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MONDAY, JANUARY 29, 2007
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Indian tribes oppose bid to alter gaming machines

By Garry Mitchell
Associated Press Writer

ATMORE — The melodic bing-bing-bing on the electronic bingo machines at the always-open Poarch Creek entertainment center in South Alabama has kept players busy and the parking lot crowded.

Would they keep playing if the game took a little longer and required more players? Or would they head to gaming centers elsewhere, off tribal land?

These questions have poured into the National Indian Gaming Commission in response to its proposal to change such electronic games, a move that Indian tribal leaders in at least 10 states, including Alabama, fear could cause hundreds of millions of losses in annual revenues and hundreds of jobs.

“These proposed rules are unnecessary and should be significantly revised to reduce new layers of federal bureaucracy,” Chadwick Smith, principal chief of the Cherokee Nation in Oklahoma, has told the NIGC.

With advances in technology, the NIGC says the line between Class II games, such as bingo, and Class III games, such as Vegas-style slot machines, has blurred. The commission, joined by the Justice Department, has proposed new uniform standards for Class II games that are widely used in Indian gaming centers.

Tribal leaders contend the change would cause bingo games to be less entertaining, played at half the current pace by requiring a two-second delay between each ball draw and, in one example, requiring a customer to wait for five additional players instead of the current one additional player.

An additional wait doesn’t sit well with some players.

“To me, it would reduce your chances of winning,” said James Stromer, 73, of Pensacola, Fla. He lives about an hour’s drive from Atmore, and about two hours from the slots at Mississippi Gulf Coast casinos.

“Class III machines are best for me, like they have in Biloxi,” he said on a recent January afternoon.

Bryan Couch, 35, who lives on the Creek reservation in South Alabama, said he’s opposed to adding minutes to the playing time because he’s usually in a hurry.

“Sometimes I don’t have a whole lot of time. I try my luck and get on out,” he said.

NIGC spokesman Shawn Pensoneau said he did not have a date for a final ruling on the proposed change.

“This being an extremely important issue to the Indian gaming industry, the commission is carefully reviewing all of the comments, recommendations and concerns before publishing a final rule,” he said.

Pensoneau said some tribes may agree that a distinction between Class II and Class III games would be beneficial to the industry. “Exactly how the distinction is determined is where the differences arise,” he said.

Nationwide, the new-rule scenario could reduce gaming revenue by $142.7 million, with an additional loss of $9.6 million in non-gaming revenue, according to an independent analysis of the proposal for the NGIC by Alan Meister of the Los Angeles-based Analysis Group Inc. The analysis also says about 458 tribal member jobs would be lost.

No Class III games

In Alabama and other states without tribal-state compacts, Class III games are not allowed. Tribal leaders say the changes to Class II games will drive away players, leaving tribes with little recourse but to consider whether to continue operations.

Poarch Creek Chairman Buford L. Rolin of Atmore has asked the commission to withdraw the proposed rule changes and would like to avoid any litigation over the issue.

Rolin estimates the Poarch Creeks, Alabama’s only federally recognized tribe, would have lost more than $65 million last year in net income out of its $108.3 million in revenue if the rule change had been in place.

Because of the regulatory uncertainty, he said, the tribe also may be forced to shelve its $500 million expansion plans for two of its existing gaming centers in Alabama. The tribe has 2,100 machines at three locations.

“These numbers may appear dramatic, but when the proximity of competition is considered they may be conservative,” Rolin said in a letter last year to NIGC Chairman Philip N. Hogen in Washington, D.C. “In short, the viability of our gaming enterprises is at stake.”

The NIGC has been trying to determine which games fall under tribal-state compacts and which do not. Rolin says if the Creeks’ machines fall into the Class III category under the proposed standards, the tribe will seek to continue using them for three years under an exception to the NIGC rule.

In 2004, the NIGC identified certain Poarch Creek games as “questionable.” Rolin said the tribe removed 76 games and modified about 600 others to satisfy the NIGC’s concerns. That action resulted in a 34 percent decrease in revenue and a 56 percent decrease in net income, Rolin said.

“There is no game in existence in the Class II gaming industry that would be able to stand up to the proposed standards,” said Smith, the Cherokee chief in Oklahoma, in a letter last November to the NIGC.

Under the proposed changes, he said his tribe would be forced to shut down all of its 2,165 Class II games.

Dexter W. Lehtinen of Miami, an attorney for the Miccosukee Tribe in Florida, said the proposed regulations will prohibit the growth of Class II gaming and “micromanages tribal business judgment and regulatory responsibilities.” He said the proposals also would eliminate virtually all games that Congress intended to allow as “similar to bingo.”

Kickapoo Chairman Juan Garza of Eagle Pass, Texas, said Congress passed the Indian Gaming Regulatory Act, in part, to boost tribal economic development.

“Class II gaming has done just that,” Garza said in his written comments on the proposed changes. Like Alabama, Texas has no gaming compact with the tribe, which rules out Vegas-style casinos. Because of that, he said, the tribe is wary of any proposals that may undermine the games it operates.

Hogen met Friday in Crystal City, Va., with an advisory panel making recommendations on the machine standards. In a statement, Hogen said the panel had offered a “fresh approach” that focuses on the game system, not just the “player boxes” that has the potential of addressing many of the NIGC’s concerns about the Class II machines.

The public comment period on the NIGC’s proposals ends Wednesday.

The analysis by Alan Meister’s group found that tribes with a viable alternative to Class II machines, such as Vegas-style slot, would not be likely to suffer losses in gaming revenue. These tribes include all of those with Class II machines in Arizona, Florida, Oklahoma, Oregon, and Wyoming, and most tribes with Class II machines in California.

Tribes without a viable alternative to Class II machines would have to adopt lower revenue-generating machines that comply with the proposed changes. These tribes include all of those with Class II machines in Alabama, Alaska, Minnesota, Montana, Nebraska, New York, Texas, South Dakota, Washington and Wisconsin, and the one tribe with Class II-only facility in California.

Veteran players interviewed at the Creeks’ Atmore gaming center on Jan. 19 were unaware of the NIGC debate and couldn’t quite grasp how it may affect their bingo.

“I just make sure how much money I’m playing,” said O. H. Rivers, of Pace, Fla. “Longer you stay on the machine, the happier you are.

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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