Indian Gaming Today

Tuesday, February 19, 2008

More on "Bingo Slots"

In our last post, we talked about the impact of the National Indian Gaming Commission's proposed Class II regulations on the debate over casino gaming in Massachusetts. The Mashpee Wampanoag, though, isn't the only tribe impacted by the proposed regulations.

A handful of states are "Class II only" states, meaning that because state law doesn't allow casino-style gaming, tribes can't operate Class III or casino-style games. That's because IGRA only allows tribes to operate Class II or Class III gaming if the state allows "such gaming." In those states, tribal gaming is limited to Class II games. It's easy to imagine the role of Class II machines, or so-called "bingo slots", in achieving IGRA's goals in those states. Just picture a bingo hall and a casino -- with a few exceptions driven by market, there's no question that casino-style gambling is more lucrative. And, since one of the common criticisms of Indian gaming is that some tribes are still facing extreme poverty and unemployment, Class II machines can help to equalize Indian gaming's positive effects across tribes.

The economic impact study concerning the proposed regulations, commissioned by the NIGC, found the rules would have "a significant negative impact" on Class II gaming revenue, and therefore on the tribes that operate such games. The study concluded that the proposed changes would reduce gaming revenue by $142.7 million, with an accompanying loss of $9.6 million in non-gaming revenue and a $17.4 million reduction in tribal government revenue. The NIGC report is Alan Meister, The Potential Economic Impact of Proposed Changes to Class II Gaming Regulations, Report Submitted to the National Indian Gaming Commission (November 3, 2006).

But there's more at stake than money. Under IGRA, tribes are entitled to operate Class II games, including those played on machines, without state interference. We've argued elsewhere that any changes to how machines are classified should be grounded in IGRA's policy goals -- in other words, it isn't enough to say "But they look like slots!" The NIGC's proposed regulations will impact tribal sovereignty by changing what machines tribes are entitled to operate free of state control, and by impairing -- in some cases, drastically -- tribes' ability to negotiate compacts on a level playing field. And in Class II only states, the regulations may intensify the uneven positive impacts of Indian gaming across the country.

Read more:

NIGC's Proposed Classification Standards for Class II games, Definitions for Electronic or Electromechanical Facsimile, Technical Standards for Class II games and Minimum Internal Control Standards (MICS) for Class II games. Click

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Friday, February 08, 2008

“Bingo Slots" and Indian Gaming in Massachusetts

The National Indian Gaming Commission's proposed Class II regulations are impacting debates over Indian gaming across the country, including in Massachusetts, where casino gaming is very much a hot topic.

The proposed regulations are the NIGC's latest effort to clarify the distinction between a Class II machine (which is regulated by the tribe with NIGC oversight) and a Class III machine (which requires a tribal-state compact). Class II machines play Class II games, such as bingo or pull-tabs, but resemble slot machines with spinning reels. Though the underlying game played by a Class II machine is clearly different -- a live bingo draw with multiple players rather than the internal random number generator of a slot machine -- its superficial similarity to a slot machine is troubling to some federal and state policymakers. The challenge for the NIGC is to respond to increasing political pressure to create a "bright-line" rule while staying true to Congress's intent in IGRA to allow tribes to use technology to enhance the play of Class II games.

In Massachusetts, the debate centers on casino-style gaming, including Class III machines. As the Mashpee Wampanoag Tribe and the state continue to struggle over the issue of casinos, the NIGC's proposed regulations may have the effect of lessening the tribe's bargaining power. Because the Class II machines don't require a compact, the tribe can operate them without state consent. As it stands, that's a powerful argument for the tribe in a market like Massachusetts, where even a Class II "casino" is likely to be extraordinarily lucrative -- perhaps rivaling the Seminoles' financial success in Florida with Class II machines. But if the NIGC's proposed regulations require slower play and less superficial similarity to slot machines, then those requirements may make the Class II machines less attractive or exciting to customers -- and that may make the Mashpee Wampanoag's "chip" of a Class II casino worth less, both in terms of potential profits and in terms of the tribe's ongoing negotiations with Massachusetts officials.

Read more
here in the Cape Cod Times.

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