Gaming has become the single largest governmental revenue source for hundreds of tribes since the Indian Gaming Regulatory Act was enacted in 1988-yet despite that, many naysayers, almost always without direct experience with tribal gaming, doubt the wisdom of tribes overseeing their own gaming operations.

Yet tribal regulators are the first-and some would argue-the most effective line of defense in protecting the integrity of their gaming operations.

Of the three layers of gaming regulation, state, federal and tribal, the tribal element is the most important according to most tribes-not surprisingly!  But is it true that the agency closest to the casino in question does the best job?

California Conflict
In California, the state agency in charge of regulating tribal/state gaming compacts and 58 casinos is the California Gambling Control Commission. Governor Arnold Schwarzenegger’s budget for 2008-2009 increased its number of officers from 70 to 83, to reflect the growth of tribal gaming in the state.

Yet one tribal gaming commission in that state, that of the San Pasqual tribe in San Diego County, whose executive director is John Roberts, has a staff of 52 to regulate Valley View Casino. That’s more than half of the amount devoted by the state agency to nearly 60 casinos.

Extend that same truth to the 400 Indian gaming establishments, operated by 230 gaming tribes all over the United States. In the sentiments of one federal regulator, it would take the states and federal government armies of regulators to perform the same job that the tribes perform.

But that didn’t stop the California Gambling Control Commission last October from aggressively trying to assert its authority by demanding “prompt access” to tribal casinos and their financial records. It also approved regulations that gave it the authority to inspect casino books, gaming operations, customer and employee access to cash, and the game integrity.

The commission said that it was filling a vacuum that had been created after a federal appeals court ruled that the National Indian Gaming Commission didn’t have the authority to directly regulate tribal gaming.

But those are all tasks currently performed by tribal gaming commissions.

As Howard Dickstein, an attorney who represents gaming tribes, observed at the time, “The dispute really isn’t about the standards. The dispute is over who has the authority to enforce them… The state apparently doesn’t have adequate respect for tribal governments and their gaming agencies’ independence. They’re managing to unite every tribe in the state of California against them.”

Roberts explains the split.

“To say we’ve had a difference of opinion is an understatement,” Roberts said. “We didn’t feel they had legal authority to do this. We screamed, ‘You can’t do it.’ And they said, ‘Yes we can.'”

In December the commission retreated from its stance. Tribes in California hailed the retreat as an admission, or at least recognition that the tribes already do a more-than-adequate job.

The tension between the California commissions and the gaming tribes is a dynamic that is played out in states and between tribes all over Indian Country.

Most tribes take their regulatory role very seriously. “Tribes take a tremendous amount of pride in their ability to regulate themselves,” says Tracy Burris, for many years a gaming commissioner with the Choctaw Nation in Oklahoma, and who a few months took up that job at Viejas Casino in southern California.

Is it justifiable pride?

“I understand what my culture requires me to do,” explains Burris. “It is important to me culturally that I have honor. It is the honor of the tribes that is important to them. Whether that is true of all of the people who work for us, I can’t say. But when it comes to self-regulation or governance our honor is important to us. Doing a good job is a matter of honor.”

“The only thing I leave the world with is my word. A handshake is only as good as the one who shakes it. Paper can burn. Your word is the only thing that you take with you when you leave this world,” says Burris.

Rules & Regs
Most tribes believe the tribal first line of defense suffices because they have the most interest in making sure that everything is operated cleanly.

That’s also the view of Norman H. DesRosiers, vice chairman of the National Indian Gaming Commission, the federal agency that oversees Indian gaming. DesRosiers was himself a gaming commissioner for several tribes, and is credited with writing many of the gaming regulations that the great majority of tribal gaming commissioners use today.

“DesRosiers drafted phenomenal policies that are almost a standard for tribal gaming,” says Burris. “We all looked to Norm in the early days for guidance.”

DesRosiers started in 1993 as an inspector and training supervisor at Fort McDowell Tribal Gaming Commission. From 1994 to 1998 he was vice president of the Arizona Tribal Gaming Regulators Alliance and during that same period was executive director of the San Carlos Apache Tribal Gaming Commission. Later he served as commissioner for the Viejas Tribal Gaming Commission. He has been on the NIGC for two years.

He began writing the policies that so many tribes would use as a touchstone at San Carlos and finished them at Viejas.

“I did write a couple of tribal regulations that exceeded state and federal regulations,” says DesRosiers. “They were based on my experience with other tribal regulator agencies and things that could go wrong. I am proud and flattered that many tribes have used those models and even the state of California picked up on a few of those things.”

After about 14 years of tribal experience, “I got a pretty good feel for how to regulate it at all levels,” he says. The foremost insight he took away from that experience was that IGRA recognizes tribal regulators as primary. “In my experience most of those regulators are very protective of that sovereign authority,” he says.

“Any shared authority with the state is the product of government-to-government agreements, i.e. compacts. The federal government retains an oversight role in Class II regulation. We have to approve tribal gaming ordinances and management contracts and we have the right to review background investigations of key employees and the right to object to key employees,” says DesRosiers. 

NIGC is certainly a busy agency, even if it doesn’t have direct responsibility for enforcing tribal gaming regulations. It has a field staff of auditors who perform compliance reviews, and another group that conducts background checks for management contracts. It reviews violations and ordinances to ensure that they comply with minimum requirements, or Minimum Internal Control Standards (MICS).

“Occasionally we provide opinions as to whether proposed gaming facilities are eligible. The chairman (Phil Hogen) and I spent a lot of time in the field consulting with tribes on proposed regulations.”

DesRosiers feels that once a tribal gaming agency establishes a record of meeting or exceeding federal regulations, that engenders confidence among state and federal regulators. “If they do that, they should get minimum oversight by those agencies. If I am a tribal commission and I do the job right I’m minimizing the number of visits from state and federal regulators.”

Burris contends that it ought to be obvious that a tribe will do a good job of regulating its casino since its own money is at stake.

Roberts agrees. “Some statements that come from the state contend that if tribes are regulating themselves that they must not be doing a very good job. We have tried telling the state and other agencies that the tribe is looking out for its own money. The purpose of this tribal commission is to protect the tribe’s assets. The tribe is going to employ as much proper rules and internal controls as it can. There are the minimum standards of NIGC, and there is the reality is that most tribes have more stringent rules. Valley View Casino has been open for eight years. We are constantly upgrading to take new technology into account. The tribe is looking out for its own money. Who else will do that?”

Another criticism that is leveled is that a tribal commission might show preference for a tribal member in a dispute.

“There are only 300 tribal members,” says Roberts, answering that charge. “How many of those actually go into the casino and play is very small. There hasn’t been an incident since I have been here where a tribal member was accused of something wrong. Employees who are members of the tribe are treated no different and no worse than other employees.”
    

Digging Deep
San Pasqual’s commission runs a very complex business. It is in charge of all audits. Every employee in the casino has to have a gaming license, which the commission issues after conducting background checks.

The state tribal gaming compact requires that certain “key” employees get a special license through the state. The tribe also runs key employees’ backgrounds checking for past criminal behavior. The commission uses a small machine that electronically scans fingerprints and sends them off to the FBI, which actually performs the checks.

Another vital function of most tribal gaming commissions is to monitor individual slot machines to make sure that they are working correctly.

At Viejas the commission has one commissioner with a staff of 59. Most commissions have administrative responsibility for their staffs. At Viejas, in addition to licensing staff members, they also license vendors, so background checks are necessary for them.

“It’s pretty extensive,” says Burris. “You are trying to determine suitability, from work history, credit to criminal past, if any. We are responsible for looking at people’s character and associations.” A former or current gang member, for example, would probably not be a suitable employee.

The compliance issues that a commission must address deal primarily with technology, says Burris.

“You inspect and test the electronic gaming units and the cards. We use national standards but we also use industry standards. As technology advances, the game is classified and you have a technical standard by which it functions. The statute always drives us. First it gives us our authority and then it gives us our direction.”

Standard Deductions
Where tribal commissions from tribe to tribe and state to state differ is in standards, although because of the efforts of DesRosiers and others those standards are becoming more standardized all over Indian Country.

“The unique thing about tribal gaming in California,” says Roberts, “is that we help each other. If a new tribe might not have the resources to put together regulations and standards we offer assistance to them for free. Because if one tribe stumbles-it reflects on all.

“Someone will call me up and say, ‘Shoot me your policies for table games.’ They may not have the resources to hire an accounting or law firm to draft those policies. Or we might go to their property and give them advice,” he says.

But increasingly, Roberts says, that standard of cooperation is extending across the entire Indian gaming map.

“Standards are similar statewide and nationally. They are at least equal to if not better than commercial regulations in Nevada or Mississippi. Their regulations do not surpass what we have in California.”

In DesRosiers’ mind there is no doubt that IGRA vests the tribes with the authority and the responsibility of regulating their own gaming operations. In many cases, state-tribal compacts also give tribes that responsibility.

“But much more important in my opinion, the tribal agencies are there, physically present 24/7, enforcing compliance, conducting investigations, settling disputes, conducting internal auditing and background investigations. They have a hands-on knowledge of their own facilities and at least at the federal level we depend on that front-line oversight and presence,” he says.

Typically, a tribal agency finds and investigates improprieties within days or even hours of the occurrence.

“If left to federal auditors it might be months or maybe forever and the evidence would be long gone,” says DesRosiers. “In my experience they are physically present to respond to protect the patrons’ interest when they are required to investigate disputes. It certainly helps in building the integrity of gaming operations to have gaming officials there to immediately attend to those issues.”

Burris agrees, “If we relied on the NIGC to oversee all of the facilities with a staff of 100 it would nowhere be adequate for our gaming facilities.”

Tribal Level
Federal statutes and regulations and IGRA establish the minimums, that tribes must have ordinances and minimum background and licensing requirements for key employees, plus requirements that tribes must safeguard the environment, public health and safety.

However, according to the commissioner, “through tribal ordinances and regulation and often as part of compacts, the tribes more often than not exceed those federal requirements. A lot of tribal regulations that I wrote had not previously existed and exceeded those models.”

Could the laws that created the relationship between tribal, state and federal gaming regulation be improved?

“If you ask a hundred different people you will get a hundred different opinions,” says DesRosiers. “Tribal people probably think it should be left entirely to them. If you talk to states they will tell you that laws should give them more authority in tribal affairs.

“From the federal perspective you will get a little different take. We think some things could be changed to clarify the issues. I think there is universal agreement that the act has made the best effort to try and balance the efforts of three sovereigns and not every sovereign got everything they wanted.  But it has been enough to allow the industry to flourish and by most accounts to become one of the greatest economic successes for tribal governments that has come down the road.”