McCain: More regulations needed for tribal casinos

Erica Werner

Thursday, April 28, 2005 | 9:49 a.m.

WASHINGTON -- Sen. John McCain, chairman of the Indian Affairs Committee, said Wednesday he will seek tougher regulations for the booming tribal gambling industry, which far outpaced Nevada as it reaped $18.5 billion in revenue last year.

McCain, R-Ariz., faced opposition from tribal leaders at a hearing where he called for changes including more money for oversight and new rules to keep tribes from passing off slot machines as less-regulated bingo devices.

He said it was high time to review the federal law regulating tribal casinos, which has not been amended since its passage in 1988 helped turn Indian gambling into a huge industry with more than 400 casinos in 28 states.

"I don't want this hearing to be viewed as some attack on Indian gaming. It's not. Indian gaming is here to stay," McCain said. "The question is do we protect the patrons of Indian gaming to the fullest extent consistent with our responsibilities, and I think we have clearly identified some areas that need to be addressed."

The National Indian Gaming Commission, the federal agency that regulates the nation's 400-plus tribal casinos, had a 2004 budget of about $10.5 million and employs 78 people, according to testimony Wednesday from its chairman, Phil Hogen.

By comparison, Nevada's Gaming Control Board had a 2004 budget of $36.4 million and 439 employees to oversee about 360 casinos.

"I don't believe that the NIGC has enough funds. I don't believe it. Because I look at the comparable regulation of gaming in Nevada," McCain said. Major Nevada resorts took in $9.88 billion in gambling revenue in the 2004 fiscal year.

Tribal officials objected that the Indian Gaming Regulatory Act shouldn't be changed. They argued that in combination with state and federal oversight, the regulatory agencies that tribes themselves have in place offer more than sufficient oversight.

"We are a little bit frustrated that we continually hear how tribal gaming is insufficiently regulated," said Norman DesRosiers, chief administrator of the tribal gambling agency for the Viejas Band of Kumeyaay Indians in San Diego County. "There are enforcement mechanisms in place, and I don't think more legislation is necessarily the answer."

But McCain suggested new laws or rules clarifying the distinction between bingo machines, which don't require specific state approval as long as the state allows bingo, and slot machines, which do. Technological advances have blurred the distinction by making some bingo machines look and seemingly play like slots, several witnesses said.

McCain also criticized an exception to government ethics rules that allows federal employees to go straight from working for the Bureau of Indian Affairs to representing tribes before the federal government.

He said stricter rules were needed for non-tribal companies that sign on with tribes to help them develop and manage casinos, thereby reaping huge profits from an industry Congress intended to help Indians.