[Federal Register: May 25, 2006 (Volume 71, Number 101)]
[Proposed Rules]
[Page 30231-30235]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25my06-26]
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Part II
Department of the Interior
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National Indian Gaming Commission
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25 CFR Part 502
Definition for Electronic or Electromechanical Facsimile; Proposed
Rule
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DEPARTMENT OF THE INTERIOR
NATIONAL INDIAN GAMING COMMISSION
25 CFR Part 502
RIN 3141-AA31
Definition for Electronic or Electromechanical Facsimile
AGENCY: National Indian Gaming Commission (``NIGC'' or ``Commission''),
Interior.
ACTION: Proposed rule.
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DATES: Submit comments on or before August 23, 2006.
Consultation: The Commission will be conducting government-to-
government consultations with Tribes on this proposed rule at the
following times:
July 10-11 Minneapolis, Minnesota.
July 12-13 Denver, Colorado.
July 18-19 Washington, DC.
July 24-25 Tacoma, Washington.
July 26-27 Ontario, California.
August 8-9 Oklahoma City, Oklahoma.
Invitations will be mailed out to Tribal leaders in the coming weeks.
These consultation meetings will be transcribed. To schedule a
consultation please contact Natalie Hemlock, Special Assistant to the
Commission, at (202) 632-7003.
ADDRESSES: Mail comments to ``Comments on Electronic or
Electromechanical Facsimile definition'' National Indian Gaming
Commission, Suite 9100, 1441 L Street, NW., Washington, DC 20005, Attn:
Penny Coleman, Acting General Counsel.'' Comments may be transmitted by
facsimile to 202-632-0045, or mailed or submitted to the above address.
FOR FURTHER INFORMATION CONTACT: Penny Coleman or John Hay, Office of
General Counsel, Telephone 202-632-7003. This is not a toll free call.
SUMMARY: The proposed rule revises the definition of a term Congress
used to define Class II gaming under the Indian Gaming Regulatory Act,
25 U.S.C. 2701, et seq. (``IGRA'' or ``Act''). Specifically, the
proposed rule revises the definition for ``electronic or
electromechanical facsimile'' that appears in part 502 of the
Commission's regulations (25 CFR part 501 et seq.). The Commission
defined these terms in 1992 and revised the definitions in 2002. The
proposed rule offers further revision.
SUPPLEMENTARY INFORMATION:
Background
IGRA, 25 U.S.C. 2701-21, enacted by the Congress in 1988,
establishes the NIGC and sets out a comprehensive framework for the
regulation of gaming on Indian lands. The Act establishes three classes
of Indian gaming.
``Class I gaming'' means social games played solely for prizes of
minimal value or traditional forms of Indian gaming played in
connection with tribal ceremonies or celebrations. 25 U.S.C. 2703(6).
Indian tribes regulate Class I gaming exclusively.
``Class II gaming'' means the game of chance commonly known as
bingo, whether or not electronic, computer, or other technologic aids
are used in connection therewith, including, if played in the same
location, pull-tabs, lotto, punch boards, tip jars, instant bingo, and
other games similar to bingo, and various card games so long as they
are not house banking games. 25 U.S.C. 2703(7)(A). Specifically
excluded from Class II gaming, however, are banking card games such as
blackjack and electronic or electromechanical facsimiles of any game of
chance or slot machines of any kind. 25 U.S.C. 2703(7)(B). Indian
tribes and the NIGC share regulatory authority over Class II gaming.
Indian tribes can engage in such gaming without any state involvement.
``Class III gaming'' includes all forms of gaming that are not
Class I gaming or Class II gaming. 25 U.S.C. 2703(8). Class III gaming
thus includes all other games of chance, including most forms of
casino-type gaming such as slot machines of any kind, electronic or
electromechanical facsimiles of any game of chance, roulette, banking
card games such as blackjack, and pari-mutuel wagering. Class III
gaming may be conducted lawfully only if the state in which the tribe
is located and the tribe reach an agreement called a tribal-state
compact. Alternatively, a tribe may operate Class III gaming under
gaming procedures issued by the Secretary of the Interior if the tribe
and the state have not reached agreement or if the state has refused to
negotiate in good faith toward an agreement. The tribal-state compact
or Secretarial procedures may contain provisions for concurrent state
and tribal regulation of Class III gaming. In addition, the NIGC also
exercises regulatory authority over Class III gaming under IGRA, and
the United States Department of Justice and United States Attorneys
possess exclusive criminal jurisdiction over Class III gaming on Indian
lands and also possess certain civil jurisdiction over such gaming.
As a legal matter, Congress defined the parameters for game
classification when it enacted IGRA. As a practical matter, however,
the congressional definitions were general in nature and specific terms
within the broad gaming classifications were not explicitly defined.
The Commission adopted regulations in 1992 that included definitions
for many terms used in the statutory classification scheme, including
``electronic or electromechanical facsimile'', 25 CFR 502.7, and
``electronic computer or other technologic aid'', 25 CFR 502.8. The
Commission revised the definitions in 2002. See 67 FR 41166 (June 17,
2002) for an extensive discussion of the reasons for the Commission's
decision to revise these key terms.
A recurring question as to the proper scope of Class II gaming
involves the use of electronics and other technology in conjunction
with bingo and lotto as well as pull tabs, instant bingo, and other
games similar to bingo that may be Class II if played in a location
where Class II bingo is played. In IGRA, Congress recognized the right
of tribes to use ``electronic, computer or other technologic aids'' in
connection with these forms of Class II gaming. Congress provided,
however, that ``electronic or electromechanical facsimiles of any game
of chance or slot machines of any kind'' constitute Class III gaming.
Because a tribe wishing to conduct Class III gaming may do so only in
accordance with an approved tribal-state compact, it is important to
distinguish the two classes.
As the Commission worked through a process to develop
classification standards, it became apparent that the revised
definitions issued by a divided Commission in June 2002, See 67 FR
41166, did not provide the clarity that had been a goal in that
rulemaking. Accordingly, the Commission proposes to revise the
definition of the term ``electronic or electromechanical facsimile.''
Development of the Proposed Rule Through Consultation With Indian
Tribes
In recognition of tribal sovereignty and the fundamental importance
of game classification to the operation and regulation of gaming on
Indian lands under IGRA, the Commission developed a policy and process
for consultation with Indian tribes that would provide opportunity for
early and meaningful tribal input regarding formulation of the change
to this regulation.
In particular, while initially advising tribes of the Commission's
intention to develop these Class II Game Classification Standards, the
Commission also actively consulted with tribes regarding formulation of
the Commission's first-ever official government-to-government tribal
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consultation policy. After several months of consultation with tribes,
the Commission's official tribal consultation policy was adopted and
published in the Federal Register on March 31, 2004. See 69 FR 16973.
The Commission purposely established this policy in order to have
consultation policy guidelines in place for pre-rulemaking tribal
consultation on the Class II classification standards and other planned
Commission rulemaking initiatives.
The Commission's tribal consultation policy calls for the
Commission, to the extent practicable and permitted by law, to engage
in regular, timely, and meaningful government-to-government
consultation with Indian tribes when formulating proposed new or
revised administrative regulations that may substantially affect the
operation or regulation of gaming on Indian lands. To fulfill this
policy commitment to consult with tribes on these proposed Class II
regulations, the Commission devised a three-part plan to afford tribes
a reasonable and practicable opportunity to consult with the Commission
and to provide early input in formulation of the regulations, before
they were published as proposed rules in the Federal Register and the
actual rulemaking process began.
First, the Commission endeavored to consult in person at least
twice with each gaming tribe between May 2003 and March 2006 regarding
development of these proposed regulations. During this time period, the
Commission sent out over 500 separate invitations to individual tribes
to consult with the Commission and provide input. Many tribes accepted
one or more of the Commission's invitations to consult during this pre-
rulemaking period and participated in separate government-to-government
consultation meetings with the Commission regarding the proposed
regulations and other matters. While some tribes declined the
Commission's invitation(s) to consult, between May 2003 and March 2006,
the Commission conducted over 300 separate government-to-government
consultation meetings with individual tribes and their leaders or
representatives regarding development and formulation of these proposed
regulations.
Second, the Commission established a joint Federal-Tribal advisory
committee on March 31, 2004, composed of both Commission and tribal
representatives to assist the Commission in formulating these proposed
Class II gaming regulations. In January 2004, the Commission requested
all gaming tribes across the country to nominate tribal representatives
to serve on this advisory committee. From the tribal nominations
received, the Commission selected the following seven tribal
representatives on March 31, 2004, to serve on the committee: Norm Des
Rosiers, Gaming Commissioner, Viejas Band of Kumeyaay Indians; Joseph
Carlini, Gaming Commission Executive Director, Agua Caliente Band of
Cahuilla Indians; Kenneth Ermatinger, Gaming Commission Executive
Director, Sault Ste. Marie Tribe of Chippewa Indians of Michigan; Jamie
Hummingbird, Gaming Commission Director, Cherokee Nation, Oklahoma;
Mark Garrow, Gaming Commission Inspections Manager, St. Regis Mohawk
Tribe; Melvin Daniels, General Manager, Muckleshoot Indian Bingo,
Muckleshoot Indian Tribe; Charles Lombardo, Sr. Vice-President for
Gaming Operations, Seminole Tribe of Florida.
To date, the advisory committee has held six (6) meetings: May 13,
2004 in Washington, DC; August 2-3, 2004, Washington, DC; September 13-
14, 2004, Cherokee, North Carolina; December 1-3, 2004, Oklahoma City,
Oklahoma; January 12-13, 2005, Palm Springs, California; and March 11,
2005, Chicago, Illinois. During these meetings, all of which were open
to the public, the committee discussed the various characteristics of
Class II and Class III games of chance, their play, and related gaming
technology and methods. In addition, the committee also discussed,
reviewed, critiqued and commented on four (4) different, successive
preliminary working drafts of the proposed Class II classification
standards, which were prepared by the Commission representatives on the
committee.
The seven tribal committee representatives provided early tribal
input and valuable insight, advice, and assistance to the Commission in
developing each of the respective working drafts, as well as the
current proposed regulations. Although there were many instances of
accord, there were also many times during the development of the
proposed regulations that the tribal committee representatives strongly
disagreed with decisions made by the Commission.
In particular, tribal representatives strongly advocated no change
to the current regulation definition of ``electronic or
electromechanical facsimile'' of games of chance. While understanding
the tribal representatives' position on this issues, the Commission is
bound by Congress's intent, as expressed in IGRA, to promulgate rules
that clearly distinguish technologically-aided Class II games from
Class III ``electronic or electromechanical facsimiles of any game of
chance'' or ``slot machines of any kind.'' Accordingly, the Commission
concluded that it could not accept some of the tribal representatives'
recommendation in formulating the proposed rule.
The Commission's establishment of the joint Federal-Tribal advisory
committee was the subject of a legal challenge while the Commission was
preparing the proposed rule for publication. On March 10, 2005, nearly
one year after the Commission established the committee, the
Confederated Salish and Kootenai Tribes of the Flathead Nation and the
Santa Rosa Rancheria Indian Community filed suit against the Commission
alleging that several of the committee members were not eligible to
participate on the committee. Following a hearing in federal court at
which the request for temporary restraining order was denied, the
Commission determined that it should proceed to publish the proposed
rule for comment while the legal standing of the committee was further
litigated. The Commission also sought clarification from those tribes
that nominated the Committee members concerning the member's role as an
official representative of the Tribe. As a result of this
clarification, and, out of an abundance of caution, the Commission
regretfully requested that two members of the Committee step down.
The third component of the Commission's effort to consult with
tribes during the development of these proposed regulations was to make
the various preliminary working drafts of the proposed regulations
available to all tribes and their leaders for review and comment
independent of the joint Federal-Tribal advisory committee. All four
preliminary drafts were published on the Commission's website. In
addition, the third and fourth preliminary drafts were successively
mailed to each tribe inviting written comment. Many tribes and the
public submitted written comments on these respective working drafts.
The tribal comments were shared with the members of the advisory
committee for their review and carefully considered by the Commission
in formulating these proposed regulations.
In addition to forming the Advisory Committee, scheduling and
conducting individual tribal consultation meetings and Advisory
Committee meetings, and requesting and considering written tribal
comments on preliminary drafts of the proposed regulations, the
Commission also facilitated further pre-rulemaking consultation with
tribes by
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other means. In particular, the Commission attended and addressed
several different assemblies of tribal leaders and tribal gaming
operators and regulators at meetings and conferences between January
2003 and March 2006 organized by state and regional tribal gaming
associations, the National Indian Gaming Association, and the National
Congress of American Indians. At these meetings and conferences, the
Commission advised tribal leaders of its intention and plan to develop
these regulations and provided periodic updates regarding the progress
and status of the regulations development. The Commission also made
itself available at these meetings to answer any questions from tribal
leaders regarding the proposed regulations.
In addition, the Commission also met individually with several
tribes and their leaders in its Washington, DC, offices, at each
tribe's request, to discuss these proposed regulations and their
formulation and implementation.
Through each of these various means, the Commission actively
endeavored to provide all tribes with a reasonable and practical
opportunity over the past twenty-two months to meet and consult with
the Commission on a government-to-government basis and provide early
and meaningful tribal input regarding the formulation and
implementation of these proposed regulations. This proposed change to
the definition of ``electronic or electromechanical facsimile'' was
part of the process outlined above.
By April of 2005, the Commission was prepared to send the fifth
draft to the Federal Register for publication as a proposed rule.
However, the Department of Justice (DOJ) contacted the Commission and
expressed concern that the draft regulations might not be consistent
with the Johnson Act. The Commission spent five months meeting with DOJ
to resolve its concerns. As a result of these meetings, the DOJ drafted
amendments to the Johnson Act. Following several consultation sessions
with Tribes, the DOJ sent the draft amendments to the Office of
Management and Budget earlier this year. So much time has elapsed that
it is not likely that the proposed legislation will pass during the
109th Congress. The need to regulate Class II technologic aids has not
diminished and the Commission is compelled to proceed with these
regulations. The proposed regulations differ from the fifth draft that
was provided to the public in April of 2005. From a procedural
standpoint, as previously explained, the definition of ``electronic or
electromechanical facsimile'' has been placed in regulations separate
from the classification standards. The changes to that draft are a
result of the Commission addressing the concerns of DOJ that these
regulations clearly distinguish between Class II and Class III games.
The only change to these definitions is the addition of the word
``fundamental.''
Purpose and Scope
The definition for ``electronic or electromechanical facsimile''
has been misconstrued by some as allowing for bingo facsimiles. Under
IGRA, a facsimile is Class III. The proposed change to the definition
for the term ``electronic or electromechanical facsimile'' will clarify
that facsimiles of bingo are not permissible Class II games under IGRA.
Changes to the Definition of ``Electronic or Electromechanical
Facsimile'' in Part 502
a. ``Electronic or Electromechanical Facsimile''
The Commission proposes to revise the definition for ``electronic
or electromechanical facsimile'' contained in Sec. 502.8. Some have
misinterpreted the 2002 revision and argued that facsimiles of bingo
were properly classified as Class II. The revision makes clear that all
games including bingo, lotto and ``other games similar to bingo,'' when
played in an electronic medium, are facsimiles when they incorporate
all of the fundamental characteristics of the game. In making this
change, the Commission also wishes to emphasize that even bingo, lotto,
and ``other games similar to bingo'' are ``electronic or
electromechanical facsimiles'' of a game of chance when the format for
the game either has players playing against a machine rather than
broadening participation among multiple players, or fully incorporates
the fundamental characteristics of these games electronically and
requires no competitive action or decision making.
Regulatory Flexibility Act
This proposed rule will not have a significant economic effect on a
substantial number of small entities as defined under the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq. Indian Tribes are not considered
to be small entities for the purposes of the Regulatory Flexibility
Act.
Small Business Regulatory Enforcement Fairness Act
This proposed rule is not a major rule under 5 U.S.C. 804(2), the
Small Business Regulatory Enforcement Fairness Act. This rule does not
have an annual effect on the economy of $100 million or more. This rule
will not cause a major increase in costs or prices for consumers,
individual industries, Federal, state or local government agencies or
geographic regions and does not have a significant adverse effect on
competition, employment, investment, productivity, innovation, or the
ability of U.S.-based enterprises to compete with foreign-based
enterprises.
Unfunded Mandates Reform Act
The Commission has determined that this proposed rule does not
impose an unfunded mandate on state, local, or tribal governments or on
the private sector of more than $100 million per year. Thus, it is not
a ``significant regulatory action'' under the Unfunded Mandates Reform
Act, 2 U.S.C. 1501 et seq. The Commission has determined that this
proposed rule may have a unique effect on tribal governments, as this
rule applies to tribal governments, whenever they undertake the
ownership, operation, regulation, or licensing of gaming facilities on
Indian lands as defined by the Indian Gaming Regulatory Act. Thus, in
accordance with section 203 of the Unfunded Mandates Reform Act, the
Commission implemented a small government agency plan that provides
tribal governments with adequate notice, opportunity for meaningful
consultation, and information, advice, and education on compliance.
The Commission's plan includes the formation of a Tribal Advisory
Committee and request for input from tribal leaders through government-
to-government consultations and through written comments to draft
regulations that are provided to the tribes. Section 204(b) of the
Unfunded Mandates Reform Act exempts from the Federal Advisory
Committee Act (5 U.S.C. App.) meetings with tribal elected officials
(or their designees) for the purpose of exchanging views, information,
and advice concerning the implementation of intergovernmental
responsibilities or administration. In selecting Committee members,
consideration was placed on the applicant's experience in this area, as
well as the size of the tribe the nominee represented, geographic
location of the gaming operation, and the size and type of gaming
conducted. The Commission attempted to assemble a committee that
incorporates diversity and is representative of tribal gaming
interests. The Commission will meet with the Advisory Committee to
discuss the public comments that are received as a result of the
publication of this proposed rule and make
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recommendations regarding the final rule. The Commission also plans to
continue its policy of providing technical assistance, through its
field offices, to tribes to assist in complying with classification
issues.
Takings
In accordance with Executive Order 12630, the Commission has
determined that this proposed rule does not have significant takings
implications. A takings implication assessment is not required.
Civil Justice Reform
In accordance with Executive Order 12988, the Office of General
Counsel has determined that the proposed rule does not unduly burden
the judicial system and meets the requirements of sections 3(a) and
3(b)(2) of the Executive Order.
Paperwork Reduction Act
This proposed rule does not require information collection under
the Paperwork Reduction Act of 1995, 44 U.S.C. 3501, et seq., and is
therefore not subject to review by the OMB.
National Environmental Policy Act
The Commission has determined that this proposed rule does not
constitute a major federal action significantly affecting the quality
of the human environment and that no detailed statement is required
pursuant to the National Environmental Policy Act of 1969 (42 U.S.C.
4321 et seq.).
List of Subjects in 25 CFR Part 502
Gambling, Indian-lands, Indian-tribal government, Reporting and
recordkeeping requirements.
Accordingly, for the reasons described in the preamble, the
Commission proposes to amend its regulations in 25 CFR part 502 to read
as follows:
PART 502--DEFINITIONS OF THIS CHAPTER
1. The authority citation for part 502 continues to read as
follows:
Authority: 25 U.S.C. 2071 et seq.
2. Revise Sec. 502.8 to read as follows:
Sec. 502.8 Electronic or electromechanical facsimile.
(a) Electronic or electromechanical facsimile means a game played
in an electronic or electromechanical format that replicates a game of
chance by incorporating the fundamental characteristics of the game.
(b) Bingo, lotto, and other games similar to bingo are facsimiles
when:
(1) The electronic or electromechanical format replicates a game of
chance by incorporating all of the fundamental characteristics of the
game, or
(2) An element of the game's format allows players to play with or
against a machine rather than broadening participation among competing
players.
Dated: May 18, 2006.
Philip N. Hogen,
Chairman.
Cloyce V. Choney,
Commissioner.
[FR Doc. E6-7873 Filed 5-24-06; 8:45 am]
BILLING CODE 7565-01-P