Feds put Class II slots in crosshairs

Sep 27, 2005 7:31 AM

While the National Indian Gaming Commission struggles to clarify the difference between Class II and Class III gaming devices, the Department of Justice is seeking new legislation that would make many Class II games illegal.

The announcement came from Tom Heffelfinger, the U.S. Attorney for Minnesota and the chairman of the Native American Issues Subcommittee for the Department of Justice.

Speaking at this month’s Global Gaming Expo in Las Vegas, Heffelfinger said the legislation is necessary because technological advances have "blurred the lines" between Class II and Class III machines.

Class II games often look and play like "standard" Class III slot machines, but their outcome is often controlled by a separate bingo-like game.

The proposed legislation would amend the Johnson Act, passed by Congress in the early 1950’s to restrict slot machines outside of Las Vegas.

Currently, tribes can operate Class II games without state compacts and revenue sharing. The amendment would make many Class II games illegal, flying in the face of the policies laid out in the Indian Gaming Regulatory Act.

Oklahoma attorneys have said that changing the definition of electronic gaming devices would have a devastating economic impact. Class II games are the backbone of Oklahoma’s gaming industry, and the new legislation would require tribes to compact with the state for the majority of games that are already established.

Class III gets a pass in Wyoming

The Interior Department approved a request by the Northern Arapaho Tribe of Wyoming to offer limited Class III gaming without a tribal-state compact. The decision is the first of its kind in the history of the Indian Gaming Regulatory Act.

"This is a monumental achievement for our people and our future," said Northern Arapaho Business Council Chairman Richard Brannan in a statement. "It’s our economic engine for jobs, growth, and services for our people."

The decision came after three years of negotiation, and the state has now agreed to negotiate with the Eastern Shoshone Tribe as well.

The Northern Arapaho tribe plans to offer higher-stakes gambling machines and table games at its Wind River Casino within 60 days. The tribe says it will seek an amendment, based on a ruling by the 10th U.S. Circuit Court of Appeals, to allow all Class III games. A new $10.3 million casino is also in the works.

Abramoff probe reveals connection to White House

Lobbyist Jack Abramoff is not alone.

David Safavian, the former head of procurement at the Office of Management and Budget, was arrested last week. He was charged with making false statements about whether he was involved with Abramoff’s attempts to purchase government land.

Safavian worked with Abramoff at the Washington-based lobbying firm of Preston Gates Ellis & Rouvelas Meeds. He was also a partner of Grover Norquist, a Republican strategist who worked with Abramoff to oppose legalizing gambling in Alabama.

The Senate Indian Affairs Committee is investigating Abramoff and his associate Michael Scanlon (a former aide of House Majority Leader Tom DeLay) for diverting funds paid to them by tribal clients. Between 2001 and 2004, Abramoff and Scanlon took in more than $66 million in fees, according to Senator John McCain, the Arizona Republican who chairs the Indian affairs panel.

Abramoff is also under investigation by the Justice Department’s public integrity section, the FBI, the Internal Revenue Service and the Interior Department’s inspector general. In August, he was indicted by a federal grand jury in Fort Lauderdale, Florida, on wire fraud charges in connection with the purchase of SunCruz Casino Ltd., a casino ship company.

House Majority Leader Tom DeLay once called Abramoff "one of my closest and dearest friends.’’ DeLay, who has participated in overseas trips sponsored by Abramoff, is under scrutiny by Democrats, who have accused him of violating House rules prohibiting lawmakers from accepting trips financed by lobbyists.

Deputy chief of staff William Jarrell, also a former aide to DeLay, was part of Bush’s transition team focusing on the Interior Department, which oversees the Bureau of Indian Affairs, at the time Abramoff was representing the interests of Indian tribes.

Other Republican ties to Abramoff include Montana Senator Conrad Burns.

Burns has been criticized by the Montana Democratic Party for receiving $136,500 in donations from Abramoff and Scanlon’s tribal clients.