Federal Circuit Court Decision Limits NIGC Authority Over Class III Gaming

On Oct. 20, the U.S. Court of Appeals for the D.C. Circuit held that the National Indian Gaming Commission's regulations setting minimum internal control standards (MICS) could not apply to Class III gaming operations.

The MICS, promulgated in 1999, are highly detailed operating standards that cover aspects of gaming from requiring that a bingo ball be displayed to patrons before it is called to requiring two employees to initial a corrected error on a slot machine count. The NIGC intended the MICS to apply to both Class II and Class III operations.

The federal court said that IGRA does not give the NIGC authority to regulate Class III gaming; instead, IGRA leaves Class III regulation to the terms of tribal-state compacts.

The ripple effects of this decision will be intriguing. Congress currently is considering an amendment to IGRA to give the NIGC power to regulate Class III gaming, though passage of the bill, introduced by Sen. John McCain, may be unlikely this term.