Indian gaming could use some enforcement help |

Indian gaming could use some enforcement help

Guy W. Farmer

I like maverick Sen. John McCain, R-Ariz., more than ever now that he’s called for a federal crackdown on the virtually unregulated, multi-billion-dollar Indian gambling industry in this country. And I’d like to see our own Sen. Harry Reid, the Senate minority leader and a former Nevada Gaming Commission chairman, join McCain in a bipartisan effort to regulate some 400 tribal casinos in 28 states.

McCain, who chairs the Senate Indian Affairs Committee, announced late last month that his committee will soon hold a hearing to review the federal Indian Gaming Regulatory Act, which hasn’t been amended since it was passed in 1988.

“I don’t want this hearing to be viewed as an attack on Indian gaming,” McCain said. “It’s not. Indian gaming is here to stay. The question is, Do we protect the patrons of Indian gaming to the fullest extent consistent with our responsibilities? I think we have clearly identified some areas that need to be addressed.” No kidding!

One area that obviously needs to be addressed is the lack of effective enforcement and regulation to assure that patrons of tribal casinos are protected from fraud and cheating. McCain noted that the toothless National Indian Gaming Commission has only 78 employees and a $10.5 million budget to police an $18.5 billion industry.

By contrast, Nevada’s gaming control agencies have 439 employees and a budget of $36.4 million to police 360 casinos with 2004 gross winnings of $9.88 billion. Or, as the Wall Street Journal put it, “Indian casinos are largely self-regulating,” which is unacceptable.

Tribal officials object to any changes in the 1988 Indian Gaming Regulatory Act, and argue that the tribes are fully capable of policing themselves. “There are enforcement mechanisms in place, and I don’t think more legislation is necessarily the answer,” said the chief gambling regulator for the Viejas Band of Kumeyaay Indians in San Diego County. Those who believe him would let the fox guard the henhouse – not a good idea.

McCain also said stricter rules are needed for non-tribal companies (including Nevada gaming licensees) that contract with tribes to develop and manage their casinos, thereby reaping huge profits from an industry that was designed to benefit Indian tribes. For example, Station Casinos of Las Vegas, which runs the thriving Thunder Canyon Casino just off I-80 outside Sacramento, earned nearly $20 million in management fees last year and is promoting another big tribal casino in south Sonoma County near I-80.

I have repeatedly called upon Nevada Attorney General Brian Sandoval and state gaming control agencies to force Station to choose between its Nevada and California casino interests on grounds that our gaming licensees shouldn’t be permitted to compete unfairly against struggling Reno/Tahoe casinos. Gaming Commission regulations clearly state that Nevada licensees shall operate “in the best interests of the people of the state of Nevada,” and there’s no way that Thunder Canyon is in our best interests.

Sandoval replied to one of my columns two years ago by denying that he had any authority over “the conduct of persons who hold Nevada gaming licenses,” which was a total copout by the state’s chief law enforcement officer. Sandoval went on to say that the 1993 Nevada Legislature “took it upon themselves to allow Nevada gaming licensees to enter into out-of-state gaming activities … without the need to obtain any type of prior approval from Nevada’s gaming authorities.” Well, then, it’s time for our legislators to take another look at that insidious provision because it does so much damage to Northern Nevada’s economy.

An in-depth study of tribal casinos by Time magazine in December 2002 concluded that the National Indian Gaming Commission was “understaffed, underfunded, underperforming and undersupervised,” and nothing has changed since then. Time also asserted that Indian gaming interests had “learned the art of buying influence in Washington” by contributing at least $8.6 million to candidates for federal office between 1993 and 2002; most of the money (86 percent) went to Democrats.

Right next door, Indian tribes were the largest contributors in California’s gubernatorial recall campaign a couple of years ago, and they remain bitterly opposed to Gov. Arnold Schwarzenegger’s attempts to collect a fair share of state and local taxes from tribal casinos.

Also in 2002, the Interior Department’s inspector general investigated the tribal recognition process by which “groups (tribes) of dubious lineage” are granted rights to open casinos. The I.G. found that two Clinton-era heads of the inept Bureau of Indian Affairs had abused their authority by granting recognition to six tribes over the objections of BIA staffers. Both former BIA directors left government to join law firms working on Indian casino deals. Meanwhile, the FBI is investigating possible ties between tribal gambling and organized crime. Nice!

These are the kinds of shenanigans that attracted Sen. McCain’s attention, and not a moment too soon. For starters, the senator wants to appropriate more money for the regulation of tribal casinos and to pass new rules to keep them from passing off slot machines as less-regulated “bingo devices.” That’s the scam tribal casinos were running in Washington state during last year’s statewide election.

I eagerly await Sen. McCain’s committee hearings and hope that Sen. Reid will join in a bipartisan effort to subject runaway Indian gambling to strict federal controls.

n Guy W. Farmer, of Carson City, worked for Nevada’s gaming control agencies during the mid-1960s.