©2008Gaming Regulatory Consultants THE INDEPENDENT TRIBAL GAMING COMMISSION Gaming Regulatory Consultants

©2008Gaming Regulatory Consultants Indian Gaming Regulatory Act (IGRA) Enacted in 1988 Enacted in 1988 Requires a Compact with the State for regulation of Class III gaming Requires a Compact with the State for regulation of Class III gaming Establishes Indian Tribes as the primary regulators of Indian gaming Establishes Indian Tribes as the primary regulators of Indian gaming Requires that gaming revenues be used for purposes related to Tribal member services Requires that gaming revenues be used for purposes related to Tribal member services

©2008Gaming Regulatory Consultants Department of Interior Bureau of Indian Affairs Recognition of Indian Tribes Recognition of Indian Tribes Place land into trust for Tribal benefit Place land into trust for Tribal benefit (Note IGRA prohibits gaming on land taken into trust after 1988 subject to certain exceptions) Approves Tribal-State Compacts Approves Tribal-State Compacts Approves Revenue Allocation Plans (RAPs) distribution plans. Approves Revenue Allocation Plans (RAPs) distribution plans.

©2008Gaming Regulatory Consultants National Indian Gaming Commission (NIGC) National Indian Gaming Commission (NIGC) Established by IGRA as an independent federal regulatory agency Established by IGRA as an independent federal regulatory agency Oversees both Class II and III gaming Oversees both Class II and III gaming (Recent Colorado River Indian Tribe (CRIT) decision questions NIGC Class III authority)

©2008Gaming Regulatory Consultants Other Federal Agencies Department of Justice Department of Justice FBI investigates criminal activity on Indian Land, including crimes related to gaming FBI investigates criminal activity on Indian Land, including crimes related to gaming Indian Gaming Working Group: joint effort with NIGC to coordinate resources Indian Gaming Working Group: joint effort with NIGC to coordinate resources Department of Treasury Department of Treasury FinCEN: Bank Secrecy Act money-laundering controls (CRTs and SARs) FinCEN: Bank Secrecy Act money-laundering controls (CRTs and SARs) IRS: federal tax compliance issues IRS: federal tax compliance issues

©2008Gaming Regulatory Consultants Tribal-State Gaming Compacts Required for Class III gaming Required for Class III gaming Negotiated between state and tribal government Negotiated between state and tribal government Approved by the Secretary of the Interior Approved by the Secretary of the Interior “May” include provisions that address: “May” include provisions that address: Operating and facility maintenance standards, including licensing Operating and facility maintenance standards, including licensing “any other subjects that are directly related to the operation of gaming activities” “any other subjects that are directly related to the operation of gaming activities”

©2008Gaming Regulatory Consultants Tribal Gaming Ordinance The Tribe has the sole proprietary interest in and responsibility for the conduct of any gaming operation on tribal lands The Tribe has the sole proprietary interest in and responsibility for the conduct of any gaming operation on tribal lands The regulation of gaming is vested in the Tribal Gaming Commission The regulation of gaming is vested in the Tribal Gaming Commission

©2008Gaming Regulatory Consultants Tribal Government COUNCIL COMMITTEE CASINOSMANAGEMENT COMMISSION ADVISORY BOARD

©2008Gaming Regulatory Consultants Commission Responsibility Tribe: asset protection Tribe: asset protection Public: integrity of gaming Public: integrity of gaming State/Federal governments: uphold laws State/Federal governments: uphold laws

©2008Gaming Regulatory Consultants Commission Functions Legislate: promulgate rules Legislate: promulgate rules Enforce: compliance with laws & rules Enforce: compliance with laws & rules Adjudicate: hear disciplinary actions Adjudicate: hear disciplinary actions

©2008Gaming Regulatory Consultants Elements of Independence Independent Powers & Duties (Authority) Independent Powers & Duties (Authority) Vested regulatory authority Vested regulatory authority Specified enforcement powers Specified enforcement powers Qualifications of Commissioners (Expertise) Qualifications of Commissioners (Expertise) Not associated with elected officials or gaming operator Not associated with elected officials or gaming operator Required to meet suitability requirements Required to meet suitability requirements Terms of Office/Compensation (Impartial) Terms of Office/Compensation (Impartial) Staggered terms Staggered terms Removal only for proven misconduct Removal only for proven misconduct Adequate salaries not based on gaming revenue percentage Adequate salaries not based on gaming revenue percentage

©2008Gaming Regulatory Consultants Gaming Commission Director Internal AuditCompliance Officer Background Investigators Tribal Gaming Commission Structure

©2008Gaming Regulatory Consultants Budget Separate from other agencies Separate from other agencies Based on duties and responsibilities Based on duties and responsibilities Recognizes need to develop expertise Recognizes need to develop expertise Insulated from political influence/reprisal Insulated from political influence/reprisal

©2008Gaming Regulatory Consultants Pitfalls Meddling in Tribal Politics Meddling in Tribal Politics Intervening on behalf of relatives/friends Intervening on behalf of relatives/friends Abuse of power Abuse of power Failure to act responsibly Failure to act responsibly

©2008Gaming Regulatory Consultants Good Regulation = Positive Image "I do not believe that self-regulation without oversight is real regulation," – Senator John McCain, Senate Committee on Indian Affairs "I do not believe that self-regulation without oversight is real regulation," – Senator John McCain, Senate Committee on Indian Affairs “This tribe's philosophy is that it is just good business to have good regulation and checks and balances,”. – Norm DesRosiers, NIGC Commissioner; former Viejas Gaming Commissioner “This tribe's philosophy is that it is just good business to have good regulation and checks and balances,”. – Norm DesRosiers, NIGC Commissioner; former Viejas Gaming Commissioner

©2008Gaming Regulatory Consultants Contact Information Tom Nelson Tom Nelson (719) (719) Pat Leen Pat Leen (517) (517)