Proposal to Amend the Johnson Act

ATTACK ON TRIBAL ECONOMIC RESOURCES

The National Indian Gaming Commission’s Proposed Rules To Amend Class II DefinitionsAnd Establish Classification Standards

On May 25, 2006, the National Indian Gaming Commission (NIGC) published their proposed rules for Class II Definitions and Classification Standards in the Federal Register.

IMMENSE ECONOMIC HARM TO TRIBES. Based on conservative projections, tribal governments stand to lose over $1 BILLION of revenue a year under the proposed rules. There are approximately 50,000 Class II electronic game stations in use by Tribes today generating over $2 billion of revenue annually- this means that a prime source of funding for tribal governmental programs will almost be cut in half.

RESERVATION ECONOMIES WILL BE DEVASTATED: If finalized, the NIGC’s proposed rules will devastate the economies of Tribes that depend primarily on Class II gaming for revenue to fund vital tribal governmental programs, infrastructure, and other essential community needs.

JOBS WILL BE LOST: Tribal governments are the largest employer in many of the areas that would be affected. The NIGC’s proposed rule will cause a disproportionate loss of jobs at Class II facilities. This means that tens of thousands of American jobs will be lost in areas of the country that can least afford it.

DISREGARDS NIGC’S OWN PRECEDENT. The proposed rules outlaw even the Class II electronic bingo games previously approved by the NIGC. In fact, NOT ONE single Class II electronic bingo game approved by the NIGC since IGRA was enacted would be legal under the proposed regulations.

ADMINISTRATIVE REVERSAL OF JUDICIAL DECISIONS. In recent years, tribes have won important victories before the Ninth and Tenth Circuit Courts of Appeal in relation to linked electronic bingo games. These cases made clear that that tribes are not limited to “traditional” bingo games and confirmed that Class II games can be both fast and profitable. United States v. 103 Electronic Gambling Devices, 223 F.3d 1091 (9th Cir. 2000); United States v. 162 MegaMania Gambling Devices, 231 F.3d 713 (10th Cir. 2000).

THE RULES CREATE UNREASONABLE AND UNLAWFUL RESTRICTIONS. While the proposed rules would not prohibit the use of electronics in Class II gaming altogether, the games that would be permissible will be exceptionally slow, less aesthetically pleasing, less enjoyable, and overall far less appealing to players; making these games dramatically less profitable than existing Class II games.

ATTACK ON TRIBAL ECONOMIC RESOURCES

THE REGULATIONS WILL RESULT IN MORE LITIGATION. The proposed ruleswill create new legal uncertainties, which – after a decade of litigation – were thought to have been resolved by the federal courts. The NIGC’s proposed rules will lead to litigation for decades to come where only the lawyers will ultimately profit.

LEGISLATION THROUGH REGULATION.These limitations so distort game play as to make the resulting game not bingo at all. They are legislation rather than regulation. Through these proposed rules the NIGC usurps Congress’ legislative role and overturns IGRA’s acknowledgement of a tribal right to offer bingo with the assistance of technologic aids. Contrary to the NIGC’s stated intent, these proposed rules do not clarify the definition of bingo provided by Congress, they entirely change the definition altogether!

INDIFFERENCE TO TRIBAL INTERESTS AND CONCERNS. The NIGC established a seven-member tribal advisory committee to assist in the development of these Class II regulations. In spite of assurances that the committee process would be open and transparent, virtually all the drafting was done by the NIGC behind closed doors. Although the Committee unanimously objected to unreasonable restrictions on Class II games, none of its significant objections were accepted by the NIGC. The same is true of recommendations made by tribal governments and organizations in written comments on the various drafts of the regulations.