not wanting to renew a compact would submit to those mechanisms, and thus the
specter of Seminole is present, in that the state could raise without the possibility of effective
challenge the 11th Amendment defense affirmed by the U.S. Supreme Court in Seminole.
If a state were to block renewal of our compacts, what would then happen to the millions of
dollars of investments made in our gaming enterprises? What would then happen to the hundreds
of jobs each casino provides? What would happen to efforts by both the State and Tribes to meet
the objectives of welfare reform, so recently enacted by this body? Without a legislative remedy,
we simply do not know, and we do not want to take the chance that Secretarial procedures, which
are certain to generate years of litigation and another Supreme Court decision, will solve the
problem.
What most of us would prefer is a solution that was incorporated into the first version of the
predecessor to S. 1077 last Congress, S. 487: an opt-in process by which states could participate,
at their choosing, in the compact formation process. If a state chose not to participate, the
Secretary of Interior would be responsible for negotiating with a Tribe concerning the terms of
any state-tribal gaming compact which would permit Class III gaming. It is the opinion of most
gaming attorneys that such a system would survive constitutional scrutiny.
We are also aware that states are generally concerned that such a system would let the Secretary
of Interior decide what the scope of gaming (the kinds of games allowed) should be for a tribe
operating a gaming enterprise within the state's borders, and the Secretary's determination of the
scope of gaming would be different than that of the state. Since tribes, after all, depend on state
citizens other than their members as customers of their casinos to generate revenues for the
tribes, the states believe they should have some say in the determination of the scope of gaming
because it affects what a particular state believes are its prerogatives.
First, we are not at all convinced that the states have very much to worry about, given the
analytical framework already in place within IGRA, as a result of the 1987 landmark decision of
the U.S. Supreme Court in the Cabazon v. California case. The Cabazon analysis preserved in
IGRA, and, we might add, in S. 1077, does not mean, as some states believe, that Indian tribes
can conduct all types of casino style games just because the state permits one kind of casino style
game within its borders. The Great Plains Indian Gaming Association is not at all suggesting that
the Cabazon test be replaced with a more expansive standard, even though we believe that as
separate sovereigns, and as Treaty tribes, we retain the right to conduct any gaming we choose
within our reservation boundaries.
Second, one way that some, if not all, of a state's concerns could be met is to make sure that if the
Secretary of Interior is negotiating a compact with a particular tribe, the state's input about the
scope of gaming will be heard and considered. We recognize that the process is ultimately a
political one, as the Secretary of Interior is an appointed political official, subject to the political
pressures of the President who appointed him or her. Within that political context, neither the
states, nor the Senators of this committee, need to fear that the views of a particular state will not
be considered, even without special provisions in the legislation to do so.
Thus, we would urge that this Committee include within S. 1077 the same language, or language
similar to it, that appeared in the version of S. 487 as originally introduced in the 104th Congress
concerning the compacting process. Not only do our sister and brother tribes in other states that
have not yet been able to obtain a Tribal-State gaming compact need some certainty in the
compacting process, we also need that same level of certainty as we go through efforts to renew
our own gaming compacts with our respective states.
Finally, we have a few technical problems with S. 1077 that we would urge be addressed by this
Committee as it considers this bill.
First, the requirement now present in IGRA that at least two members of the National Indian
Gaming Commission be enrolled members of Federally recognized Indian tribes is missing in the
requirements for appointments to the three person Federal Indian Gaming Regulatory
Commission formed under S. 1077. The requirement of Section 5(b)(5)(B) of S. 1077 that at
least two members must be "individuals with extensive experience or expertise in tribal
government" is not at all adequate. Many persons who have extensive experience with our tribal
governments also have been our chief adversaries and have no interest in helping us satisfy the
needs of our people.
Second, the requirement of meeting minimum federal standards does not appear to leave any
possibility for tribes to become self-regulating in relation to Class III gaming activities. Section 8(c)(1)(b) of S. 1077, which gives the Commission exclusive authority to regulate unless and
until minimum standards are met, implies that the Commission will retain coexisting authority to
regulate Class III gaming activities, even when the Tribe has shown that it is meeting or
exceeding the Federal minimum standards imposed. We believe that we should be allowed to
obtain a self-regulation certificate for Class III gaming activities similar to that provided in
Section 11(c) of S. 1077 for Class I and II gaming activities.
Third, little guidance is given to those Tribes where changes to existing compacts will need to be
made to meet Federal minimum standards. Are the compacts to be amended and those
amendments approved by the Secretary, or are such amendments to conform to the minimum Federal standards to be made without review? In general, we would note that there is no
provision for how amendments to compacts are to be handled by the Commission.
Conclusion
In closing, the Great Plains Indian Gaming Association Tribal Nations have supported Tribal,
State or Federal legislation which is intended to provide a proper regulatory environment for our
tribal gaming enterprises. The member Tribal-Nations recognize the efforts of Senator McCain
and Senator Inouye in regard to S. 1077 and are willing to work with the Committee members in
addressing some specific concerns contained in the bill. These concerns include.
We look forward to working with this Committee and its members to fashion amendments to the Indian Gaming Regulatory Act that continue to be helpful to our efforts for economic development and self-sufficiency for our peoples. Please feel free to contact us or our staff with any concerns you may have. Thank you for the opportunity to present our testimony to this Committee.