Proposed Rule2022-25741
Class III Tribal State Gaming Compacts
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 6, 2022
Issuing agencies
Interior DepartmentIndian Affairs Bureau
Abstract
The Bureau of Indian Affairs (BIA) seeks input on changes to its regulations governing the review and approval of Tribal-State gaming compacts. The revisions would add factors and clarify how the Department reviews "Class III Tribal-State Gaming Compacts" (Tribal- State gaming compacts or compacts).
Full Text
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<title>Federal Register, Volume 87 Issue 233 (Tuesday, December 6, 2022)</title>
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[Federal Register Volume 87, Number 233 (Tuesday, December 6, 2022)]
[Proposed Rules]
[Pages 74916-74947]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-25741]
[[Page 74915]]
Vol. 87
Tuesday,
No. 233
December 6, 2022
Part IV
Department of the Interior
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Bureau of Indian Affairs
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25 CFR Part 293
Class III Tribal State Gaming Compacts; Proposed Rule
Federal Register / Vol. 87, No. 233 / Tuesday, December 6, 2022 /
Proposed Rules
[[Page 74916]]
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DEPARTMENT OF THE INTERIOR
Bureau of Indian Affairs
25 CFR Part 293
[2231A2100DD/AAKC001030/A0A501010.999900]
RIN 1076-AF68
Class III Tribal State Gaming Compacts
AGENCY: Bureau of Indian Affairs, Interior.
ACTION: Proposed rule.
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SUMMARY: The Bureau of Indian Affairs (BIA) seeks input on changes to
its regulations governing the review and approval of Tribal-State
gaming compacts. The revisions would add factors and clarify how the
Department reviews ``Class III Tribal-State Gaming Compacts'' (Tribal-
State gaming compacts or compacts).
DATES: Interested persons are invited to submit comments on or before
March 1, 2023.
ADDRESSES: You may submit comments by any one of the following methods.
<bullet> Federal eRulemaking Portal: Please upload comments to
<a href="http://www.regulations.gov">http://www.regulations.gov</a> by using the ``search'' field to find the
rulemaking and then following the instructions for submitting comments.
<bullet> Email: Please send comments to <a href="/cdn-cgi/l/email-protection#24474b4a5751485045504d4b4a64464d450a434b52"><span class="__cf_email__" data-cfemail="e5868a8b9690899184918c8a8ba5878c84cb828a93">[email protected]</span></a> and
include ``RIN 1076-AF68, 25 CFR part 293'' in the subject line of your
email.
<bullet> Mail: Please mail comments to Indian Affairs, RACA, 1001
Indian School Road NW, Suite 229, Albuquerque, NM 87104.
FOR FURTHER INFORMATION CONTACT: Oliver Whaley, Director, Office of
Regulatory Affairs and Collaborative Action (RACA), Office of the
Assistant Secretary--Indian Affairs; Department of the Interior,
telephone (202) 738-6065, <a href="/cdn-cgi/l/email-protection#ecbeadafadac8e858dc28b839a"><span class="__cf_email__" data-cfemail="cf9d8e8c8e8fada6aee1a8a0b9">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: This proposed rule is published in exercise
of authority delegated by the Secretary of the Interior to the
Assistant Secretary--Indian Affairs (Assistant Secretary; AS-IA) by 209
DM 8.
Table of Contents
I. Statutory Authority
II. Executive Summary
III. Background
IV. Summary of Comments Received
A. General Comments
B. Section Comments
V. Summary of Changes by Section
A. Proposed Subpart A--General Provisions and Scope
B. Proposed Subpart B--Submission of Tribal-State Gaming
Compacts
C. Proposed Subpart C--Secretarial Review of Tribal-State Gaming
Compacts
D. Proposed Subpart D--Scope of Tribal-State Gaming Compacts
VI. Procedural Requirements
A. Regulatory Planning and Review (E.O. 12866)
B. Regulatory Flexibility Act
C. Congressional Review Act (CRA)
D. Unfunded Mandates Reform Act of 1995
E. Takings (E.O. 12630)
F. Federalism (E.O. 13132)
G. Civil Justice Reform (E.O. 12988)
H. Consultation With Indian Tribes (E.O. 13175)
I. Paperwork Reduction Act
J. National Environmental Policy Act (NEPA)
K. Effects on the Energy Supply (E.O. 13211)
L. Clarity of This Regulation
M. Public Availability of Comments
I. Statutory Authority
In enacting IGRA, Congress delegated authority to the Secretary to
review compacts to ensure that they comply with IGRA, other provisions
of Federal law that do not relate to jurisdiction over gaming on Indian
lands, and the trust obligations of the United States. 25 U.S.C.
2710(d)(8)(B)(i)-(iii).
II. Executive Summary
The Department of the Interior (Department) is considering
revisions to its regulations governing the review and approval of
Tribal-State gaming compacts (25 CFR part 293). The revisions would add
factors and clarify how the Department reviews ``Class III Tribal-State
Gaming Compacts'' (Tribal-State gaming compacts or compacts).
The Department's current regulations do not identify the factors
the Department considers; rather, those factors are contained in a
series of decision letters issued by the Department dating back to
1988. Evolution in the gaming industry and ongoing litigation highlight
the need for the Department to clarify how it will analyze Tribal-State
gaming compacts to determine whether they comply with the Indian Gaming
Regulatory Act of 1988 (IGRA), 25 U.S.C. 2701, et. seq., other
provisions of Federal law that does not relate to jurisdiction over
gaming on Indian lands, or the trust obligations of the United States
to Indians.
III. Background
In 1988 the Indian Gaming Regulatory Act acknowledged that many
Tribes were already engaged in gaming, and placed limits on Tribes'
sovereign right to conduct gaming. It sought to ensure that Indian
Tribes are the primary beneficiaries of the gaming operation, but also
authorized State governments to play a limited role in the regulation
of class III Indian gaming by negotiating agreements with Tribes called
``Class III Tribal-State Gaming Compacts'' (class III gaming compacts
or compacts). Congress sought to strike a balance between Tribal
sovereignty and States' interests in regulating gaming and ``shield it
from organized crime and other corrupting influences.'' 25 U.S.C.
2702(2).
At the time of IGRA's enactment, Indian gaming represented an
approximately $121 million segment of the total United States gaming
industry, while Nevada casinos reported approximately $4.1 billion in
gross gaming revenue.\1\ By the end of fiscal year 2021, Indian gaming
represented an approximately $39 billion segment of the total United
States gaming industry, with commercial gaming reporting $53
billion.\2\ In the Casino City's Indian Gaming Industry Report 2018
Edition, Allen Meister, Ph.D. of Meister Economic Consulting, estimated
that Indian Gaming gross gaming revenue for 2016 of approximately $31.5
billion represented a total economic contribution of $105.4 billion
across the U.S. economy.
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\1\ See, e.g., ``The Economic Impact of Tribal Gaming: A State-
By-State Analysis,'' by Meister Economic Consulting and American
Gaming Association dated November 8, 2018.
\2\ See, e.g., ``The Nation Indian Gaming Commission's annual
gross gaming revenue report for 2021;'' see also American Gaming
Association's press release ``2021 Commercial Gaming Revenue
Shatters Industry Records, reaches $53B.''
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In line with the growth in Indian gaming, State licensed commercial
gaming and State lotteries have also experienced growth. In the early
1980's when Congress began considering legislation addressing Indian
gaming, two States had legalized commercial casino gaming and seventeen
had State run lotteries. By 2017, twenty-four States had legalized
commercial casino gaming resulting in approximately 460 commercial
casino locations, excluding locations with State licensed video lottery
terminals, animal racetracks without gaming machines, and card rooms.
In 2017, the gross gaming revenue for the commercial casino industry
represented approximately $40.28 billion and generated approximately
$9.2 billion in gaming tax revenue. Further, 44 States were operating
State lotteries in 2017.
The expansion of State lotteries and State licensed commercial
gaming can place Tribes and States in direct competition for market
share. Also, advancements in gaming technology and changes in State and
Federal gaming law since the passage of IGRA
[[Page 74917]]
has shaped the compact negotiation process. As a result, class III
gaming compacts have expanded in scope and complexity as the parties
seek mutually beneficial provisions. However, IGRA did not anticipate
the compact negotiation process would be between competitors, rather
sovereign governments seeking to regulate gaming.
Through IGRA, Congress required Tribes to enter into a compact with
a State to conduct class III gaming. 25 U.S.C. 2710(d)(1)(C). IGRA
requires States to negotiate class III gaming compacts in good faith,
limits the scope of bargaining for class III gaming compacts, and
prohibits States from using the process to impose any tax, fee, charge,
or other assessment on Tribal gaming operations. 25 U.S.C.
2710(d)(3)(A); 2710(d)(3)(C); and 2710(d)(4).
Under IGRA, the Department has 45 days to complete its review and
either approve or disapprove a class III gaming compact. If the
Department takes no action within that 45-day period, the Tribal-State
gaming compact is considered approved by operation of law--to the
extent that it is consistent with IGRA. In order for a compact to take
effect, notice of its approval must be published in the Federal
Register.
The regulations that codify the Department's review process for
Tribal-State gaming compacts are found at 25 CFR part 293 and were
promulgated in 2008 (``2008 Regulations''). 73 FR 74004 (Dec. 5, 2008).
The Department's 2008 Regulations were designed to ``address[es] the
process for submission by Tribes and States and consideration by the
Secretary of Class III Tribal-State Gaming Compacts, and [are] not
intended to address substantive issues.'' 73 FR 74004-5. The
Department's consideration of substantive issues appears in a number of
decision letters. In addition, a body of case law has developed
addressing the appropriate boundaries of class III gaming compacts.
Through this rule making, the Department seeks to codify longstanding
Departmental policies and interpretation of case law in the form of
substantive regulations which would provide certainty and clarity on
how the Secretary will review certain provisions in a compact.
On March 28, 2022, the Department published a Dear Tribal Leader
Letter announcing Tribal consultation pursuant to the Department's
consultation policy and under the criteria in E.O. 13175, regarding
proposed changes to 25 CFR part 293. The Department held two listening
sessions and four formal consultation sessions. The Department also
accepted written comments until June 30, 2022.
The Dear Tribal Leader Letter included a Consultation Draft of the
proposed revisions to 25 CFR part 293 (hereinafter Consultation Draft);
a Consultation Summary Sheet of Draft Revisions to part 293; and a
redline reflecting proposed changes to the 2008 Regulations. The Dear
Tribal Leader Letter asked for comments on the Consultation Draft as
well as responses to seven consultation questions.
The Department received a number of written and verbal comments
from Tribal leaders and Tribal advocacy groups. The Department also
received written comments from non-Tribal entities which are not
addressed in the Tribal consolation comment and response but will be
included and addressed as part of the public comment record.
IV. Summary of Comments Received
A. General Comments
Several commenters commented on the process and timing of the
proposed rulemaking process. Some requested additional consultations
during the rulemaking process, some requested the Department engage in
extensive consultations equating to negotiated rulemaking, and others
encouraged the Department to proceed with the rulemaking expeditiously.
The Department acknowledges the comments. The Department seeks to
balance robust consultation with expeditious processing of the
rulemaking. The Department held four virtual consultation sessions, two
in-person listening sessions, and is providing additional opportunities
for comment on the proposed regulations, which reflect the significant
input of Tribal leaders during the scheduled consultation sessions and
their written comments.
A number of commenters responded to the Department's first
consultation question: ``[d]o the draft revisions increase certainty
and clarity in the Secretary's compact review process? Are there
additional ways to increase certainty and clarity?'' Commenters
expressed support for the proposed revisions to part 293 and noted the
Consultation Draft appeared to codify longstanding Departmental
policies and interpretation of case law in the form of substantive
regulations which would provide certainty and clarity on how the
Secretary will review certain provisions in a compact. Commenters also
provided a number of specific suggested improvements to specific
propose sections, including expressing concerns that some provisions as
written are overly broad or vague and may cause confusion. Other
commenters cautioned the Department should not apply the proposed
regulations in a rigid or paternalistic manner and when possible, defer
to a Tribe's sovereign decision making.
The Department acknowledges the comments. The Department seeks to
clarify and enforce the proper scope of compacts negotiated under IGRA
while deferring to and respecting Tribes' sovereign decision making.
The proposed regulations codify existing limitations on Tribes and
States negotiating compacts pursuant to IGRA. The Department has
addressed specific suggested improvements in the relevant sections
below including narrowing some provisions.
A number of commenters responded to the Department's second
consultation question: ``[d]o the draft revisions provide sufficient
guidance to parties engaged in compact negotiations? Are there ways to
provide additional guidance?'' Commenters expressed support for the
Consultation Draft and opined that the proposed new substantive
provisions would improve the guidance for negotiating parties.
Commenters also recommended the Department include in the proposed rule
a codification of the Department's longstanding practice of offering
``technical assistance'' to negotiating parties. Other commenters noted
``sufficient guidance'' was a laudable but ultimately unachievable
goal. One commenter expressed concern with the Consultation Draft and
argued the proposed substantive provisions are cumbersome, unnecessary,
and would result in increased requests for technical assistance as
Tribes negotiate with State and local governments as required by IGRA.
The Department acknowledges the comments. The Department addresses
technical assistance in a separate comment summary and response below.
The Department notes the proposed substantive provisions reflect a
codification of longstanding Department policy and case law, including
the proper scope of a compact. The Department notes intergovernmental
agreements between Tribes and States, or local governments can be
beneficial, however, Congress provided a narrow scope of topics Tribes
and States may include when negotiating a Tribal-State gaming compact.
Commenters requested clarification on whether the proposed
regulations would impact ongoing negotiations.
The Department notes the Consultation Draft, and the proposed
[[Page 74918]]
regulations are prospective and reflect a codification of existing
Departmental policy, past precedent, and case law. The Consultation
Draft has been made public and the Department encourages Tribes and
States that are engaged in negotiations to review the Consultation
Draft and the proposed regulations.
A number of commenters requested the Department clarify the
effective date of the proposed substantive provisions and questioned
whether they would be retroactive. Commenters requested clarification
when parties may submit under the new regulations once promulgated. One
commenter provided proposed text for a section addressing the effective
date and grandfather clause.
The Department has accepted the proposed regulatory text in part
and added a section to the proposed rule addressing the effective date
of the proposed regulations. The new section is numbered Sec. 293.30.
IGRA limits the review period to approve or disapprove compacts or
amendments to 45 days. As a result, the Department cannot retroactively
approve or disapprove compacts or amendments after the 45-day review
period has run.
A number of commenters questioned the Secretary's authority to
promulgate substantive regulations interpreting IGRA's scope of compact
negotiations. Commenters further questioned the Secretary's authority
to determine evidence of bad faith noting IGRA delegated that role to
the courts and requested clarification on how the Secretary will find
bad faith.
The Secretary has authority to promulgate these regulations on the
procedures for the submission and review of compacts and amendments
based on the statutory delegation of powers contained in IGRA and 25
U.S.C. 2, and 9. In enacting IGRA, Congress delegated authority to the
Secretary to review compacts to ensure that they comply with IGRA,
other provisions of Federal law that do not relate to jurisdiction over
gaming on Indian lands, and the trust obligations of the United States.
25 U.S.C. 2710(d)(8)(B)(i)-(iii). IGRA establishes the parameters for
topics that may be the subject of compact and amendment negotiations
and included in compacts. Thus, in reviewing submitted compacts and
amendments, the Secretary is vested the authority to determine whether
the compacts contain impermissible topics. The Department recognizes
that section 2710(d)(7)(A)(I) vests jurisdiction in district courts
over any causes of action . . . arising from the failure of a State . .
. to conduct [ ] negotiations in good faith.'' Therefore, the
Department has replaced the phrase ``evidence of bad faith'' with the
phrase ``evidence of a violation of IGRA'' in the proposed rule. This
change harmonizes the Department's regulations, with IGRA's plain
language, is prescribing those topics, as addressed by IGRA, that may
provide evidence of a violation of IGRA and which a court may find as
evidence of bad faith negotiations to assist Tribes with their
negotiations.
A number of commenters requested the Department include a
``Seminole Fix'' in the proposed rule, referencing the decision by
Supreme Court of the United States in Seminole Tribe v. Florida, 517
U.S. 44 (1996), holding Congress could not waive a State's sovereign
immunity through IGRA. Some commenters recommended the Department
provide technical amendments to 25 CFR part 291 in response to Texas v.
United States (Traditional Kickapoo Tribe), 497 F.3d 491 (5th Cir.
2007) and New Mexico v. United States (Pueblo of Pojoaque), 854 F.3d
1207 (10th Cir. 2017). Commenters stated the Fifth Circuit and the
Tenth Circuit found part 291 did not provide for an independent forum
to make the threshold finding that the subject State failed to conclude
negotiations in good faith and therefore part 291 was too far adrift
from Congressional intent to be allowed to stand. Other commenters
recommended providing a mechanism for the Department to seek
intervention by the Department of Justice when States raise their 11th
Amendment Immunity to a Tribe's challenge of bad faith negotiations
under IGRA. Commenters noted without a workable Seminole fix, Tribes
are often at the mercy of the States who are often the Tribe's gaming
competitor and seek to undermine Tribal sovereignty. Commenters noted
some Tribes are forced to either accept a State's demand for improper
provisions or revenue sharing, or risk a notice of violation and
closure for operating without a compact.
The Department notes a minority of circuits have invalidated the
Department's part 291 Regulations, which were promulgated to provide
Tribes with Secretarial Procedures in response to the Supreme Court's
decision in Seminole Tribe of Florida v. Florida, 517 U.S. 44 (1996),
which found that Congress lacked the authority to subject States to
suits by Indian Tribes under IGRA. The Department is considering all
avenues including technical amendments to part 291. The proposed part
293 regulations reflect the Department's efforts to ensure all Tribes
may benefit from the goals of IGRA while enforcing IGRA's limited scope
of compacts. The inclusion of clear guidance and codification of key
tests as well as articulating situations that may be evidence of a
violation of IGRA and therefore evidence of bad faith negotiations is a
step in this direction. The Department declines to codify a formal
process by which Tribes may submit evidence of bad faith in
negotiations to the Department for its consideration and referral to
the Department of Justice. The Department has long coordinated with the
Department of Justice and the National Indian Gaming Commission
regarding enforcement or non-enforcement of IGRA's requirement that a
Tribe conduct class III gaming pursuant to a compact or secretarial
procedures.\3\ The Department will continue to coordinate with the
Department of Justice and the National Indian Gaming Commission
regarding enforcement of IGRA.
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\3\ See, e.g., Statement of Indian Gaming in New Mexico, DOJ 95-
459 (August 28, 1995); Statement of Indian Gaming in New Mexico, DOJ
95-553 (October 27, 1995); and Justice Department and California
announce plan for orderly transition to legal Indian Gaming, DOJ 98-
102 (March 6, 1998).
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Several commenters requested the Department include additional
examples of ``bad faith'' including: take it or leave it compacts; a
State's refusal to offer substantially similar compacts to all Tribes
in the State; and a State's refusal to negotiate a compact or amendment
until an existing compact is set to expire.
The Department acknowledges these may be examples of bad faith
negotiations under IGRA. The Department has included in the proposed
rule several provisions which the Department considers to be evidence
of a violation of IGRA. The Department will continue to coordinate with
the Department of Justice and the National Indian Gaming Commission
regarding enforcement of IGRA.
Several commenters requested the Department provide notice to the
Department of Justice when a compact is disapproved and request the
Department of Justice file a bad faith lawsuit against the State on
behalf of the Tribe.
On its face, the disapproval of a compact or amendment is not
evidence of bad faith negotiations. If, however, the Tribe provides
evidence that the State forced the Tribe to include the disapproved
provision, the Department may request the Department of Justice file a
bad faith lawsuit on behalf of the Tribe in certain situations.
Several commenters requested the Department publish all compact
decision letters as well as deemed approval letters in an accessible
index.
[[Page 74919]]
The Department acknowledges the comments. The Department strives to
publish all compact decision letters as well as deemed approval letters
on the Office of Indian Gaming's website, which includes an accessible
index.
A number of commenters requested the Department include in the
proposed rule a formal codification of the Office of Indian Gaming's
practice of providing technical assistance to Tribes and States. Some
commenters requested a fixed timeline for the Department to issue a
technical assistance letter. Other commenters requested the Department
include the option for a `legal opinion' or formal Departmental action
in response to some requests for technical assistance.
The Department declines to accept the recommendation. Technical
assistance is neither a `pre-determination' nor `legal guidance,'
rather it is often an explanation of past precedent and interpretation
of case law. The Department notes Tribes and States have presented a
wide range of unique questions to the Office of Indian Gaming, which
may require extensive policy and legal research. Further, depending on
the parties' needs and the scope of their requests, some may prefer
verbal technical assistance over written technical assistance. The
Department will continue to provide technical assistance.
Several commenters discussed their experiences negotiating compacts
with States or seeking to enforce disputes under their compacts. Other
commenters discussed the importance of Indian gaming to their Tribes as
a source of revenue, job growth, and economic self-sufficiency.
The Department acknowledges these comments.
Several commenters discussed legal articles, including work by
former Assistant Secretary--Indian Affairs Kevin Washburn.
The Department acknowledges these comments.
Several commenters recommended the Department quote IGRA's
statutory language rather than paraphrase the statute as that can
result in unintended changes. A commenter recommended the Department
narrowly tailor the proposed substantive provisions. Other commenters
also noted a primary concern is the definition of gaming activity in
Sec. 293.2(d) and used in Sec. 293.23 of the Consultation Draft,
Sec. 293.24 of the proposed draft regulations.
The Department adhered closely to the statutory text in the
Consultation Draft and the proposed substantive provisions codify
longstanding Departmental policy and case law. The Department notes the
term ``gaming activity'' is not defined in IGRA. As discussed below,
the Department has revised the definition of ``gaming activity'' in
Sec. 293.2, as well as addressed it in Sec. 293.24.
Consultation Question: Should the draft revisions include provisions
that facilitate Statewide remote wagering or internet gaming?
A number of commenters responded to the Department's sixth
consultation question: ``[s]hould the draft revisions include
provisions that facilitate Statewide remote wagering or internet
gaming?'' The overwhelming majority of commenters agreed that the
Department should include provisions relating to i-gaming. Several
commenters believe that i-gaming provisions are necessary because
Tribes need to be able to compete in the digital industry. Other
commenters pointed out that the draft revisions should address i-gaming
and provide for its allowance as negotiated between a Tribe and State.
Another commenter explained that IGRA encourages agreements between
sovereigns.
Several other commenters stated that the State law model of i-
gaming is not a substitute for i-gaming under IGRA and Tribes should be
able to engage in internet gaming under IGRA. A handful of comments
also expressed support for the Department's inclusion but questioned
the need to define gaming activity as including the elements of prize,
consideration, and chance, as it could potentially be misconstrued in a
court ruling that requires all three elements to be present on Indian
lands.
Finally, several of the commenters in support of inclusion of i-
gaming also praised the Department's i-gaming analysis in the June 21,
2021, Deemed Approved letter to the Seminole Nation. At least three
commenters also submitted proposed language for the Department to
address i-gaming.
A handful of commenters opposed the Department addressing i-gaming
in the draft revisions. One commenter stated that the issue was not
ripe for inclusion; another stated that i-gaming was subject to State
law and there's no case law to state that the Secretary has power over
this topic; another thought that the issue is an unresolved matter of
Federal law and the Department should not weigh in; and another
believed there is a lack of ability to regulate i-gaming and would harm
brick and mortar facilities.
Two commenters did not expressly support or oppose the inclusion of
i-gaming; one noted that the Department should further consult with
Tribes before making any decisions and the other noted that while the
Department's views on the legality of such a provision would be
helpful, it is unclear what further provisions would be proposed. Other
commenters shared personal experiences and/or legal analysis which
helped inform their decision-making.
The Department acknowledges the comments and has added a new
section to the proposed rule ``Sec. 293.29 May a compact of amendment
include provisions addressing Statewide remote wagering or internet
gaming,'' addressing Statewide remote wagering and internet gaming. The
IGRA provides that a Tribe and State may negotiate for ``the
application of the criminal and civil laws and regulations of the
Indian Tribe or the State that are directly related to, and necessary
for, the licensing and regulation of such activity'' and ``the
allocation of criminal and civil jurisdiction between the State and the
Indian Tribe necessary for the enforcement of such laws and
regulations.'' 25 U.S.C. 2710(d)(3)(c)(i)-(ii). The Department's
position is that the negotiation between a Tribe and State over
Statewide remote wagering or i-gaming falls under these broad
categories of criminal and civil jurisdiction. Accordingly, provided
that a player is not physically located on another Tribe's Indian
lands, a Tribe should have the opportunity to engage in this type of
gaming pursuant to a Tribal-State gaming compact.
B. Section Comments
Comments on Sec. 293.1 What is the purpose of this part?
Several commenters recommended the Department revise Sec. 293.1(a)
by including the word ``or'' after the word ``and'' so that the
relevant provision would read ``[p]rocedures that Indian Tribes and/or
States must use when submitting . . . .'' The commenters suggested
change would clarify either party may submit compacts or compact
amendments.
The Department has accepted this suggested revision and notes that
Sec. 293.6 explains either the Tribe or the State may submit the
compact or amendment.
Several commenters supported the proposed revisions to Sec. 293.1.
The Department acknowledges the comment.
Comments on Sec. 293.2 How are key terms defined in this part?
Several commenters recommended the Department retain the 2008
Regulation's introductory text for Sec. 293.2 ``[f]or purposes of this
part, all
[[Page 74920]]
terms have the same meaning as set forth in the definitional section of
the Indian Gaming Regulatory Act of 1988, 25 U.S.C. 2703 and any
amendments thereto.''
The Department declines to accept the recommendation to retain the
2008 Regulation's introductory text for Sec. 293.2. The Department
proposed changes to the introductory text in Sec. 293.2 to improve
clarity.
One commenter recommended the phrasing ``[i]n addition to terms
already defined in IGRA, this part defines the following additional key
terms.''
The Department declines to accept the recommendation. One term
``Indian Tribe'' is defined in IGRA at 25 U.S.C. 2703(5) and refined
here as ``Tribe.'' The proposed language indicates the defined terms in
Sec. 293.2 are all new or additional terms, which could cause
confusion.
Several commenters expressed support for the proposed revisions to
Sec. 293.2 and noted the new definitions for key terms are consistent
with IGRA.
The Department acknowledges the comments.
Comments on Sec. 293.2(a)--Amendment
Several commenters suggested the definition of Amendment in Sec.
293.2(a) and as applied in Sec. 293.4 is too broad. Other commenters
suggested the Department clarify the definition of Amendment to exclude
strictly administrative or procedural amendments from review under
Sec. 293.4.
The Department has revised Sec. 293.4 to address these and related
comments on that section.
One commenter requested the Department revise the definition of
Amendment to include ``or an amendment to secretarial procedures
prescribed under 25 U.S.C. 2710(d)(7)(B)(vii) when such amendment is
agreed upon by the Indian Tribe and State.'' The commenter explained
this addition would clarify that any such agreements are treated as a
``compact'' or ``compact amendment'' for the purposes of IGRA's 45-day
review period.
The Department has accepted the recommendation and include the
proposed text in Sec. 293.2(a).
Comments on Sec. 293.2(c)--Extension
Several commenters expressed support for the revised definition of
Extension in Sec. 293.2(c).
The Department acknowledges the comments.
One commenter recommended the Department remove the words ``or
amendment'' from the definition of Extension and noted that Sec. 293.5
does not include the words ``or amendment.''
The Department notes the terms ``Compact'' and ``Amendment'' are
frequently used interchangeably depending on the underlying facts and
needs of the parties to the agreement. For that reason, the Department
used the phrase ``compact or amendment'' throughout the Consultation
Draft of part 293. The Department has made a conforming edit to Sec.
293.5.
Comments on Sec. 293.2(d)--Gaming Activity
Several commenters recommended the Department revise the definition
of ``gaming activity or gaming activities'' in Sec. 293.2(d) by
replacing the word ``prize'' with the word ``reward.'' The commenters
explained the term `reward' is the more commonly used term in the
Tribal gaming industry.
The Department accepted the recommended revision to Sec. 293.2(e),
in part. The definition of gaming activity or gaming activities now
reads ``[g]aming activity or gaming activities means the conduct of
class III gaming involving the three required elements of change,
consideration, and prize or reward.''
Several commenters expressed concern that including a definition of
Gaming Activity in part 293 could be construed to require all elements
of the gaming activity to occur on a Tribe's Indian lands thereby
precluding Tribes from negotiating Statewide mobile or i-gaming in
compacts.
The Department acknowledges this concern and has included a new
proposed Sec. 292.29 which addresses i-gaming in compacts.
Comments on Sec. 293.2(e)--Gaming Facility
One commenter recommended the Department include a defined term for
``gaming spaces'' consistent with the rational in the Department's 2021
disapprovals of three California compacts. The commenter explained that
including ``gaming spaces'' defined term would resolve a logical
conflict between the Department's definition of gaming facility and 25
U.S.C. 2710(d)(3)(C)(vi), which permits a compact to include
``standards for the . . . maintenance of the gaming facility, including
licensing.'' The commenter explained that by defining gaming facility
as the whole structure for the purposes of building maintenance under
the second clause of 25 U.S.C. 2710(d)(3)(C)(vi); and gaming spaces for
section 2710(d)(3)(C)(i), (ii), the first clause of (vi), and (vii),
would provide parties with clarity regarding the appropriate limits of
State oversite under IGRA.
The Department accepted the recommendation and has included gaming
spaces as a defined term and revised the definition of gaming facility
by moving the clause addressing the gaming spaces to the new paragraph
(f) gaming spaces. The revised definition of gaming facility addresses
the commenter's concern regarding building maintenance and licensing
under the second clause of 25 U.S.C. 2710(d)(3)(C)(vi).
A number of commenters addressed the clause addressing the gaming
spaces in the proposed definition of gaming facility in Sec. 293.2(e).
Several commenters recommended the Department replace the phrase
``the spaces that are necessary for conduct of gaming'' with the phrase
``the spaces that are directly related to, and necessary for, the
operation of class III gaming activities.'' Commenters explained that
phrasing is more consistent with how the Department has described the
appropriate reach of the term ``gaming facility'' in a compact.
Several commenters recommended the Department replace the phrase
``including the casino floor'' with the phrase ``such as the casino
floor.'' Commenters explained this change would permit the parties to
determine which areas should be properly included and which areas
should properly be excluded.
Several commenters recommended the Department revise the phrase
``class III gaming device, and storage areas'' by adding the word
``and'' before the phrase and deleting the comma after the word
``device'' so that the phrase would read ``and class III gaming devices
and supplies storage areas.'' Another commenter recommended adding the
work ``gaming'' before the word ``supplies'' to read ``gaming supplies
storage areas.''
Several commenters recommended adding the phrase ``and other
secured areas'' at the end of the definition.
Several commenters recommended clarifying that the definition of
gaming facility excludes areas that merely provide amenities to gaming
patrons--hotels, restaurants, and other spaces that are not directly
used for the conduct of class III gaming.
The Department has accepted the recommended revisions to the clause
addressing the gaming spaces in the definition of gaming facility in
part. The new definition of gaming spaces incorporates the suggested
revisions and continues to seek the smallest physical footprint of
potential State jurisdiction over a Tribe's land under IGRA. This
[[Page 74921]]
definition is intended to codify the Department's long-standing narrow
read of 25 U.S.C. 2710(d)(3)(C) as applying only to the spaces in which
the operation of class III gaming actually takes place. The revised
definition of gaming facility addresses building maintenance and
licensing under the second clause of 25 U.S.C. 2710(d)(3)(C)(vi) and is
intended to be narrowly applied to only the building or structure where
the gaming activity occurs.\4\
---------------------------------------------------------------------------
\4\ See, e.g., Letter to the Honorable Peter S. Yucupicio,
Chairman, Pascua Yaqui Tribe of Arizona, from the Director, Office
of Indian Gaming, dated June 15, 2012, at 5, and fn. 9, discussing
the American Recovery & Reinvestment Act of 2009 and the IRS's
``safe harbor'' language to reassure potential buyers that tribally-
issued bonds would be considered tax exempt by the IRS because the
bonds did not finance a casino or other gaming establishment.
---------------------------------------------------------------------------
One commenter recommended the Department include the term
``structure'' to reflect the diversity of structures Tribes utilize for
the conduct of Gaming.
The Department has accepted the recommended revision to the
definition of gaming facility. The definition of gaming facility in
Sec. 293.2(e) now reads ``the physical building or structure, where
the gaming activity occurs.
Several commenters recommended the Department include a definition
for the term ``project'' in Sec. 293.2, as part of the definition of
the term ``gaming facility'' in Sec. 293.2(e). The commenters
explained that some States have used the term ``project'' or ``gaming
project'' in conjunction with ``gaming facility'' to extend State
oversight and taxation through triggering extensive environmental
reviews and impact or mitigation payments when a Tribe seeks to develop
or expand a ``gaming facility.''
The Department declines to include a definition for the term
``project.'' Proposed revisions to part 293, including the definitions
of gaming facility and gaming spaces, and proposed substantive
provisions in Sec. Sec. 293.24, 293.25, and 293.28 build on the
Department's narrow read of the permissible scope of a Tribal State
compacts, and is consistent with the Department's disapproval of
compacts from the State of California in part due to expansive
definitions of ``gaming facility'' and ``project.''
Comments on the Term Necessary for
Several commenters recommended the Department define or otherwise
articulate a standard for interpreting the term ``necessary for'' as it
is used in 25 U.S.C. 2710(d)(3)(C) and 25 CFR part 293. The commenters
further recommended the Department defer to a Tribe's reasonable
determination of which provisions in a compact are ``necessary for the
operation of class III gaming.''
The Department notes there is not a strict definition for
``necessary,'' therefore, we must look to the context in which it is
used in the statute. As used in IGRA, ``necessary'' is a limiting
phrase, or one that employs the common law use of ``necessary'' in the
strict sense of indispensable or essential.\5\ When applying provisions
which incorporate ``necessary for'' in IGRA and in part 293 the
Department will ask ``is this provision absolutely needed for the Tribe
to operate class III gaming?''
---------------------------------------------------------------------------
\5\ ``Like ordinary English speakers, the common law uses
`necessary' in this strict sense of essential or indispensable.''
Vorchheimer v. Philadelphian Owners Ass'n, 903 F.3d 100, 106 (3d
Cir. 2018) (discussing Congress' use of ``necessary'' in legislation
where no definition provided). ``[W]hen Congress wants to loosen
necessity to mean just `sufficiently important,' it uses the phrase
`reasonably necessary.' '' Id. at 107; see Ayestas v. Davis, __ U.S.
__, 138 S. Ct. 1080, 1093 (2018) (``[18 U.S.C. 3599] appears to use
the term `necessary' to mean something less than essential. The
provision applies to services that are `reasonably necessary,' but
it makes little sense to refer to something as being `reasonably
essential.' '').
---------------------------------------------------------------------------
Comments on Sec. 293.3 What authority does the Secretary have to
approve or disapprove compacts and amendments?
Several commenters supported the proposed revisions to Sec. 293.3,
but questioned if the internal cross-reference to Sec. 293.14 is
accurate.
The Department acknowledges the comments. The internal cross-
reference to Sec. 293.14 appears in the current Sec. 293.3 and the
redline reflects a strikeout of ``293.14'' with the updated cite to
Sec. 293.15.
Several commenters recommend that Sec. 293.3 cite the statutory
authority of the Secretary to approve or disprove a compact or
amendment. Commenters noted other sections in part 293 address the
baseline requirements of compact execution and submissions.
The Department has revised Sec. 293.3 to remove references to the
signatures of the parties.
One commenter recommended the Department revise Sec. 293.3 by
adding the phrase: ``and an amendment resulting from another agreement,
including, but not limited to, agreements, other documents, dispute
resolutions, settlement agreements, or arbitration decisions.''
The Department declines to include the proposed language in Sec.
293.3. The Department notes revisions to Sec. Sec. 293.4, 293.7, and
293.21, address amendments caused by dispute resolution agreement,
arbitration award, settlement agreement, or other resolution of a
dispute outside of Federal court.
Several commenters recommended the Department revise Sec. 293.3 by
adding the phrase: ``and applicable approvals of both parties.''
The Department declines to include the proposed language in Sec.
293.3. The Department notes revisions to Sec. Sec. 293.7 and 293.8
address the execution and approval requirements for a compact or
amendment.
Comments on Sec. 293.4 Are compacts and amendments subject to review
and approval?
Several commenters recommended the Department revise Sec. 293.4 by
moving the references to ``agreements or other documents'' from
paragraph (a) to paragraph (b) and removing references to the State
including its political subdivisions from paragraph (b). Commenters
noted these changes would allow a Tribe to determine which documents
are not `amendments.'
The Department accepted the proposed revisions in part. The
Department notes that proposed Sec. 293.21 addresses compact
amendments arising from dispute resolution procedures and proposed
Sec. 293.27 addresses intergovernmental agreements or memoranda of
understanding between the Tribe and the State or its political
subdivisions. The Department notes the Sec. 293.4 determination
process is open to either party consistent with the submission
procedures in Subpart B.
Several commenters recommended the Department split Sec. 293.4(b)
into a new section addressing ancillary agreements. The commenters
noted this proposed section would strike a balance between documents
that amend a compact and are properly subject to Secretarial review and
documents or agreements between Tribal regulators and State regulators
addressing technical implementation of compact terms. The proposed new
section would be titled ``[w]hen are ancillary agreements and documents
subject to review and approval?'' The proposed new section would
include three new paragraphs and contain revisions to the text of Sec.
293.4(b).
The Department accepted the proposed revisions in part and
incorporated the proposed ancillary agreement test in Sec. 293.4(b).
Several commenters requested the Department codify a streamlined
approach for review and approval of technical amendments.
The Department declines to provide a separate ``streamlined''
procedure for
[[Page 74922]]
technical amendments. IGRA provides the Secretary with a 45-day review
period, which also applies to technical amendments.
Comments on Sec. 293.4(a)
Several commenters questioned if the Secretary's authority under
IGRA extended to `non-compact' agreements between Tribes and States or
local governments. Commenters noted that Tribes often find agreements
with local governments addressing a myriad of topics--including
payments in leu of taxes, service agreements, and mutual aid
agreements--are mutually beneficial and in the Tribe's best interest.
Commenters further questioned the Department's inclusion of ``[a]ny
agreement which includes provisions for the payment from a Tribe's
gaming revenue . . .'' in Sec. 293.27 as requiring review and
determination under Sec. 293.4(c), if such agreements are a
``compact'' or ``amendment.''
The Department declines to accept the comments. The Department
notes some States have included a requirement in compacts for the Tribe
to enter into agreements with local governments often addressing
payments by the Tribe for the loss of tax revenue. Some of these
agreements are designed to avoid Secretarial review and impose
impermissible taxes or other assessments on the Tribes. IGRA at 25
U.S.C. 2710(b)(2)(B) permits a Tribe to utilize net gaming revenue to
fund the Tribe's government, provide for general welfare of the Tribe
and its members, promote Tribal economic development, to donate to
charitable organizations, and help fund operations of local
governments. However, IGRA then at 25 U.S.C. 2710(d)(4) prohibits a
State and its political subdivisions from imposing any ``tax, fee,
charge, or other assessment'' on the Tribe for engaging in class III
gaming. The proposed Sec. 293.4(c) process is designed to ensure these
agreements receive proper scrutiny and are not the result of a State
improperly demanding--through its political subdivisions--a tax, fee,
charge, or other assessment.
Several commenters requested the Department narrow the scope of
Sec. 293.4. The commenters explained that many compacts anticipate the
utilization of ancillary agreements between the Tribe and the State to
interpret specific compact terms for the purpose of effective operation
and regulation of the day-to-day minutiae of operating class III
gaming. Commenters noted that the consultation draft of Sec. 293.4
could be construed to capture internal controls, memorandum of
understanding between Tribal and State regulatory and licensing bodies,
and other documents utilized by the parties to effectively and
efficiently ensure the Tribe's class III gaming operation is in
compliance with the compact and with IGRA.
The Department has revised Sec. 293.4 to clarify which documents
the Department considers within the definition of ``amendment'' subject
to Secretarial review.
Other commenters noted some compacts include mechanisms for the
Tribe and the State to add games pursuant to changes in State or
Federal law without amending the Compact and noted that the
consultation draft of Sec. 293.4 could be construed to capture the
Tribe and the State's documentation of games added pursuant to changes
in State or Federal law.
The Department has revised Sec. 293.4 to clarify which documents
the Department considers within the definition of ``amendment'' subject
to Secretarial review.
Several commenters requested the Department revise Sec. 293.4(a)
for consistency with Sec. 293.21 by exempting Federal court decisions
from Secretarial review as an `amendment.'
The Department has revised Sec. 293.4 for consistency with Sec.
293.21 to clarify which documents the Department considers within the
definition of ``amendment'' subject to Secretarial review.
Several commenters raised concerns that the Department's inclusion
of ``dispute resolution, settlement agreements, or arbitration
decisions'' within Sec. 293.4's list of documents subject to
Secretarial review may discourage parties from utilizing potentially
cost-effective dispute resolution methods and would increase burdens on
the parties. The commenters argued the expansion of Secretarial review
to include dispute resolution, settlement agreements, or arbitration
decisions may increase uncertainty. Commenters also recommended the
Department defer to a Tribe's determination if a document warrants
Departmental review.
The Department has revised Sec. 293.4 for consistency with Sec.
293.21 to clarify which documents the Department considers within the
definition of ``amendment'' subject to Secretarial review.
Other commenters expressed support for the Department's inclusion
of ``dispute resolution, settlement agreements, or arbitration
decisions'' within Sec. 293.4's list of documents subject to
Secretarial review and noted examples of settlement agreements and
arbitration awards which materially change the parties' obligations
under the compact in a manner that may conflict with IGRA and would
otherwise have been considered an amendment subject to Secretarial
review. Commenters noted an example where an arbitration panel decision
added a term to the compact changing the Tribe's revenue sharing
obligation beyond the compact provisions reviewed by the Secretary.
Commenters noted the Tribe determined the arbitration decision amended
the compact and sought Secretarial review but was prevented by the
State's refusal to certify the arbitration decision as an amendment.
The Department acknowledges the concerns raised by the commenters.
The Department notes the proposed changes to part 293 are intended to
address these and similar situations. The Department has revised Sec.
293.4 in response to these comments.
Several commenters requested the Department revise Sec. 293.4(a)
by removing the phrase ``regardless of whether they are substantive or
technical.''
The Department declines the requested revision and notes that
phrase is found in the 2008 Regulations at Sec. 293.4(b). When
promulgating the 2008 Regulations the Department had proposed an
exception for ``technical amendments'' but in response to comments on
the 2008 Notice of Proposed Rulemaking, removed that provision. 73 FR
74005 (Dec. 5, 2008). The Department explained many commenters
questioned how to determine if an amendment was `substantive' and
subject to Secretarial review, or `technical' and not subject to
Secretarial review.
One commenter recommended the Department clarify Sec. 293.4(a) by
moving the words ``agreements or other documents'' after the phrase
``including but not limited to'' along with conforming grammatical
edits.
The Department incorporated the suggested edit in the revised Sec.
293.4(a) and (c).
Comments on Sec. 293.4(b)--Which Has Been Renumbered as Sec. 293.4(c)
The Department has renumbered the proposed Sec. 293.4(b) as Sec.
293.4(c) and comments have been edited to reflect the new section
number.
Several commenters expressed support for the Department's proposed
process in Sec. 293.4(c) to provide parties a determination if an
agreement is a ``compact'' or ``amendment'' and must be submitted for
review and approval by the Secretary. Commenters noted this proposed
process provides Tribes with a similar service as the National Indian
Gaming Commission's ``declination
[[Page 74923]]
letters,'' which determine if an agreement is a ``Management Contract''
requiring approval by the NIGC Chair.
The Department acknowledges the comments.
Several commenters requested the Department amend Sec. 293.4(c) by
including a deadline for the Department to review the submitted
document and to issue a determination letter.
The Department has added a 60-day review period for a determination
under Sec. 293.4.
Other commenters requested the Department clarify if a non-party
may submit a request for a Sec. 293.4(c) determination.
The Department notes the existing 2008 Regulations at Sec. 293.6
address the processes by which the parties to a Compact may submit it
for Secretarial review. In relevant part, Sec. 293.6 states ``either
party [ ] to the compact or amendment can submit.'' The Consultation
Draft of Sec. 293.4(c) utilized similar language and stated, ``either
party may request in writing a determination . . . if their agreement
is a compact or amendment.'' The Department has consistently and will
continue to exclude third parties from the submission and review
process.
Several commenters requested the Department amend Sec. 293.4(c) to
clarify if the Department's determination letter or materials submitted
pursuant to this review would be used by the Department as the basis
for an adverse action against the Tribe. Commenters also requested the
Department include in a Sec. 293.4(c) determination letter a
discussion of any provisions in the underlying document which may lead
to subsequent disapproval as a compact under IGRA.
The Department intends for the Sec. 293.4(c) determination process
to provide parties with improved clarity whether their agreement or
other document is a compact or amendment, without submitting the
document for Secretarial review and approval or disapproval. The
Department historically has provided parties with technical assistance
as well as deemed approval letters which identify problematic
provisions. The Department anticipates a Sec. 293.4(c) determination
letter may include similar guidance; however, the Department declines
to revise Sec. 293.4(c) to require such guidance.
Several commenters requested the Department clarify how and where a
party may submit a request and encouraged the Department to allow
flexibility in submitting such requests.
The Department has revised Sec. 293.9 to clarify that compacts,
amendments, written requests for a determination pursuant to Sec.
293.4(c), or requests for technical assistance must be submitted to the
Office of Indian Gaming at the address listed in Sec. 293.9. The
Department further notes that Sec. 293.9 has been revised to include
the email address ``<a href="/cdn-cgi/l/email-protection#4d242329242c232a2c2024232a0d2f242c632a223b"><span class="__cf_email__" data-cfemail="9af3f4fef3fbf4fdfbf7f3f4fddaf8f3fbb4fdf5ec">[email protected]</span></a>''.
Several commenters requested the Department amend Sec. 293.4(c) to
require the Department's determination letter clearly state in the
introduction of the letter either: ``Yes. This agreement constitutes a
[compact/amendment] requiring secretarial approval'' or ``No. This
agreement does not constitute a [compact/amendment] . . . .''
The Department declines to include the requested requirement within
the regulatory text of Sec. 293.4(c). The Department is required to
utilize plain writing--in other words clear, concise, and well-
organized writing. The Department implements this requirement by
providing a brief summary of the document submitted and the
Department's determination in the introductory section of decision
letters.
Several commenters requested the Department revise the concluding
sentence of Sec. 293.4(c) to state: ``[t]he Department will issue a
letter providing notice of the Secretary's determination.'' Commenters
suggested this would reduce potential ambiguity.
The Department has accepted the requested revision to the
concluding sentence of Sec. 293.4(c).
Comments on Sec. 293.5 Are extensions to compacts or amendments
subject to review and approval?
Several commenters supported the proposed revisions to Sec. 293.5
and noted the revisions reflected the Department's longstanding
practice of treating extensions as a type of amendment which is
exempted from Secretarial approval prior to publication of a notice in
the Federal Register.
The Department acknowledges the comments.
Several commenters requested the Department clarify the
distinctions between an ``amendment'' and an ``extension'' as defined
in Sec. 293.2 and applied in Sec. Sec. 293.4 and 293.5. Commenters
noted an extension may have the effect of changing the ``operation and
regulation'' of a Tribe's Class III gaming activities.
The Department has revised Sec. 293.2(c). The 2008 Regulations
adopted the provision exempting extensions from Secretarial review in
response to a comment on the draft rule, which had proposed to exempt
``technical amendments'' but not substantive amendments or extensions.
See 73 FR 37909 (July 2, 2008) and 73 FR 74005. Extensions are a form
of amendment, which changes only the term of the compact, but not other
provisions in the compact.
One commenter suggested the Department provide a mechanism for a
Tribe to unilaterally extend an existing compact in the event the Tribe
and the State are unable to successfully negotiate an amendment or new
compact. The commenter noted such a mechanism would incentivize the
State to engage in timely good faith negotiations and protect Tribes
from risking the expiration of an existing compact due to a State's
negotiation delays.
The Department appreciates the concern raised by the commenter but
lacks the authority to provide a mechanism for unilateral compact
extensions. We will include this type of provision as a best practice
in providing technical assistance.
Several commenters questioned if the parties to an approved compact
with an automatic renewal provision or automatic extension provision
are subject to Sec. 293.5, when the provisions of the compact are
satisfied thereby extending the compact.
The Department notes compacts may have provisions allowing for
renewal or extensions of the term of the compact if certain provisions
are met. The Department does not consider the renewal or extension of
the term of the compact under the very terms of the compact as an
extension as defined in Sec. 293.2(e) and requiring publication of
notice in the Federal Register under Sec. 293.5. The Department has
revised the definition of extension to clarify extensions are new
agreements between the parties to extend the compact term rather than
the exercise of an existing provision.
Several commenters requested the Department amend Sec. 293.5 to
limit the reference to documents required under Sec. 293.8 to
paragraph (b) and (c) as required by the 2008 Regulations. Commenters
stated the requiring compliance with all of Sec. 293.8 would be a
burden on Tribes seeking an extension.
The Department has revised the reference in Sec. 293.5 to 293.8 in
response to these comments. Section 293.5 now requires the documents
listed in Sec. 293.8(a) through (c). The Department notes the
provision in Sec. 293.8(a) reflects the definition of extension in
Sec. 293.2(e).
Several commenters questioned the necessity for the Department to
publish a notice of compact extension in the Federal Register in order
for the
[[Page 74924]]
extension to be ``in effect.'' Commenters questioned if the process for
extensions may result in undue delay because the extension requires a
Federal Register document but is exempted from Secretarial review and
not subject to the statutory 45-day review period.
The Department disagrees with the comment. An extension is subject
to the 45-day statutory review period. Proposed revisions to Sec.
293.5 in the Consultation Draft included clarifying that IGRA requires
publication of a notice of extension in the Federal Register for the
extension to be in effect. The Department notes an extension is an
amendment to the duration of the compact and under the proposed
regulations continues to receive expedited processing.
Several commenters requested the Department revise Sec. 293.5 to
require publication of a notice of compact extension within 14 days of
the submission of the extension.
The Department declines to revise Sec. 293.5 to include a 14-day
deadline for publishing a notice of compact extension in the Federal
Register. The Department notes an extension is a type of amendment that
receives expedited processing. Further Sec. 293.14 addresses timing of
publication of notices in the Federal Register in compliance with IGRA.
Several commenters requested the Department revise Sec. 293.5 to
exempt restated compacts in the same manner as extensions.
The Department declines the requested revision. A restated compact
is a new restatement of existing provisions as amended in a compact,
and thus, a new compact subject to review. An extension is an amendment
that changes only the duration of the compact, and is not subject to
review. IGRA limits the Secretary's authority to review and approve or
disapprove a compact or amendment to 45 days. The Department encourages
parties to utilize restated compacts or amended and restated compacts
as a best practice to incorporate a series of amendments into a single
document. The Department finds it helpful if the Tribe or State also
submits a redlined copy of the restated compact.
Comments on Sec. 293.6 Who can submit a compact or amendment?
Several commenters sought clarification on whether Sec. 293.6, or
other provisions in part 293, exclude third party submissions.
The Department has consistently and will continue to exclude third
parties from the submission and review process. The Department's
longstanding application of Sec. 293.6 is to permit either party to
the compact or amendment to submit the required documents for
Secretarial review and approval. The Consultation draft of Sec. 293.6
contained minor stylistic edits for clarity and consistency.
Several commenters expressed support for the proposed revisions to
Sec. 293.6.
The Department acknowledges the comments.
Comments on Sec. 293.7 When should the Tribe or State submit a compact
or amendment for review and approval?
Several commenters requested the Department revise Sec. 293.7 to
more accurately reflect the legal status of the document pending
secretarial review, and in some instances, how an amendment may be
created through compact dispute resolution procedures. One commenter
requested the Department replace the phrase ``legally entered into by
the parties'' with the phrase ``duly executed by the Tribe and State in
accordance with applicable Tribal and State law.'' Another commenter
suggested adding the phrase ``or the amendment has been issued by an
arbitration panel'' to the end of Sec. 293.7.
The Department notes the Consultation Draft of Sec. 293.7 remained
unchanged from the 2008 Regulations. The phrase ``legally entered
into'' reflects the requirements of the statutory text in IGRA at 25
U.S.C. 2710(d)(8)(A), and is consistent with the requirements in Sec.
293.8, in compliance with both Tribal law and State law. The Department
has revised Sec. 293.7 by adding the phrase ``or is otherwise binding
on the parties'' to more accurately reflect how an amendment or other
ancillary agreement may be created, as described in Sec. 293.4.
One comment suggested the phrase ``legally entered into by the
parties'' in Sec. 293.7 contradicts Sec. 293.14 because the compact
does not take effect until it is published in the Federal Register.
The Department has revised Sec. 293.7 to state ``duly executed by
the Tribe and the State in accordance with applicable Tribal land State
law, or is otherwise binding on the parties.'' IGRA requires the
compact or amendment to first be entered into by the parties; second,
submitted for review by the Secretary; and third, have notice published
in the Federal Register prior to the compact or amendment being ``in
effect.'' 25 U.S.C. 2710(d)(3)(B).
Comments on Sec. 293.8 What documents must be submitted with a compact
or amendment?
Several commenters noted the documents required for submission
under Sec. 293.8 may contain confidential business information of the
Tribe and requested the Department maintain confidentiality of
sensitive business information and protect it from release under the
Freedom of Information Act.
The Department routinely receives confidential Tribal business
information in response to requests for additional information under
Sec. 293.8(d) of the 2008 Regulations. This information is protected
from public disclosure under exemption 4 of the Freedom of Information
Act. Additionally, prior to releasing any requested tribally submitted
information, the Department consults with the submitting Tribe to
confirm such information is confidential business information and can
properly be withheld. The Department recommends that as a best
practice, Tribes should notify the Department when confidential
information is submitted, so that it can be properly withheld if
requested under the Freedom of Information Act.
Several commenters noted the documents required by Sec. 293.8, if
not submitted, are grounds of disapproval of a compact under Sec.
293.16(b). Commenters requested clarity on how the Department will
determine if the requirements of Sec. 293.8 have been met and if the
Department will provide parties opportunities to submit missing
documents or cure deficiencies in the submitted documents.
The Department notes that Sec. 293.16(b) clarifies that the
Department must inform the parties in writing of any missing documents
required by Sec. 293.8.
Several commenters requested the Department revise Sec. 293.8 to
include an express waiver the Secretary may invoke if or when either
party shows a need for additional flexibility in submitting a compact
or amendment. Commenters noted parties to a compact who resort to
arbitration or similar dispute resolution may be reluctant to provide
the required certification of an arbitration panel decision under Sec.
293.8(b) and (c) in an effort to avoid Secretarial review or
enforcement of an unfavorable decision.
The Department declines to include a blanket waiver under Sec.
293.8, but notes the Secretary may consider issuing a discretionary
waiver in certain circumstances after consideration of the submitted
documents. Certain documents, such as arbitration decisions, are self-
certifying. Section
[[Page 74925]]
293.16 addresses the Secretary's discretionary authority to disapprove
a compact or amendment.
Some commenters also noted that a Tribe may choose to adopt a
compact or amendment, including an arbitration award, under protest and
requested the Department revise Sec. 293.8(b) to allow for a Tribe to
adopt a compact or amendment under protest.
The Department declines to include the requested revision. Section
293.8(b) requires a Tribal resolution or other document that certifies
that the Tribe has approved the compact or amendment in accordance with
applicable Tribal law. The Department notes that a Tribal resolution or
cover letter may articulate that the Tribe's `approval' is under
protest or identify provisions in the compact or amendment that the
Tribe disagrees with or is concerned violate IGRA.
One commenter questioned the Department's proposed change of
pronoun in Sec. 293.8(c) from ``he or she'' to ``they.''
The Department made certain stylistic edits including using a
gender-neutral pronoun in Sec. 293.8(c), which is the only section
that uses a pronoun.
Several commenters expressed support for the proposed revisions to
Sec. 293.8. Commenters noted that the proposed Sec. 293.8(d) reflects
proposed changes to Sec. Sec. 293.4, 293.21, and 293.27, which address
certain types of ancillary documents which are sometimes referenced or
required by a compact or amendment.
The Department acknowledges the comments.
Several commenters expressed concern with Sec. 293.8(d) and
questioned if the documents required by Sec. 293.8 were subject to
secretarial review and approval. Commenters noted that the Consultation
Draft of Sec. 293.4 expanded the Department's definition of compacts
or amendments subject to Secretarial review and appeared to conflict
with Sec. 293.8(d). Commenters further noted Sec. Sec. 293.4 and
293.8(d) could capture Tribal Gaming ordinances and/or minimum internal
control standards which may not be drafted at the time of compact
submission. Commenters noted a broad reading of Sec. 293.8(d) posed an
undue burden on Tribes and impermissibly intruded into Tribal self-
governance and self-determination.
The Department has revised Sec. 293.8(d) to clarify this provision
does not apply to Tribal Gaming Ordinances subject to review and
approval by the Nation Indian Gaming Commission pursuant to 25 U.S.C.
2710 and 25 CFR part 522. Further, the Department has revised Sec.
293.4 to clarify which documents are compact or amendments subject to
Secretarial review. The documents identified in Sec. 293.8(d) allow
the Department to understand how the compact or amendment interacts
with other documents and agreements, which in some instances are
treated as grounds for material breach of the compact. The Department
notes in some instances compacts have utilized ancillary documents to
improperly impose State law or State law equivalent onto Tribal
governments and a Tribe's Indian lands.
Several commenters requested the Department revise Sec. 293.8(d)
by including the phrase ``provided however that nothing herein shall
prohibit the amendment, modification, or other changes to Tribal
ordinance or laws and any such change, amendment, or modification is
not required to be submitted for review and approval unless otherwise
expressly required by Federal law.''
Several commenters requested the Department amend proposed Sec.
293.8(d) to state that any agreement between a Tribe and a State, its
agencies or its political subdivisions required by a compact or
amendment if the agreement requires the Tribe to make payments to the
State, its agencies, or its political subdivisions, or it restricts or
regulates a Tribe's use and enjoyment of its Indian Lands. Commenters
argued this language is more narrowly tailored and addresses the
concerns raised in Sec. 293.28 of the Consultation Draft. Commenters
requested the Department defer to a Tribe's decision to provide
voluntary payments to local governments as permitted by IGRA at 25
U.S.C. 2710(b)(2)(B)(v).
One commenter suggested comprehensive revisions to Section 293.8,
including renumbering the subsections and adding two new sections. The
commenter proposed adding references to amendments arising out of
dispute resolution processes including arbitration. The commenter
proposed adding a new section addressing the Secretary's authority to
waive the requirements of Sec. 293.8. The commenter also proposed
adding a section requiring the Secretary to provide notice to the
parties within 14 business days if the Secretary determines documents
required by Sec. 293.8 are missing and permit the parties to either
submit the documents or request a waiver of Sec. 293.8.
The Department declines to include the requested new provisions in
Sec. 293.8. The Department notes that the requested provision
addressing the Secretary's authority to offer a wavier under 25 CFR 1.2
is not required for the Secretary to issue a waiver of specific
requirements. The Department also notes that the requested provision
addressing a notice to the parties providing an opportunity to cure
deficiencies reflects the Department's longstanding practice.
Additionally, the remaining language in that provision addresses the
Secretary's authority to disapprove a compact or amendment and is
addressed in Sec. 293.16.
Several commenters expressed concerns with Sec. 293.8(e), arguing
the section is vague and ambiguous, potentially permitting the
Department to request documents unrelated to the Secretary's review of
the submitted compact.
The Department notes Sec. 293.8(e) in the Consultation Draft
retains the text of Sec. 293.8(d) in the 2008 Regulations. This
provision allows the Department to request additional information--when
needed--to determine if a submitted compact complies with IGRA.
Comments on Sec. 293.9 Where should a compact or amendment be
submitted for review and approval?
A number of commenters responded to the Department's seventh
consultation question ``[s]hould the draft revisions include provisions
that offer or require the submission of electronic records?''
Commenters encouraged the Department to include provisions allowing
electronic submission but cautioned against requiring electronic
submission. Commenters noted electronic submission is less expensive
and is faster than traditional methods of submission. Commenters also
noted parties should be provided reasonable flexibility when submitting
compacts or amendments for Secretarial Review. Several commenters
questioned the need for the inclusion of electronic submission in the
proposed regulations, noting in their experience the technical
requirements of submission are not a significant consideration between
parties negotiating a compact.
The Department acknowledges the comments and has included the
Office of Indian Gaming's email address in Sec. 293.9. The Department
notes the Consultation Draft included proposed revisions to the 2008
Regulations which were stylistic or technical in nature including
electronic submission.
Several commenters requested the Department revise Sec. 293.9 by
removing the requirement for hard copy submission of the ``original
copy'' when a party chooses to utilize email submission. Commenters
noted that the Department could request an original hard copy if needed
under Sec. 293.8(e). Commenters also noted many Tribal and
[[Page 74926]]
State governments as well as the gaming industry are utilizing
electronically signed and verified documents.
The Department will reevaluate the requirements in Sec. 293.8(a)
for an ``original compact or amendment executed by both the Tribe and
the State'' and Sec. 293.9 ``as long as the original copy is submitted
to the address listed above'' as the Department updates the record
keeping requirements. The Office of Indian Gaming is the formal record
keeper and archivist of Tribal-State gaming compacts for the
Department. The Office is bound by Departmental record keeping
requirements, including electronic records.
Comments on Sec. 293.10 How long will the Secretary take to review a
compact or amendment?
Several commenters expressed support for the proposed revisions to
Sec. 293.10.
The Department acknowledges the comments.
Comments on Sec. 293.11 When will the 45-day timeline begin?
Several commenters recommended the Department amend Sec. 293.11 to
allow for electronic submissions to trigger the 45-day review period
upon submission by removing the requirement for the Office of Indian
Gaming to stamp the document received. Commenters argued that the
inclusion of a date stamp for electronically submitted documents is no
longer necessary to confirm when the document was received. Commenters
also noted the requirement for the Office of Indian Gaming to date
stamp a document received could result in administrative delays.
The Department declines to remove the requirement for the Office of
Indian Gaming to stamp the document received in order for the 45-day
review period to begin for electronically submitted documents. The
Department notes the Consultation Draft of Sec. 293.11 reflects the
removal of the cross reference to Sec. 293.9 and the address of the
Office of Indian Gaming. The consultation draft of Sec. 293.9 was
amended to include a dedicated email address for the Office of Indian
Gaming to facilitate email submission of documents. The application of
a date stamp for submitted documents irrespective of the submission
method allows for consistent timely processing of all documents.
Several commenters requested the Department amend Sec. 293.11 to
include a requirement that the Office of Indian Gaming provide
submitters with an email acknowledgement of receipt with confirmation
of the 45-day review period.
The Department has revised Sec. 293.11 to include an emailed
acknowledgement of receipt to the parties when the parties have
provided their email addresses.
Several commenters noted an apparent conflict between Sec. Sec.
293.11 and 293.9 and requested clarification if the 45-day review
period begins with the receipt of the electronic copy or upon receipt
of the mailed original copy.
The Consultation Draft reflected revisions in Sec. Sec. 293.9 and
293.11 to allow for electronic or hard copy submission. The Department
has revised Sec. 293.9 to clarify the Department will accept either
email or hard copy submission but requires a hard copy submission in
addition to the emailed copy. The 45-day review period starts when the
Office of Indian Gaming date stamps a hard copy original or an
electronic copy of the document.
Comments on Sec. 293.12 What happens if the Secretary does not act on
the compact or amendment within the 45-day review period?
Several commenters noted that it was unclear what the legal effect
is for a compact or amendment ``approved by operation of law'' or
``deemed approved'' when a guidance letter is issued after the 45-day
review period.
The Department acknowledges the comments. A guidance letter issued
after the 45th day review period does not alter the effective date of
the compact or amendment. The effective date of a compact or amendment
is the date the document is published in the Federal Register, as
explained in Sec. 293.14. A compact or amendment approved by operation
of law is considered to have been approved by the Secretary, but only
to the extent the compact or amendment is consistent with the
provisions of IGRA. A guidance letter explains the provisions the
Department believes to be inconsistent with IGRA.
Many commenters noted that the added language effectively codifies
the Secretary's current practice.
The Department acknowledges the comments.
One commenter indicated that the provision conflicts with the
Secretarial requirements under Sec. 293.10.
The Department disagrees with the comment. The proposed regulations
at Sec. 293.12 explain what happens if the Secretary does not act on
the compact or amendment within the 45-day review period.
Several commenters stated that it was unclear if there would be a
process to appeal a guidance letter issued after the 45-day review
period, with one commenter suggesting that the Secretary should
consider including an appeal or review process.
The Department acknowledges the comments but declines to amend the
provision to include an appeal or review process.
One commenter stated that it was unclear from the provision if the
Secretary's issuance of a guidance letter under this provision would
impact the publication of a ``deemed approved'' compact in the Federal
Register.
The Secretary's issuance of a guidance letter under this provision
does not impact the publication of a ``deemed approved'' compact in the
Federal Register. A guidance letter issued after the 45-day review
period does not alter the effective date of the compact or amendment.
The effective date of a compact or amendment is the date the notice is
published in the Federal Register, as explained in Sec. 293.14.
Several commenters expressed concern that the Secretary could
``unapprove'' a compact or amendment through issuance of a guidance
letter. These commenters requested that the Department specifically
address the effect of a guidance letter on a compact's approval and
which provisions are not deemed approved. One commenter expressed
concern that if the Secretary takes no action or issues a guidance
letter, a court may interpret the Secretary's guidance letter or
inaction to mean that the compact violates IGRA and is void,
potentially leaving a Tribe without the authority to continue to offer
gaming under the compact. One commenter based its concern on the
relationship between Sec. Sec. 293.12 and 293.15.
The Department acknowledges the comments. Under IGRA, the
Department has 45 days to complete its review and either approve or
disapprove a class III gaming compact. If the Department takes no
action within that 45-day period, the Tribal-State gaming compact is
considered approved by operation of law--to the extent that it is
consistent with IGRA. A guidance letter issued after the 45th day of
the review period does not alter the effective date of the compact or
amendment. The effective date of a compact or amendment is the date the
notice is published in the Federal Register, as explained in Sec.
293.14. A compact or amendment approved by operation of law is
considered to have been approved by the Secretary, but only to the
extent the compact or amendment is consistent with the provisions of
IGRA. A guidance letter explains the provisions the
[[Page 74927]]
Department believes to be inconsistent with IGRA.
One commenter disagreed with the inclusion of Sec. 293.12 and
stated that the Secretary should not issue guidance letters after the
45-day review period because the Secretary should only act within the
45-day review period and not beyond.
The Department disagrees with the comment. A compact is not
``considered to have been approved'' by operation of law also known as
``deemed approved'' until after the 45-day review period. The
Department cannot issue a guidance letter until after the 45th day.
One commenter stated that the Secretary has an obligation to ensure
that compacts between Tribes and States are rejected if they violate
the provisions of IGRA and stated that Sec. 293.12 appears to permit
the Secretary to allow compacts that violate IGRA to be ``deemed
approved'' without alerting the relevant State, Tribe, or the public
that provisions of the ``approved'' compact violate IGRA. The commenter
recommended that Sec. 293.12 be amended to state that ``[t]he
Secretary, after the 45th day, is required to issue a guidance letter
to the parties identifying any provisions that are inconsistent with
IGRA and thus not approved by operation of law.'' Another commenter
suggested the Department add language stating ``Accordingly, the
signatory Tribe or State may subsequently challenge the non-compliant
compact provisions as unenforceable or severable from the compact.''
The Department accepts the comments in part and will make the
appropriate changes to Sec. 293.12, indicating the Secretary will
issue a letter confirming the 45-day review period has lapsed and
therefore the compact or amendment has been approved by operation of
law. The Secretary's letter may identify provisions of the ``deemed
approved'' compact that violate IGRA. The Department takes no position
on whether a Tribe or a State may subsequently challenge the non-
compliant compact provisions as unenforceable or severable from the
compact.
One commenter recommended that the language in this section stating
that ``[t]he Secretary is not required to issue a letter, and if the
Secretary does issue a letter, any such letter may offer guidance to
the parties on the Department's interpretation of IGRA,'' be stricken.
The Department agrees with the changes and will strike the language
from Sec. 293.12. The Secretary will issue a letter confirming the 45-
day review period has lapsed and therefore the compact or amendment has
been approved by operation of law.
Many commenters requested that the Department state how it will
determine whether to issue a guidance letter and articulate a standard
to promote the uniform issuance of guidance letters. These commenters
expressed concern that if the Secretary is not required to issue a
guidance letter, the lack of a guidance letter may place some Tribes on
unequal footing. These commenters request that Sec. 293.12 be revised
to articulate a standard that will ensure the uniform issuance of
guidance letters.
The Department accepts the comments in part and will make the
appropriate changes to Sec. 293.12, indicating the Secretary will
issue a letter confirming the 45-day review period has lapsed and
therefore the compact or amendment has been approved by operation of
law. The Secretary's letter may include guidance identifying provisions
of the ``deemed approved'' compact that violate IGRA.
One commenter recommended that the Department clarify whether
revised Sec. 293.12 is intended to be a change in Department policy or
a drafting error.
The Department acknowledges the comment. Section 293.12 will
reflect a change in policy to issue a letter in each instance when a
compact is deemed approved and clarify that letter may include guidance
identifying provisions of the ``deemed approved'' compact that violate
IGRA.
Several commenters requested the inclusion of a deadline by which
the Secretary will issue a guidance letter. One commenter requested
that Sec. 293.12 be revised to provide that guidance letters be issued
within 60 days of the date a compact is approved by operation of law in
order to provide Tribes with certainty with respect to renegotiating
terms of a compact and avoid lost time negotiating provisions the
Department finds are in conflict with IGRA.
The Department accepts the comments in part. Section 293.12 will
reflect that the Secretary will issue a letter after the 45th day but
within 90 days from the date of submission. This timeline is consistent
with the requirement to publish notice in the Federal Register in Sec.
293.14.
Several commenters expressed concerns that the Secretary has no
explicit statutory authority to issue a guidance letter. One commenter
expressed concerns that a guidance letter, which is not required to be
issued under IGRA, could be used as a litigation roadmap, potentially
to oppose the project, and may pin the Secretary to a litigation
position. The commenter suggested further discussion and requested that
the Secretary consider a process that would provide confidentiality to
the Tribe and State by, for example, communicating to the attorneys for
the respective Tribe and State the Secretary's concerns if any
provisions were inconsistent with IGRA to discuss perceived
inconsistencies.
The Department acknowledges the comment. The Secretary has
authority to promulgate these regulations based on the statutory
delegation of powers contained in IGRA and 25 U.S.C. 2, and 9 to review
compacts and amendments. A guidance letter issued after the 45th day
review period does not alter the effective date of the compact or
amendment. A compact or amendment approved by operation of law is
considered to have been approved by the Secretary, but only to the
extent the compact or amendment is consistent with the provisions of
IGRA. A guidance letter explains the provisions the Department believes
to be inconsistent with IGRA. The Department currently offers technical
assistance to Tribes and States; however the Department does not
provide pre-approvals or legal opinions.
One commenter noted that ``deemed approval'' letters have had the
effect of allowing States like California to attempt to use the letter
as a way of forcing impermissible provisions into compacts.
The Department accepts the comments in part and will make the
appropriate changes to Sec. 293.12, indicating the Secretary will
issue a letter informing the parties that the compact or amendment has
been approved by operation of law, the letter may identify provisions
of the ``deemed approved'' compact that violate IGRA.
One commenter recommended that the revised regulations be modified
to expressly state the principles underlying the policy of issuing
``deemed approved'' letters and the limits of that policy.
The Department accepts the comments in part and will make the
appropriate changes to Sec. 293.12, indicating the Secretary will
issue a letter informing the parties that the compact or amendment has
been approved by operation of law. The letter may identify provisions
of the ``deemed approved'' compact that violate IGRA. The Department
declines to expressly state when the letter will include guidance or
limits to that policy.
One commenter noted that States are often dismissive of ``deemed
approved'' letters and requested that the Department revise the
language to state that ``[a]ccordingly, the signatory Tribe
[[Page 74928]]
or State may subsequently challenge the non-compliant compact
provisions as unenforceable or severable from the compact,'' stating
that this additional language would eliminate State's false perception
that an approval by operation of law is de facto approval of a State's
``illicit agenda in compact negotiations.''
The Department acknowledges the comment. Under IGRA, the Department
has 45 days to complete its review and either approve or disapprove a
class III gaming compact. If the Department takes no action within that
45-day period, the Tribal-State gaming compact is considered approved
by operation of law--to the extent that it is consistent with IGRA. The
Department takes no position on whether a Tribe or a State may
subsequently challenge the non-compliant compact provisions as
unenforceable or severable from the compact.
Several commenters recommended that Sec. 293.12 be amended to
allow Tribal governments to request guidance letters and legal opinions
from the Secretary or the Office of Solicitor for compacts.
The Department acknowledges the comment. The Department currently
offers technical assistance to Tribes and States; however the
Department does not provide pre-approvals or legal opinions.
One commenter stated that the issuance of a guidance letter
explaining why a submitted compact was not affirmatively approved but
``deemed approved'' by operation of law was a solid improvement, noting
that such letters provide an excellent source to inform and improve the
negotiation process.
The Department acknowledges the comment.
Comments on Sec. 293.13 Who can withdraw a compact or amendment after
it has been received by the Secretary?
Several commenters requested the Department revise Sec. 293.13 by
adding the word ``both'' so that the relevant provision reads ``Tribe
and State must both submit.''
The Department accepts the requested revision. The Department notes
the parties may submit a joint request for withdrawal of the compact or
amendment, or submit individual requests for withdrawal.
One commenter recommended the Department accept electronically
submitted requests for withdrawal.
The Department accepts the requested revision and has revised Sec.
293.9 to clarify all submissions and requests under part 293 must be
submitted to the Office of Indian Gaming, either at the physical
address or the email address.
One commenter requested the Department revise Sec. 293.9 to permit
a Tribe to unilaterally withdraw a compact or amendment after
submission.
The Department declines the requested change and notes this
requirement remains unchanged from the 2008 Regulations, which requires
both parties to request withdrawal. The compact process under IGRA is a
formalized contract between sovereigns which is submitted to the
Department for review and approval only after it is legally entered
into or is otherwise binding on the parties.
Comments on Sec. 293.14 When does a compact or amendment take effect?
Several commenters requested clarity of the effect of an approval
by operation of law on a compact and subsequent publication of a notice
in the Federal Register.
The Department acknowledges the comments. The Department notes IGRA
provides a 45-day review period after which a compact is approved by
operation of law but only to the extent the compact is consistent with
IGRA. 25 U.S.C. 2710(d)(8)(C). A notice must also be published in the
Federal Register for the compact to be in effect. 25 U.S.C.
2710(d)(8)(D).
One commenter requested the Department amend Sec. 293.14 by
changing the timeline for publication of a notice in the Federal
Register from 90 days to 55 days from the date the compact or amendment
is received to, or within 10 days of approval/disapproval, whichever is
shorter.
The Department declines the requested change in the Federal
Register notice timeline, which remains unchanged from the 2008
Regulations and is considered reasonable. The Department notes IGRA
does not require publication of a notice in the Federal Register if the
compact or amendment is disapproved.
Comment on Sec. 293.15 Is the Secretary required to disapprove a
compact or amendment that violates IGRA?
Several commenters agreed with the Department's proposed language
in Sec. 293.15, explaining that the Secretary has the discretionary
authority to disapprove a compact that violates IGRA, but is not
required to do so. However, many of the commenters that agreed with the
Department's proposed language did express concern over the possibility
that the language could encourage future administrations to avoid
disapproving compacts where appropriate. Other commenters noted the
importance of Deemed Approval determinations to empower Tribes to
reject the non-compliant provisions of a deemed approved compact
through litigation or other means.
The Department acknowledges the comments. The Department retains
its proposed language in Sec. 293.15. The Department is concerned a
mandate that the Secretary affirmatively disapprove compacts that
violate IGRA would narrow the discretion IGRA provides to the Secretary
to either disapprove or approve a compact within a 45-day review
period. Furthermore, this type of mandate could create unintended
consequences if the Department fails to act within the prescribed 45-
day review period on a compact that violates IGRA. The current
language, which tracks the language of IGRA, provides that if the
Secretary fails to act within the 45-day review period, the compact is
deemed approved but only to the extent it is consistent with IGRA.
Several commenters expressed concern with the Department's proposed
language in Sec. 293.15 and argued that a compact which violates IGRA
must be affirmatively disapproved. Another commenter went as far as
stating that allowing compacts to go into effect that should be
disapproved is a violation of IGRA.
The Department acknowledges the comments. The Department retains
its proposed language in Sec. 293.15. The Department is concerned a
mandate that the Secretary affirmatively disapprove compacts that
violate IGRA would narrow the discretion IGRA provides the Secretary to
either approve or disapprove a compact within the prescribed 45-day
review period. Furthermore, this type of mandate could create
unintended consequences if the Department fails to act within the
prescribed 45-day review period on a compact that violates IGRA. The
current language, which tracks the language of IGRA, provides that if
the Secretary fails to act within the 45-day time period, the compact
is deemed approved but only to the extent it is consistent with IGRA.
Finally, a few commenters agreed that the Secretary has
discretionary authority over whether to disapprove a compact but should
be required to issue a guidance letter or legal opinion identifying
provisions not approved under IGRA. Commenters recommended the
Secretary defer to a Tribe's sovereign decision-making and permit
compacts to go into effect rather than disapprove.
The Department acknowledges the comments. The Department retains
its proposed language in Sec. 293.15. The Department is concerned a
mandate that
[[Page 74929]]
the Secretary affirmatively disapprove compacts that violate IGRA would
narrow the discretion IGRA provides the Secretary to either approve or
disapprove a compact within the prescribed 45-day review period.
Furthermore, this type of mandate could create unintended consequences
if the Department fails to act within the prescribed 45-day time period
on a compact that violates IGRA. The current language, which tracks the
language of IGRA, provides that if the Secretary fails to act within
the 45-day time period, the compact is deemed approved but only to the
extent it is consistent with IGRA. The Department has revised Sec.
293.12 to provide the Secretary will issue a letter informing the
parties that the compact or amendment has been approved by operation of
law and the letter may include guidance.
Comments on Sec. 293.16 When may the Secretary disapprove a compact or
amendment?
Several commenters requested the Department clarify Sec.
293.16(a)(3) and suggested the provision is overly broad.
The Department acknowledges the comments, but notes this provision
is consistent with Congress's grant of discretionary disapproval
authority to the Secretary. 25 U.S.C. 2710(d)(8)(B)(iii).
Several commenters recommended the Department revise Sec.
293.16(a)(3) to include an opportunity for an appropriate designee of
the Secretary to serve as a mediator to facilitate fair compact
negotiations between a Tribe and a State and to ensure that Federal law
is complied with by the parties.
The Department acknowledges the comments. The Department routinely
provides technical assistance to Tribes and States including guidance
on Departmental precedents and past procedures, the Departments
interpretation and application of case law, as well as best practices.
One commenter requested the Department include a new section titled
``[m]ay a compact or amendment include provisions that violate the
trust obligations of the United States to Indians?'' The proposed text
for this section would explain that a compact may not include
provisions that violate the trust obligations of the United States and
cited to provisions limiting third-party Tribe's rights to conduct
gaming as an example of a provision violating the trust obligation.
The Department declines the requested new section and notes Sec.
293.24(c)(1) addresses compact provisions which act to limit a third-
party Tribe's rights to conduct gaming.
Several commenters expressed support for the proposed Sec.
293.16(b) and noted it helps enforce the requirements in other sections
of part 293.
The Department acknowledges the comments.
Several commenters objected to the proposed Sec. 293.16(b) which
provides the Secretary may disapprove a compact if the documents
required in Sec. 293.8 are not submitted. Commenters questioned the
Secretary's authority to disapprove a compact based on the parties'
failure to submit specific documents. Several commenters expressed
concerns that the document required by Sec. 293.8(d) may be overly
broad and burdensome. Other commenters recommended the Department
revise Sec. 293.16 to require written notice of deficiencies and an
opportunity to cure before disapproving a compact under Sec.
293.16(b).
The Department accepts the comments and notes Sec. 293.16(b)
provides the Secretary with grounds to disapprove a compact if the
documents required by Sec. 293.8 are not submitted. The Department has
revised Sec. 293.16(b) to require written notice of deficiencies,
which is consistent with the Department's longstanding practice of
informing parties of deficiencies and permitting parties to cure the
deficiencies. IGRA provides the Secretary with discretionary authority
to disapprove a compact if it violates one of the three specified
criteria. 25 U.S.C. 2710(d)(8)(B). Section 293.16(b) allows a
presumption that a compact violates one of the three specified criteria
if the parties fail to cure deficiencies in the record.
Several commenters requested the Department revise Sec. 293.16(b)
to provide if the parties fail to submit the required documents in
Sec. 293.8, the Secretary will return the compact as incomplete. The
commenters recommended the Department clarify that the parties may
resubmit the compact or amendment after it has been returned based on
the failure to submit the required documents, but must submit all of
the required supporting documents.
The Department declines to accept the requested provisions. IGRA
provides the Secretary with 45-days to review and approve or disapprove
a compact. The Secretary does not have the authority to return a
compact as incomplete which could frustrate Congress's clear intent to
prevent unnecessary delay by providing a 45-day review period.
One commenter recommended the Department revise Sec. 293.16 by
including a provision permitting the Secretary while reviewing an
amendment to a compact to disapprove provisions in the underlying
compact or amendment which was approved by operation of law if that
provision violates one of IGRA's three specified criteria.
The Department declines to include the proposed provision. IGRA
limits the Secretary's authority to review and approve or disapprove a
compact or amendment to 45 days. As a result, the Department cannot
retroactively approve or disapprove a compact or amendment after the
45-day review period has run. Instead, the Department's review is
limited to the text of the document under review during the 45-day
review period. The Department treats restated and resubmitted compacts
as a new compact because the parties have submitted entire text of the
compact for review. The Department encourages parties to utilize
restated compacts or amended and restated compacts as a best practice
to incorporate a series of amendments into a single document. The
Department finds it helpful if the Tribe or State also submits a
redlined copy of the restated compact.
Comments on Sec. 293.17 May a compact or amendment include provisions
addressing the application of the Tribe's or the State's criminal and
civil laws and regulations?
Several commenters expressed support for the proposed Sec. 293.17.
The Department acknowledges the comments.
Several commenters recommended the Department revise Sec. 293.17
to clarify how the parties can comply with the requirement to ``show
that these laws and regulations are both directly related to and
necessary for, the licensing and regulation of the gaming activity.''
Commenters noted this provision adds a vague new requirement that could
cause confusion.
The Department accepts this comment in part. The Department has
revised Sec. 293.17, to clarify the Secretary may ask for a showing
that the provisions addressing the application of criminal and civil
laws and regulations are both directly related to and necessary for,
the licensing and regulation of the gaming activity.
Several commenters addressed Sec. 293.17 in responding to the
Department's third consultation question ``[s]hould the draft revisions
include provisions that facilitate or prohibit the enforcement of State
court orders related to employee wage garnishment or patron winnings?''
Commenters suggested the parties may address the effect of such State
(or Tribal) court orders as a jurisdictional matter under Sec. 293.17.
[[Page 74930]]
The Department declines to address the enforcement of State court
orders related to employee wage garnishment or patron winnings in Sec.
293.17. The Department has added enforcement of State court orders to
the list of provisions in a compact which are not directly related to
the operational gaming activities in Sec. 293.24(c). The Department
notes this is consistent with the 9th Circuit decision in Chicken Ranch
Ranchera of Me-Wuk Indians v. California, 42 F.4th 1024 (9th Cir.
2022).
Comments on Sec. 293.18 May a compact or amendment include provisions
addressing the allocation of criminal and civil jurisdiction between
the State and the Tribe?
A number of commenters responded to the Department's fourth
consultation question: ``[s]hould the draft revisions include
provisions that facilitate or prohibit State court jurisdiction over
the gaming facility or gaming operations? Should this apply to all
claims or only certain types of claims?''
Many commenters discouraged the Department from including
provisions which could be perceived as permitting or facilitating State
court jurisdiction because States have a history of leveraging limited
grants of jurisdiction to undermine Tribal sovereignty. Commenters
noted while IGRA includes allocation of jurisdiction it also is
intended to promote strong Tribal governments which includes strong
Tribal courts. Other commenters noted Tribal courts should be the
default jurisdiction, however court jurisdiction could be left to
negotiations between a Tribe and State, at the request of a Tribe when
the Tribal court does not have the capability to take full jurisdiction
over the relevant claims. Commenters also discussed case law supporting
the presumption that Tribal court is the proper venue for third party
claims--including patron disputes, labor disputes, and tort claims
against the Tribe arising out of the Tribe's gaming facility.
The Department acknowledges the comments. The Department proposed
Sec. 293.18 to clarify the Department reads IGRA's provision
permitting Tribes and States to allocate criminal and civil
jurisdiction narrowly and limited by Sec. 293.17. The Department has
addressed third party tort claims in proposed Sec. 293.24(c).
Several commenters supported the proposed Sec. 293.18, as drafted,
and noted it appears consistent with IGRA and case law. Commenters also
noted the proposed provision could help preserve Tribal court systems.
The Department acknowledges the comments.
Several commenters questioned the need for the proposed Sec.
293.18.
The Department acknowledges the comments. The Department notes IGRA
provides a compact may include provisions relating to the allocation of
criminal and civil jurisdiction between the State and the Tribe
necessary for the enforcement of such laws and regulations. 25 U.S.C.
2710(d)(3)(C)(ii).
Several commenters requested the Department include a bad faith
standard for jurisdiction when a State seeks to compel State
jurisdiction of the Tribe or Indian country.
The Department acknowledges the comments. The Department has added
provisions in Sec. 293.24(c) to address these concerns, which Sec.
294.24(d) now states are ``considered evidence of a violation of
IGRA.''
Several commenters requested the Department amend proposed Sec.
293.18 to expressly require the Tribe to request the State take
jurisdiction over claims involving the gaming facility or gaming
operations in order for such an allocation of jurisdiction to be
proper.
The Department did not adopt the comment. A compact or amendment
may include provisions allocating criminal and civil jurisdiction
between the State and the Tribe necessary for the enforcement of the
laws and regulations described in Sec. 293.17.
Several commenters requested the Department revise Sec. 293.18 to
prohibit State court jurisdiction over Tribal gaming operations or
facilities.
The Department did not adopt the comment. A compact or amendment
may include provisions allocating criminal and civil jurisdiction
between the State and the Tribe necessary for the enforcement of the
laws and regulations described in Sec. 293.17.
Comments on Sec. 293.19 May a compact or amendment include provisions
addressing the State's costs for regulating gaming activities?
A number of commenters expressed support for the proposed Sec.
293.19. Commenters noted States have used IGRA's regulatory cost
provision as an indirect tax often funding both regulatory and non-
regulatory functions. Commenters opined the bad faith standard would
assist negotiating parties in limiting regulatory cost provisions and
Tribal oversite over the State's use of those funds. Commenters also
noted the Department will likely receive severe pushback from States on
this provision and encouraged the Department to ``stay the course.''
The Department acknowledges the comments. Section 293.19 addresses
Tribal payments for the State's costs of regulating gaming activities.
As explained above the Department has replaced the phrase ``evidence of
bad faith'' with ``evidence of a violation of IGRA.''
Several commenters expressed concern with the inclusion of a bad
faith standard in proposed Sec. 293.19. Commenters questioned the
Secretary's authority to determine bad faith and questioned how the
Department would enforce such a provision over the life of the compact.
IGRA provides the Secretary with the authority to review and
approve or disapprove a compact within a 45-day review period. The
Department evaluates the terms of the compact including auditing
standards for assessments of regulatory costs as part of this review.
The Department has revised Sec. 293.19 to clarify the Secretary's
review is limited to the terms of the compact. Enforcement of those
terms lies with the parties and is governed by the compact's dispute
resolution provisions, if any. As explained above, the Department has
replaced the phrase ``evidence of bad faith'' with ``evidence of a
violation of IGRA.''
Several commenters requested the Department provide definitions for
``actual and reasonable'' and provide boundaries on the types of costs
for which the State may reasonably seek reimbursement. Other commenters
requested the Department allow flexibility for States to aggregate
costs with limits on what costs can be aggregated.
The Department declines to provide specific boundaries on the types
of gaming regulatory costs for which the State may seek reimbursement.
The Department reads IGRA's provision permitting the State to assess
regulatory costs narrowly and inherently limited to the negotiated
allocation of regulatory jurisdiction. Providing specific definitions
would diminish parties' flexibility in negotiating a reasonable
allocation of regulatory jurisdiction that best meets the needs of the
parties. Further, the Department has revised Sec. 293.19 to give
parties the flexibility in negotiating the terms of a compact to
determine how the State will show aggregate costs are actual and
reasonable.
Several commenters requested the Department require the State to
provide annual audits, prove actual and reasonable expenses, and
periodically negotiate regulatory costs. One commenter requested the
Department
[[Page 74931]]
add the phrase ``and reasonable'' to the last sentence in Sec. 293.19.
Another commenter requested the Department add the phrase ``or refuses
to provide such records'' to the last sentence in Sec. 293.19.
The Department has accepted these suggested edits in part and has
revised Sec. 293.19, to reflect these comments.
Several commenters requested the Department clarify how the
department distinguishes between assessed regulatory costs and a
prohibited tax, fee, charge, or other assessment.
The Department acknowledges the comments. Section 293.25 includes a
discussion of the Department's interpretation of IGRA's prohibition
against the imposition of a tax, fee, charge, or other assessment. IGRA
provides a compact may include provisions relating to ``the assessment
by the State of [the Tribe's class III gaming activity] in such amounts
as are necessary to defray the costs of regulating [the Tribe's class
III gaming activity].'' 25 U.S.C. 2710(d)(3)(C)(iii). IGRA in section
2710(d)(4) then prohibits the State from imposing a tax, fee, charge,
or other assessment except for any assessments that may be agreed to
under paragraph (3)(C)(iii). The Department reads IGRA's provision
permitting the State to assess regulatory costs narrowly and inherently
limited to the negotiated allocation of regulatory jurisdiction.
Section 293.25 includes a discussion of the Department's interpretation
of IGRA's prohibition against the imposition of a tax, fee, charge, or
other assessment.
Comments on Sec. 293.20 May a compact or amendment include provisions
addressing the Tribe's taxation of gaming?
Several commenters expressed support for the proposed Sec. 293.20,
and noted clear guidelines are beneficial to all parties by reducing
the risk that improper provisions will be included. Commenters
expressed support for the inclusion of a bad faith standard in the
proposed Sec. 293.20. Several commenters requested the Department add
the word ``presumptive'' so the relevant sentence would read ``[t]he
inclusion of provisions addressing the Tribe's taxation of other
activities is considered presumptive evidence of bad faith.''
The Department acknowledges the comments but declines to add the
word ``presumptive.'' As explained above the Department has replaced
the phrase ``evidence of bad faith'' with ``evidence of a violation of
IGRA.''
Several commenters expressed opposition for the proposed Sec.
293.20. Commenters raised concerns that the proposed text appears to
allow States to tax gaming revenue. Other commenters noted this may
cause States to demand specific forms of Tribal taxation of Tribal
gaming and argues the provision is unnecessary.
The Department acknowledges the comment, but notes IGRA provides a
compact may address Tribal taxation of Tribal gaming in amounts
comparable to State taxation of State gaming. 25 U.S.C.
2710(d)(3)(C)(iv). The Department has revised Sec. 293.20 to clarify
this provision.
Comments on Sec. 293.21 May a compact or amendment include provisions
addressing remedies for breach of the compact?
Several commenters expressed support for the proposed Sec. 293.21
and the inclusion of a bad faith standard. Several commenters discussed
their experiences with States seeking to enforce dispute resolution
agreements or decisions that violated IGRA.
The Department acknowledges the comments. As explained above, the
Department has replaced the phrase ``evidence of bad faith'' with
``evidence of a violation of IGRA.''
Several commenters questioned the Secretary's authority to review
dispute resolution agreements, arbitration awards, settlement
agreements, or other resolutions of a dispute outside of Federal court.
The Department acknowledges the comments. The Secretary has
authority to promulgate these regulations based on the statutory
delegation of powers contained in IGRA and 25 U.S.C. 2, and 9 to review
compacts and amendments. The Department is aware of arbitration awards,
settlement agreements, and other similar dispute resolution agreements
which have amended the terms of a compact. IGRA requires the Secretary
to review compacts and publish notice in the Federal Register before a
compact is in effect and the Department has made conforming edits to
Sec. 293.4.
Several commenters expressed concern with the proposed Sec.
293.21. Commenters stated the documents sought under the provision was
overly broad. Other commenters suggested the proposed Sec. 293.21
would encourage parties to seek dispute resolution in Federal court and
discourage parties from seeking more cost effective and faster
resolution of disputes because of the risk the Secretary may reject the
agreement. Commenters noted settlement agreements are often
confidential. One commenter requested clarification why the Department
is interested in reviewing dispute resolution agreements and
arbitration awards. Another commenter cautioned the Department's review
of these provisions may prevent Tribes from exercising self-
determination and sovereignty in compact negotiations.
The Department acknowledges the comments. The Department seeks to
ensure all compacts, amendments, and dispute resolution agreements or
awards are consistent with IGRA and are properly in effect. The
Department has made conforming edits to Sec. Sec. 293.2, 293.4, 293.7,
and 293.21 to address concerns raised regarding secretarial review of
compact amendments arising out of dispute resolution. The Department
encourages parties to resolve compact disputes in a timely, cost-
effective manner, which is consistent with IGRA.
Several commenters requested the Department revise the proposed
Sec. 293.21 by amending the title and adding text to Sec. 293.21. The
proposed title would read: ``[m]ay a compact or amendment include
provisions addressing the resolution of disputes for breach of the
compact?''
The Department has accepted the proposed revisions in part. As
explained above, the Department has replaced the phrase ``evidence of
bad faith'' with ``evidence of a violation of IGRA.''
Several commenters requested the Department clarify if compacts
should include dispute resolution options other than termination of a
compact, which only harms the Tribe.
The Department acknowledges the comments. The Department notes that
compacts are carefully negotiated long-term agreements between
sovereigns. IGRA provides compacts may include ``remedies for breach of
contract.'' The Department notes well drafted compacts include options
for the parties to continue operating under the compact, while seeking
to resolve any disputes arising from the compact. If the compact
includes payments to the State for regulatory costs as described in
proposed Sec. 293.19, or revenue sharing as described in Sec. 293.25,
the Department recommends including provisions which permit the Tribe
to divert disputed funds into an escrow account.
One commenter requested the Department include a grandfather clause
for established settlement agreements to protect the settled
expectations of parties to existing agreements. The commenter explained
a party may seek to relitigate a settled dispute by arguing the
agreement is not valid.
The Department declines to include a grandfather clause for
settlement agreements which have not been submitted for Secretarial
review and
[[Page 74932]]
publication of a notice in the Federal Register. The Department has
included revisions to the proposed Sec. 293.21 as well as Sec. 293.4
to clarify and limit the scope of this review. The Department
encourages parties to seek Sec. 293.4 review if the parties are
concerned their settlement agreement is an `amendment.'
Comments on Sec. 293.22 May a compact or amendment include provisions
addressing standards for the operation of gaming activity and
maintenance of the gaming facility?
A number of commenters expressed support for the proposed Sec.
293.22 and requested the Department strengthen the provision by
defining what qualifies as ``maintenance'' in greater detail.
Commenters explained some States seek expansive regulatory standards
that are not related to the maintenance of a facility. Other commenters
noted State's may seek to require a Tribe to adopt State law equivalent
ordinances and requested the Department add the following sentence to
Sec. 293.22, ``[i] f a compact or amendment mandates that the Tribe
adopt standards equivalent or comparable to the standards set forth in
a State law or regulation, the parties must show that these mandated
Tribal standards are both directly related to and necessary for, the
licensing and regulation of the gaming activity.''
The Department acknowledges the comments and has revised Sec.
293.22 by including the requested sentence.
Comments on Sec. 293.23--Which Has Been Renumbered as 293.24--What
factors will be used to determine whether provisions in a compact or
amendment are directly related to the operation of gaming activities?
The Department has renumbered the proposed Sec. 293.23 as Sec.
293.24 comments have been edited to reflect the new section number.
Several commenters expressed support for the proposed Sec. 293.24.
Commenters explained the provision would improve compact negotiations
by providing parties with clear guidance on which topics are consistent
with IGRA and which topics are outside of IGRA's narrow scope of
compact terms under 25 U.S.C. 2710(d)(3)(C). Commenters noted the
proposed Sec. 293.24 is consistent with the Departments long standing
requirement of a direct connection and repudiation of some States'
application of a ``but for'' test.
The Department acknowledges the comments.
One commenter expressed concern that the Department was
inadvertently creating additional tests including a ``incidental
benefit'' test in Sec. 293.24.(b) and a ``not directly related'' test
in Sec. 293.24(b) and (c) as well as an ``unrelated to'' test in Sec.
293.24(c)(4).
The Department acknowledges the comments. The Department has
revised Sec. 293.24(b) and (c)(4) for consistency and notes the phrase
``not directly related'' as used in Sec. 293.24 as the inverse of the
phrase ``directly related.''
One commenter recommended the Department include a section
immediately preceding proposed Sec. 293.24 mirroring the question-and-
answer format of the proceeding sections in Subpart D. The section
would be titled ``[m]ay a compact or amendment include provisions that
are not directly related to the operation of gaming activities?'' With
a firm declaration that provisions which are not directly related to
the operation of gaming activities is a violation of IGRA.
The Department has incorporated the recommended section with
modifications for consistency with the proceeding section in Subpart D.
The new section is numbered Sec. 293.23 and the following sections
have been renumbered.
Several commenters recommended the Department revise Sec. 293.24
by inserting the word ``activity'' or ``activities'' after the phrase
``class III gaming'' for consistency with other sections in part 293.
The Department has added the word ``activity'' or ``activities'' as
appropriate in Sec. 293.24.
Several commenters requested the Department provide a table of
authority for provisions considered ``directly related to the operation
of gaming activities'' under Sec. 293.24(a) as well as provisions
considered ``not directly related to the operation of gaming
activities'' under Sec. 293.24(c). Commenters recommended the
Department revise or remove provisions which were not supported by past
decisions issued by the Department and/or case law.
The Department has prepared a table of authorities addressing these
and other provisions.
Several commenters recommended the Department provide standards
and/or a procedure within the regulatory text outlining how the parties
are expected to comply with the requirement in Sec. 293.24(a) to
``show that [provisions included in the compact or amendment] are
directly connected to the Tribe's conduct of class III gaming.''
Commenters also recommended the Department include in the part 293
regulations deference to a reasonable Tribal determination that a
provision is directly connected to the Tribe's conduct of class III
gaming.
The Department declines to provide a specific procedure for
complying with Sec. 293.24 in order to provide the parties with the
necessary flexibility to address the specific terms of their agreement.
Some parties chose to provide a justification brief explaining key or
novel provisions to the Department as part of their compact or
amendment submission. When necessary, the Department's practice is to
request additional information from the parties regarding specific
provisions in the compact or amendment. Additionally, the Department
frequently provides technical assistance to parties negotiating a
compact or amendment by flagging provisions which may violate IGRA or
may require additional justification. A best practice for compacts
requiring State legislative approval is to seek technical assistance
before the compact is formally adopted by legislative action.
A number of commenters responded to the Department's third
consultation question ``[s]hould the draft revisions include provisions
that facilitate or prohibit the enforcement of State court orders
related to employee wage garnishment or patron winnings?'' Commenters
encouraged the Department to include provisions which prohibit Tribal
enforcement of State court orders related to employee wage garnishment
and/or patron winnings in compacts. The commenters explained that these
provisions are not directly related to operation of gaming activities
under 25 U.S.C. 2710(d)(3)(C)(vii). Further some commenters explained
they have prevailed in litigation arguing that State court wage
garnishment orders are not binding on the Tribe or the Tribe's
employees. Commenters noted that while comity agreements between
sovereigns may be mutually beneficial, compact negotiations should not
be used to force Tribes to enforce these provisions. Commenters also
explained without a Tribal law mechanism for domesticating a State
court order, enforcing such an order erodes Tribal sovereignty and
exposes the Tribe and the Tribal gaming operation to unwarranted
liability.
The Department has added enforcement of State court orders to the
list of provisions which are not directly related to the operational
gaming activities in Sec. 293.24(c). The Department notes this is
consistent with the 9th Circuit decision in Chicken Ranch Ranchera of
Me-Wuk Indians v. California, 42 F.4th 1024 (9th Cir. 2022).
Several commenters requested the Department include in the Sec.
293.24(c)
[[Page 74933]]
list of provisions which are not directly related to the operation of
gaming activities provisions which require the Tribe to negotiate
memorandum of understanding or intergovernmental agreements with local
governments.
The Department has added requiring memorandum of understanding or
intergovernmental agreements with local governments to the list of
provisions which are not directly related to the operational gaming
activities in Sec. 293.24(c). The Department notes this is consistent
with the 9th Circuit decision in Chicken Ranch Ranchera of Me-Wuk
Indians v. California, 42 F. 4th 1024 (9th Cir. 2022).
Several commenters requested the Department include in the Sec.
293.24(c) list of provisions, which are not directly related to the
operation of gaming activities, provisions which require the Tribe to
submit to State court jurisdiction over tort claims arising from the
Tribe's conduct of class III gaming activities.
The Department has added requiring State court jurisdiction over
tort claims arising from the Tribe's conduct of class III gaming
activities to the list of provisions which are not directly related to
the operational gaming activities in Sec. 293.24(c). The Department
notes this is consistent with the District of New Mexico's decision in
Pueblo of Santa Ana v. Nash, 972 F. Supp. 2d 1254 (D.N.M 2013).
Several commenters requested the Department include an additional
paragraph to Sec. 293.24 codifying the Department's practice of
providing technical assistance letters to negotiating parties regarding
whether a proposed compact provision is `directly related' to the
Tribe's operation of gaming activities consistent with IGRA. Commenters
requested the Department further include avenues for parties to obtain
assistance from the Department in seeking guidance letters or legal
opinions from the National Indian Gaming Commission and the United
States Department of Justice.
The Department declines to adopt a formal codification of its
practice providing technical assistance to Tribes and States. The
Department will continue to coordinate with the Department of Justice
and the National Indian Gaming Commission regarding enforcement of
IGRA.
Comments on Sec. 293.24(a)
Several commenters objected to the Department's inclusion of
provisions in Sec. 293.24(a) addressing patron conduct within the
gaming facility as ``directly related to the Tribe's conduct of
gaming.'' Commenters argued the examples provided--without further
clarification or supporting past precedent and or case law--may cause
confusion and invite State overreach. Other commenters noted the
examples provided of subjects regulating patron conduct included
subjects which resulted in contentious negotiations with their
respective States, including State attempts to ban alcohol and smoking
in Tribal facilities while requiring State licensed facilities serve
alcohol. Other commenters recommended the Department revise the list of
examples in Sec. 293.24(a) to reflect non-controversial subjects that
are ``directly related to the Tribe's conduct of gaming'' including
minimum age restrictions and the transportation of gaming devices and
equipment.
The Department acknowledges the comments. The Department has
provided a comprehensive table of authorities supporting the examples
included in Sec. 293.24(a). The Department has also revised the list
to reflect non-controversial subjects the Department has found to be
``directly related to the Tribe's conduct of gaming.'' We note the
inclusion of an item in the Department's ``directly related'' list in
Sec. 293.24(a) does not suggest a State may insist on any requirement
addressing a ``directly related'' item.\6\
---------------------------------------------------------------------------
\6\ See, e.g., Chicken Ranch Ranchera of Me-Wuk Indians v.
California, 42 F.4th 1024, 1063 (9th Cir. 2022).
---------------------------------------------------------------------------
Several commenters recommended stylistic edits to Sec. 293.24(a)
for consistency with Sec. 293.24(c).
The Department has revised Sec. 293.24 for consistency.
One commenter noted the reference to patron conduct in Sec.
293.24(a) could include illegal patron conduct including trafficking in
the gaming facility and adjacent non-gaming amenities. The commenter
requested the Department's view on provisions which address criminal
jurisdiction.
The Department acknowledges the comment. The phrase ``patron
conduct'' has been removed from Sec. 293.24(a). Further, criminal
jurisdiction is addressed in Sec. 293.17.
Comments on Sec. 293.24(b)
Several commenters questioned the Department's inclusion of Tribal
infrastructure projects in Sec. 293.24(b) and noted provisions
addressing those projects may be beneficial to Tribes.
The Department acknowledges the comments. The Department notes that
infrastructure projects may be beneficial for Tribes. The Department
included Tribal infrastructure in Sec. 293.24(b) to highlight that
these projects should not be ``considered directly related to the
Tribe's conduct of gaming'' simply because they may be funded using
gaming revenue or may provide a benefit to the gaming facility.
Several commenters requested the Department remove the word
``incidental'' from Sec. 293.24(b). Commenters noted the phrase
``incidental benefits'' may cause confusion and result in unintended
State overreach.
The Department has removed the word ``incidental'' from Sec.
293.24(b).
Comments on Sec. 293.24(c)
One commenter requested the Department revise Sec. 293.24(c) to
state ``Provisions which the Department may consider not directly
related to the operation of gaming activities includes . . .''
The Department declines to adopt the requested revision.
Several commenters raised concerns with the Department's
interpretation in Sec. 293.24(c)(1) that ``[l]imiting third party
Tribes' rights to conduct gaming'' is not directly related to operation
of gaming activities under 25 U.S.C. 2710(d)(3)(C)(vii). Several
commenters requested clarification and noted the Department has
approached compact provisions impacting third party Tribes differently
and cited to the Department's discussion and approval of ``section 9''
in the 1993 Michigan compacts. Other commenters noted that Sec.
293.24(c)(1) could include Tribal parity provisions or `most favored
nation' provisions. Other commenters recommended the Department remove
this provision arguing it is ambiguous and potentially limits
geographic exclusivity provisions. Other commenters applauded Sec.
293.24(c)(1) and noted it appeared consistent with the Departments long
standing objection to compact provisions which sought to limit third
party Tribes' rights under IGRA.
The Department acknowledges the comments. The Department has
consistently distinguished compacts with Statewide gaming market
regulatory scheme from compacts which limit third party Tribes rights
under IGRA. In both Michigan and Arizona, the States and the Tribes
negotiated mutually beneficial agreements addressing the location and
size of Tribal gaming as part of a Statewide scheme. These and similar
compacts included Tribe-to-Tribe revenue sharing provisions to offset
market disparities between urban and rural Tribes. These compacts are
identical across the State or contain identical relevant provisions.
The Department has consistently found
[[Page 74934]]
these types of agreements consistent with IGRA.\7\
---------------------------------------------------------------------------
\7\ See, e.g., Letter from Ada Deer, Assistant Secretary--Indian
Affairs to Jeff Parker, Chairperson, Bay Mills Indian Community
dated November 19, 1993, approving the 1993 Michigan Compact; Letter
from Bryan Newland, Principal Deputy Assistant Secretary--Indian
Affairs, to Robert Miguel, Chairman Ak-Chin Indian Community, dated
May 21, 2021, at 2, discussing the Tribe-to-Tribe revenue sharing
and gaming device leasing provisions.
---------------------------------------------------------------------------
These are contrasted by compacts which act to prevent a Tribe, who
is not party to the compact or the broader Statewide scheme, from
exercising its full rights to conduct gaming under IGRA, most notably
in the form of geographic exclusivity from Tribal competition. The
Department has consistently expressed concern with these types of
arrangements, and in some cases disapproved compacts containing such
provisions.\8\ The Department has not limited this provision to ``anti-
compete'' or ``geographic exclusivity from Tribal competition'' to
permit the Secretary flexibility in evaluating other provisions which
may also improperly limit a third-party Tribe's rights under IGRA.
---------------------------------------------------------------------------
\8\ See, e.g., Letter from Gale Norton, Secretary of the
Interior, to Cyrus Schindler, Nation President, Seneca Nation of
Indians dated November 12, 2002, discussing the limits placed on
Tonawanda Band and the Tuscarora Nation in the Seneca Nation's
exclusivity provisions, and describing such provisions as ``anathema
to the basic notion of fairness in competition and . . .
inconsistent with the goals of IGRA''; Letter from Aurene Martin,
Assistant Secretary--Indian Affairs (acting), to Harold ``Gus''
Frank, Chairman, Forest County Potawatomi Community, dated April 25,
2003, addressing the parties removal of section XXXI.B which created
a 50 mile `no fly zone' around the Tribe's Menominee Valley facility
and explained ``we find a provision excluding other Indian gaming
anathema to basic notions of fairness in competition and
inconsistent with the goals of IGRA''; Letter from Aurene Martin,
Assistant Secretary--Indian Affairs (acting), to Troy Swallow,
President, Ho-Chunk Nation, dated August 15, 2003, addressing
section XXVII(b), limiting the Governor's ability to concur in a
two-part Secretarial Determination under section 20(b)(1)(A) of IGRA
for another Tribe as ``repugnant to the spirit of IGRA''; Letter
from Kevin Washburn, Assistant Secretary--Indian Affairs, to Harold
Frank, Chairman, Forest County Potawatomi Community dated January 9,
2013, disapproving an amendment which would have made the Menominee
Tribe guarantee Potawatomi's Menominee Valley facility profits as a
condition of the Governor's concurrence for Menominee's Kenosha two-
part Secretarial Determination, affirmed by Forest Cty. Potawatomi
Cmty. v. United States, 330 F. Supp. 3d 269 (D.D.C. 2018). See also
Letter from Bryan Newland, Assistant Secretary--Indian Affairs to
Claudia Gonzales, Chairwoman, Picayune Rancheria of Chukchansi
Indian of California, dated November 5, 2021, at 13.
---------------------------------------------------------------------------
Commenters recommended the Department include examples of ``non-
gaming Tribal economic activities'' to clarify the Department's
standard articulated in Sec. 293.24(b).
The Department has included examples of non-gaming Tribal economic
development in Sec. 293.24(c)(8).
Comments on Sec. 293.24--Which Has Been Renumbered as Sec. 293.25--
What factors will the Secretary analyze to determine if revenue sharing
is lawful?
The Department has renumbered the proposed Sec. 293.24 as Sec.
293.25 and comments have been edited to reflect the new section number.
A number of commenters responded to the Department's fifth
consultation question: ``[s]hould the draft revisions include
provisions that identify types of meaningful concessions that a Tribe
may request from State, other than protection from State-licensed
commercial gaming (i.e., exclusivity), for which a Tribe could make
revenue-sharing payments? How would such provisions affect compact
negotiations?'' Many commenters expressed support for including an
illustrative list of potential concessions similar to the lists in
Sec. 293.24. Commenters noted such a list would aid negotiating
parties in identifying types of concessions a State may offer in
exchange for revenue sharing. Commenters suggested examples could
include: geographic exclusivity, Statewide mobile sports wagering, and
a Governor's concurrence in a Secretarial Two-Part Determination under
section 2719(b)(1)(A). Other commenters opposed including an
illustrative list of potential concessions similar to the lists in
Sec. 293.24. Those commenters noted States may improperly use such a
list to demand revenue sharing while offering a concession of limited
value to the Tribe. Commenters recommended the Department follow a
case-by-case evaluation which provides negotiating parties flexibility.
The Department acknowledges the comments and notes these comments
highlight the sensitive nature of revenue sharing in compacts. The
Department declines to include a list of meaningful concessions as both
the concession and the revenue sharing rate must be evaluated on a
case-by-case basis. The Department has approved revenue sharing in
exchange for meaningful concessions including geographic exclusivity
from State-licensed gaming and Statewide mobile or i-gaming
exclusivity.\9\ The Department cautions parties not to negotiate for a
future meaningful concession which may require intervening Federal or
State actions as that concession may be considered illusory.
---------------------------------------------------------------------------
\9\ See, e.g., Letter from Bryan Newland, Assistant Secretary--
Indian Affairs to the Honorable R. James Gessner, Jr., Chairman,
Mohegan Tribe of Indians dated September 10, 2021, approving the
Tribe's compact amendment with the State of Connecticut; and Letter
from Bryan Newland, Assistant Secretary--Indian Affairs to the
Honorable Rodney Butler, Chairman, Mashantucket Pequot Indian Tribe
dated September 10, 2021, approving the Tribe's amendment to its
Secretarial Procedures, as amended in agreement with the State of
Connecticut.
---------------------------------------------------------------------------
A number of commenters expressed support for the proposed Sec.
293.25. Commenters noted the proposed Sec. 293.25 appeared to codify
existing case law as well as the Department's articulation of the test
for determining if revenue sharing is appropriately bargained for
exchange or an improper tax. Commenters noted that some States seek to
require--or heavily incentivize--intergovernmental agreements with
political subdivisions of the State, such as a local government,
requiring payments by the Tribe as a disguised tax. Commenters noted
this will assist parties in compact negotiations by clearly
articulating the Department's test for evaluating revenue sharing.
Several commenters recommended the Department review revenue sharing
provisions in compacts on a case-by-case basis with deference to a
Tribe's sophisticated negotiations and cautioning against a
paternalistic review.
The Department acknowledges the comments and notes the proposed
Sec. 293.25 codifies the Department's longstanding test for evaluating
revenue sharing. The Department included payments to local governments
in Sec. Sec. 293.4, 293.8, 293.25, and 293.28, in an effort to address
mandated intergovernmental agreements which may disguise improper
taxes.
Several commenters requested the Department define ``meaningful
concession'' and ``substantial economic benefit.'' Commenters proposed
the Department define meaningful concession as: (1) something of value
to the Tribe; (2) related to gaming; (3) which carries out the purposes
for which the IGRA was enacted, and (4) which is not a proper subject
of negotiation that the State already has an obligation to negotiate
with the Tribe under IGRA.
The Department accepted this comment. A new definition for
``meaningful concession'' is adopted in Sec. 293.2, which reads as
follows: a ``meaningful concession'' is: (1) something of value to the
Tribe; (2) directly related to gaming; (3) something that carries out
the purposes of IGRA, and (4) not a subject over which a State is
otherwise obligated to negotiate under the IGRA.
A new definition for ``substantial economic benefits'' is adopted
in Sec. 293.2, which reads as follows: ``substantial economic
benefits'' is: ``(1) a beneficial impact to the Tribe, (2) resulting
from a meaningful concession,
[[Page 74935]]
(3) made with a Tribe's economic circumstances in mind, (4) spans the
life of the compact, and (5) demonstrated by an economic/market
analysis or other similar documentation submitted by a Tribe or a
State.''
Several commenters requested the Department include a requirement
within Sec. Sec. 293.8 and 293.25 for the compacting Tribe to submit a
market analysis to demonstrate that any revenue sharing arrangements
will provide actual benefits to the Tribe which justify the payment
amount.
The Department acknowledges the comments. The Department has added
the requested requirement to Sec. Sec. 293.8 and 293.25. Section
293.8(e) is amended to require a Tribe or a State to submit a market
analysis along with their compact when the compact contains revenue
sharing provisions. Additionally, Sec. 293.25(b)(2) is amended to
include ``the value of the specific meaningful concessions offered by
the State provides substantial economic benefits to the Tribe in a
manner justifying the revenue sharing required by the compact.''
Several commenters requested the Department include IGRA's primary
beneficiary test to the Department's revenue sharing analysis.
The Department acknowledges the comments. The Department has added
the requested requirement to Sec. 293.25 as a new Sec. 293.25(b)(3),
which now requires evidence showing that the Tribe is the primary
beneficiary of its conduct of gaming, if the parties adopt revenue
sharing.
A number of commenters described their varying experiences under
differing revenue sharing arrangements. Some noted revenue sharing has
become a necessary negotiation tactic to bring a reluctant State to the
negotiation table after the Supreme Court's decision in Seminole. Some
commenters discussed revenue sharing with local governments through
intergovernmental agreements. Others noted that some particularly high
revenue sharing rates based on gross revenue have resulted in the State
receiving more revenue than the Tribe's portion of the net revenue.
Commenters also discussed situations when States have either actively
sought to undermine the Tribe's exclusivity--while not technically
violating the compact--or refusing to enforce State law to protect the
Tribe's exclusivity.
The Department acknowledges these comments. The Department has long
expressed concern with relatively high revenue sharing arrangements,
often permitting compacts containing them to go into effect and
occasionally disapproving them. The Department's understanding of
revenue sharing provisions, as well as exclusivity provisions, has
evolved consistent with case law and experiences of Tribes operating
under differing revenue sharing provisions for more than 30 years. The
Department has long offered, and will continue to offer, technical
assistance--highlighting the Department's precedents as well as
observed best practices--to parties negotiating revenue sharing
provisions.
A number of commenters questioned the Secretary's authority to
review revenue sharing with ``great scrutiny'' or include a bad faith
standard to evaluations of revenue sharing provisions. One commenter
opined revenue sharing payments are an improper workaround for IGRA's
prohibition on the assessment of a tax, fee, charge, or other
assessment. Other commenters expressed concern with the proposed Sec.
293.25 and cautioned the proposed provisions may cause unintended
consequences including limiting a Tribe's options to contribute
reasonable revenue share to a State to protect exclusivity or
redistribute funds to non-gaming Tribes. One commenter opined the
Department's past precedents on revenue sharing and exclusivity is
suspect, citing the Department's decisions in New Mexico and New York
and questioning the value of the exclusivity over the lives of those
compacts.
The Department acknowledges the comments. The proposed regulations
codify the Department's longstanding test for determining when revenue
sharing in a compact is a prohibited ``tax, fee, charge, or other
assessment'' because it goes beyond what is permitted by guidance in
relevant court decisions. The Department notes that its evaluation of
revenue sharing has evolved to incorporate changes in case law
including Rincon v. Schwarzenegger, 602 F.3d 1019 (9th Cir. 2010). The
Department finds persuasive, but not binding, the language in Rincon
where the Ninth Circuit explained that IGRA requires courts to consider
a State's demand for taxation as evidence of bad faith, not conclusive
proof (citing In re Indian Gaming Related Cases (Coyote Valley II), 331
F.3d 1094, 1112-13 (9th Cir. 2003), which in turn cited section
2710(d)(7)(B)(iii)(II)). The Department's great scrutiny standard is
consistent with IGRA's prohibition on a State demanding a tax, fee,
charge, or other assessment under section 2710(d)(4) and IGRA's
instruction to the courts in section 2710(d)(7)(B)(iii)(II). The
Department notes the Secretary expressed concerns with the exclusivity
provisions in both the 2015 New Mexico deemed approval letters and the
2002 Seneca Nation deemed approval letter but deferred to the judgment
of the Tribes.\10\ As explained above, the Department has replaced the
phrase ``evidence of bad faith'' with ``evidence of a violation of
IGRA.''
---------------------------------------------------------------------------
\10\ See Letter from Gale Norton, Secretary of the Interior, to
Cyrus Schindler, Nation President, Seneca Nation of Indians dated
November 12, 2002; see also Letter from Kevin Washburn, Assistant
Secretary--Indian Affairs, to Ty Vicenti, President, Jicarilla
Apache Nation, dated June 9, 2015.
---------------------------------------------------------------------------
Several commenters suggest the Department expand the bad faith
standard in Sec. 293.24(c). Some commenters requested the Department
include a State's continued insistence that the Tribe accept the
proposed ``meaningful concession'' in exchange for revenue sharing as
evidence of bad faith. Commenters opined that the provision is
consistent with the Ninth Circuit's analysis of the issue in Rincon
Band v. Schwarzenegger, 602 F.3d 1019 (9th Cir. 2010). Other commenters
requested the Department include a State's request for revenue sharing,
or insistence on a specified rate paid by other Tribes, either in the
State or in a neighboring State, or past rates that are no longer
supported by the current market, as presumptive evidence of bad faith.
Other commenters requested the Department include a State's disparate
treatment of similarly situated Tribes in the State as presumptive
evidence of bad faith.
The Department declines to include additional examples as bad faith
or adopt a ``presumptive bad faith'' standard. As explained above, the
Department has replaced the phrase ``evidence of bad faith'' with
``evidence of a violation of IGRA.'' The compact negotiation process in
IGRA envisions a negotiation between two sovereigns, although the
Department notes in some instances Tribes have successfully engaged in
collective negotiations with the State. If a State makes an offer which
the Tribe rejects, the Tribe may make a counteroffer. The IGRA provides
that if a State does not negotiate, or does not negotiate in good
faith, the remedial provisions of the statute permit a Tribe to bring
an action in Federal district court. The Department will continue to
coordinate with the Department of Justice and the National Indian
Gaming Commission regarding enforcement of IGRA.
Some commenters requested the Department revise Sec. 293.25 to
require the Tribe to initiate revenue sharing negotiations and to tie
the revenue sharing provision's specific payments to specific
concessions. The proposed revised text would read: ``(1) the Tribe
[[Page 74936]]
requested and the State has offered specific meaningful concessions the
State was otherwise not required to negotiate; and (2) the value of the
specific meaningful concessions offered by the State provides
substantial economic benefits to the Tribe in a manner justifying the
revenue sharing required by the compact.''
The Department accepts the requested revision as Sec.
293.25(b)(1) and (2).
One commenter requested the Department include a provision in
Sec. 293.25 permitting the Tribe, during the life of the compact,
to request technical assistance or a legal opinion if the meaningful
concession continues to provide substantial economic benefits to the
Tribe justifying continued revenue sharing payments and, if not, to
what extent the revenue sharing payments should be adjusted to
remain in compliance with IGRA.
The Department declines to adopt the requested provision in Sec.
293.25. The Department will continue to offer technical assistance to
Tribes and States, including identification of best practices. The
Department notes best practices include careful drafting of both the
terms of the Tribe's exclusivity--or other meaningful concession--along
with remedies for breach and triggers for periodic renegotiation of
specific provisions.
Several commenters requested the Department clarify that a State's
obligation under IGRA to negotiate a compact is not a ``meaningful
concession'' for the purposes of revenue sharing.
The Department acknowledges the comments. Congress required Tribes
and States to negotiate class III gaming compacts in good faith,
provided a remedy if States refused to negotiate in good faith, limited
the scope of bargaining for class III gaming compacts, and prohibited
States from using the process to impose any tax, fee, charge or other
assessment on Tribal gaming operations. 25 U.S.C. 2710(d).
Several commenters noted the proposed Sec. 293.25, while helpful
for most Tribes and States, is without a Seminole fix effectively a
dead letter.
The Department has addressed comments requesting a Seminole fix
above under general comments. There the Department notes it has long
coordinated with the Department of Justice and the National Indian
Gaming Commission regarding enforcement of IGRA.
Several commenters requested the Department clarify that the result
of a ``bad faith'' determination under Sec. 293.25 would result in
automatic disapproval of the compact or amendment.
The Department declines to establish an automatic disapproval
standard. As explained above, the Department has replaced the phrase
``evidence of bad faith'' with ``evidence of a violation of IGRA.'' The
Secretary's discretion to disapprove or take no action is discussed
under Sec. Sec. 293.12, 293.15, and 293.16.
One commenter noted that the proposed regulation at Sec. 293.25,
when read in conjunction with Sec. 293.24, is ambiguous and needs to
be clarified. The two proposed regulations, taken together, seem to
imply that the ``meaningful concession exception'' is limited to a
State's demand for a fee.
The Department acknowledges the comments. The Department notes
Sec. 293.24 addresses provisions which are considered ``directly
related to gaming'' while Sec. 293.25 addresses revenue sharing. The
Department also notes the recent decision by the Ninth Circuit in
Chicken Ranch overturned the district court's application of the
meaningful concession test to provisions which were tangentially
related to gaming. The Department finds the Ninth Circuit's reasoning
persuasive, but not binding, that meaningful concessions cannot make an
out-of-scope topic proper under IGRA. Chicken Ranch Ranchera of Me-Wuk
Indians v. California, 42 F.4th 1024 (9th Cir. 2022)
Comments on Sec. 293.25--Which Has Been Renumbered as Sec. 293.26--
May a compact or extension include provisions that limit the duration
of the compact?
The Department has renumbered the proposed Sec. 293.25 as Sec.
293.26 comments have been edited to reflect the new section number.
Several commenters expressed support for the proposed Sec. 293.26
and explained compacts should be very long term or perpetual.
Commenters noted the negotiation process can be lengthy and require a
significant investment of resources.
The Department acknowledges the comments.
Several commenters expressed support for the inclusion of a bad
faith standard in the proposed Sec. 293.26. Several commenters
requested the Department add the word ``presumptive'' so the relevant
sentence would read ``[a] refusal to negotiate a long-term compact, or
a short-term extension to allow for negotiations to continue, is
considered presumptive evidence of bad faith.''
The Department acknowledges the comments but declines the requested
revision. As explained above the Department has replaced the phrase
``evidence of bad faith'' with ``evidence of a violation of IGRA.''
One commenter requested the Department define ``long-term'' as at
least 15-years, and ``short-term'' as at least one year.
The Department declines the proposed definition of ``at least 15-
years'' for long term but has accepted the proposed definition of ``at
least 1 year'' for short term.
Several commenters requested the Department clarify that the
existence of a compact with a Tribe does not negate a State's
obligation to negotiate a new compact or an amended compact for the
period after the current compact expires.
The Department acknowledges the comments. The Department notes IGRA
at 25 U.S.C. 2710(d)(3)(A) obligates a State to negotiate with a Tribe
in good faith at the request of the Tribe. The existence of a compact
does not absolve the State of its duty under IGRA.
Comments on Sec. 293.26--Which Has Been Renumbered as 293.27--May a
compact or amendment permit a Tribe to engage in any form of class III
gaming activity?
The Department has renumbered the proposed Sec. 293.26 as 293.27
comments have been edited to reflect the new section number.
Several commenters expressed their support for this provision,
noting that it will assist Tribes in negotiating scope of gaming
provisions.
The Department acknowledges the comments.
A few commenters, while expressing support for the provision,
stated that the provision was unclear as to its intent, and requested
that the Department clarify that ``any'' means ``all.'' One commenter
suggested the Department modify the second sentence to clarify the
intent of the provision as follows: ``A State's refusal to negotiate a
compact over all forms of class III gaming if it allows any form of
class III gaming, is considered evidence of bad faith.'' While one
commenter suggested the Department revise the second sentence to remove
``not prohibited by the State.''
The Department acknowledges the comments but declines the requested
revisions. As explained above, the Department has replaced the phrase
``evidence of bad faith'' with ``evidence of a violation of IGRA.'' The
language used by the Department follows the authority granted by IGRA.
One commenter noted that the term ``not prohibited'' has been the
subject of much debate, interpretation, and litigation since IGRA was
enacted and that a State, although its laws may
[[Page 74937]]
prohibit such gaming, the State allows it to occur through non-
enforcement. The commenter suggested that the Department revise the
provision to make it clear that the mere existence of laws which state
that class III gaming or a form of class III gaming is prohibited alone
are not determinative of whether a State in fact prohibits class III
gaming or a form of class III gaming, and that the Department will also
examine the State's policies and practices regarding enforcement of
laws that purport to prohibit class III gaming or a form of class III
gaming in determining whether a State in fact prohibits such gaming.
The Department acknowledges the comment but declines the requested
revision. The language used by the Department follows the authority
granted by IGRA.
Many commenters, while expressing support for the provision, noted
that courts have disagreed with this approach, particularly the Tenth
Circuit, Ninth Circuit, and Eighth Circuit, where those courts adopted
a narrower interpretation of the term ``permits such gaming,'' adopting
the view that the phrase ``such gaming'' refers to specific types of
class III games that a State permits. These commenters expressed
concern that the provision is thus inconsistent with these more recent
Federal court decisions and may lead to unnecessary litigation and
cause some confusion and obstruction in future compact negotiations.
One commenter questioned the language of Sec. 293.27, noting that
there is a body of Federal case law regarding the distinction between
``permitted'' and ``prohibited'' gaming activities. The commenter did
not believe that Sec. 293.27 adds value to existing case law.
The Department acknowledges these comments. The Department takes
the position that the Second Circuit's decision in Mashantucket Pequot
Tribe v. Connecticut, 913 F. 2d 1-24 (2d Cir. 1990) holding that
Congress intended to codify the test set out in California v. Cabazon
Band of Mission Indians, 480 U.S. 202 (1987) when it used the phrase
``permits such gaming'' such that IGRA refers to class III gaming
categorically is correct. Under the Secretary's delegated authority to
interpret and promulgate rules for IGRA, the Department finds that if a
State allows any form of class III gaming, it is regulating all forms
of class III gaming, which are a subject for good faith negotiations.
One commenter stated that Sec. 293.27 appears to take a broader
approach in scope of class III games and that it was unclear whether as
currently drafted if Sec. 293.27 speaks in class III games regulated
by the State and not prohibited in the State and how provisions
regarding Statewide remote wagering or internet wagering would be
addressed under this provision.
The Department acknowledges this comment. Sec. 293.27 provides
that if a State allows any form of class III gaming, the State is
regulating all forms of class III gaming, which are permitted under
IGRA and thus a subject for good faith negotiations. In response to
comments received during consultation the Department has added a new
proposed section addressing i-gaming, Sec. 293.29.
Several commenters suggested that a State's refusal to allow all
forms of class III gaming as allowed under a State's constitution or
other laws should be considered presumptive evidence of bad faith.
The Department acknowledges these comments but declines to make
this revision. IGRA does not permit a presumptive determination of bad
faith. Additionally, as explained above the Department has replaced the
phrase ``evidence of bad faith'' with ``evidence of a violation of
IGRA.''
Comments on Sec. 293.27--Which Has Been Renumbered as Sec. 293.28--
May any other contract outside of a compact regulate Indian gaming?
The Department has renumbered the proposed Sec. 293.27 as Sec.
293.28 and comments have been edited to reflect the new section number.
Several commenters expressed support for the proposed Sec. 293.28.
The Department acknowledges the comments.
Several commenters expressed concern with proposed Sec. 293.28.
Commenters stated that the provisions requiring Tribes to submit all
the agreements encompassed under Sec. 293.28 and Sec. 293.4(b) are
overly broad and should be revised to ensure they do not impact
existing jurisdiction agreements, in lieu tax agreements, mutual aid
agreements for law enforcement, health and safety agreements, alcohol
regulation agreements, utility agreements, necessary roadway
improvements, lending agreements, vendor agreements, and
intergovernmental agreements with units of local governments.
Commenters assert that the breadth of Sec. 293.28 would create doubt
over the validity of many existing jurisdiction agreements, undermine
Tribal sovereignty, and interfere with the Tribes' ability to negotiate
necessary local agreements according to what the Tribe believes is in
its best interest based on its circumstances and experience.
Other commenters stated that the proposed new requirement for the
Secretary to approve any ``Agreements which include provisions for the
payment from a Tribe's gaming revenue . . . .'' is unnecessary and will
result in the submission of an ``exponential'' number of agreements to
the Office of Indian Gaming causing unnecessary delay and creating new
roadblocks to a Tribe's economic development efforts. Moreover,
offering a vague declination type remedy, with no time limit on agency
action and no deemed approval mechanism will create further unnecessary
delay. Further, IGRA at 25 U.S.C. 2710(d)(3) specifies ``compacts''
that are executed between Tribes and States under Federal and
applicable State law, not counties or other political subdivisions of
the State.
The Department accepted the comments, in part. Section 293.28 is
modified to indicate that only agreements between Tribes and States, or
States' political subdivisions, which govern gaming and include
payments from gaming revenue, are covered by this section. Agreements
that do not regulate gaming need not be submitted to the Department for
approval as part of a Tribal-State gaming compact. Likewise, agreements
between Tribes and the State and/or local governments that facilitate
cooperation and good governance, but that do not regulate gaming,
should not be incorporated into or referenced as a requirement of a
Tribal-State gaming compact. Additionally, the Department has revised
Sec. 293.4(b) to require the Department to issue a determination
whether a submitted document is a compact or amendment within 60 days
of it being received and date stamped by the Office of Indian Gaming.
Several commenters requested the Department revise Sec. 293.28 to
permit rather than require a Tribe to submit the targeted documents and
narrow which documents are targeted. Commenters explained the proposed
revisions to Sec. 293.28 would ensure that compacts and amendments do
not include provisions that are not directly related to the operation
of a Tribe's class III gaming operation. Commenters stated Tribes
should have the option to request the Department's review and approval
of other agreements, mandated or required by a compact or amendment,
that do not exceed the scope permitted under IGRA.
The Department accepted the requested revisions. The Department
revised Sec. 293.28 to reflect the section only covers agreements
between a Tribe and a State or the State's political subdivisions,
which regulates the
[[Page 74938]]
Tribe's right to conduct gaming or includes payments from the Tribe's
gaming revenue. The Department has also revised Sec. 293.4 as
discussed above. Agreements between a Tribe and the State and/or local
governments that facilitate cooperation and good governance, but that
do not regulate gaming or include payments from gaming revenue, should
not be incorporated into, or referenced as a requirement of, a Tribal-
State gaming compact.
Several commenters requested the Department revise proposed Sec.
293.28, to exclude lending/loan agreements. The commenter argued the
proposed language in Sec. 293.28 would require Tribes to send lending
agreements (loan documents) for Department review and approval under
IGRA because it is not uncommon for lending agreements to require a
Tribe hold gaming revenue in accounts for collateral or similar
purposes. Commenters questioned if the Department intends to review
financial documentation and lending agreements between Tribes and
third-party lenders, which are subject to the National Indian Gaming
Commission's review to determine if the agreement constitutes a
management contract. Commenters opined subjecting lending agreements to
review by the Department and the National Indian Gaming Commission
would be extremely burdensome.
The Department accepted the requested revisions. The Department
revised Sec. 293.28 to reflect the section only covers agreements
between a Tribe and a State or the State's political subdivisions,
which regulates the Tribe's right to conduct gaming or includes
payments from the Tribe's gaming revenue. Third-party agreements, such
as lending documents and regular course of business agreements need not
be submitted to the Department for approval as part of a Tribal-State
gaming compact.
Several commenters questioned the Secretary's authority to review
all documents included in the proposed Sec. 293.28. Commenters
explained section 2710(d)(3) of IGRA specifies that compacts are
executed between Tribes and States under Federal and applicable State
law, not counties or other political subdivisions of the State.
Commenters explained this provision would arguably require submission
of a vast number of agreements between Tribes and State and local
governments. Commenters asserted that the use of gaming revenue is
governed by 25 U.S.C. 2710(b)(2)(B) and many compacts and gaming
ordinances have similar requirements. Commenters argued policing non-
compact agreements, which call for payment from gaming revenue, is far
afield of the Secretary's limited authority to approve or disapprove a
compact.
The Department acknowledges the comments. IGRA directs that the
Secretary review and either approve or disapprove compacts within a 45-
day review period. In enacting IGRA, Congress delegated authority to
the Secretary to review compacts to ensure that they comply with IGRA,
other provisions of Federal law that do not relate to jurisdiction over
gaming on Indian lands, and the trust obligations of the United States.
25 U.S.C. 2710(d)(8)(B)(i)-(iii). IGRA establishes a limited scope of
appropriate topics in a Tribal-State gaming compact. Thus, in reviewing
submitted compacts and amendments, the Secretary is vested the
authority to determine whether the compacts contain topics outside
IGRA's limited scope. IGRA limits a Tribe's use of gaming revenue to:
funding Tribal governmental operations or programs; providing for the
general welfare of the Tribe and its members; promoting Tribal economic
development; donating to charitable organizations; or help fund
operations of local governmental agencies. 25 U.S.C. 2710(b)(2)(B).
However, IGRA in section 2710(d)(4) prohibits the State or its
political subdivisions from imposing a tax, fee, charge, or other
assessment. The Department reads section 2710(b)(2)(B) to permit a
Tribe to voluntarily help fund operations of local governmental
agencies, not as an end-run around the prohibition against imposed
taxes, fees, charges, or other assessments in section 2710(d)(4).
Section 293.25 includes a discussion of the Department's interpretation
of IGRA's prohibition against the imposition of a tax, fee, charge, or
other assessment.
Comments on Sec. 293.28--Which Has Been Renumbered as Sec. 293.31--
How does the Paperwork Reduction Act affect this part?
The Department has renumbered the proposed Sec. 293.28 as Sec.
293.31 comments have been edited to reflect the new section number.
Several commenters expressed support for the proposed Sec. 293.31.
The Department acknowledges the comments and notes the proposed
Sec. 293.31 is the renumbered but unrevised Sec. 293.16 in the
Department's 2008 Regulations.
V. Summary of Changes by Section
The Department proposes to provide primarily technical amendments
to the existing process-based regulations, including the title. The
proposed technical amendments are intended to clarify the process and
contain edits for internal consistency and improved readability. The
Department also proposes to add 15 sections addressing substantive
issues and organize part 293 into 4 subparts. The Department proposes
to amend the title to part 293 by removing the word ``process'' from
the title. The proposed amended title would be ``part 293 Class III
Tribal State Gaming Compacts.'' The Proposed Amendments incorporate
comments received during Tribal consultation on the Consultation Draft
and discussed above in the Tribal Consultation section.
A. Proposed Subpart A--General Provisions and Scope
The Proposed Subpart A, titled ``General Provisions and Scope''
would contain Sec. Sec. 293.1 through 293.5.
Proposed Amendments to Sec. 293.1--What is the purpose of the part?
The Department proposes technical amendments to clarify that the
proposed part 293 Regulations contain both procedural and substantive
regulations.
Proposed Amendments to Sec. 293.2--How are key terms defined in this
part?
The Proposed Amendment restructures the existing Sec. 293.2 by
removing the paragraph for the introductory sentence and editing that
sentence for clarity. The proposed restructuring improves clarity by
using the paragraphs for each defined term. The existing definitions
for Amendment, Compact or Tribal-State Gaming Compact, and Extension
reflect proposed edits to improve clarity and respond to comments
received during consultation. The Proposed Amendments includes seven
new definitions: gaming activity or gaming activities, gaming facility,
gaming spaces, IGRA, meaningful concession, substantial economic
benefit, and Tribe.
<bullet> Gaming activity or gaming activities are interchangeable
terms repeatedly used in IGRA but not defined by IGRA. Therefore, the
Department proposes to define these terms as used in part 293 and in
Tribal-State gaming compacts as ``the conduct of class III gaming
involving the three required elements of chance, consideration, and
prize.''
<bullet> Gaming Facility is a term used in IGRA at 25 U.S.C.
2710(d)(3)(C)(vi), but is not defined by IGRA. IGRA permits a compact
to include ``standards for the operation of such activity and
maintenance of the gaming facility, including licensing.'' As a result,
compacting parties have on occasion used this provision to extend State
regulatory standards beyond the
[[Page 74939]]
maintenance and licensing of the physical structure where the Tribe is
conducting gaming. The definition of gaming facility addresses building
maintenance and licensing under the second clause of 25 U.S.C.
2710(d)(3)(C)(vi) and is intended to be narrowly applied to only the
building or structure where the gaming activity occurs. Therefore, the
Department proposes to define gaming facility as ``the physical
building or structure where the gaming activity occurs.'' \11\
---------------------------------------------------------------------------
\11\ See, e.g. Letter to the Honorable Peter S. Yucupicio,
Chairman, Pascua Yaqui Tribe of Arizona, from the Director, Office
of Indian Gaming, dated June 15, 2012, at 5, and fn. 9, discussing
the American Recovery & Reinvestment Act of 2009 and the IRS's
``safe harbor'' language.
---------------------------------------------------------------------------
<bullet> Gaming spaces is a term the Department has used to clarify
the physical spaces a compact may regulate. The Department proposed to
define Gaming Spaces as ``the areas within a Gaming Facility that are
directly related to and necessary for the conduct of class III gaming
such as: the casino floor; vault; count room; surveillance, management,
and information technology areas; class III gaming device and supplies
storage areas; and other secured areas. where the operation or
management of class III gaming takes place, including the casino floor,
vault, count, surveillance, management, information technology, class
III gaming device, and supplies storage areas.''
<bullet> IGRA is the commonly used acronym for the Indian Gaming
Regulatory Act of 1988 (Pub. L. 100-497) 102 Stat. 2467 dated October
17, 1988, (Codified at 25 U.S.C. 2701-2721 (1988)) and any amendments.
The Department proposes to include IGRA as a defined term to facilitate
consistency and readability in the regulations.
<bullet> Meaningful concession is a term the Department has adopted
from Ninth Circuit caselaw as part of the Department's long-standing
test for revenue sharing provisions. The Department proposes to define
meaningful concession as: ``something of value to the Tribe; directly
related to gaming; something that carries out the purposes of IGRA; and
not a subject over which a State is otherwise obligated to negotiate
under IGRA.''
<bullet> Substantial economic benefit is a term the Department has
adopted from Ninth Circuit caselaw as part of the Department's long-
standing test for revenue sharing provisions. The Department proposes
to define substantial economic benefit as: a beneficial impact to the
Tribe; resulting from a meaningful concession; made with a Tribe's
economic circumstances in mind; spans the life of the compact; and
demonstrated by an economic/market analysis or similar documentation
submitted by the Tribe or the State.
<bullet> Tribe--the Department is proposing to include Tribe as a
defined term to facilitate consistency and readability in the
regulations.
Proposed Amendments to Sec. 293.3--What authority does the Secretary
have to approve or disapprove compacts and amendments?
The Proposed Amendment contains a conforming edit to existing Sec.
293.3.
Proposed Amendments to Sec. 293.4--Are compacts and amendments subject
to review and approval?
The Proposed Amendments contains clarifying edits combining
paragraphs (a) and (b) from the 2008 Regulations into a new paragraph
(a); a new paragraph (b) which was proposed during Tribal consolation,
and a new paragraph (c) which creates a process by which the Parties
may seek a determination if an agreement or other documentation is a
``compact or amendment'' without submitting that agreement for review
and approval pursuant to IGRA. These proposed changes clarify that any
document between a Tribe and the State or its political subdivisions
which establish, change, or interpret the terms of a Tribe's compact or
amendment regardless of whether they are substantive or technical, must
be submitted for review and approval by the Secretary. The Department
is concerned that compacting parties have read the existing definition
of Compact in Sec. 293.2(b)(2) and the existing Sec. 293.4, narrowly
to exclude from Secretarial review a range of agreements or other
documents which often impact the parties understanding and application
of the terms of their compact, or payments made by a Tribe from gaming
revenue. The Department is proposing a new paragraph (b) to clarify the
scope of documents that may be considered an amendment and a new
paragraph (c) to allow parties to seek a determination from the
Department that their agreement is or is not a compact. This process is
modeled on the National Indian Gaming Commission's practice of issuing
declination letters for agreements which do not trigger NIGC's review
and approval of management contracts as required by IGRA at 25 U.S.C.
2711.
Proposed Amendments to Sec. 293.5--Are extensions to compacts subject
to review and approval?
The Proposed Amendments contain clarifying edits for consistency
and readability. Additionally, the Department is proposing to add a
sentence which codifies the Department's long-standing practice that an
extension must be published in the Federal Register to be in
effect.\12\
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\12\ See, e.g. Notice of Final Rulemaking Part 293, 73 FR 74004,
74007 (Dec. 5, 2008).
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B. Proposed Subpart B--Submission of Tribal-State Gaming Compacts
The Proposed Subpart B, titled ``Submission of Tribal-State Gaming
Compacts'' would contain Sec. Sec. 293.6 through 293.9.
Proposed Amendments to Sec. 293.6--Who can submit a compact or
amendment?
The Proposed Amendments contains conforming edits for consistency
to Sec. 293.6.
Proposed Amendments to Sec. 293.7--When should the Indian Tribe or
State submit a compact or amendment for review and approval?
The Proposed Amendments contains conforming edits for consistency
to both the heading and the body of Sec. 293.7.
Proposed Amendments to Sec. 293.8--What documents must be submitted
with a compact or amendment?
The Proposed Amendments contains conforming edits for consistency
to Sec. 293.8. Additionally, the Department is proposing to renumber
the existing paragraphs and add a new paragraph (d). The proposed
paragraph (d) would clarify that compact submission package should
include any agreements between the Tribe and the State or its political
subdivisions which are required by the compact or amendment and either
involve payments made by the Tribe from gaming revenue, or restricts or
regulates the Tribe's use and enjoyment of its Indian lands, as well as
any ancillary agreements, documents, ordinances, or laws required by
the compact which the Tribe determines is relevant to the Secretary's
review. The Department's review of the compact includes analyzing if
the provision(s) requiring ancillary agreements, documents, ordinances,
or laws violate IGRA or other Federal law because the underlying
agreement includes provisions prohibited by IGRA, and therefore the
Secretary may disapprove the compact.
[[Page 74940]]
Proposed Amendments to Sec. 293.9--Where should a compact or amendment
be submitted for review and approval?
The Proposed Amendments contains conforming edits for consistency
and proposed new sentence to permit electronic submission of compacts.
The Office of Indian Gaming will accept and date stamp electronic
submissions for the purpose of initiating the 45-day review period. The
first copy of a compact or amendment that is received and date stamped
initiates the 45-day review period.
C. Proposed Subpart C--Secretarial Review of Tribal-State Gaming
Compacts
The Proposed Subpart C, titled ``Secretarial Review of Tribal-State
Gaming Compacts'' would contain Sec. Sec. 293.10 through 293.16. The
Proposed Amendments include renumbering the existing Sec. 293.14 When
may the Secretary disapprove a compact or amendment? as Sec. 293.16.
Renumbering and renaming the existing Sec. 293.15 When does an
approved or considered-to-have-been-approved compact or amendment take
effect? as Sec. 293.14 When does a compact or amendment take effect?
And adding a new Sec. 293.15 Is the Secretary required to disapprove a
compact or amendment that violates IGRA?
Proposed Amendments to Sec. 293.10--How long will the Secretary take
to review a compact or amendment?
The Proposed Amendments contains conforming edits for consistency
to Sec. 293.10.
Proposed Amendments to Sec. 293.11--When will the 45-day timeline
begin?
The Proposed Amendments contains conforming edits to Sec. 293.11
for consistency with proposed changes to Sec. 293.9, and a new
sentence providing the Department will send an email confirming receipt
of electronically submitted compacts or amendments including when the
Secretary's 45-day review period ends.
Proposed Amendments to Sec. 293.12--What happens if the Secretary does
not act on the compact or amendment within the 45-day review period?
The Proposed Amendments contain clarifying edits for consistency
and readability. Additionally, the Department proposes to include a new
provision codifying the Department's practice of issuing letters
informing the parties that the compact or amendment has been approved
by operation of law after the 45th day. The letter may include guidance
to the parties identifying certain provisions that are inconsistent
with the Department's interpretation of IGRA--also known as Deemed
Approval Letters.
Proposed Amendments to Sec. 293.13--Who can withdraw a compact or
amendment after it has been received by the Secretary?
The Proposed Amendments contains conforming edits for consistency
to Sec. 293.13.
Proposed Amendments to Sec. 293.14--When does a compact or amendment
that is affirmatively approved or approved by operation of law take
effect?
The Proposed Amendments renumber the existing Sec. 293.15 as Sec.
293.14 to improve overall organization of the regulations. The Proposed
Amendments contain clarifying edits for consistency and readability to
both the heading and the body of Sec. 293.14.
Proposed Sec. 293.15--Is the Secretary required to disapprove a
compact or amendment that violates IGRA?
The Proposed Amendments contain a new Sec. 293.15, which clarifies
IGRA's limits on the Secretary's authority to review compacts.
Congress, through IGRA at 25 U.S.C. 2710 (d)(8), provided the Secretary
with time-limited authority to review a compact and discretionary
disapproval authority. Within this limited time period, the Secretary
may approve or disapprove a compact. IGRA further directs that if the
Secretary does not approve or disapprove a compact within IGRA's
limited time frame for review, then the compact shall be considered to
have been approved by the Secretary, but only to the extent the compact
is consistent with the provisions of IGRA. 25 U.S.C. 2710(d)(8)(C). The
Department notes that one Circuit has held that the Secretary must
disapprove a compact if it violates any of the three limitations in
IGRA and may not approve the compact by operation of law. Amador County
v. Salazar, 640 F.3d 373, 381 (DC Cir. 2011). The Department, however,
strongly disagrees with the court's holding, finding that it conflicts
with and negates a specific provision of IGRA.
Proposed Sec. 293.16--When may the Secretary disapprove a compact or
amendment?
The Proposed Amendments renumber and restructure the existing Sec.
293.14 as Sec. 293.16 to improve overall organization of the
regulations. Additionally, the Department proposes to renumber the
existing paragraphs and add a new paragraph (b). The proposed paragraph
(b) would clarify that if a compact submission package is missing the
documents required by Sec. 293.8 and the parties decline to cure the
deficiency, the Department will presume that the compact or amendment
violates IGRA.
D. Proposed Subpart D--Scope of Tribal-State Gaming Compacts
The Proposed Subpart D, titled ``Scope of Tribal-State Gaming
Compacts'' would contain Sec. Sec. 293.17 through 293.31. The Proposed
Amendments include substantive provisions addressing the appropriate
scope of a compact under IGRA. These provisions continue the question-
and-answer approach utilized in the existing regulations. These
provisions codify existing Departmental practice and provide compacting
parties clear guidance on the appropriate scope of compact
negotiations.
Proposed Sec. 293.17--May a compact include provisions addressing the
application of the Tribe's or State's criminal and civil laws and
regulations?
The Proposed Amendments contains a new Sec. 293.17 clarifying the
appropriate scope of terms addressing the application of the criminal
and civil laws and regulations in a compact. Congress through IGRA at
25 U.S.C. 2710(d)(3)(C)(i) provided that a compact may include
provisions addressing the application of criminal and civil laws and
regulations of the Tribe or the State that are directly related to, and
necessary for, the licensing and regulation of the gaming activity.
Proposed Sec. 293.18--May a compact include provisions addressing the
allocation of criminal and civil jurisdiction between the State and the
Tribe?
The Proposed Amendments contains a new Sec. 293.18 clarifying the
appropriate scope of terms addressing the allocation of criminal and
civil jurisdiction in a compact. Congress through IGRA at 25 U.S.C.
2701(5) found that ``[T]ribes have the exclusive right to regulate
gaming activity on Indian lands if the gaming activity is not
specifically prohibited by Federal law and is conducted within a State
which does not, as a matter of criminal law and public policy, prohibit
such gaming activity.'' Congress then provided that a compact may
include provisions addressing the allocation of criminal and civil
jurisdiction between the Tribe and the State necessary for enforcement
of the laws and regulations described in section 2710(d)(3)(C)(i). See
IGRA at 25 U.S.C. 2710(d)(3)(C)(ii).
[[Page 74941]]
Proposed Sec. 293.19--May a compact include provisions addressing the
State's costs for regulating gaming activities?
The Proposed Amendments contains a new Sec. 293.19 clarifying the
appropriate scope of assessments by the State to defray the costs of
regulating the Tribe's gaming activity. Congress through IGRA at 25
U.S.C. 2710(d)(3)(C)(iii) provided that a compact may include
provisions relating to the assessment by the State of the gaming
activity in amounts necessary to defray the costs of regulating the
gaming activity. Congress through IGRA at 25 U.S.C. 2710(d)(4)
clarified any assessments must be negotiated and at no point may a
State or its political subdivisions impose any taxes, fees, charges, or
other assessments upon a Tribe through the compact negotiations. The
Proposed Amendments further clarify that the compact should include
requirements for the State to show actual and reasonable expenses over
the life of the compact and the absence of such provisions is
considered evidence of a violation of IGRA.
Proposed Sec. 293.20--May a compact include provisions addressing the
Tribe's taxation of gaming?
The Proposed Amendments contains a new Sec. 293.20 clarifying the
appropriate scope of provisions addressing a Tribe's taxation of
tribally licensed gaming activity. Congress through IGRA at 25 U.S.C.
2710(d)(3)(C)(iv) provided that a compact may include provisions
relating to the Tribe's taxation of gaming activities in amounts
comparable to the State's taxation of gambling. A Tribal-State gaming
compact may not be used to address the Tribe's taxation of other
activities that may occur within or near the Tribe's gaming facility.
The inclusion of provisions addressing the Tribe's taxation of other
activities is considered evidence of a violation of IGRA.
Proposed Sec. 293.21--May a compact or amendment include provisions
addressing the resolution of disputes for breach of the compact?
The Proposed Amendments contains a new Sec. 293.21 clarifying the
appropriate scope of provisions addressing remedies for breach of the
compact. Congress through IGRA at 25 U.S.C. 2710(d)(3)(C)(v) provided
that a compact may include provisions relating to remedies for breach
of contract. Compacts often include alternative dispute resolution
including binding arbitration as part of the parties' remedies for
allegations of breach of contract. Despite the Department's existing
regulations clarifying that compacts and all amendments are subject to
Secretarial review, some compacting parties have resolved disputes in
manners which seek to avoid Secretarial review. Therefore, the
Department proposes Sec. 293.21 to clarify that any dispute resolution
agreement, arbitration award, settlement agreement, or other resolution
of a dispute outside of Federal court must be submitted for review and
approval by the Secretary. Further, the proposed Sec. 293.21
references the Sec. 293.4 determination process for review prior to
formal submission of a dispute resolution agreement as an amendment.
The inclusion of provisions addressing dispute resolution in a manner
that seeks to avoid the Secretary's review is considered evidence of a
violation of IGRA.
Proposed Sec. 293.22--May a compact or amendment include provisions
addressing standards for the operation of gaming activity and
maintenance of the gaming facility?
The Proposed Amendments contains a new Sec. 293.22 clarifying the
appropriate scope of provisions addressing the Tribe's standards for
the operation of the gaming activity as well as the Tribe's standards
for the maintenance of the gaming facility, including licensing in a
compact. Congress through IGRA at 25 U.S.C. 2710(d)(3)(C)(vi) provided
that a compact may include provisions relating to standards for the
operation of such activity and maintenance of the gaming facility,
including licensing. The Department interprets 2710(d)(3)(C)(vi)
narrowly as two separate clauses addressing separate Tribal and State
interests. First, a compact may include provisions addressing the
standards for the operation and licensing of the gaming activity.
Second, a compact may include provisions addressing the maintenance and
licensing of the gaming facility building or structure. The Proposed
Amendments in Sec. 293.2 includes definitions of both gaming facility
and gaming spaces to provide parties with clarity regarding the
appropriate limits of State oversite under IGRA. Any compact provisions
addressing the maintenance and licensing of a building or structure
must be limited to the building or structure where the gaming activity
occurs--the gaming facility. Further, if a compact or amendment mandate
that the Tribe adopt standards equivalent or comparable to the
standards set forth in a State law or regulation, the parties must show
that these mandated Tribal standards are both directly related to and
necessary for, the licensing and regulation of the gaming activity.
Proposed Sec. 293.23--May a compact or amendment include provisions
that are directly related to the operation of gaming activities?
The Proposed Amendments contains a new Sec. 293.23 clarifying a
compact may include provisions that are directly related to the
operation of gaming activities. Congress through IGRA at 25 U.S.C.
2710(d)(3)(C)(vii) provided that a compact may include provisions
relating to any other subjects that are directly related to the
operation of gaming activities. The Proposed Amendments in Sec. 293.24
codify the Department's longstanding narrow interpretation of section
2710(d)(3)(C)(vi).
Proposed Sec. 293.24--What factors will be used to determine whether
provisions in a compact or amendment are directly related to the
operation of gaming activities?
The Proposed Amendments contains a new Sec. 293.24 which codifies
existing case law and the Department's longstanding narrow
interpretation of section 2710(d)(3)(C)(vi) as requiring a ``direct
connection.'' The Department notes the Ninth Circuit in Chicken Ranch
found the Department's longstanding direct connection test persuasive
and consistent with the court's own independent analysis of IGRA and
case law. The proposed Sec. 293.24 provides compacting parties with
examples of provisions which have a direct connection to the Tribe's
conduct of class III gaming activities as well as examples the
Department has found do not satisfy the direct connection test.
Proposed Sec. 293.25--What factors will the Secretary analyze to
determine if revenue sharing is lawful?
The Proposed Amendments contains a new Sec. 293.25 which clarifies
the appropriate scope of provisions addressing revenue sharing.
Congress, through IGRA at 25 U.C.S. 2710 (d)(4), prohibited States from
seeking to impose any tax, fee, charge, or other assessment upon an
Indian Tribe or upon any other person or entity authorized by an Indian
Tribe to engage in a class III activity. The Proposed Amendments
codifies the Department's longstanding rebuttable presumption that any
revenue sharing provisions are a prohibited tax, fee, charge, or other
assessment. The Proposed Amendments
[[Page 74942]]
also contains the Department's test to rebut that presumption.
Proposed Sec. 293.26--May a compact or extension include provisions
that limit the duration of the compact?
The Proposed Amendments contains a new Sec. 293.26 which addresses
the appropriate duration of a compact. The Department and IGRA
anticipate that compacts are long-term agreements between a Tribe and a
State that reflect carefully negotiated compromises between sovereigns.
Proposed Sec. 293.27--May a compact permit a Tribe to engage in any
form of class III gaming activity?
The Proposed Amendments contains a new Sec. 293.27, which
clarifies the appropriate scope of class III gaming that a State
permits. Congress, through IGRA at 25 U.C.S. 2710(d)(1)(B), requires
that a Tribe seeking to conduct class III gaming be located in a State
that permits such gaming for any purpose by any person, organization,
or entity.
The Department takes the position that the Second Circuit's
decision in Mashantucket Pequot Tribe v. Connecticut, 913 F. 2d 1-24
(2d Cir. 1990) holding that Congress intended to codify the test set
out in California v. Cabazon Band of Mission Indians, 480 U.S. 202
(1987) when it used the phrase ``permits such gaming'' such that IGRA
refers to class III gaming categorically is correct. Under the
Secretary's delegated authority to interpret and promulgate rules for
IGRA, the Department finds that if a State allows any form of class III
gaming, it is regulating all forms of class III gaming, which are a
subject for good faith negotiations.
Proposed Sec. 293.28--May any other contract outside of a compact
regulate Indian gaming?
The Proposed Amendments contains a new Sec. 293.28 which clarifies
that any agreement between a Tribe and a State or its political
subdivisions which seeks to regulate a Tribe's right to conduct
gaming--as limited by IGRA--is a gaming compact that must comply with
IGRA and be submitted for review and approval by the Secretary.
Proposed Sec. 293.29--May a compact or amendment include provisions
addressing Statewide remote wagering or internet gaming?
The Proposed Amendments contains a new Sec. 293.29, which
clarifies a compact may include provisions allocating jurisdiction to
address Statewide remote wagering or internet gaming. The IGRA provides
that a Tribe and State may negotiate for ``the application of the
criminal and civil laws and regulations of the Indian Tribe or the
State that are directly related to, and necessary for, the licensing
and regulation of such activity'' and ``the allocation of criminal and
civil jurisdiction between the State and the Indian Tribe necessary for
the enforcement of such laws and regulations.'' 25 U.S.C.
2710(d)(3)(c)(i)-(ii). The Department's position is that the
negotiation between a Tribe and State over Statewide remote wagering or
i-gaming falls under these broad categories of criminal and civil
jurisdiction. Accordingly, provided that a player is not physically
located on another Tribe's Indian lands, a Tribe should have the
opportunity to engage in this type of gaming pursuant to a Tribal-State
gaming compact. The Department notes the ultimate legality of gaming
activity outside Indian lands remains a question of State law,
notwithstanding that a compact discusses the activity. However,
C
[…truncated; see source link]Indexed from Federal Register on December 6, 2022.
This is legal information, not legal advice. Laws vary by jurisdiction and change frequently. Always verify current law with official sources and consult a licensed attorney in your jurisdiction for advice on your specific situation.