National Indian Gaming Commission Chairman Phil Hogen has announced a new twist in the labyrinthine process toward a “bright line” defining Class II gaming under the Indian Gaming Regulatory Act. The struggle among competing interests over the proper scope and regulation of Class II games has become a spectacle requiring close attention to the players and their positions.
Since the summer of 2004, the NIGC has labored over increasingly arcane rules it proposes to govern the definition, scope, technological standards and minimum internal control standards (MICS) for tribes offering technologically aided games of bingo, pull tabs and games similar to bingo under IGRA.
The commission has pressed forward for years over objections by tribes and the Class II industry, which insist the proposals flatly contradicted the statute, judicial decisions and prior NIGC regulations. The NIGC was equally undeterred by objections from the U.S. Department of Justice and some states that its proposals were too permissive, and subject to challenge on that basis. Indeed, even when the NIGC’s own economic study forecast billions of dollars of adverse impact on the tribal economy, should its then-proposed regulations take effect, the commission seemed set on its regulatory course.
But that course has now taken an abrupt turn. A roomful of tribal leaders and others gathered in Oklahoma City for the Oklahoma Sovereignty Symposium were surprised-and then pleased-to hear the chairman state that the commission was going to set aside the proposed definition and classification rules that would have extinguished the viability of Class II gaming.
According to Chairman Hogen, the commission now proposes to follow two paths to enlightenment, at the end of which he will be able to retire from the commission confident that Class II gaming is protected against the forces of darkness.
He expects very soon to proceed with final rules for technical standards and minimum internal control standards. He says that the commission will not move forward with the proposed definition of “facsimile” or the extensive classification rules. In their place will be an administrative appeal of the single issue of “one-touch” networked bingo play. The new strategy may entail less litigation-or more. It has certainly generated significant interest and discussion by tribal leaders and attorneys across the United States.
Escaping the Regulatory Quagmire
The proposed classification and definition regulations, if promulgated, would certainly have been challenged, and would have provided a rich source of legal issues likely to delay their taking effect for years. The many comments filed in opposition to the proposed rules argued the rules were unsupported by the language and intent of IGRA, as previously construed by federal courts.
Indeed, the commission was proposing to withdraw and replace a “facsimile” definition that had already received judicial approval. And then there were (and are) procedural flaws in the rulemaking procedure itself, offering even richer opportunities for legal challenge.
In setting aside the proposed regulations, the chairman seizes an opportunity to focus on an issue central to the definition of permissible Class II bingo systems: whether a Class II player may participate in a game in which the aid device automatically covers drawn bingo numbers for the player-the controversial “one- touch” or “autodaub” system that permits players to engage in linked bingo games that play quickly, and provide the “fast, fun and lucrative” qualities that the DOJ has argued defeats their Class II status, but which greatly advance the viability of Class II gaming. One tribe’s actions now raise that single issue before the NIGC and, potentially, before a reviewing court.
In late May, the Metalakatla Indian Community, located on the only Indian reservation in the state of Alaska, submitted to the NIGC a simple amendment of its approved gaming ordinance. With no Class III compact available, Metlakatla depends on a modest Class II facility to replace lost fishing and forestry revenues; it wished to enhance its operation beyond the two-touch games it was conservatively operating, but did not want to risk NIGC enforcement against one-touch games.
The Metlakatla Indian Community Council engineered a direct challenge grounded in its governmental authority. Based on its conclusion that IGRA permits one-touch play of Class II linked bingo systems, the council amended its gaming ordinance accordingly. The amendment reads as follows:
“Class II gaming includes an electronic, computer or other technologic aid to the game of bingo that, as part of an electronically linked bingo system, assists the player by covering, without further action by the player, numbers or other designations on the player’s electronic bingo card(s) when the numbers or other designations are electronically determined and electronically displayed to the player.”
Metlakatla Ordinance Amendment, § 4.2, May 28, 2008 (emphasis added).
The language authorizes a bingo system to provide technological assistance to a player asking that it “daub” numbers on a card when such numbers or other designations match those drawn or electronically determined. The tribe immediately submitted that amendment to the chairman as required by 25 C.F.R. § 522.3(a). The chairman wasted little time in disapproving it.
On June 4, the day before chairman’s public announcement in Oklahoma City, he issued a letter to the mayor of the Metlakatla Indian Community detailing his reasons for disapproving the amendment. The letter reiterated many of the restrictive arguments commission staff have developed and embraced in the last several years in opposition to tribal operation of one-touch bingo games. None of these arguments is new to those who have followed the commission’s public pronouncements.
The chairman once again claims that a one-touch game lacks the “competition” required to prevent a linked bingo game from being an impermissible Class III facsimile. He notes that a player in such a game could not “sleep” a bingo, and would therefore not be competing against other players to win the game. Finally, in his attempt to reconcile his conclusion with the existing facsimile definition, the chairman criticizes that definition and seeks to eliminate the permissive provisions with which he disagrees.
In essence, he seeks to make effective his own facsimile definition without the administrative formalities necessary to withdraw and replace the existing 25 C.F.R. § 502.8. Most significantly, the chairman’s letter reiterates positions previously taken in speeches, regulatory proposals or non-binding opinions of the Office of General Council-but now, for the first time, opens those positions to judicial review. The debate thus enters a wholly new phase.
The chairman’s disapproval of the Metlakatla Ordinance Amendment is subject to appeal to the “full” commission, and thereafter to review in federal court under the Administrative Procedure Act. The Metlakatla tribe’s July 7 appeal to the NIGC started that process. The subsequent schedule will be as follows:
• July 28: Chairman’s response to the appeal;
• August 11: Metlakatla reply to the chairman’s response;
• August 21: Deadline for other tribes to submit amicus briefs to NIGC;
• October 6: Deadline for full commission to decide the appeal.
The full commission’s decision on appeal will be subject to judicial review so long as the case is filed within the statutory six-year limitation period.
The Controversy Continues
In more recent meetings, the chairman has declined to commit himself to precise direction for further action on Class II regulation. He continues to indicate that the NIGC will not go forward with the classification standards or facsimile definition proposals.
He might, he says, announce withdrawal of those proposals at the same time as the commission announces its intent to move forward with the two remaining proposed rules-on technical standards and MICS. He continues to see a need for what he now describes as “a brighter line” distinguishing permissible Class II technological aids from facsimiles that may only be played pursuant to a compact.
There are widely differing reactions to the chairman’s recent pronouncements. While the technical standards and MICS as published last October are substantively more acceptable than the NIGC’s original proposals, as result of extended discussions and changes pressed by tribal and industry participants over a year-long collaborative process, the NIGC’s classification and facsimile proposals were not subject to similar examination.
Many believe that all of the regulatory proposals particularly suffer from insufficient consultation with tribal governments. There is little disagreement among tribal advocates that the previous package of proposed regulations would have devastated the industry, but there is significantly less agreement on how best to protect that same industry going forward. Many tribes are pressing the chairman to formally withdraw the set-aside regulations, and will not be comfortable until that is accomplished.
Class II remains vitally important to the future of all tribal gaming. Immediately after the chairman announced his determination to set aside the classification proposal, the state of Massachusetts showed renewed interest in discussing a compact with the Mashpee Wampanoag Tribe.
The significance of Class II gaming is not just the bingo game.
Judith Shapiro is a Washington, D.C., Indian law attorney who has been active in the Class II regulatory process. She can be reached at 202-723-6400 or by email at firstname.lastname@example.org.