NIGC backs off
Class II rewrite

Feb 20, 2007 3:10 AM

Amid pressure from tribes, the National Indian Gaming Commission has scrapped its proposal to redefine Class II gambling.

Federal regulators instead will write a new set of regulations industry experts say will be a watered-down version of what the commission originally planned.

The commission’s new intention, which went into the Federal Register last week, comes after months of complaining by tribes and electronic game makers that the new rules would be too strict.

The rule changes were designed to restore a semblance of bingo to Class II machines.

By law, those games must be based on bingo, but critics say technological advances have made them virtually indistinguishable from Class III or Las Vegas-style slot machines.

The proposals would have doubled the time needed to play a game and would have required six players, linked by a central computer system, for a game to begin.

Regulators also sought to eliminate automatic daubing, which is a favorite technique of regular players, and to have a bingo card comprise half of each video screen.

Phil Hogen, chairman of the federal regulatory body, said while a clear distinction is needed between Class II and Class III machines, the tribes’ input showed that a return to the drawing board was needed.

A news release from Hogen indicates the new proposals might just stay on the shelf. He added the agency is working on revisions.

Another comment period would follow, "if and when we finish" those revisions, he said.

Oklahoma, which has more Class II machines than any other state, has the most at stake, but their future is still unclear. The original set of proposed rules would have rendered Class II gambling obsolete, forcing tribes to enter Class III compacts.

Twelve of Oklahoma’s 28 casino-owning tribes sent comments to federal regulators.

They were among 100 tribes nationwide that responded since last summer.

Those tribes and about 40 game makers were universally critical of the three-member commission’s proposals.

Oklahoma tribes took in $1.5 billion in 2005, which was fourth most among the 28 Indian gaming states, according to an industry study.

About 60 percent of the nearly 35,000 machines in Oklahoma currently are classified as Class II.

States can share in the revenue from Class III tribal gambling but not from Class II gambling.

When Oklahoma voters approved Class III gaming compacts in 2004, state officials projected revenue of $53 million a year for teacher pay raises, all-day kindergarten and other education programs.

In fiscal year 2006, the state collected just $14.2 million. However, monthly revenue from those compacts has increased steadily, even without the federal agency’s new rules in place.

The Office of State Finance expects to make $33.6 million for the year ending June 30.

State Treasurer Scott Meacham doesn’t expect tribes to begin removing Class III games in light of the federal agency’s decision.

"More and more of the tribes are moving to the compacted games every day, and my guess is that when the feds get around to finally doing anything, it will be a moot issue in Oklahoma, because everybody will have the new (compacted) games anyway," he said.

In fact, industry officials cheered the federal agency’s decision to start over from scratch.

"I think the NIGC is finally listening to us," said Janie Dillard, gaming director for the Choctaw Nation.

"Obviously it’s pretty positive for the Class II industry," said Brian Foster, president of the Oklahoma Indian Gaming Association.