Closer Look at Oversight of Indian Gaming

Regulation and oversight of Indian casinos has become the major stumbling block for the compacts currently before the State Assembly and the anti-casino factions have focused on this issue saying that the lack of oversight should be reason enough to shoot down the deals. Taking a closer look once again sheds some real perspective on the issue.

First, it is very obvious that the last thing that tribes with casinos want is to appear to the public as having corrupt operations. No one has a greater interest in protecting the integrity of tribal government gaming than the tribes. It has become their vehicle out of poverty and they want to ensure that the vehicle does not break down. Tribal governments with casinos have long held that their gaming operations are the most stringently regulated in the gaming industry. Is this true?

Tribal governments recognized early the vital need for stringent regulation. In response, well before the U.S. government established operational standards, the California-Nevada Indian Gaming Association (now the California Nations Indian Gaming Association) promulgated comprehensive "California Indian Gaming Internal Control Guidelines." These controls cover a broad range of casino activities, from the integrity of the games to related operations and personnel. The creation of these regulations was the desire of tribal governments to create a tribally governed regulatory framework that met or exceeded standards adopted by gambling jurisdictions, such as Nevada and New Jersey.

Perspective in relation to the entire gaming industry, nationwide research conducted by the National Indian Gaming Association (NIGA) reported that tribal governments spend $212 million annually to regulate their gaming operations. This is compared to $155 million states spend for regulatory activities covering casinos and riverboat gaming. Tribal gaming operations employ 2,800 regulators, as compared to 981 for riverboat gaming, 720 for Atlantic City and 432 for Nevada gaming operations.

Indian gaming operations in California are subject to regulation by the U.S. Government and the state of California pursuant to tribal-state compacts and the respective tribal governments. This compares with commercial casinos, which are subject primarily only to state regulation

Tribal Governments are the frontline regulators of gaming on the reservations, placing highest priority on protecting tribal assets, ensuring the integrity of gaming and assuring a safe, secure and healthy recreational and work environment for customers and employees.

Tribal government gaming proceeds are also subject to oversight by the Bureau of Indian Affairs. Tribal government casinos also fall under U.S. Department of Treasury Title 31 regulations governing financial transactions to prohibit money laundering. In addition, Indian gaming operations are subject to U.S. Justice Department and FBI investigations when it appears violations of federal law have occurred. Tribal gaming facilities are also subject to health and safety regulations promulgated by the federal Occupational Safety and Health Administration, and the Environmental Protection Agency.

At the state level, the framework for tribal government gaming falls under the California Constitution, as enacted by the voters in March 2000, when they approved Proposition 1A, permitting tribes to enter into tribal-state gaming compacts. The compacts provide for regulation by the California Gambling Control Commission. While tribes are the first line of regulators by federal law, the California Gambling Control Commission has jurisdiction over areas agreed to by the tribes in the 1999 tribal-state compacts. These include operation, concentration, and supervision of gambling establishments, persons or things having to do with the operations of gambling establishments in the State of California. In the past this commission has not gotten involved because setting a standard would be duplicating what the National Indian Gaming Commission already had in place. But, last fall a Federal Appeals court upheld a ruling that the National Indian Gaming Commission does not have the authority to regulate most tribal casinos. In response to this, before the Assembly Governmental Organization committee was briefed on internal controls for Indian casinos this past May, Gov. Arnold Schwarzenegger unveiled a revised budget proposing expansion of a state unit to audit California's tribal casinos. The governor is seeking $1.7 million from the Indian Gaming Special Distribution Fund for the unit to enforce the already stringent policies in place.

Philip Hogen, chairman of the National Indian Gaming Commission, advised Assembly members at the hearing that the tribes seeking ratified compacts already meet or exceed federal internal control standards. "If you look at the dollars the tribes spend on the minimum control standards they have, you'll find they are very careful about it,'' Hogen said. "They recognize the public's confidence in what they do is critical; how they do it is on the line."

In California, tribal casinos are also subject to regulatory jurisdiction by the Division of Gambling Control within the state Department of Justice. Under the authority of the California Attorney General, the Division of Gambling Control is the law enforcement entity for gambling activities for the State of California, and is the entity that conducts criminal background investigations for the Commission on gambling license and work permit applications received by the Commission.

The tribal governments themselves provide frontline, day-to-day regulation of Indian casinos, under ordinances that are consistent with state and federal law, many of which are more stringent than those standards for commercial gaming. Tribal gaming regulators have proven themselves as effective regulators. Tribal regulators work conscientiously, competently and independently in providing strong regulation of Indian casinos. Recognizing the seriousness in undertaking these sovereign responsibilities is likely to produce the most effective regulation.

So, after all is said in done, do the anti-casino forces have a legitimate issue? You decide.

Sources:
http://www.viejas.com/vbki/html/tg_game-reg.htm
http://www.viejas.com/vbki/html/tg_viej-reg.htm http://resourcescommittee.house.gov/109/testimony/2006/kevinwashburn.htm http://www.thedesertsun.com/apps/pbcs.dll/article?AID=/20070515/NEWS06/705150305/1003/business