^ IMPLEMENTATION OF INDIAN ^^ GAMING REG ULATORY ACT / 4,R 31/3:103-17/PT.5 Inplenentation of Indijn Siniiig Reg.- HEAKIJNG- BEFORE THE SUBCOMMITTEE ON NATIVE AMERICAN AFFAIRS OF THE COMMITTEE ON NATURAL RESOURCES HOUSE OF REPRESENTATIVES ONE HUNDRED THIRD CONGRESS FIRST SESSION ON IMPLEMENTATION OF PUBLIC LAW 100-497, THE INDIAN GAMING REGULATORY ACT OF 1988, AND RELATED LAW ENFORCEMENT ISSUES HEARING HELD IN WASHINGTON, DC OCTOBER 5, 1993 Serial No. 103-17, Part V Printed for the use of the Committee on Natural Resources IMPLEMENTATION OF INDIAN GAMING REGULATORY ACT OVERSIGHT HEARING BEFORE THE SUBCOMMITTEE ON NATIVE AMERICAN AFFAIRS OF THE COMMITTEE ON NATURAL RESOURCES HOUSE OF REPRESENTATIVES ONE HUNDRED THIRD CONGRESS FIRST SESSION ON IMPLEMENTATION OF PUBLIC LAW 100-497, THE INDIAN GAMING REGULATORY ACT OF 1988, AND RELATED LAW ENFORCEMENT ISSUES HEARING HELD IN WASHINGTON, DC OCTOBER 5, 1993 Serial No. 103-17, Part V Printed for the use of the Committee on Natural Resources U.S. GOVERNMENT PRINTING OFFICE 84-760 WASHINGTON : 1994 For sale by the U.S. Government Printing Office Superintendent of Documents, Congressional Sales Office, Washington, DC 20402 ISBN 0-16-046382-3 COMMITTEE ON NATTJRAL RESOURCES GEORGE MILLER, California, Chairman PHILIP R. SHARP, Indiana EDWARD J. MARKEY, Massachusetts AUSTIN J. MURPHY, Pennsylvania NICK JOE RAHALL II, West Virginia BRUCE F. VENTO, Minnesota PAT WILLIAMS, Montana RON DE LUGO, Virgin Islands SAM GEJDENSON, Connecticut RICHARD H. LEHMAN, California BILL RICHARDSON, New Mexico PETER A. DeFAZIO, Oregon ENI F.H. FALEOMAVAEGA, American Samoa TIM JOHNSON, South Dakota LARRY 1,aR0CC0, Idaho NEIL ABERCROMBIE, Hawaii CALVIN M. DOOLEY, CaUfornia CARLOS ROMERO-BARCELO, Puerto Rico KARAN ENGLISH, Arizona KAREN SHEPHERD, Utah NATHAN DEAL, Georgia MAURICE D. HINCHEY, New York ROBERT A. UNDERWOOD, Guam HOWARD L. BERMAN, California LANE EVANS, lUinois PATSY T. MINK, Hawaii THOMAS J. BARLOW III, Kentucky THOMAS M. BARRETT, Wisconsin DON YOUNG, Alaska, Ranking Republican Member JAMES V. HANSEN, Utah BARBARA F. VUCANOVICH, Nevada ELTON GALLEGLY, CaUfornia ROBERT F. SMITH, Oregon CRAIG THOMAS, Wyoming JOHN J. DUNCAN, Jr., Tennessee JOEL HEFLEY, Colorado JOHN T. DOOLITTLE, Cahfomia WAYNE ALLARD, Colorado RICHARD H. BAKER, Louisiana KEN CALVERT, California SCOTT McINNIS, Colorado RICHARD W. POMBO, California JAY DICKEY, Arkansas John Lawrence, Staff Director Daniel Weiss, Professional Staff Member Richard Meltzer, General Counsel Daniel Val Kish, Republican Staff Director Subcommittee on Native American Affairs BILL RICHARDSON, New Mexico, Chairman PAT WILLIAMS, Montana CRAIG THOMAS, Wyoming, Ranking SAM GEJDENSON, Connecticut Republican Member ENI F H. FALEOMAVAEGA, American DON YOUNG, Alaska Samoa RICHARD H. BAKER, Louisiana TIM JOHNSON, South Dakota KEN CALVERT, California NEIL ABERCROMBIE, Hawaii KARAN ENGUSH, Arizona Tadd Johnson, Staff Director Marie Howard, Professional Staff Member Steven J.W. Heeley, Counsel June Lorenzo, Professional Staff Member Barbara Robles, Clerk William Johansen, Staff Assistant Richard Houghton, Republican Counsel on Native American Affairs (II) CONTENTS Page Hearing held: October 5, 1993 1 Charts submitted by Mr. Richardson: 1. Share of Gaming HANDLE for Major Types of Gaming, 1991 and J9g2 2 2. National Gaming ^\^N for Ms^^^^^^ 1992 4 3. Share of Gaming WIN for Major Types of Gaming, 1991 and 1992 5 Summary of Indian Gaming Regulatory Act 9 "Estimated Financial Trends in National and Indian Gaming: Tables and Charts for a Briefing Book," compiled by Roger Walke, Analyst in American Indian Policy, Government Division, Congressional Research Service 13 Member statements: Hon. BiU Richardson 1 Hon. Craig Thomas 32 Hon. Neil Abercrombie 38 Hon. Ken Calvert 38 Hon. Tim Johnson 38 Hon. George Miller 88 Witness statements: Hon. Daniel K. Inoviye, a U.S. Senator from the State of Hawaii, and Chairman, Senate Committee on Indian Affairs 39 Prepared statement of Senator Inouye 43 Hon. John McCain, a U.S. Senator from the State of Arizona, and Vice Chairman, Senate Committee on Indian Affairs 51 Prepared statement of Paul L. Maloney, Senior Counsel for Policy, Criminal Division, Department of Justice, before Select Committee on Indian Affairs, U.S. Senate, on March 18, 1992 53 Prepared statement of Senator McCain 62 Hon. WilUam J. Hughes, a Representative in Congress from the State of New Jersey 66 Prepared statement of Representative Hughes 70 Hon. Marge Roukema, a Representative in Congress from the State of New Jersey 77 "Was Mob Behind Tribe's Casino," New Jersey Law Journal, Septem- ber 13, 1993 79 Prepared statement of Representative Roukema 84 Panel consisting of: Jim E. Moody, Section Chief, Organized Crime/Drug Operations, Criminal Investigative Division, Federal Bureau of Investigation .... 101 F*repared statement of Mr. Moody 103 Laurence A. Urgenson, Acting Deputy Assistant Attorney General, Criminal Division, U.S. Department of Justice 113 Prepared statement of Mr. Urgenson 116 David B. Palmer, Deputy Assistant Commissioner for Criminal Inves- tigation, Internal Revenue Service, accompanied by Peter G. Djinis, Director, Office of Financial Management, Department of the Treasury 126 Prepared statement of Mr. Palmer 129 Hon. Robert G. Torricelli, a Representative in Congress from the State of New Jersey 162 Prepared statement of Mr. TorriceUi 165 Donald Trump, Chairman and President, Trump Organization, New York, New York 175 Prepared statement of Mr. Trump 178 (III) IV Page Witness statements — Continued Donald Trump, Chairman and President, Trump Organization, New York, New York— Continued Information submitted to Chairman Richardson from Mr. Trump by letter dated October 25, 1993 189 Transcript of Imus broadcast 243 'Torricelli gambUng bill a prize-winning insult" article 248 'The wrong way to fight competition" article 249 Affidavit of Richard M. Milanovich, Chairman, Agua Cahente Band of CahuiUa Indians, and additional documentation 253 Panel consisting of: Hon. Ada E. Deer, Assistant Secretary of Indian Affairs, Bureau of Indian Affairs, U.S. Department of the Interior, accompanied by Hilda A. Manuel, Director, Indian Gaming Management Staff, and Theodore R. Quasula, Chief, Division of Law Enforcement 270 Prepared statement of Ms. Deer 272 Hon. Anthony J. Hope, Chairman, National Indian Gaming Commis- sion 281 Prepared statement of Mr. Hope 283 Hon. Joel Frank, Commissioner, National Indian Gaming Commis- sion '. 302 Michael D. Cox, General Counsel, National Indian Gaming Commis- sion, accompanied by Hon. Jana McKeag, Commissioner 304 Panel consisting of: Timothy Wapato, Executive Director, National Indian Gaming Asso- ciation 308 Information regarding alleged incident of organized crime on Cabazon Reservation submitted by Mr. Wapato 311 Prepared statement of Mr. Wapato 315 Richard James Elroy, Retired Special Agent, Federal Bureau of In- vestigation 348 Prepared statement of Mr. Elroy 351 G. Michael Brown, President and CEO, Mashantucket Pequot Na- tion's Foxwoods Casino and High Stakes Bingo, Ledyard, CT, ac- companied by Lt. Col. Robert Root, Connecticut State Police 354 Prepared statement of Mr. Brown 357 "The Economic Impacts of the Foxwoods High Stakes Bingo & Casino on New London County and Siurounding Areas" and additional attachments to Mr. Brown's testimony 367 F. William Johnson, CEO, Mystic Lake Casino, Shakopee Sioux Tribe, Prior Lake, MN, accompanied by PoUce Chief Dick Powell, City of Prior Lake Police Department 444 Prepared statement of Mr. Johnson 448 APPENDIX October 5, 1993 Additional material submitted for the hearing record fi-om: Hon. Donald M. Payne, a Representative in Congress from the State of New Jersey: Statement of support for the Ramapough Mountain Indian Tribe 459 Hon. Benjamin A. Gilman, a Representative in Congress from the State of New York: Statement of support for the Ramapough Mountain In- dian Tribe 460 Seminole Tribe of Florida: Letter to Chairman Richardson from Hon. James E. BilUe, Chairman, dated October 13, 1993 462 Chief Ronald "Redbone" Van Dunk, Chief of the Ramapough Mountain Indians: Prepared statement and attachments 464 George L. Schneider, Counsel to the Ramapough Mountain Indian Tribe: Prepared statement 474 O'Connor & Hannan, Attorneys at Law: Letters regarding Indian gaming and Federal taxation ;■• 478 National Governors' Association: Letter to Senators Inouye and McCain dated August 17, 1993 485 IMPLEMENTATION OF PUBLIC LAW 100-497, THE INDIAN GAMING REGULATORY ACT OF 1988, AND RELATED LAW ENFORCEMENT IS- SUES TUESDAY, OCTOBER 5, 1993 House of Representatives, Subcommittee on Native American Affairs, Committee on Natural Resources, Washington, DC. The subcommittee met, pursuant to call, at 9:35 a.m., in room 1324, Longworth House Office Building, Hon. Bill Richardson (chairman of the subcommittee), presiding. STATEMENT OF HON. BILL RICHARDSON Mr. Richardson. The committee will come to order. Today we are taking testimony on the implementation of the In- dian Gaming Regulatory Act of 1988. This is the fifth in a series of oversight hearings the subcommittee has conducted on this sub- ject. I have asked that several charts be prepared for the committee by the Congressional Research Service which indicate where Indian gaming stands in relation to other types of legalized gaming na- tionally. [The charts follow:] (1) 3 «> ' 1 1 1 L?J j1 CO 1 '^ ON OS -jr ""X V_J en 9 S 4> Dl) (A S .S o o^ CZ5 OS OS 0\ OJ 83 ^ l-i ] 5> CO x: s o O vd O ■^ o ^1 11 O If Mr. Richardson. Chart one, illustrated as a pie, indicates the percentage of "handle." "Handle" means the total of all wagers made. This is the money which is bet and rebet or churned. Each bet, whether the house wins or loses, is added to the "handle." Note that Indian gaming, in blue, is only 4.6 percent of the "handle" in the country while Nevada and Atlantic City-type casinos were at 76 percent in 1992. Chart 2 shows the amount of "handle" in dollars. In 1992, non- Indian casinos went over $250 billion in "handle" while Indian gaming establishments were around $6 billion. Charts 3 and 4 show the concept of "win." The "win" in gambling means the revenues which go to the gaming facility after the cus- tomer winnings are paid out. This is the equivalent to a non-gam- ing business's gross revenues. Chart 3 shows that lotteries and casinos combined made in ex- cess of $20 billion in the "win" category while Indian gaming estab- lishments won slightly over $1 billion in 1992. Again, as chart 4 shows, the Indian percentage of the "win" is only around 5 percent. Indian gaming is governmental gaming. All of the revenues go back into the reservations. Many other types of gaming on these charts are for profit. We have almost 100,000 Indians homeless or underhoused. Na- tive Americans have the shortest lifespan and the highest rates of suicide, tuberculosis, and diabetes. We have an unusual interest in this hearing, and in the efforts of speeding up the proceedings, I am going to insert into the record my statement and background information and urge that our opening statements be relatively of short duration. [The prepared statement of Mr. Richardson and additional infor- mation follow:] OPENING STATEMENT OF CHAIRMAN RICHARDSON October 5, 1993 The Committee will come to order. Today we are taking testimony on the implementation of the Indian Gaming Regulatory Act of 1988. This is the 5th in the series of oversight hearings the Subcommittee has conducted on this subject. I have asked that several charu have been prepared for the Committee by the Congressional Research Service which indicate where Indian Gaming stands in relation to other types of legalized gaming nationally. Chart One, illustrated as a pie, indicates the percentage of "handle". "Handle" means the total of all wagers made. This is the money which is bet and rebet or "churned". Each bet, whether the house wins or loses, is added to the "handle". Note that Indian gaming, in blue, is only 4.6% of the handle in the country whOe Nevada and Atlantic Qty type casinos were at 76% in 1992. Chart Two shows the anaount o( "handle" in dollars. In 1992 non- Indian casinos went over $250 billion in handle while Indian gaming establishments were around $6 billion. Charts three and four show the ccmcept oi "win". The "win" in gambling m^an^ the revenues which go to the gaming facility after the custraner winnings are pa id out This is the equivalent to a non-gaming businesses "gross revenues". Chart Three shows that k}tteries and casinos ctmbined made in excess of $20 btSion in the "win" categoiy while Indian gaming establishments "won" less slightly over $1 biOicn in 1992. Again, as Chart Four shows, the Indian percentage of the win is only around S%. Indian gaming is governmental gaming. AH of the revenues go back into the reservations. Many of the other types of gaming on uiese charts are fcM' profit Indian gaming is a desperate remedy f(v a desperate situation. Abnost 100,000 Indians are homeless or underboused. Indians have the shortest life span and the highest rates of suicide, tubercukxis and diabetes. Over half (rf the pec^le on reservations are unempkiyed. On maiy tcservatioas, Indian gaming has been a way out of the w(»st poverty in our nation. The guniaf revenues are mandated to go back into governmental programs to benefit the Indiu people. On the MiUe Lacs Reservation m Minnesota last week, a new school was opened. The school was buih with gaming dollars and not ckk penny of federal govenmient awi s tance. This is what the Act was meant to da Tnrfian tribes are experiencing a new hope for the future, and a new hope ttriiicfa they have not felt in decades or even centuries. Many voices speak out vehemently against Indian gaming, but as a tribal leader told me recently, "no one ever objected to the Indians being poor". Today we will discuss law enforcement issues in Indian gaming. There has been a hysteria surrounding Indian gaming from the begiiming. There have been allegations of organized crime and money laundering rampant on reservations. Today, we will hear from the law enforcement agencies charged with regulating Indian gaming and enforcing federal laws on the reservations. We will also hear from tribal witnesses and private parties to get their perspectives on law enforcement issues in Indian gaming. This Subcommittee is committed to seeking the truth on these matters. These allegations are quite significant and the Committee takes its oversight responsibilities very seriously. If there is criminal activity in these gaining operationt, we need to know about it and actively work to put a stop to it If the level of criminal activity is not at serious as some allege, we must work to ensure that this industry is weQ regulated and the criminal elements are kept in check. But we must begin by asking the questions • which is our purpose today. SUMMARY OF THE INDIAN GAMING REGULATORY ACT On October 17, 1988, the President signed into law the Indian Gaming Regulatory Act, Public Law 100-497, 25 U.S.C. 2701 et sea . The Act provides a system for the regulation of gaming on Indian lands by dividing gaming into three classes, establishing the National Indian Gaming Commission to regulate Class II gaming and authorizing compacts between tribes and states for the regulation of Class III gaming. Class I Gaming Class I gaming includes social or traditional gaming which is played in connection with tribal ceremonies or celebrations. Class I gaming is regulated exclusively by the tribes. Class II Gaming Class II gaming includes bingo and, if played at the same location as bingo, pull tabs, lotto, punch boards, tip jars, and instant bingo. Class II gaming also includes card games which are authorized by state law or not explicitly prohibited by state law and played at any location in the state. The card games must be played in conformity with state law or regulations regarding hours of operation and pot limits. A tribe may engage in Class II gaming if the state in which the tribe is located permits such gaming for any purpose by any person, organization or entity. Class II geiming is regulated by the National Indian Gaming Commission and the tribe or solely by the tribe if issued a certificate of self -regulation. Class III Gaming Class III gaming includes all gaming not included in Class I or Class II, such as casino-type games, gambling devices, pari- mutuel betting, etc. Class III gaming is prohibited unless authorized by a tribal- state compact. Class III Gaming and Tribal-State Compacts Class III gaming is lawful when it is authorized by a tribal ordinance approved by the chairman of the Commission, is located in a state that permits such gaming (whether for charitable, conunercial, or governmental purposes), and is conducted in conformance with a tribal-state compact which has been approved by the Secretary of the Interior. The Act authorizes an Indian tribe and the state in which the tribe is located to enter a compact governing gaming activities. The compact may include provisions concerning: the application of 10 tribal or state criminal and civil laws directly related to gaming, the allocation of jurisdiction between the state and the tribe, state assessments to defray the costs of regulating the activity, taxation by the tribe in amounts comparable to state taxation, remedies for breach of contract, standards for the operation and maintenance of the gaming facility, and any other subjects related to the gaming activity. The state is not authorized to impose a tax or assessment (except assessments that are agreed to) upon a tribe or person authorized by a tribe to conduct a gaming activity. The state cannot refuse to negotiate a compact based on its inability to impose a tax, fee, or other assessment. The federal districts courts are vested with jurisdiction over: actions by Indian tribes arising from the failure of a state to negotiate with a tribe seeking to enter a compact or to negotiate in good faith, any action by a state or tribe to enjoin a Class III activity which violates the tribal-state compact. A tribe may initiate an action for failure to negotiate in good faith against a state only after the passage of 180 days from the date the tribe requested the state to enter negotiations for a compact. If the court finds that the tribe has failed to negotiate in good faith, it shall order the state and the tribe to conclude a compact within 60 days. If the state and the tribe fail to conclude a compact within the 60-day period, the parties are to submit a court-appointed mediator their last best offers for a compact. The Secretary of the Interior is authorized to approve tribal- state compacts. The Secretary may disapprove a compact if it violates: the Act, any other federal law that does not relate to jurisdiction over Indian gaming, or the trust obligations of the United States to Indians. The compact takes effect once the Secretary publishes a notice in the Federal Register that the compact has been approved. Gaming on Indian Lands after Enactment Gaming is prohibited on land acquired by the Secretary in trust for an Indian tribe after the date of enactment of the Act unless: (1) the land is within or contiguous to the tribe's existing reservation boundaries; or (2) if an Oklahoma tribe, the lands are within the tribe's former reservation or the lands are contiguous to other land held in trust or restricted status for that tribe. This prohibition does not apply if the Secretary determines that a gaming facility would be in the best interests of the tribe and its members and would not be detrimental to the local community and the governor of the state concurs with the Secretary's determination. This prohibition also does not apply to 11 lands: taken in trust as part of a settlement of a land claim, comprising the initial reservation of a tribe federally acknowledged, or restored to a tribe that has been restored to federal recognition. National Indian Gaming Commission Composition The Commission is composed of three full-time members with the Chairman appointed by the President and the other two members appointed by the Secretary of the Interior. Two of the three Commissioners must be members of federally recognized Indian tribes and no more than two members can be of the same political party. The Chairman of the Commission is Anthony J. Hope. The two Commissioners are Jana McKeag and Joel Frank. Powers of Chairman The Chairman is empowered to: (1) issue temporary closure orders; (2) levy civil fines; (3) approve tribal gaming ordinances; and (4) approve management contracts. The Chairman is also vested with such powers as the Commission may delegate. Powers of the Commission The Commission is vested with the following powers which cannot be delegated: (1) approve the annual budget; (2) adopt regulations for civil fines; (3) adopt an annual schedule of fees; (4) authorize Chairman to issue subpoenas; and (5) permanently close a gaming activity. The Commission is vested with the following additional powers: (1) monitor gaming activities; (2) inspect gaming premises; (3) conduct background investigations; (4) inspect records related to gaming; (5) use the U.S. mails; (6) procure supplies; (7) enter into contracts; (8) hold hearings; (9) administer oaths, and (10) promulgate regulations. Tribal Self -Regulation A tribe may petition the Commission for a certificate of self- regulation if it has been engaged in a Class II activity continuously for a three-year period with at least one of the years being after the date of enactment of the Act and has otherwise complied with the Act; The Commission may issue the certificate if it is satisfied that the tribe has: (1) conducted the gaming activity in a manner that has resulted in an honest accounting of all revenues, has a reputation for a safe and honest operation, and is generally free of evidence of criminal or dishonest activity; 12 (2) adopted and is implementing an adequate system for: accounting of revenues, investigation, licensing, and monitoring of employees, and investigation, enforcement, and prosecution for violations of its gaming laws; and (3) conducted the gaming activity on a fiscally sound basis. Management Contracts The Chairman may approve a management contract if it provides: (1) adequate accounting procedures; (2) access by tribal officials to the gaming operations in order to verify the daily gross revenues and income; (3) a minimum guaranteed payment to the tribe that has preference over the retirement of development and construction costs; (4) a ceiling for the repayment of such costs; (5) a maximum term of 5 years or, at tribal request, 7 years; and (6) grounds and procedures for terminating the contract. The management fee cannot exceed 30 percent of the net revenues unless the tribe requests a higher percentage. The Chairman may approve a higher percentage, not to exceed 40 percent, if a higher percentage is justified based on the capital investment and projected income. All existing ordinances and management contracts, whether or not approved by the Secretary, must be submitted to the Chairman. Commission Funding The Commission is authorized to assess each gaune a fee which is based on a sliding fee scale from one-half of one percent to two and one-half percent on the first $1,500,000 of gross revenues and up to five percent of amounts over $1,500,000. The total amount of fees which the Commission can assess in any fiscal year is limited to $1,500,000. The Commission is authorized to request appropriations in an amount equal to the annual assessment. Section 8. Thus, the commission's annual budget cannot exceed $3,000,000 ($1,500,000 from assessments and $1,500,000 from appropriations) . There is authorized to be appropriated in an amount not to exceed $2,000,000 for the first fiscal year. 13 CRS Congressional Research Service • The Library of Congress • Washington, D.C. 20540-7000 ESTIMATED FINANCIAL TRENDS IN NATIONAL AND INDIAN GAMING: Tables and Charts for a Briefing Book Compiled by Roger Walke Analyst in American Indian Policy Government Division October 4, 1993 14 Table 1. Estimated National Legal Gaining HANDLE ('Churned' Dollars), by Type of Gaming, 1982-1992 1M2 ie«3 IM4 U» I9M IM7 P«in Hono - Tnck Hones -OTB Horac* - Subtotal Gnyhounds - Track Gnyhouoda - 0TB Greyhounds - Subtoul Toul • Perifliutuele Loltenes All Other Guno Video Lotteries Totsl - Lotteries Cesinoe SV/SJ Slot Mschlnes NV/NJ Tebie Guses Cruise Ships Rjverbosts Other Commert:ieJ Ceeinos- »9.990.62«,S72 »l.707^1.903 >II.697.900.47S S2J08.S61.89S I2J08.561.898 J622.7S2.3KI I14.629.2».73« M. 088.300.000 si4.400.ooo.oaa S87.0O0.0Oa.0O0 $9,932,179,428 S1.71S.986.659 Sll.S48.166.aS6 S2.326.S46.934 SS61.369 S2.326.39S.303 S619.8a4.39l $14,694,367,779 S 18.800.000.000 SS7JO0.0OO.0Oa SI0.417.6l!k.960 Sl.766.4S2.79a $12,183,071,760 $2,461,386,761 $e.631.S4S $2,466,917,699 $666,869,006 $16,306,868,366 $23,792,860,563 S92.86S.783. 646 $10,486,397,644 S1.763.S60.97S $12J40.248.622 $2,698,934,362 $4,423,618 $2,703,367,980 S663.96SJ72 $16,607,574,774 $10,481,686,728 $1,938,990,563 $12.420.67ej91 $3,009,193,413 $9,420 J61 $3.0 18.5 13.664 $667,575,369 $16,106,866,324 $26,182,148,083 S99.557.639.436 $28,503,598,369 $101,438,240,164 $11,007,987,415 $2,104,253,896 $13.112241.310 $3,190,892,997 $12,428,724 $3,203,321,721 $707,507,464 $17,023,070,495 $8,132,600,000 $10,213,260,000 $12,479,720,000 $13,140,292,000 S3Z794J63,961 $112,043,911,391 Total • Cesinoe Legal Bookmaking Sportsbooks Horaebooks Total - Legal Bookmeking Canl Rooms Bingo (other than on Indian reservations] Chantable Games Indian ITsssi islloHS Class n Class m Total — ladUn Ras. TOTAL LEGAL $101,400,000,000 $106,000,000,000 $I16.661.644J0S $126,739,667,619 $129,941,836,623 $144,838,166,342 $416,161,891 $692,019,766 S929.114.79S $886,867,210 $122,800,048 $160,326,188 S1S4.367232 $243,249,092 $637,970,939 SS62344.944 $1,113,482,030 Sl.129.106.302 $1,000,000,000 $1,062,000,000 Sl.066.000.000 $1,096,960,000 $3,000,000,000 S3.070.0Oa.0OO $3,164,118,000 $3,437,988,620 $1200.000.000 $1,400,000,000 $1,640,000,000 $1,681,680,000 $126,766,506,675 — — $250,000,000 $132,139,912,723 $146,972,602,693 $169.166267216 $898,939,394 Sl.014.319.728 $290. 180.529 $366,564,366 $1,189,119,923 $1,379,884,084 $1,118,889,000 $3,125,000,000 $3,599,574,086 $3,977,169,407 $1,789,307,520 $286,714,286 $166,611,028,661 S2.0O2. 960.838 $314JS6.714 $186,800,817,880 Sourt:e: Annual estimates prepared by ChristiansenyCununin^ Assocdates, Inc., for Gaming & Wagering Business magazine's July 15-S«pt. 14 issues, 1989-1993. Most recently revised figures used. Notes: • "Other Commertnal Casinos" includes all commercial land -based casinos that are not in Nevatla or New Jersey and are not on Indian reservations. Examples of such casinos are those in Deadwood, SD, and in certain towns in Colorado. •• "Non-Casino Gaming Devices" includes gaming devices in State-regulated non-casino establishments such as bars, restaurants, stores, etc. OTB = Off-Track Bettmg 15 Table 1. Estimated National Legal Gaming HANDLE ('Churned' Dollars), by Type of Gaming, 1982-1992 PanmuluelB Hocaf ■ Track Hoi»> . OTB Horses - SubtoUj Greyhounds - Trmck Greyhounds - OTB Gniyhounds - Subtotal Jsi-alai ToUl - Psximutuels All Other Games Video Lotteries Total - Lotteries NV/NJ Slot Machines NV/NJ Table Games Cnjise Ships Riverboata Other Commercial* Non-Casino Devices** Total - Casino* Legal Bookmaking Sporlabooka Horsefaooks Total • Legal Bookmaking Card Rooms til. 181.073.866 IZ487.088.e21 SI3.668. 162.387 83.246.422,210 $16.SS0.28S $3,262,972,496 $639,224,435 $17,570,369,317 $10,312,606,882 $3,417,069,719 $13,929,576,601 $3,183,112,602 $28,571,564 $3,211,684,166 $552,746,477 $17,694,007,244 $17,051,880,000 $19,488,330,000 $67,667,092,665 $65,790,588,454 $126,295,623,085 $127,774,754,003 $1,762,500,000 $23,141,217 $230,000,000 $249,874,874 $184,192,716,740 $195,600,858,548 $1,317,304,075 $1,434,952,978 $414,563,172 $403,178,763 $1,731,867,247 $1,838,131,741 $3,453,125,000 $7,564,918,000 $3,670,167,867 $3,794,482,916 $10,414,964,557 $3,721,698,942 $14,136,653,499 $3,438,744,803 $26,886,215 $3,466,631,018 $666,627,881 $18,157,912,398 $9,863,556,679 $4,028,593,038 $13,892,149,717 $3,463,487,796 $38,898,771 $3,602,386,567 $488,368,157 $17,882,904,441 $20,734,834,000 $20,678,640,000 $281,946,000 $354,842,000 $21,016,780,000 $20,933,482,000 $76,166,608,629 $161,638,696,232 $3,708,296,000 $3»4,S67,261 $306,800,000 $242,204,966,122 $84,398,462,227 $149,744,002,493 $4,076,676,000 $1,099,431,461 $771,022,759 $363,603,126 $240,463,097,066 $1,672,279,393 $1,871,063,086 $483,530,637 $392,124,903 $2,156,810,530 $2,263,187,989 $8,378,107,000 $8,399,639,000 $4,071,613,000 $4,230,164,000 $9,633,550,092 $4,677,706,686 $14,111,265,778 $3,242,150,864 $62,229,466 $3,304,380,320 $426,890,129 $17,841,526,227 $23,036,474,000 $1,326,363,000 $24,361,827,000 $94,567,329,008 $143,100,618,577 $4,280,608,760 $7,319,681,198 $3,078,234,749 $667,447,916 $262,893,820,498 $1,800,782,918 $307,612,279 $2,108,296,197 $8,428,086,000 $4,306,214,000 Charitable Gamta Indian Resarvations Class n Class m Total — Indian Raa. TOTAL LEGAL $3,581,133,231 $4,222,352,352 $4,467,407,000 $4,606,898,000 $1,294,000,000 $1,397,500,000 $1,346,100,000 $4,038,260,000 $2,640,100,000 $6,435,760,000 $303,092,696,050 $304,204,122,486 $345,714,286 $1,000,000,000 $231,596,962,688 $251,203,080,800 $4.774.84 1 000 $1,430,000,000 $13,744,500,000 $15,174,600,000 $329,889,108,922 Annual estimates preparetl by ChhstiansenyCtimmings Associates, Inc.. for G<xming & Wagering Business magazine's July 15-Sept. 14 issues, 1989-1992, and July 15-Aug. 14, 1993, issue. Most recently revised figures used. * "Other Commercial Casinos" includes all commennal land-based casinos that are not in Nevatla or New Jersey and are not on Indian reservations. Examples of such casinos are those in Deadwood, SD, and in certain towns in Colorado. •• "Non-Casino Gaming Devices" includes gaining devices in State-regulated non-casino establishments such as bars, restatirants, stores, etc. OTB = Off-Track Betting 16 Table 2. Changea In National Legal Gaming HANDLE ("Churned' Dollars), by Type of Gaming, 1982-1992 and 1985-1992 Overall Average Annual Percent Change: Percent Change: 1982 to 1992 1982 to 1992 Overall Average Annual Percent Change: Percent Change: 1985 (or later 1985 (or later year) to 1992 year) to 1992 PwinutueU Mono ■ Tnck Hono OTB HonM - Subtoul Greyhouoda • Track Grayhounda • OTB Greybounda • Subtotal Total • Panmutuola AU Other Canca Video Lotteriee Total ■ Lotteriee NV/NJ Slot Machlnee NV/NJ Table Ganiee Cruiae Shipe Other Commercial Caainoe* Non-Caeino Gaming Devices*' Total • Caaioee Legal Bootrmelring Sportebooka Hotvebooka Total - Legal Bookntakiog Card Rooma Bingo (other than on Indian leaervational Charitable Gamea Indian R aeei laUona CUaan Claaain ToUl — Indian Rm. TOTAL LEGAL IM I3« 20.63% 46.10% 11.106.36% 49.62% .0161% 22-80% SS6 66% 64.40% 333.7S% 150.40% 291.90% 742.61% 43.S4% 297.90% 162.33% -0.47% -9.09% 10.37% 161.01% 1.89% 16.29% 3.91% 20-13% 69.07% 1.306.75% 4.11% 22.23% ■3.73% -35.86% 207% 14 31% _ 11 10% - 370.43% 19.54% 138 53% 20.71% 261.16% 5.10% 43.74% - 14287% - 566.77% - 13.201.96% - 14237% 9.67% 101.12% 15.30% 103^8% 9.61% 26.42% 14.64% 86,72% 23.76% 668.32% 36«% 26.26% 10.51% 921.06% 6.969.80% 107 jn% ■136% 14.69% 2.05% 2.66% 46.89% 2.91% •S.15% 1.93% 6.40% 1 16 89% 13.22% 20 14% 5.32% 34 42% 666.77% 410.47% 24.77% 10,50% 10.67% 3,41% 9-33% 33.82% 321% 16 08% 6.12% 21964% 79.78% 10.97% Source: Calculated by CRS from annual estimates prepared by Cbristiansen/Cummings Associates, Inc. for Gaming & Wagenng Business magazue's July 15-Sept. 14 issues, 1989-1993. Most recently revised figures used. Notes: * "Other Commerciai Casinos' includes all cnmmerdal land-based casinos that are not in Nevada or New Jersey and are not on Indian reservations. Examples of such casinos are those m Deadwood, SO, and in certain towns in Colorado. •• "Non-Casmo Gaming Devices" mcludes gaming devices in State-regulated non-casino establishments such as bars, restaurants, stores, etc OTB = Off-Track Betting 17 Table 3. Each Gaming Type's Share of National Legal Gaming HANDLE CChumed" Dollars). 1982-1992 ~~^~ 1982 1983 1984 1985 liie 1987 lisi 1989 1990 1991 1992 Panmutuels Horses • Track Horses - 0TB Horses - Subtotal Greyhounds - Track Greyhounds - 0TB Greyhounds - Subtotal Jai-alai Total - Parimutuels Total - Lotteries Casinos NV/NJ Slot Machines NV/NJ Table Games Cruise Ships Riverboats Other Commercial Non-Casino Devices Total - Casinos Legal Bookmaking Sportsbooks Horsebooks Total - Legal Bookmaking Card Rooms Bingo [other than on Indian reservations] Charitable Gaines Total — Indian Reservations TOTAL LEGAL 7.94% 7.52% 7.09% 1.36% 1.30% 1.20% 9.30% 8.82% 8.29% 1.76% 1.76% 1.67% 1.76% 1.76% 1.67% 0,50% 0.47% 0.45% 11.55% 11.04% 10.41% 3.25% 3.91% 5.53% 11.45% 14.23% 16.19% 16.45% 17.12% 17.65% 24.90% 26.19% 25.13% 27.74% 28.66% 69.18% 65.99% 63.19% 62.55% 60.92% 60.30% 54.53% 50.87% 53.33% 49.23% 43 38% — — — — — — — 0.70% 1.22% 1.34% 1.30% — — — — — — — — — 0.36% 2.22% — — — — — — — 0.01% 0.13% 0.25% 0.93% — — — — — — 0.10% 0.10% 0.10% 0.12% 0.17% 80.63% 80.22% 79.38% 79.00% 78.04% 77.95% 79,53% 77.87% 79.91% 79.04% 76.66% 6.59% 6.29% 5.92% 4.83% 4.18% 3.44% 3.24% 2.89% 1.10% 1.16% 1.13% L07% 1.36% L23% 1.32% 1.39% 7.69% 7.46% 7.06% 5.90% 5.55% 4.66% 4.57% 4.28% 1.70% 1.81% 1.72% 1.40% 1.27% 1.13% 1.14% 0.98% — 0.01% 0.01% 0.01% 0.01% 0.01% 0.01% 0.02% 1.70% 1.81% 1.72% 1.41% 1.28% 1.14% 1.15% 1.00% 0.42% 0.40% 0.38% 0.28% 0.22% 0.18% 0.16% 0.13% 9.81% 9.67% 9.16% 7.59% 7.04% 5.99% 5.88% 5.41% 6.42% 7.49% 7.07% 7.36% 7.76% 6.93% 6.88% 7.38% 0.33% 0.52% 0.63% 0.56% 0.54% 0.10% 0.12% 0.13% 0.15% 0.17% 0.43% 0.65% 0.76% 0.71% 0.71% 0.80% 0.80% 0.72% 0.69% 0.67% 2.39% 2.32% 2.15% 2.16% 2.16% 0.95% 1.06% 1.05% 0.55% 0.57% 0.57% 0.20% 0.18% 0.16% 0.74% 0.75% 0.73% 1.68% 1.49% 3.01% il4% 1.58% L51% 1.06% 1.07% 1.08% 1.55% 1.68% 0.16% 0.17% 0.17% 0.15% 0.40% 0.55% 0.62% 0.55% 0.16% 0.13% 0.09% 0.71% 0.74% 0.64% 2.76% 276% 2.55% 1.34% L39% L31% 1.47% 1.51% 1.45% 0.87% L79% 4.60% 100.0% 100.0% 1000% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Source: Calculated by CRS from annual estimates prepared by Christiansen/Cummin^ Associates, Inc., for Gaming & Wagering Business magazine's July 15-Sept. 14 issues, 1989-1993. Most recently revised figures used. Notes: • "Other Commercial Casinos" includes all commercial land-based casinos that are not in Nevada or New Jersey and are not on Indian reservations. Examples of such casinos are those in Deadwood, SD, and in certain towns in Colorado. •• "Non-Casino Gaming Devices" includes gaming devices in State-regulated non-casino establishments such as bars, restaurants, stores, etc. OTB = Off-Track Betting 18 Table 4. Estimated National Legal Gaming WIN (Gross Revenues), by Type of Gaining, 1982-1992 PtnmutueU Hono Trmck Hoim OTB HorwM ■ SubloUi Gnyhound* • Track Grayhounds - OTB Gnylwund* - SubtouJ ToUl — Puimulueb Lotteries All Other Gemcs Video LoUerio ToleJ — Lotuna NV/NJ Slot Meohino NV/NJ Table Gemee Cniiee Shipe Rjverboela SI.S6O.00a,000 (400.000.000 lZ2M.ooo,ooa S430.ooo.oao (430,000.000 1112.000.000 S2. 792.000.000 S1.867.3IS.000 S40 1.640.644 S2.25S.8SS.644 S4&3.&40.152 SO S4U.S40.162 S11I.S64.790 S2.S23.963.S86 S1.94S.089. 136 S40S.9I6.009 S2.357.005. 145 S47S.020.221 Sl.OSI.OSl S479.071.272 S122.090.OI2 S2.958. 166.429 SI.980.8S0.496 S409.267.26S S2.390. 147.764 S626.292.201 $640,487 S627.132.GS8 S129.3S4.980 S3.D46.666.432 S 1.979.990.434 S452.S60.397 S2.432.550.831 S686. 792.716 S 1.789.848 S6S8.S82.S64 S130.108.421 S3.IS1.241.816 S2.176.201.lll S482.226,76S S2.6S8.427.S79 S620.947.777 S2.423.369 S623.371.146 S 137.75 1.703 S3.419.S60.72a $2,170,000,000 S3.044.0OO.0OO S4. 147.575.000 S5.208.772.800 S6.334.406.359 $6,581,972,263 S2.000.000.000 S2j;oo.ooo.ooo S2.35S.0O0.0OO $2,647,333,012 S2.904.619.182 $3,153,117,000 S3.SS4.S2S.000 $2,252,000,000 S2.400.194.79S $2,543,614,412 $2,590,901,883 SZ81 1.01 1.000 ToteJ — Cesiooe Sportsbooka Horaeboolu Totel — Legal Bookmeldng Cerd Roome Bingo [other then OD Indieo reeervetionel Cberiteble GeiDce Indian R eeei lalloae cum n Clmam IH TOTAL LEGAL $4,200,000,000 K610.000.000 $6,047,527,810 $6,448,233,594 SS.744.018.8S3 $6,395,839,000 $7,724,862 $13,037,685 $25,762,547 $60,000,000 $780,000,000 $19,250,974 $24,262,825 $43,513,799 $62,000,000 $798,000,000 $21,634,417 $31,212,619 $52,747,036 $53,260,000 SS17.862.797 $21,947,393 $39,056,828 $61,004,221 $54,847,500 $910,035,688 $35,598,000 $45,007,000 $80,605,000 $55,944,450 $941,648,581 $29,821,000 $55,383,000 $86,204,000 $260,000,000 SS94.863.117 $396,000,000 $464,000,000 $539,000,000 S682.000.000 SS05.S37.236 $674,846,891 - - - $87,500,000 SIOO.OOO.OOO $110,000,000 $10,413,762,547 $11,834,477,365 $13,616,129,072 $16,399,059,135 $16,913,702,325 $18,312.275990 Source: Anntial estimates prepared by ChnstJansenyCiimmings Associates. Inc., for Gaming & Wagering Business magazine's July 15-Sept. 14 issues, 19S9-1993. Most recently revised figures used. Notes: * "Other Commertnal Casinos' includes all co.timerdal land-based casinos that are not in Nevada or New Jersey and are not on Intlian reservations. Examples of such casinos are those in Deadwood. SD, and in certain towns in Colorado. ** *Non-Caaino Gaming Devices" includes gaming devices in State-regtilated non-casino establishments such as bars, restaurants, stores, etc. OTB = Off-Track Betting 19 Table 4. Estimated National Legal Gaming WIN (Gross Revenues), by Type of Gamine 1982-1992 ia«8 1988 1990 19SI 1902 Parimuluela Horse. . Truk $2,262,497,269 $2,089,381,419 $2,090,342,557 J 1.976,45 1.169 $1,939,309,121 Honws . 0TB 1509.750,996 $734,302,421 $806,503,403 $865,005,296 $969,662,063 Horeea - SubtotAi $2,762,248,265 $2,823,683,840 $2,896,845,960 $2840.466.464 $2908,871,184 Greyhounds - Track $625,017,715 $627,243,054 $691,774,030 $701,246,641 $675,367,175 Greyhounds ■ OTB $3,231,734 $5,427,066 $6,087,339 $7,416,330 $12,711,226 Greyhounds - SubtoUi $628,249,449 $632,670,120 $696,861,369 $708,662,971 $688,078,400 Jsi-diU $124,187,617 $107,766,036 $113,131,625 $100,343,331 $89,264,492 Tolsl — Psumutuol. $3,514,686,331 $3,564,119,996 $3,706,838,854 $3,649,462,766 $3,686,214,076 LottoHes All Olher Gimta - - $10,192,418,000 $10,105,539,000 $11,214,733,000 Video LoltencM - - $96,462,000 $121,841000 $242230,000 ToUl — UlUne. Casinos J8.423.628.720 $9,599,360,000 $10,288,880,000 $10,227,381,000 $11,466,963,000 NV/NJ Slol Mjchinoi $4,006,823,000 $4,360,125,000 $4,890,301,000 $6.242299.000 $6,830,586,443 NV/NJ Table Camea $3,054,030,000 $3,103,516,000 $3,412,892,000 $3,200,968,000 $3,120,137,399 Crujse Ships - $170,000,000 $260,759,000 $290,887,000 $306,431,350 Riverboata - - - $79,686,780 $418,021,561 Other Commercial - $2,140,293 $31,972,405 $63,912,237 $224,300,143 Non-Caaino Gaming Devices** $96,770,000 $107,443,693 $132,613,300 $167,680,407 $242172,466 Tolal — Casinos $7. 156.623.000 $7,733,224,986 $8,728,537,706 $9,036,432,424 $10,140,649,362 Legal Bookjsaldng Sportsbooka $42,022,000 $46,775,000 $48,799,000 $62300.000 $60,601000 Horsobooka $61,687,000 $69,993,000 $76,466,867 $66,079,878 $46,799,000 Tolal - Ug.1 Bookmaking $103,709,000 $106,768,000 $125,254,867 $107,379,878 $97,401,000 Card Rooma $276,250,000 $695,510,064 $667,593,000 $659,114,000 $660,811,000 Bingo [other than on Indian reservationat $1,056,103,272 $947,600,236 $1,019,194,000 $1,064,613,000 $1,090,944,000 Charitable Games $712,409,564 (I.114.337.S78 $1,194,044,000 $1,230,120,000 $1,298,949,000 Indian RaMmUona Class a - - S3S«,20a,000 «4 19.260.000 $429,000,000 CUaain - - (100,300,000 $300,900,000 $1,069,940,000 Total — Indian Raaarvntions $121,000,000 $300,000,000 $488,600,000 $720,160,000 $1,498,940,000 TOTAL LEGAL $2I.3S3.40».877 $23,969,821,159 $26,208,842,416 $26.6a3, 663,068 $29,930.871,43» Source: Annual estimatea prepared by Chriatiansen/C Buainesa magazme's July 15-Sept. 14 issues, Notes: • "Other Commercial Casinos' ineluiiea all r lummings Associates, Inc., for Gamine & Waeerinr 1989-1993. Most recently revised Ggtlres used. ■ — --— ™o."»i uuiu-wuKni auunae mat are not in nevada or New Jersey and are not on Indian reservations. Eiamples of such casinos are those in Deadwood. SD and m certain towns in Colorado. •• 'Non-Casino Gaming Devices' includes gaming devices in State-regulated non-casino establishments such as bars, restaurants, stores, etc. OTB = Off-Track Betting 20 Table 3. Changes in National Legal Gaming WIN (Gross Revenues), by Type of Gaming, 1982-1992 and 1985-1992 Overall Percent Annual Average Overall Average Annual Change: Percent Change: Percent Change: Percent r-hange: 1982 to 1992 1982 to 1992 1985 (or later 1985 (or later year) to 1992 year) to 1992 HorK> - Tr>ct Hoi»»aTB Horacs -SubtoUj Greyhounds • Track Greyhounda • OTB Greyhounds - Sublotsl Jsi sisi Total — Psnmuluels Lotteries All Othsr Gsnas Video Lotteries Tolsl — Lotteries Caair NV/NJ Slot Madiines NV/NJ Table Gaaus Cmise Ships Riverhosts 4M% 142.39% 29.2«* 57.06% 1.109.38% SO 02% 20 30* 32.03% 191.53% 4182% 0.47% 9.26% 260% 4.62% 36 56% 4.81% -2.24% 2.82% 11.29% 3.56% -210% 136.90% 21.70% 28.33% 1.412.36% 30.53% -3101% 20.99% 10.03% 151.11% 119.96% 100,73% 22.67% 79.67% 424.59% 10.379,88% 0,30% 13.11% 285% 3.63% 47.41% 3.88% ■5.16% 276% 4.90% 58.47% 1192% 10.47% 2.96% 21.57% 424 59% 371.47% Non-Casino Gaining Devices" Total — (dittos Legal BoolUDsking Sportabooks Horsebooka Total — Legal Bookraaking Card Rooms Bingo father than on Indian Charitable Games Indias RsssrvsUons Class n Class m TotsJ — ladUa TOTAL LEGAL 555 05% 159.45% 278.07% 1.221.62% 39.86% 228.02% 20.68% 10.00% 14.22% 29.45% 3.41% 1261% 15187% 130.56% 19.82% 59.66% 1,104.82% 19.88% 12^.19% 10.51% 966,74% 1.613,07% 26,10% 12.67% 262% 6.91% 42.70% 262% 1216% 5.12% 226.61% 50.06% CaltnjJated by CRS from annual estimates prepared by ChnstiansenyCummings Associates, Inc.. for Gaming & Wagering Business magazine's July 15-Sept. 14 issues, 1989-1993. Most recently revised figures tjsed, * -Other Commercial Casinos" includes all commercial land-based casinos that are not ui Nevada or New Jersey and are not on Indian reservations. Examples of such casinos are those in Deadwood, SD, and in certain towns in (Colorado. •• -Non-Casmo (5ammg Devices' includes gaming devices in Sute-regulated non-casino establishments such as bars, restaurants, stores, etc. OTB = Off-Track Betting 21 Table 6. E^ach Gaining Type's Share of National Legal Gaming WIN (Gross Revenues), 1982-1992 1982 1983 1984 1985 1986 1987 1988 1989 1990 I99I 1992 Parimutuela Horses - Track 17.76% 15.69% 14.31% 12.86% 1L71% 1L88% 10.54% 8.72% 7.98% 7.45% 6.48% Horses - 0TB 3.84% 3.39% 3.00% 2.66% 268% 2.63% 2.39% 3.06% 3.08% 3.22% 3.24% Horses — Subtotal 21.61% 19.09% 17.31% 15.52% 14.38% 14.52% 12.93% 11.79% 11.05% 10.66% 9.72% Greyhounds - Track 4.13% 3.83% 3.51% 3.42% 3.47% 3.39% 2.93% 262% 2.64% i66% 226% Greyhounds - 0TB 0.01% 0.01%. 0.01% 0.01% 0.02% 0.02% 0.02% 0.03% 0.04% Greyhounds — 4.13% 3.83% 3.52% 3.42% 3.48% 3.40% 294% 2.64% 266% 269% 230% Subtotal Jai-alai 1.08% 0.94% 0.90% 0.84% 0.77% 0.75% 0.58% 0.45% 0.43% 0.38% 0.30% Total — Parimutuels 26.81% 23.86% 21.73% 19.78% 18.63% 18.67% 16.45% 14.88% 14.14% 13.73% 12.32% Total — Lotteries 20.84% 25.72% 30.46% 33.83% 37.45% 35.94% 39.43% 40.06% 39.26% 38.26% 38.28% Casinos ^fv/NJ Slot 19.21% 19.92% 19.44% 18.86% 18.64% 19.58% 18.76% 18.16% 18.66% 19.61% 19.48% Machines NV/NJ Table Games 21.13% 19.03% 17.63% 16.52% 15.32% 15.35% 14.30% 12.95% 13.02% 11.98% 10.42% Cruise Ships — — — — — — — 0.71% 0.99% L09% L02% Riverboats — — - - - - - — - 0.30% 1.40% Other Conunerdal _ _ — — _ — _ 0.01% 0.12% 0.24% 0.75% Casinos' Non-Casino Gaming — — _ — — _ 0.45% 0.45% 0.51% 0.59% 0.81% Devices" Total — Casinos 40.33% 38.95% 37.07% 35.38% 33.96% 34.93% 33.50% 32.28% 33.30% 33.80% 33.88% Legal Bookmaking Sportsbooks 0.07% 0.16% 0.16% 0.14% 0.21% 0.16% 0.20% 0.19% 0.19% 0.20% 0.17% Horsebooks 0.17% 0.21% 0.23% 0.25% 0.27% 0.30% 0.29% 0.25% 0.29% 0.21% 0.16% Total — Legal 0.25% 0.37% 0.39% 0.40% 0.48% 0.47% 0.49% 0.44% 0.48% 0.40% 0.33% Bookmaking Card Rooms 0.48% 0.44% 0.39% 0.36% 0.33% 1.37% 1.29% 2.49% 2.51% 2.47% 2.21% Bingo (other than on 7.49% 6.74% 6.01% 5.91% 5.57% 4.89% 4.94% 3.95% 3.89% 3.99% 3.64% Indian reservations] Charitable Games 3.80% 3.92% 3.96% 3.78% 2.99% 3.14% 3.33% 4.65% 4.56% 4.65% 4.34% Total — Indian _ _ _ 0.57% 0.59% 0.60% 0.57% 1.25% 1.86% 2.69% 5.01% Reservations TOTAL LEGAL 100.0% 100.0% 100.0% 100.0% 100 0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% Calculated by CRS from annual estimates prepared by Christiansen/CummingB Associates, Inc., for Gaming & Wagering Business magazine's July 15-Sept. 14 issues, 1989-1993. Most recently revised figures used. * "Other Commercial Casinos" includes all commercial land-based casinos that are not in Nevada or New Jersey and are not on Indian reservations. Examples of such casinos are those in Deadwood, SD, and in certain towns in Colorado. •• "Non-Casino Gaming Devices" includes gaming devices in State-regulated non-casino establishments such as bars, restaurants, stores, etc. 0TB = Off-Track Betting 22 c CO •o c c o CO z o c o CO o> 00 o c m SJBIIOQ iO SUOJina 23 sjEiioQ ^o suoniig 24 O 0) giS 0) OO 3 ^ O) — c CO •D c c o (0 z o c o 0) O) CO c O CD a^i (D Z 1 CO ? E < ! CO o o CD J) cc z 0) ■a < o CO O Q Z H m ■ O) 0) c a> ^ f- CO E CO 1 (•J ! (0 ^ (1) o 0) ; 3 £ o CO ■Q 1 CO CO k. k. n> CO CO 0) £ 0. _i U B m ^ E E 3 o . CO) 0)0) OT?J = Q. St EOT "^ c E'" O O) ^ c ;= a ^5 O oi c ilJE O a ccO go ^ ^ ^ ^ ^ ^ S? ^i? S5 ^ 55 o o o o o o o o o o o o 0) 00 N. CO U5 "^ CO CM 25 ^1^ ^^^^ £m ^^**V^,„,^^ (Q a> ^^^^^ = O) ^^^^^ OT ^^^^^ OiA ^^^K .. CO ^k =bS \ 0) ^k EuT \ 3 -1 ^, £ o \ oz \ L.< \ X \ m \ -1 o \ O.E • • \ Z £ \ < a • \ xo \ o>-= V c 2 — c E o (Q :? o « z c . iS-S ■o c •; ^ c 0) . o 1 ^ 0) £0. Q. -. ' I CO £ 1 k (0 ■ ' tf 1 ^ 1 1 1 1 1 ' ^ '^ ^ >? nP > o^ o^ tf* tf^ 5^ f i5 U "i "^ n c M T < 3 a ° CO CO -2; 35 >cp ■^ TO ■ JS E g Ei o ^ 8 03 <3| uJ « CO ea 26 c CO '•B _c c o uei C5 Z .2 a: 2 ® -a < _J O 2 D) (0 .E a> ? CO Jo O 0) S5 (0 £ CO >- D> 2 -C o E (T> m u 0) ni 3U c <D u> (0 a> 3 c: U) U (0 >• ^ X3 n 0) ■DtO ai 1 •>- 3 -5 p o <) CO ni (0 t- = CO ^5 LijE CJ TO So SJE||0G jo suojing 27 sjEiioQ |o suoiiiig 28 ;? ?^ ^ ;^ ^ ^ ^ ^ ^ o o o o o o o o o o O) 00 I^ (O lO "* CO C\J 29 30 D) C CO E O) O) (Q ^ o »» 1 CM c 0) 1*^ ■o >- C C o m, E Q. (Q 0) DO X} O) — E c ^ 3 ^tf tf) z 0) (0 o (0 gT3 (Q = CD U o>0 « 2 a sdn-lJBJS *o JaquinN 31 32 Mr. Richardson. With that, I would Uke to recognize the rank- ing member of our subcommittee. STATEMENT OF HON. CRAIG THOMAS Mr. Thomas. Thank you, Mr. Chairman. I heard you. I will also insert mine in the record. I think it is very important that we have this hearing. This is the fifth one. It seems to me, and I am not an old hand at this issue, but it does seem to me there are a number of issues that, as we move for- ward, need to be clarified. One, I suppose, is the notion among gov- ernors and others that there is absolutely no control over what the tribes do, and obviously that is not true. Under the arrsingements the tribes do only what can be done in the State. On the other hand, I think there is some feeling among some of the tribes that they shouldn't have any restrictions at all, and I don't think that is a realistic notion. So, somehow we need to get those things somewhat clarified. In any event, I am delighted to have this hearing, and I espe- cially want to welcome our witnesses, our counterparts from the Senate. Grentlemen, it is nice to have you here, and I look forward to your testimony. Thank you, sir. [Prepared statement of Mr. Thomas follows:] 33 Statement of the Honorable Craig Thomas of Wyoming ON Oversight of the I.G.R.A October 5, 1993 Thank you Mr. Chairman. I am pleased to take part in this, the fifth in a series of oversight hearings on the Indian Gaming Regulatory Act. I think that it is vitally important that we as a body fully examine all facets of this issue before moving on to considering any legislation. As you know, I am fully committed to the goals and objectives of the Indian Gaming Regulatory Act. Gaming in Indian country since the enactment of IGRA has resulted in unparalleled economic growth, both for the tribes and for 34 their surrounding non-Indian communities. Once poverty- stricken tribes have picked themselves up by their boot- straps and are now providing educational, employment, economic, and social benefits to their members. In addition, gaming has produced a beneficial ripple effect in many local economies. While IGRA has, in my opinion, worked well in its present form, it is clear that some recent developments require that we reexamine the Act to fine-tune It. While there are some issues that we need to address ~ the issue of good-faith compacting, for example ~ there are others which have been raised as canards by opponents of Indian gaming and which I believe we need simply to refute and subse- quently discard. Among these is the allegation that Indian gaming is being significantly infiltrated by organized crime. Although opponents of Indian gaming have consistently made this allegation, their contention lacks both specifics and proof. I have seen no credible evidence to back up their asser- tion. In fact, the Department of Justice has repeatedly stated that this is simply not the case. I look forward to the testimony of the representatives from the FBI, DO J, and IRS on this issue today, and hope that it will lay to rest these accusations once and for all. Another fiction put forward by the opponents of Indian gaming Is that the tribes have been somehow provided an unfair competitive advantage over other citizens. However, our tragic treatment of Indian people over the years has placed them at a severe disadvantage both economically 36 and socially: 31% of Indian people live In poverty; Native Americans are three times as likely to be unemployed as non-Indian people; tubercolosis levels are 480% higher than for the general population, alcoholism 388% higher, diabetes 169% higher, and suicides 300% higher. Given these figures, even if we had intended IGRA to give the tribes such an economic edge I could not characterize it as unfair. In any event, I would note that triabi gaming enterprises are subject to many legal limitations which non-Indian enterprises are not. Only Indian gaming is subject to federal oversight and regulation. Only Indian tribes are required to negotiate with state governments before they can engage in any form of casino-type gaming. Only Indian tribes are required to spend their gaming income 37 solely for tribal governmental purposes and not for private business profit. In closing, Mr. Chairman, I would like to welcome our witnesses today -- especially our counterparts from the other body Senators Inouye and McCain. I look fonA/ard to their testimony. In addition, at this point I have several documents that I would like to submit for inclusion in the record. Thank you, Mr. Chairman. 38 Mr. Richardson. The chair recognizes the gentleman from Ha- waii. STATEMENT OF HON. NEIL ABERCROMBIE Mr. ABERCROMBIE. Thank you, Mr. Chairman. Mr. Chairman, my remarks will consist only of welcoming Sen- ator Inouye here, not only as a colleague but as a mentor of some, more than three decades now. Senator, since I first shook your hand on the comer of Kapewani Boulevard. We have seen a lot of changes since then. But one of the changes that are most important, Mr. Chairman, for purposes of this hearing is that Senator Inouye has led the way in this Nation in contemporary times to see to it that Native Amer- ican affairs receive the kind of legislative attention and redress that was necessary. I don't believe that it is possible to cite anyone else in the Nation in our legislative history that has shown more concern and taken more practical advantage of the opportunity to lead than Senator Inouye has. So I, as one of those who has not only followed his career but been the beneficiary of his legislative expertise, am very, very happy to be here serving on this subcommittee as a counterpart to the leadership that he has provided in the United States Senate. Mr. Richardson. The chair recognizes the gentleman from Cali- fornia. STATEMENT OF HON. KEN CALVERT Mr. Calvert. Thank you, Mr. Chairman. I have a brief state- ment. Coming from a State which has the largest number of federally- recognized Indian tribes in the Nation, I am particularly concerned about the potential for organized criminal activity and corruption when gaming operations are not properly regulated. Let me hasten to add that I support the legal right of Indian tribes to offer various games of chance on the reservations as long as those games are consistent with State law and as long as they are properly regu- lated. There are several Indian tribes in California that currently have extremely well-run gaming operations to promote economic devel- opment, self-sufficiency, and strong tribal government. I support those operations. My interest is simply to make certain that all gaming operations on Indian lands are free of corrupting influence, to ensure that the tribes, not outsiders, are the primary bene- ficiaries, and that the State of California is not saddled with in- creased costs of law enforcement and regulation. When it comes to Indian gaming, I want the Indians and people of California to be winners and not forces of organized crime. Thank you, Mr. Chairman. Mr. Richardson. I recognize the gentleman from South Dakota. STATEMENT OF HON. TIM JOHNSON Mr. Johnson. Thank you, Mr. Chairman. I commend you for holding this very timely and critically important hearing. I wel- come the members of the panel, who I know will ail make very 39 positive contributions to the dialogue on this ongoing debate that we have over the role of Indian gaming and its relationship with the various States. In the State of South Dakota, we have nine Indian reservations. We have ongoing, very active gaming operations. The negotiation with the State has sometimes been a bit rocky but, on the whole, has worked itself out fairly well. I think it is regrettable in some respects that gaming seems to be such a major engine for economic development and job oppor- tunity on Indian reservations, but after over 100 years of virtually utter failure in my State of South Dakota developing other kinds of economic opportunities, I would have to say that at this point we have over 1,000 Native Americans employed in the gaming in- dustry, generating a large amount of revenue for tribes, for the most part used for very worthy purposes. These Native Americans who are employed in many cases have never held employment be- fore, and I think that the combination of new economic opportuni- ties plus enhanced education opportunities with the development of our tribal colleges has been two of the most positive things that we have seen in a long, long time in my State to break the cycle of poverty and to break the ongoing dependence of Native Americans to the Federal Government, to create a greater sense of self-suffi- ciency and to develop a greater degree of viability, economic viabil- ity, on the reservations. Nonetheless, it does require a delicate balance between the States and the tribes, it does require a very aggressive monitoring to make sure that organized crime does not become involved here, that the money — that the revenues are audited properly, that the management is kept on a high level. So I think this hearing will be a valuable contribution in our effort to oversee and possibly to pass legislation relative to Indian gaming. So I thank you, Mr. Chairman, for holding this hearing on an issue that is critically important not just to us in the West but real- ly all across the country. Mr. Richardson. I thank the gentleman. I would like to welcome our four distinguished Members of the House and Senate who will be making their testimony. As you all know, it is the committee practice that the statement is fully included in the record. I would first like to welcome the distinguished chairman of the Senate Committee on Native American Affairs who has been ag- gressively pursuing a solution to this issue. He is a champion of many Native American causes. It is an honor for us to have him appear with us along with his vice chairman. TTie chair recognizes the distinguished Senator from Hawaii. STATEMENT OF HON. DANIEL K. INOUYE, A U.S. SENATOR FROM THE STATE OF HAWAII, AND CHAIRMAN, SENATE COMMITTEE ON INDIAN AFFAIRS Senator Inouye. Thank you very much, Mr. Chairman. Mr. Chairman and members of the committee. Senator McCain and I are most grateful to you for your invitation to share our thoughts with you on a matter pending before your committee. 40 While Senator McCain will present to you an analysis of the his- tory and conditions that led to the now famous Supreme Court case in Cabazon, I will try to briefly share with you my thoughts on why I feel the Government of the United States, of which we are a part, plays an important role in the furtherance of the general welfare of native peoples. Although it seems trite and redundant to say so, it must be re- peated often enough so that all Americans will always keep in mind that Indians were here before we came along — ^that this was their world — ^that in this world they established and maintained sovereign governments, governments that flourished, governments that were led by people who were highly sophisticated and most talented. We should remind ourselves that in recognition of this reality, when the Constitution of the United States was drafted, our Founding Fathers specifically included the native peoples of this land and set forth the foundation of what we now call trust rela- tionship, and in subsequent laws and Supreme Court rulings this trust relationship has been consistently upheld, even during the dark days of the so-called Indian Wars. In recognizing this special relationship, our Grovemment, more importantly, recognized the sovereign nature of the governments of native people. This fact must be emphasized again and again. In- dian nations are sovereign nations. To that end, our predecessors in the Congress during the last century and the century prior to that entered into negotiations with these sovereign tribes culminated by the signing of solemn treaties. It has been said that the Government of the United States sol- emnly entered into 800 treaties with the various tribes and nations of Indian country. Like all treaties, we made promises and Indians made promises. In each case, we expected and we demanded that Indians live up to their promises. But I am sad to say that, of the 800 treaties, 430 were ignored by my predecessors in the United States Senate. The Members of the United States Senate simply re- fused to act upon them. Of the 370 that were ratified, we, the Unit- ed States, proceeded to violate provisions in every single one of them. Now we have before us the matter of Indian gaming. As the Supreme Court in the Cabazon case and the United States Constitution and subsequently enacted laws have clearly recognized, Indian nations are sovereign. It is in this context and in our desire to uphold the Constitution and honor the intent of our Founding Fathers that we enacted the Indian Gaming Regulatory Act of 1988. However, this law has a fundamental but often unrecognized al- teration to our national policy of trust relationship. In a real sense, the relationship, when it concerns the conduct of gaming activities on Indian lands, should have been between the Federal Govern- ment and Indian nations. However, because of the complex variety in the laws of the 50 States, we soon found that it was almost impossible to develop a Federal law or standard that would apply in a consistent and uni- form manner in all 50 States. Some States have lotteries, some have the full array of casino operations, and some, like my home 41 State, have no gaming at all. So with the full understanding of In- dian nations, we enacted a law that called for compacts to be en- tered into by two sovereign entities, a State and an Indian nation. Since July of this year, under the sponsorship of the Senate Com- mittee on Indian Affairs, representatives of the National Governors Association, representatives of the National Association of Attor- neys General, representatives of the Federal Government, and rep- resentatives of tribal governments have come together to clarify questions that have arisen as the result of the implementation of this law. Many meetings have been held in this city, in the State of Wash- ington, in New Mexico, in Arizona, and in Colorado. Countless hun- dreds of hours have been expended on discussions and negotiations, and, Mr. Chairman, I believe that we are close to resolution. For example, all parties recognize that gaming has become an enterprise upon which many State governments across this land in- creasingly rely so that these governments may provide a full range of governmental services to their citizens. What was once strictly a private commercial enterprise is neither solely private nor commercial any longer. Whether we may like it or not, in this Nation, govemmentally-sponsored and govem- mentally-conducted gaming is growing geometrically each year, and so tribal governments have begun to join their sister State govern- ments in this enterprise. In this process of discussion and negotiation, all parties appear to desire greater certainty in the determination of what games are permitted to be played under the laws of each State. All parties recognize that for those States that do not elect to enter into tribal- State compacts, there must be an alternative process for securing authority to conduct Class III gaming on Indian lands. All parties strongly endorse the most stringent regulation of gaming and the need for comprehensive and cooperative law enforcement. Through this process of discussion and negotiation, we have found that there are more interests in common and fewer over which there is a dif- ference in perspective. On October 19, we will have a meeting of all the principals, and I am hopeful that at this meeting we may come forth with some final resolution of the matter before us. We are working towards that end, and, if I may, through these means, I would like to thank all of the parties for their many hours of patient effort and dedica- tion to this process. Mr. Chairman, I am aware that most Americans are surprised to learn that Indians are sovereign. While Indians live on lands that have been set aside for them and, for the most part, held in trust by our Government, many of these sovereign Indian nations collect taxes, they enact ordinances and laws, they have the power and authority to arrest, to levy fines and impose punishment, they have the power to regulate the environment, to administer education and health care programs, they have the power to operate judicial systems and to enter into the agreements and compacts with other governments. Mr. Chairman, in recent months I have spoken before various groups and councils advocating the right of Indian nations to estab- lish and conduct gaming operations in those States that do not 42 criminally prohibit such activities. In a sense, I find myself a bit uncomfortable in this role because throughout my adult life I have opposed gaming as a means of raising revenue to support govern- ment activities. As you may know, the State of Hawaii prohibits all forms of gaming, including bingo. Mr. Chairman, however, in the case of Indian nations, I support the tribes in their gaming activities because I believe that we as a nation have failed in our job of upholding our responsibilities and obligations. In the 800 treaties that we have either ignored or violated, we promised the Indians that in exchange for the hundreds of millions of acres that they ceded to us we would protect them, assure their security, and provide for their general welfare, but history shows that we have failed and failed miserably. Instead, we participated in massacres, we did not come to their aid in times of pestilence and starvation, and so today Indian na- tions that once flourished and numbered in excess of 10 million people have little more than 2 million in their population. In com- parison, every ethnic group in the United States has increased in size over the past 200 years. But in this great country of ours, the Indian unemployment is the highest, their health statistics are the worst, their economic conditions know no equal, and yet, Mr. Chairman, in all of the wars of this century in which we have participated, Indian people have, in the spirit of brotherhood, volunteered to serve in every one of them. In fact, on a per capita basis, there are more veterans in Indian country than in the rest of this Nation. On a per capita basis, more IndiEins have given their lives and their limbs in the service of our country than any other ethnic group. Mr. Chairman, clearly they have paid their dues. I believe the time has come for this Nation to reciprocate, and I thank you once again for this opportunity, and I thank my colleague from Hawaii for his very generous remarks. Thank you very much, sir. [Prepared statement of Mr. Inouye follows:] 43 STATEMENT OF SENATOR DANIEL K. INOUYE CHAIRMAN, COMMITTEE ON INDIAN AFFAIRS UNITED STATES SENATE BEFORE THE OCTOBER 5, 1993 HEARING OF THE SUBCOMMITTEE ON NATIVE AMERICAN AFFAIRS COMMITTEE ON NATURAL RESOURCES U.S. HOUSE OF REPRESENTATIVES MR. CHAIRMAN, AND MEMBERS OF THE SUBCOMMITTEE ON NATIVE AMERICAN AFFAIRS, SENATOR McCAIN AND I ARE MOST GRATEFUL TO YOU FOR YOUR INVITATION TO SHARE OUR THOUGHTS WITH YOU ON THE MATTER THAT IS BEFORE YOUR COMMITTEE TODAY -- INDIAN GAMING. WHILE SENATOR McCAIN WILL PRESENT TO YOU AN ANALYSIS OF THE HISTORY AND CONDITIONS THAT LED TO THE NOW-FAMOUS SUPREME COURT RULING IN THE CABAZON CASE, 1 WILL TRY TO BRIEFLY SHARE WFTH YOU MY THOUGHTS ON WHY I FEEL THE GOVERNMENT OF THE UNITED STATES, OF WHICH WE ARE A PART. PLAYS AN IMPORTANT ROLE IN THE FURTHERANCE OF THE GENERAL WELFARE OF INDL\N PEOPLE. ALTHOUGH IT SEEMS TRITE AND REDUNDANT TO SAY SO, IT MUST BE REPEATED OFTEN ENOUGH SO THAT ALL AMERICANS WILL ALWAYS KEEP IN MIND THAT INDL\NS WERE HERE BEFORE THE EUROPEANS -- THAT THIS WAS THEIR WORLD. THAT IN THIS WORLD THEY ESTABLISHED AND MAINTAINED SOVEREIGN GOVERNMENTS -- GOVERNMENTS THAT FLOURISHED -- GOVERNMENTS THAT WERE 44 LED BY PEOPLE WHO WERE HIGHLY SOPHISTICATED AND TALENTED. WE SHOULD REMIND OURSELVES THAT IN RECOGNITION OF THIS REALITY. WHEN THE CONSTITUTION OF THE UNITED STATES WAS DRAFTED, OUR FOUNDING FATHERS SPECIFICALLY INCLUDED THE NATIVE PEOPLES OF THIS LAND AND SET FORTH THE FOUNDATION OF WHAT WE NOW CALL THE TRUST RELATIONSHIP. AND IN SUBSEQUENT LAWS AND SUPREME COURT RULINGS. THIS TRUST RELATIONSHIP HAS BEEN CONSISTENTLY UPHELD, EVEN DURING THE DARK DAYS OF THE SO-CALLED "INDL^iN WARS". IN RECOGNIZING THIS SPECL«iL RELATIONSHIP. OUR GOVERNMENT -- MORE IMPORTANTLY -- RECOGNIZED THE SOVEREIGN NATURE OF THE GOVERNMENTS OF NATIVE PEOPLES. THIS FACT MUST BE EMPHASIZED AGAIN AND AGAIN. INDIAN NATIONS ARE SOVEREIGN. TO THAT END, OUR PREDECESSORS IN THE CONGRESS, DURING THE LAST CENTURY AND THE CENTURY PRIOR TO THAT, ENTERED INTO NEGOTL\TIONS WITH THESE SOVEREIGN TRIBES -- CULMINATED BY THE SIGNING OF SOLEMN TREATIES. IT HAS BEEN SAID THAT THE GOVERNMENT OF THE UNITED STATES SOLEMNLY ENTERED INTO 800 TREATIES WITH THE VARIOUS TRIBES AND NATIONS OF INDIAN COUNTRY. LIKE ALL TREATIES, WE MADE PROMISES, AND THE INDL^iNS MADE PROMISES. IN EACH CASE, WE EXPECTED THE INDIANS TO LIVE UP TO THEIR PROMISES. BUT 45 I AM SAD TO REPORT, THAT OF THE 800 TREATIES, 430 WERE IGNORED BY MY PREDECESSORS IN THE UNITED STATES SENATE - THE MEMBERS OF THE SENATE SIMPLY REFUSED TO ACT UPON THEM. OF THE 370 THAT WERE RATIFIED. WE, THE UNITED STATES, PROCEEDED TO VIOLATE PROVISIONS IN EVERY SINGLE ONE OF THEM. NOW WE HAVE THE MATTER OF INDIAN GAMING BEFORE US. AS THE SUPREME COURT IN THE CABAZON CASE AND THE UNITED STATES CONSTITUTION AND SUBSEQUENTLY-ENACTED LAWS HAVE CLEARLY RECOGNIZED, INDIAN NATIONS ARE SOVEREIGN. IT IS IN THIS CONTEXT AND IN OUR DESIRE TO UPHOLD THE CONSTITUTION AND HONOR THE INTENT OF OUR FOUNDING FATHERS THAT WE ENACTED THE INDIAN GAMING REGULATORY ACT OF 1988. HOWEVER, THIS LAW, HAS A FUNDAMENTAL BUT OFTEN UNRECOGNIZED ALTERATION TO OUR NATIONAL POLICY OF TRUST RELATIONSHIP. IN A REAL SENSE, THE RELATIONSHIP -- WHEN IT CONCERNS THE CONDUCT OF GAMING ACTIVITIES ON INDIAN LANDS -- SHOULD HAVE BEEN BETWEEN THE FEDERAL GOVERNMENT AND INDIAN NATIONS. HOWEVER, BECAUSE OF THE COMPLEX VARIETY IN THE LAWS OF THE FIFTY STATES. WE SOON FOUND THAT IT WAS ALMOST IMPOSSIBLE TO DEVELOP A FEDERAL LAW OR STANDARD THAT WOULD APPLY IN A CONSISTENT AND UNIFORM MANNER IN 46 ALL HFTY STATES. SOME STAT1ES HAVE LOTTERIES, SOME HAVE THE FULL ARRAY OF CASINO OPERATIONS. AND SOME, LIKE MY HOME STATE. HAVE NO GAMING AT ALL. AND SO, WITH THE FULL UNDERSTANDING OF THE INDIAN NATIONS, WE ENACTED A LAW THAT CALLED FOR COMPACTS TO BE ENTERED INTO BY THE SOVEREIGN ENTITIES -- STATES AND INDL^iN NATIONS. SINCE JULY OF THIS YEAR, UNDER THE SPONSORSHIP OF THE COMMITTEE ON INDIAN AFFAIRS, REPRESENTATIVES OF THE NATIONAL GOVERNORS ASSOCIATION, REPRESENTATIVES OF THE NATIONAL ASS0CL\T10N OF ATTORNEYS GENERAL, REPRESENTATIVES OF THE FEDERAL GOVERNMENT AND REPRESENTATIVES OF TRIBAL GOVERNMENTS HAVE COME TOGETHER TO CLARimf QUESTIONS THAT HAVE ARISEN AS A RESULT OF THE IMPLEMENTATION OF THIS LAW. MEETINGS HAVE BEEN HELD IN WASHINGTON, DC, AND IN WASHINGTON STATE. AND IN NEW MEXICO. COUNTLESS HUNDREDS OF HOURS HAVE BEEN EXPENDED ON DISCUSSIONS AND NEGOTLaiTIONS, AND IT WOULD NOW APPEAR THAT WE ARE CLOSE TO RESOLUTION. FOR EXAMPLE, ALL PARTIES RECOGNIZE THAT GAMING HAS BECOME AN ENTERPRISE UPON WHICH MANY STATE GOVERNMENTS ACROSS THIS LAND INCREASINGLY RELY, SO THAT THESE GOVERNMENTS MAY PROVIDE A FULL RANGE OF GOVERNMENTAL SERVICES TO THEIR CITIZENS. 47 WHAT WAS ONCE STRICTLY A PRIVATE COMMERCIAL ENTERPRISE IS NEITHER SOLELY PRIVATE NOR COMMERCIAL ANY LONGER. AND WHETHER WE MAY LIKE IT OR NOT, IN THIS NATION, GOVERNMENTALLY- SPONSORED AND GOVERNMENTALLY-CONDUCTED GAMING IS GROWING GEOMETRICALLY EACH YEAR. TRIBAL GOVERNMENTS HAVE BEGUN TO JOIN THEIR SISTER STATE GOVERNMENTS IN THIS ENTERPRISE. IN THIS PROCESS OF DISCUSSION AND NEGOTL\TION, ALL PARTIES APPEAR TO DESIRE GREATER CERTAINTY IN THE DETERMINATION OF WHAT GAMES ARE PERMITTED TO BE PLAYED UNDER THE LAWS OF EACH STATE. ALL PARTIES RECOGNIZE THAT FOR THOSE STATES THAT DO NOT ELECT TO ENTER INTO TRIBAL-STATE COMPACTS, THERE MUST BE AN ALTERNATIVE PROCESS FOR SECURING AUTHORITY TO CONDUCT CLASS III GAMING ON INDL^iN LANDS. ALL PARTIES STRONGLY ENDORSE THE MOST STRINGENT REGULATION OF GAMING, AND THE NEED FOR COMPREHENSIVE AND COOPERATIVE LAW ENFORCEMENT. THROUGH THIS PROCESS OF DISCUSSION AND NEGOTL\TION, WE HAVE FOUND THAT THERE ARE MORE INTERESTS IN COMMON. AND FEWER OVER WHICH THERE IS A DIFFERENCE IN PERSPECTIVE. 48 ON OCTOBER THE 19TH, WE WILL HAVE A MEETING OF ALL OF THE PRINCIPALS AND I AM HOPEFUL THAT AT THIS MEETING, WE MAY COME FORTH WITH SOME HNAL RESOLUTION OF THE MATTER BEFORE US AND WE ARE WORKING TOWARDS THAT END. AND IF I MAY, THROUGH THESE MEANS, I WOULD LIKE TO THANK AND CONGRATULATE ALL OF THE PARTIES FOR THEIR MANY HOURS OF PATIENT EFFORT AND DEDICATION TO THE PROCESS. I AM AWARE THAT MOST AMERICANS ARE SURPRISED TO LEARN OF INDIAN SOVEREIGNTY. WHILE INDIANS LIVE ON LANDS THAT HAVE BEEN SET ASIDE FOR THEM AND FOR THE MOST PART HELD IN TRUST BY OUR GOVERNMENT. MANY OF THESE SOVEREIGN INDIAN NATIONS COLLECT TAXES, ENACT ORDINANCES, HAVE THE POWER AND AUTHORITY TO ARREST. TO LEVY FINES AND IMPOSE PUNISHMENT, TO REGULATE ENVIRONMENTAL QUALITY, TO ADMINISTER EDUCATION AND HEALTH CARE PROGRAMS, TO OPERATE JUDICIAL SYSTEMS, AND TO ENTER INTO AGREEMENTS AND COMPACTS WITH OTHER GOVERNMENTS. MR. CHAIRMAN. IN RECENT MONTHS, I HAVE SPOKEN BEFORE VARIOUS GROUPS AND COUNCILS ADVOCATING THE RIGHT OF INDIAN NATIONS TO ESTABLISH AND CONDUCT GAMING OPERATIONS IN THOSE STATES THAT DO NOT CRIMINALLY PROHIBIT SUCH ACnVITIES. IN A SENSE, 1 FIND MYSELF A BIT UNCOMFORTABLE IN THIS ROLE BECAUSE THROUGHOUT MY ADULT LIFE, I HAVE OPPOSED GAMING AS A MEANS OF RAISING REVENUE TO SUPPORT GOVERNMENTAL ACTIVITIES. 49 AS YOU MAY KNOW, THE STATE OF HAWAII PROHIBITS ALL FORMS OF GAMING, INCLUDING BINGO. HOWEVER, IN THE CASE OF THE INDIAN NATIONS, I SUPPORT THE TRIBES IN ALL OF THEIR ACnVITIES, BECAUSE I BELIEVE THAT WE AS A NATION HAVE FAILED IN OUR JOB OF UPHOLDING OUR RESPONSIBILITIES. IN THE 800 TREATIES THAT WE HAVE EITHER IGNORED OR VIOLATED, WE PROMISED THE INDL\NS THAT IN EXCHANGE FOR THE HUNDREDS OF MILLIONS OF ACRES THAT THEY CEDED TO US, WE WOULD PROTECT THEM, ASSURE THEIR SECURITY AND PROVIDE FOR THEIR GENERAL WELFARE. BUT HISTORY SHOWS THAT WE HAVE FAILED MISERABLY. INSTEAD, WE PARTICIPATED IN MASSACRES. WE DID NOT COME TO THEIR AID IN TIMES OF PESTILENCE AND STARVATION. AND SO TODAY, INDIAN NATIONS THAT ONCE NUMBERED IN EXCESS OF 10 MILLION PEOPLE HAVE LITTLE MORE THAN 2 MILLION IN THEIR POPULATION. IN COMPARISON, EVERY ETHNIC GROUP IN THE UNITED STATES HAS INCREASED IN SIZE OVER THE PAST 200 YEARS. BUT IN THIS GREAT COUNTRY OF OURS, THE INDIAN UNEMPLOYMENT IS THE HIGHEST, THEIR HEALTH STATISTICS ARE THE WORST, THEIR ECONOMIC CONDITIONS KNOW NO EQUAL. AND YET, MR. CHAIRMAN, IN ALL OF THE WARS OF THIS CENTURY, THE INDIAN PEOPLE HAVE, IN THE SPIRIT OF BROTHERHOOD, HELPED US IN EVERY WAR. 50 ON A PER CAPITA BASIS THERE ARE MORE VETERANS IN INDIAN COUNTRY THAN IN THE REST OF THE NATION. ON A PER CAPITA BASIS. MORE INDIANS HAVE GIVEN UP THEIR LIVES AND THEIR LIMBS THAN ANY OTHER ETHNIC GROUP. MR. CHAIRMAN. THEY HAVE PAID THEIR DUES. I BELIEVE THE TIME HAS COME FOR THIS NATION TO RECIPROCATE. 51 Mr. Richardson. Thank you, Senator Inouye. The chair recognizes the distinguished vice chairman, my col- league and neighbor from Arizona, John McCain. STATEMENT OF HON. JOHN McCAIN, A U.S. SENATOR FROM THE STATE OF ARIZONA, AND VICE CHAIRMAN, SENATE COMMITTEE ON INDIAN AFFAIRS Senator McCain. Thank you, Mr. Chairman, and I want to thank you for holding this hearing. I also want to express my appreciation for your and Congressman Thomas's stewardship of a much needed Subcommittee on Indian Affairs. We appreciate the working rela- tionship that we have, and I am optimistic about our ability to con- tinue to work on behalf of Native Americans not only on this issue but many others, and I am grateful for the many-year commitment, Mr. Chairman, you have had to Native Americans both in your State and mine. Mr. Chairman, I want to just discuss the Act with you for a minute and then talk about one of the major issues of this hearing, and that is the issue of organized crime and its involvement in In- dian gaming. As you Imow, Mr. Chairman, the Cabazon decision held that if a State civilly regulates any form of gaming, then the tribes in that State can engage in that activity free of State regulation. Remem- ber that all of this began with the Cabazon decision. The Cabazon decision also held that if a State law criminally prohibits a form of gambling, then the tribes within that State cannot engage in that activity. Let's make it clear, Mr. Chairman. If a State wants to criminally prohibit gaming in their State, then the Indians cannot engage in gaming in that State, and that is something, I think, that is ne- glected quite a bit. Under the Act, as you know, it says that the States can deter- mine what gaming activity is permitted, and at the insistence of the States in the non-Indian gaming industry, the Act further re- stricted tribal rights by requiring a tribal-State compact for most forms of gaming, except bingo and pull tabs. Mr. Chairman, let the record show that the Act has worked well in those States where the parties wanted it to work. There are now 76 compacts in 12 States in this country, 12 in my own State of Arizona, and where the State and Indian interests have come to- gether and sat down and negotiated in honest good faith, there have been successful compacts agreed to. Let me also mention, Mr. Chairman, what you said at the begin- ning of the hearing. Accidental deaths, the death rate of Indians is 295 percent greater than U.S. rates; the suicide rate among Indi- ans is 95 percent greater; high school dropout, 35 percent greater; unemployment; and on and on. The statistics are appalling and egregious and outrageous, and you and I and Senator Inouye, and every member of this committee has worked for years on the an- swer, and the answer is economic development, and we have failed, and all you have to do is visit a reservation in your State or mine, and we know that we have failed. What has provided funds for these much needed programs? Not the Federal Grovemment but Indian gaming. I don't like Indian 52 gaming, you don't like Indian gaming, others may not like Indian gaming. The fact is, Indian gaming has provided much needed rev- enues to provide these people with an opportunity which we owe all of our citizens. I just want to finally, Mr, Chairman, talk about one issue, the possibility or likelihood of organized crime infiltration into Indian gaming. Senator Inouye's leadership led us to a hearing on March 18, 1992. One of the witnesses was Mr. Paul Maloney, senior coun- sel for policy of the Criminsd Division of the Justice Department. Mr. Chairman, I ask unanimous consent that his entire statement be made part of the record. Mr. Richardson. Without objection. [Prepared statement of Mr. Maloney follows:] 53 g^parlmntt of |ustue STATEMENT OF PAUL L. MALONEY SENIOR COUNSEL FOR POLICY CRIMINAL DIVISION BEFORE THE SELECT COMMITTEE ON INDIAN AFFAIRS UNITED STATES SENATE CONCERNING INDIAN GAMING REGULATORY ACT ON MARCH 18, 1992 54 Mr. Chairman and Members of the Cosunittee — My name is Paul L. Maloney, and I am Senior Counsel for Policy in the Department of Justice Criminal Division. With ne once again is the Honorable Linda A. Akers, United States Attorney for the District of Arizona and Chair of the Indian Affairs Subcommittee of the Attorney General's Advisory Committee of United States Attorneys. Also accompanying me is Jim E. Moody, Chief of the Organized Crime Section of the Federal Bureau of Investigation. As I stated in my testimony on February 5th, the Department of Justice is dedicated to respond promptly to serious and flagrant non-compliance with Indian gaming laws. The Department of Justice will utilize its enforcement weapons against operations conducted without tribal sanctions or where there is evidence of organized crime infiltration, skimming or other forms of crime. For example, several prosecutions were brought against private entrepreneurs operating casinos in violation of tribal, state and federal laws on the St. Regis Mohawk reservation in the Northern District of New York; casinos operated without tribal authority were closed down in the District of Montana and the Eastern District of Oklahoma; a casino operation in the Northern District of California was closed down when reports of skimming by the manager, allegedly an associate of organized crime figures, was investigated; and, in the Southern District of California, an Indian official was convicted of embezzlement, and his wife of income tax violations, arising out of his skimming from the tribal gaming establishment he managed. 55 2 But I wish to reiterate and emphasize what I stated earlier: The perception in the media and elsewhere that Indian gaming operations are rife with serious criminality does not stand up under close examination. Under analysis, the contention breaks down into three assertions - that the tribal games have been infiltrated by organized crime families; that, they have been victimized by criminal elements not associated with the major crime families; or that the tribes are conducting illegal gaming. Insofar as organized crime is concerned, the Department of Justice believes that to date there has not been a widespread or successful effort by organized crime to infiltrate Indian gaming operations. For several years the FBI has focussed its efforts on monitoring those organizations and their associates to apprehend them as they engage in illegal activity or attempt to infiltrate legitimate enterprises. This kind of investigation revealed the attempt - which did not succeed - to infiltrate the gaming operation of the Rincon Band in California that I informed you last time resulted in the indictment of ten men on charges of racketeering, extortion, mail fraud and wire fraud. The FBI, moreover, informs me that there are at present fewer than five open investigations of organized crime family activity relating to gaming on Indian lands. As monitoring those families is one of the FBI's highest priorities, I am confident that should evidence of federal crime develop it will be fully investigated and referred to the United States Attorneys for appropriate action. 56 3 Furthermore, there has also been little evidence of criminal activity committed by criminal elements not associated with the major organized crime families. Again, on those occasions when such allegations have been brought to our attention, they have been investigated, and when sufficient evidence is developed for conviction, we have not hesitated to prosecute. One such case is that of the Indian official who skimmed the receipts of his tribe's bingo hall. I am informed that there are a handful of investigations into allegations of similar misconduct now being conducted. Finally, we come to the assertion of "illegal gaming." This label also covers different kinds of regulatory violations. One set is gaming that is not operated under tribal auspices, and therefore cannot be legal under any circximstances. To my knowledge, all such operations have been shut down. They include the St. Regis casinos and those on Crow and Choctaw lands. The other set of allegedly illegal gaming is gaming under tribal auspices. It would appear that all of the games so identified are instances in which the characterization of the gaming as illegal means gaming believed to fall in class III under the Indian Gaming Regulatory Act (IGRA) that is being conducted without the benefit of a compact negotiated with the state. In some cases the classification is in dispute, with the tribes claiming it properly falls in class II, Until the National Indian 57 4 Gaming Commission (NIGC) issues its final definition regulations later this year, it cannot be said with positive assurance that such gaming is not class II. In other instances of admitted class III gaming, the state and tribes are in the course of negotiation that will result in compacts allowing or disallowing the games. In still other cases the state has declined to include certain games within the compact and the tribe is expected to discontinue the games or file suit under the IGRA, if it has not already done so. In still other cases suits have been filed because the whole negotiation process has reached an impasse. Thus, at the moment, as I previously testified, the illegality of the challenged games is in doubt or in dispute. In these instances, the United States Attorneys are faced with the difficult decision to allocate scarce investigative and prosecutorial resources against these alleged tribal regulatory violations when there are so few that could not colorably be legitimated under the IGRA through Commission, state or judicial action, and are in the process of resolution. This can best be demonstrated by a review of the map that Senator DeConcini asked me to investigate at the previous hearing. That map, incidentally, was prepared by the Department of the Interior (DOI) from anecdotal material supplied by its field staff. The map is an outline map of the lower 48 states. Within the outlines of nine states are a total of 41 orange dots which the key identifies as signifying "illegal gaming." The characterization of gaming as illegal represents informal information which may or may 58 5 not prove correct (e.g., that the gaming is class III) or upon a fact situation that is in flux (e.g., no compact is in existence). We have examined the status of the gaming activity represented by each of the orange dots and in most instances the tribes are either in the process of negotiation with the state or the tribes have filed suit against the state contending that the state has not negotiated in good faith. In other instances, where those conditions are not present, the operations have been closed down by federal and local law enforcement. In sum, the informal survey of the Department of the Interior, when properly evaluated, does not support a perception that there is widespread serious criminal activity involving gaming on Indian reservations. What you have is gaming of questionable legality in the process of moving toward compliance with the IGRA. If the tribes and states continue in good faith under the soon to be published regulations of the NIGC, these regulatory violations, both real and apparent, will cease to exist. The Department of Justice does not withdraw its repeated warnings that the flow of currency through Indian casinos requires continuing vigilance to avert illegal activities such as embezzlement, fraud and money laundering and to protect the tribes' interests. This is true of non-Indian gaming as well. Strict compliance with the scheme of regulation ordained by Congress is of 59 6 Utmost importance to insure the benefits of lawful gaming by the Indian tribes. •Mr. Chairman, this concludes my statement and I, along with Ms. Akers and Mr. Moody, would be glad to answer any questions from you and members of the Committee. 60 Senator McCain. On page 2 — this is the statement by Mr. Maloney — "But I wish to reiterate and emphasize what I stated earUer. The perception in the media and elsewhere that Indian gaming operations are rife with serious criminaUty does not stand up under close examination. Insofar as organized crime is con- cerned, the Department of Justice believes that to date there has not been a widespread or successful effort by organized crime to in- filtrate Indian gaming operations. For several years, the FBI has focused its efforts on monitoring those organizations and their asso- ciates to apprehend them as they engage in illegal activity or at- tempt to infiltrate legitimate enterprises. This kind of investigation revesded the attempt which did not succeed to infiltrate the gaming operation of the Rincon Band in California. I am confident that should evidence of Federal crime develop, it will be fully inves- tigated and referred to the United States attorneys for appropriate action." We also have the commitment from the Justice Department, Mr. Chairman, to bring to our attention any serious evidence that might indicate organized crime infiltrating. Mr. Chairman, I want to say something we all know, wherever there is gambling, there is the possibility of infiltration of criminal elements, there is just too much temptation there, but to come be- fore this committee and allege that organized crime is infiltrating the Indian gaming in this country does not stand up with the testi- mony of the Department of Justice whom I would rely upon. Finally, Mr. Chairman, perhaps the most revered man that you and I have had the privilege of serving with was Morris Udall. In July of 1988, Morris Udall said the following: "Mr. Speaker, the In- dian tribes, using treaties we forced upon them, laws which were passed without their consent, and our own courts, sued to vindicate their right to self-government so jealously guarded by them and so solemnly promised by us. They went to our courts to fight for their right to engage in gaming activities without hindrance by State governments, and they won. In the economic wasteland of the res- ervations that we have fostered, some of the tribes have found a small ray of hope for economic betterment, a chance for better health, better education, better jobs, a better future, but we can't permit that. Powerful economic forces have mobilized to ensure that it does not happen. And what is the justification given for once again breaking our word to the Indians? The opponents of Indian gaming activities raise the specter of organized crime. In 15 years of commercial gaming activity on Indian reservations, there has not been one clearly proven case of organized crime infiltrating gaming activity. Yes, there has been whispered rumors of such activities, and yes, there is potential, and I do share that concern." Finally, Mr. Chairman, let me quote from Mr. Udall in conclu- sion. In July 1988, Congressman Mo Udall said, I must oppose legislation damaging to Indian self-government and Indian rights. It may be that an intransigent non-Indian gaming industry has the economic power and poUtical muscle to shove State rule over Indian governments down the throat of the tribes or to simply destroy the right by a Federal ban, but it will be done without my consent and without my support. 61 Mr. Chairman, it will be done without my consent and without my support. I thank you, Mr. Chairman. [Prepared statement of Mr. McCain follows:] 62 STATEMENT OF SENATOR JOHN M 'AIN BEFORE THE SUBCOMMITTEE ON NATIVE AMERICAN AFFAIRS OF THE COMMITTEE ON NATURAL RESOURCES OVERSIGHT HEARING ON THE INDIAN GAMING REGULATORY ACT OCTOBER 5, 1993 Mr. Chairman and Members of the Subcommittee, I am pleased to be here with you today and I thank you for providing this opportunity to appear before you. I also want to associate myself with the remarks made by my good friend, Senator Inouye. During the 102nd Congress the Senate Committee on Indian Affairs held three oversight hearings to determine how the Indian Gaming Regulatory Act was being implemented. We have spent much of this year engaged in a process aimed at reaching a consensus between state, federal and tribal government officials on any amendments to the Act which may be necessary to improve its implementation. This process has already yielded genuine progress and we remain hopeful that it will soon result in an agreement on amendments to the Act. Based on our experience since the Act was enacted in 1988, I think that a few general conclusions can be reached with regard to the effectiveness of the Act. First, it is clear that the Act has worked well in every state where the parties have made the effort to work cooperatively. On the other hand, where the states have refused to negotiate, the Act has not always worked well and litigation and bitterness have replaced cooperation and successful negotiations. Overall, the Act has now resulted in 76 compacts in twelve states to govern the operation of Class III gaming. In my own State of Arizona, implementation of the Act has been difficult and contentious. This year, after several years of failed efforts to enter into compacts, the state and twelve tribes have now reached final agreements and more agreements are likely in the coming months. Since 1988, Indian gaming has grown from gross revenues of about $1 billion to $6 billion in 1992. Nationwide Indian gaming constitutes about 3% of all gaming activity. Net revenues from Indian gaming in 1992 were estimated at $750 million and were primarily used to provide tribal members with education, health care, employment and the infrastructure necessary for economic growth and development. The second conclusion which can be reached is that the fears which have been raised over the years about the infiltration of Indian gaming by organized crime are false and unfounded. The 63 Senior Counsel for Policy of the Criminal Division of the Department of Justice testified before the Senate Committee on Indian Affairs on March 18, 1992 and stated: Insofar as organized crime is concerned, the Department of Justice believes that to date there has not been a widespread or successful effort by organized crime to infiltrate Indian gaming operations. . . . Furthermore, there has been little evidence of criminal activity committed by criminal elements not associated with the major organized crime families. The simple fact of the matter is that there has been very little criminal activity associated with Indian gaming. In large part the reason for this has been the vigilance of the tribal governments. They know as well or better than any of us that any criminal activity will ruin their chances to make gaming the viable economic activity which it has shown it can be on so many Indian reservations. Mr. Chairman, I believe that it would serve the Subcommittee and the entire Congress well to remember the words of our colleague, the distinguished former Chairman of the Committee on Interior and Insular Affairs, Morris Udall. On July 6, 1988, a few short months before the Indian Gaming Regulatory Act was enacted. Chairman Udall addressed the House on the issue of Indian gaming generally and the fear of organized crime in particular: Mr. Speaker, the Indian tribes, using treaties we forced upon them, laws which were passed without their consent, and our own courts, sued to vindicate their right to self- government, so jealously guarded by them and so solemnly promised by us. They went to our courts to fight for their right to engage in gaming activities without hindrance by State governments. And they won. In the economic wasteland of the reservations that we have fostered, some of the tribes have found a small ray of hope for economic betterment. A chance for better health, better education, better jobs, a better future. But we can't permit that. Powerful economic forces have mobilized to ensure that it does not happen. The most effective way to prevent it is to take away their right to self-government to make that choice for themselves and to subject them to the laws and the jurisdiction of the States. And that is what we are asked to do — to destroy that tribal right of self-government by unilaterally imposing upon them State rule. And what is the justification given for once again breaking our word to the Indians? The opponents of Indian gaming activities raise the specter of organized crime. In 15 64 years of commercial gaming activity on Indian reservations, there has not been one clearly proven case of organized crime infiltrating Indian gaming. Yes there has been whispered rumors of such activity. And yes, there is a potential and I too share that concern. However the opponents of Indian gaming, with little evidence, assert that the infiltration of organized crime is a clear and present danger and the only remedy is State jurisdiction. They say the Tribes and Federal government cannot handle organized crime; only the states can. They would have us believe that the FBI, the Justice Department and other federal law enforcement agencies cannot do what the states can. Mr. Chairman, here we are five years after enactment of the Indian Gaming Regulatory Act and we find the opponents of Indian gaming making the exact same arguments which Chairman Udall noted in July of 1988. Even a casual reading of some of the bills which have recently been introduced to amend the Act demonstrates this fact. For example, the proponents of H.R. 2287, the Gaming Regulatory and State Law Enforcement Act of 1993 claim that there is a law enforcement crisis in Indian gaming which can only be rectified by placing Indian gaming totally under state control and greatly limiting Indian gaming activity. There is no law enforcement crisis. Legislation of this type is intended to destroy Indian gaming. Nothing more and nothing less. To this extent, little has changed in the five years since the Act became law. On August 3, 1988 the Senate Committee on Indian Affairs filed its report on S.555, the bill which became the Indian Gaming Regulatory Act. In my Additional Views which accompanied the report, I noted that: As the debate unfolded, it became clear that the interests of the states and of the gaming industry extended far beyond their expressed concern about organized crime. Their true interest was protection of their own games from a new source of economic competition.... the States and the gaming industry have always come to the table with the position that what is theirs is theirs and what the Tribes have is negotiable. The States and the non-Indian gaming industry prevailed in many ways in the Indian Gaming regulatory Act. The Act embodies a significant infringement on tribal rights of self -governance. As the members of the Subcommittee know, the Act is premised on the Supreme Court's decision in the Cabazon case. The Court found that if state law criminally prohibits a form of gambling, then the tribes within that state may not engage in that activity. If on the other hand, state law civilly regulates a form of gaming, then the tribes in that state can engage in that activity free 65 from state control. The Act takes the Cabazon restriction a step further with its requirement that Class III gaming can only be conducted pursuant to an approved tribal/state compact. This provision was included in the Act over the objections of most tribes and at the insistence of the states and the non-Indian commercial gaming industry. The States, not the Tribal or Federal governments, determine what gaming activity, if any, will ultimately be permitted. Despite this fact, it is apparent that some states and some non-Indian gaming operators are once again anxious to destroy Indian gaming to eliminate it as a competitive force. If I may, I would like to once again refer to the remarks of Chairman Udall in July of 1988: ... I must oppose legislation damaging to Indian self- government and Indian rights. It may be that an intransigent non-Indian gaming industry has the economic power and political muscle to shove State rule over Indian governments down the throat of the tribes or to simply destroy the right by a federal ban. But it will be done without my consent and without my support. 66 Mr. Richardson. I thank the gentleman. The chair recognizes a leader in this House on many issues on law enforcement and crime, and we are pleased that the gentleman from New Jersey, the Honorable Bill Hughes from the Second Dis- trict, is here. Please proceed. Bill. STATEMENT OF HON. WILLIAM J. HUGHES, A REPRESENTA- TIVE IN CONGRESS FROM THE STATE OF NEW JERSEY Mr. Hughes. Thank you very much, Mr. Chairman. Good morn- ing, and thank you very much for inviting me to testify here today before this most distinguished subcommittee. At the outset, I would like to extend my thanks to you, Chairman Richardson, Chairman George Miller, and other members of this panel for the courtesies you have extended to me these past several months in our discussions about the Indian Gaming Act. I am really very pleased that you understand both the problems which exist with the current Indian Gaming Regulatory Act and the need to make some reforms, particularly in the regulatory as- pects of the law. I look forward to continuing our dialogue and to working with you to develop remedies which are in the public in- terest and are fair and reasonable to all parties involved. As the committee knows, it has been six years since Congress voted to sanction gambling operations on Indian reservations. While I believe the intent of the law was to balance both the State interests, including effective enforcement, and Indian sovereignty concern, I feel the Act has fallen short in many respects. At the 