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Bits and Pieces from Indian Country - October 2006

31 October 2006

Indian gaming fared better than the Internet in Congress. A bill to limit a tribe's ability to establish a casino off of its traditional reservation failed to gain the number of votes necessary for approval. The story is much like that of the Internet bill: it is more about Washington politics and less about the bill. This one, for procedural reasons, needed a two-thirds majority (it was a House of Representatives bill) of the House to pass and failed to meet that standard. But under normal rules it would have easily passed with a majority – so we can probably expect to see it return. It took Senator Kyl 10 years to get an Internet gambling bill – and he introduced a bill yearly – so losing is clearly not losing, but postponing as long as there is one person with an obsession. In this case there is more than one person who will fight to restrict Indian gaming – as in this bill – and in other ways.

The House of Representatives voted Sept. 13 against advancing a major Indian gaming reform bill without amendment or full debate. The 247 - 171 vote fell short of the two-thirds majority required to pass a bill under a so-called 'suspension of rules.' The suspension limited debate on the bill to 40 minutes and prohibited congressional members from offering amendments. Without a supermajority of two-thirds in favor of suspending the rules, the bill failed…The bill sought to restrict Indian gaming establishments to the boundaries of reservations, a response to the desire of numerous tribes to open casinos at lucrative off-reservation locales. Jerry Reynolds, Indian Country Today, 9-15-06

Another assault on Indian gaming is taking place under the guise of changing the Class II classification and closing what opponents see as a loophole; currently many tribes use Class II games to supplement their Class III games (and thereby increase the number of games beyond what the compact allows). The National Indian Gaming Commission is proposing new regulations that in the opinion of most tribes would severely limit the tribes' options.

This notice extends the period for comments on proposed Class II definitions and game classification standards published in the Federal Register on May 25, 2006 (71 FR 30232, 71 FR 30238). Additionally, this notice extends the period for comments on proposed Class II technical standards published in the Federal Register on August 11, 2006 (71 FR 46336). The comment period for the proposed classification, definition, and technical regulations is extended from September 30, 2006, to November 15, 2006. Federal Registry, 9-29-06

The Seminole Tribe of Florida is the most well known example of a tribe without a compact that uses a Class II game to complete its casino offerings; the tribes in Oklahoma, up until last year, also used Class II games because of a lack of a compact; and in California, the Lytton Band of Pomo, who gained notoriety by gaining a card room as a reservation but still don't have a signed and approved compact, are using Class II games in its casino.

It's not the glittering mega-gambling palace that the Lytton Band of Pomo Indians once persuaded Gov. Arnold Schwarzenegger to approve, but the tribe wants the public to know that Casino San Pablo is doing just fine, thank you. Thirteen months after installing the first of what will soon be 1,020 electronic bingo machines -- which look like Las Vegas-style slot machines -- the landless, 257-member tribe has turned what once was a sleepy card room in this tiny East Bay town into a money maker…negotiated a pact the next year that would have allowed up to 5,000 slot machines and the exclusive right to such gambling within a 35-mile radius…The deal provoked outrage in the Legislature, and the casino was soon downsized to 2,500 machines. But lawmakers never signed off on the agreement, and it remains in limbo. Herbert A. Sample, Sacramento Bee, 9-25-06

In Washington State the tribes operate, with state approval, a kind of quasi Class II-Class III arrangement that might also be eliminated if current Class II games are deemed illegal.

Other Indian Country representatives came with similar stories. Tracie Stevens, the governmental affairs director for the Tulalip Tribes of Washington, said the tribe would have "no choice" but to remove hundreds of machines and eliminate at least 40 jobs if the rules become law. Indianz News, 9-22-06

The tribes are protesting the proposed changes and the Feds have extended the comment period – but at the moment it does not look particularly optimistic for Class II. It many not happen this year, but it would appear that some change can be expected.

Fresh from the defeat of an off-reservation casino bill, tribal leaders on Tuesday took aim at new regulations that would bring significant changes to the $23 billion Indian gaming industry. At an all-day hearing before the National Indian Gaming Commission, tribal leaders, industry experts and legal advocates repeatedly criticized the proposal. They called it a major setback to the benefits tribal casinos have brought to reservations and surrounding communities. Many cited improvements in education, health care and social services, along with better relations with local governments…But the NIGC's proposal to redefine the game of bingo threatens all of the gains. Indianz News, 9-22-06

There was one bit of good news for Indian gaming, in California the 9th U.S. Circuit Court affirmed that a tribe's casino was indeed part of the tribe's government. The ruling, which was in response to former employees suing the casino, allowed that the casino was protected as part of the tribal sovereignty.

Casinos owned and operated by Indian tribes are part and parcel of a sovereign government and thus shielded from typical lawsuits in civil courts, the 9th U.S. Circuit Court of Appeals affirmed in a ruling Friday. "Immunity of the casino directly protects the sovereign tribe's treasury, which is one of the historic purposes of sovereign immunity in general," says the ruling in a case involving the Gold Country Casino, in Oroville, owned by the Berry Creek Rancheria of Tyme Maidu Indians. Central Valley Business Times, 9-30-06

There is of course lots of other gaming news from Indian Country that is very positive and encouraging. The Senecas in New York gave the state $68 million, 20 percent more than last year. In Connecticut revenues are also growing, though market share is shifting more and more toward Mohegan Sun, and the tribe got one of the first five licenses to operate a racino in Pennsylvania. A lawsuit in Florida indicates that the Seminoles' Hard Rock casino will be worth over $6 billion in net revenues over a 10-year period. All of which indicates that Indian gaming, currently estimated to be about $23 billion a year, is pretty healthy. To maintain that health will require constant diligence in Washington, D.C. and in the courts, but what industry does not have to do the same?

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.