Tribal casino technically illegal, but no closure expected

Thursday, Jan. 8, 1998 | 2:34 a.m.

The Nisqually tribe's Red Wind Casino opened eight months ago near Yelm, Wash. The tribe has since requested formal federal authorization of its operating agreement with the state of Washington.

The casino apparently is in no danger of being shut down as a result of the tribe's failure to certify the compact.

But in the audit released today, Congress' General Accounting Office said it was concerned that federal controls had failed to detect the oversight.

"The commission, which oversees and enforces compliance with (casino) gaming regulations was not aware that the Nisqually Indian Tribe was operating (the) gaming without the required approval of its compact," the GAO audit said.

"Although we do not know why the omission was not detected, we are concerned that similar instances of noncompliance may or could exist elsewhere and go unnoticed," it said.

The state compacts are the most rudimentary of the agreements tribes must secure to operate a casino. They reflect the outcome of negotiations between states and tribes on everything from the state share of profits to the number of slot machines and roulette tables in a given gaming hall.

The Nisqually Tribe negotiated and signed a compact with Washington state on May 25, 1995. It became the 12th tribe in the state to launch Las Vegas-style gambling on May 1, 1997.

But because it failed to submit the agreement to the Interior Department, "the tribe's compact was never in effect," the audit said.

The GAO discovered the problem as part of a broader review of gaming regulations in Washington, Arizona, Michigan, Nevada and New Jersey. It brought the oversight to the attention of the commission and the Interior Department in October.

"Neither was aware that the tribe's casino was operating without a compact in effect," said Barry T. Hill, the GAO's associate director for energy, resources and science issues.

"No matter what the primary cause of this particular violation may have been, the federal government's controls were inadequate. They did not identify the omission and may not be adequate to identify other violations," the audit said.

A spokeswoman for the tribe said today no one was immediately available to comment.

The GAO, the investigative arm of Congress, recommended the commission take steps to determine if similar violations are occurring elsewhere and to strengthen controls to ensure compliance with the compact requirements and other mandates in the 1988 Indian Gaming Regulatory Act.

Commission officials were in the process today of preparing a response to the GAO report, agency spokeswoman Charlotte Hrncir.

Even before the audit was completed, the commission had begun reviewing filings for all tribal casinos "to determine if the situation described in the report is an isolated incident or not," she said.

The GAO said the commission has the authority to cite the tribe or even temporarily close the casino because of the oversight.

But such action appeared unlikely, especially because the tribe and state had negotiated a compact. Congressional auditors said the commission's enforcement officials told them they considered the problem a "technical oversight by the tribe."

Hill said today he agreed that it was "a technical violation ... a minor problem in terms of the process.

"If the tribe had not cooperated, they could have gone in and closed them down. But all indications are the tribe is cooperating and they are going to get this thing fixed," he said.

At the beginning of 1997, 184 tribes were operating 281 gaming facilities in the United States, the GAO said in an earlier audit.