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Bits and Pieces from Indian Country - January 2004

17 March 2004

Gaming and politics are natural bedfellows. Gaming is a highly regulated industry; the enabling legislation and the taxation originate with politicians in their capacity as legislators. Indian gaming can be even more political that the rest of the industry. The enabling legislation and at least one level or regulation came from Congress. After the national legislation, each state becomes involved to one degree or another. The tribes have long recognized the political nature of Indian gaming and have increasingly become involved in the process of selecting the people who will be voting on legislation that effects Indian gaming and Indian issues in general. Tribes are giving money in significant amounts, and Indians are voting in significant numbers.

The president of the National Congress of American Indians pledged this week to mobilize 1 million Indian voters during the fall elections in eight states, including Alaska. …Tex Hall said the Indian turnout in Alaska, Arizona, South Dakota, New Mexico, Minnesota, Michigan, Oklahoma and California will be "critical to our success in reclaiming other important rights." Hall made the pledge during his second annual "State of Indian Nations" address Wednesday in Washington. Jack Sullivan, Associated Press, Anchorage Daily News, 1-24-04

American Indian gaming campaign contributions for the 2004 cycle have favored the Democratic Party over the Republicans - but not by much. According to the Center for Responsive Politics (CRP), Indian gaming interests…so far have given $977,062 to Democrats, while donating $867,340 to the Grand Old Party. …Overall, since 1990, Indian gaming money has gone to the Democrats 71 percent of the time (a total of $12,224,989), and 21 percent to the GOP ($5,091,656). The escalating influence of Indian gaming is made clear by CRP figures that show the industry made just $1,750 in contributions in 1990. That increased to more than $6.7 million in the 2002 election cycle. Mark Fogarty, Indian Country Today, 2-2-04

The recognition of the importance of the political process is not limited to Indian tribes and their supporters. In a retake of his push to "investigate gaming", Republican Congress Frank Wolf from Virginia is asking to have a commission investigate Indian gaming and introducing legislation to give states more control over the process. The co-sponsor of the bill is from Connecticut, which has a history of political opposition to Indian gaming. The attorney general and the congressional delegation have fought the recognition process in the courts and the legislature. Federal legislation is sure to find supporters in other states. California, Minnesota, Pennsylvania, Oklahoma, Oregon and Washington are among the states where there is a very vocal opposition to Indian gaming.

Congressman Christopher Shays (R-CT) joined Congressman Frank Wolf (R-VA) today in introducing the Tribal and Local Community Relationship Improvement Act, which will require state legislatures to approve new Indian casinos. "This legislation will help our communities control their fate when it comes to the expansion of Indian gaming," Shays explained. "Federal tribal recognition should not mean the end of local participation in decisions about casino expansion -- especially because those decisions have enormous impacts on the communities in which casinos are built. The bottom line is, citizens should have the final word on casino expansion in their communities." Connecticut Congressman Christopher Shay, Press Release, 1-29-04

Meanwhile, the National Indian Gaming Commission is continuing its job of regulating Indian gaming at the national level. A new set of minimum standards is in the works, but most important to the industry in general is an attempt to set clearer standards for determining the boundaries of Class II electronic games.

Washington, DC, January 8, 2004 -National Indian Gaming Commission (NIGC) Chairman Phil Hogen announced today that the Commission is seeking qualified tribal representatives to serve on a Standing Federal-Tribal MICS Advisory Committee, to assist the NIGC in formulating necessary amendment to the Commission's Minimal Internal Control Standards (MICS). "The Advisory Committee will help to ensure the continued success of Indian gaming," NIGC Chairman Phil Hogen said. Press Release, 1-9-04

National Indian Gaming Commission (NIGC) Chairman Phil Hogen announced today that the NIGC is seeking qualified tribal representatives to serve on a Joint Federal-Tribal Class II Game Classification Standards Advisory Committee. The Advisory Committee will assist the NIGC in formulating more definitive technical standards and regulations for distinguishing whether electronic games are Class II or Class III games under the Indian Gaming Regulatory Act (IGRA). press release, pechanga.net, 1-23-04

On the local level in Wisconsin, the Ho-Chunk Nation is taking a page from California Indian gaming campaigns, with 23 days of television advertisements to encourage voters to approve a casino in Madison.

The Ho-Chunk Nation will be spending close to $140,000 in a 23-day period advertising on three television stations in Madison, trying to convince voters to back a full-blown casino at the DeJope bingo hall in Madison. …The commercials will begin Jan. 26 and continue through Feb. 17, the day of the referendum in which the public will vote on whether the bingo hall should become a casino. Bill Novak and David Callender, Madison Capital Times, 1-5-04

In California the politics and the politicians are hard at work. The state still needs $30 or $40 billion, and the tribes still want more slot machines. The state and some tribes have begun compact negotiations; some tribes are preparing a new ballot initiative that would give the tribes all of the slots they want and give the state 8.8 percent of the take; and the racetracks and card rooms are beginning the signature gathering phase of a ballot initiative that would give them 30,000 slot machines or force the tribes into paying the state 25 percent of their revenues; and there is a third proposal that would try and walk a line between the other two. Whatever way the voters choose to go, it would seem there are changes on the way in California.

The state started tribal compact negotiations Thursday in a meeting with the Morongo Band of Mission Indians and six other tribes…the meeting in Sacramento with Daniel Kolkey, who was recently appointed by Gov. Arnold Schwarzenegger to negotiate financial concessions from California's tribes. Rae Ann Rockhill, Palm Springs Desert Sun, 1-23-04

…an initiative that would expand tribes' casino operations and protect their monopoly…it would allow them to operate as many casinos on their reservations as they choose, with as many slot machines as the market would bear. In exchange, tribes would pay 8.84% of their gambling profits to the state…as long as they retained their state monopoly…proposal by the Agua Caliente Band of Cahuilla Indians… Dan Morain, Los Angeles Times, 1-22-04

Corporations that own major horse-racing tracks and card rooms are preparing an initiative aimed at next November's ballot to allow them to operate slot machines. …The initiative….would give tribes and Schwarzenegger 90 days to renegotiate key details of the compacts….Tribes would be expected to pay 25% of their net revenue to the state…If the tribes failed to agree, tracks and card rooms would receive as many as 30,000 slot machines and would pay 35% of their net winnings to cities and counties. Dan Morain/ Bill Dwyre, Los Angeles Times, 11-21-03

Countering two proposals to expand gambling, a critic of Indian casinos offered an initiative Tuesday that would limit the number and size of tribal wagering sites and force them to pay a significantly larger share of their winnings to state and local governments. …The measure also would make it easier for unions to organize workers at the tribes' casinos, and require that tribes, which are immune to lawsuits because they are sovereign entities, permit some suits in state court. Dan Morain/Eric Bailey, Los Angeles Times, 1-28-04

On the negotiation front, things seemed to have started out well. The comments are as positive as any that could be expected. At this point it isn't clear whether or how new compacts will impact the political process. If the initiatives get enough signatures, they will go on the ballot in November, and once on the ballot, a new war will begin, California style. In Wisconsin the Ho-Chunks are spending $143,000; in California the Agua Caliente is budgeting $50 million; politics Hollywood-big-budget style. You are entering California; you can begin your Arnie imitations now. I didn't make that up, someone in California did.

Attorneys representing seven tribes…are working behind closed doors with the state's…"It was a refreshing change from prior administrations," said Howard Dickstein, an attorney for several tribes, including the Pala band in Pauma Valley. "Unlike the Wilson and Davis administrations, this governor has no opposition to growing our business or opposition to gambling as an activity, but he wants (the state) to benefit in this time of budget crisis." Edward Sifuentes, North County Times, 1-24-04

"I'm encouraged by the tribes' receptivity to the issues important to the governor and to the people of the state of California," Kolkey, the governor's representative, said in a statement. Edward Sifuentes, North County Times, 1-24-04

With a $50 million advertising budget in its hip pocket to take its campaign to the media, the Agua Caliente Band of Cahuilla Indians is gearing up for a high-stakes gambit to grow the gaming industry exponentially in the state. Earlier this week, the Agua Caliente proposed a ballot initiative that would double gaming revenue payments to the state in exchange for more gaming rights. Lou Hirsh/Jake Henshaw, Palm Springs Desert Sun, 1-24-04

In most of the 70 years in the modern era of legal gaming, politics was only a minor backdrop to the real story, the daily operations. Thirty-five years or so ago, corporate gaming started to move the story from the casino floor to Wall Street. For many of the last 15 years, the story has been more in the legislature than on Wall Street or on the casino floor. 2004 is a continuation of the story of 2002 and 2003; states' legislatures looking for money through gaming expansion, including state-owned or Indian gaming. 2004 is not only a continuation of the expansion story, but it is also a continuation of the 15 year-long Indian gaming story. In every state with Indian tribes or where out of state tribes have a historical claim to land in the state, there are two simultaneous stories; one is the move to expand Indian gaming, with some portion going to the state, and an opposite movement trying to stop or at least control the growth of Indian gaming. This year will not give us a final answer to either Indian gaming or the legislative expansion story, but the stories will certainly be advanced in 2004.


But now, that is simply my opinion, isn't it?

Ken

Ken Adams

Ken Adams is the principal in the gaming consulting firm, Ken Adams and Associates. Formed in 1990, Ken Adams and Associates specializes in information, analysis, and strategic planning for Indian tribes, casino operations and gaming manufacturers.

Ken spent over 20 years in the hotel-casino industry, prior to founding Ken Adams and Associates. He held the positions of: Director of Casino Operations, Casino Manager, and Keno Department Manager. During this time, he developed numerous innovative marketing and customer development programs and systems for evaluating casino performance. Some of those programs, such as slot clubs and tournaments, have become industry standards.

Ken is also actively involved in gathering and disseminating information that is important to the gaming industry. He is editor and publisher of and the Adams' Report, a monthly newsletter specializing in identifying trends in casino gaming, regulation and manufacturing, the Adams Daily Report, an electronic newsletter that provides electronic links to the key gaming stories of the day, and the Adams Review, a special report distributed by Compton Dancer Consulting that provides editorial commentary on gaming trends.
Ken Adams
Ken Adams is the principal in the gaming consulting firm, Ken Adams and Associates. Formed in 1990, Ken Adams and Associates specializes in information, analysis, and strategic planning for Indian tribes, casino operations and gaming manufacturers.

Ken spent over 20 years in the hotel-casino industry, prior to founding Ken Adams and Associates. He held the positions of: Director of Casino Operations, Casino Manager, and Keno Department Manager. During this time, he developed numerous innovative marketing and customer development programs and systems for evaluating casino performance. Some of those programs, such as slot clubs and tournaments, have become industry standards.

Ken is also actively involved in gathering and disseminating information that is important to the gaming industry. He is editor and publisher of and the Adams' Report, a monthly newsletter specializing in identifying trends in casino gaming, regulation and manufacturing, the Adams Daily Report, an electronic newsletter that provides electronic links to the key gaming stories of the day, and the Adams Review, a special report distributed by Compton Dancer Consulting that provides editorial commentary on gaming trends.