By Roman Frymer, editor at G&M News.
Could you summarize the main aspects of tribal gaming, from its birth in a regulatory approach, to the present day?
Well, to begin with, let’s be educational in some issues. There are over 500 tribal nations in the United States that have a relationship with the United States and the Federal Government. These are distinct governmental entities. Over the history of the United States, federal to tribal relationship has been one that informs how the regulation of Indian gaming was. Federal lawmakers were balancing the sovereign independent authority that tribal governments have for offering and regulating gaming on their land with interests from neighboring jurisdictions, as well as the Federal Government’s interest in trying to support economic development within tribal communities. At that point in the federal law, courts, including the United States Supreme Court, had affirmed the authority that tribal governments have as distinct sovereigns to offer games on their land. What resulted in 1988 with the Indian Gaming Regulatory Act (IGRA) was a framework where tribal governments have regulatory bodies as well as operations, and that the United States at the federal level has the National Indian Gaming Commission (NIGC), a federal oversight regulatory body. Apart from this, there is a compact or an agreement which determines what regulation will take place in a territory. An additional thing to know about Indian gaming within the United States is that there are unique aspects that don’t exist in other parts of the gaming sector. One of those is a classification of games. There are Class I, Class II, and Class III gaming categories. Those games, depending on the type of game that’s being offered, are regulated in a different manner. Another unique thing is that statutory, under the Indian Gaming Regulatory Act, tribes are only permitted to use the revenue from gaming for five specific purposes. The intention behind this is to help make sure that tribal governments are able to maintain gaming on their land as a governmental gaming enterprise. Those five uses include the provision of resources for public welfare and social and educational programs to many tribal communities. Then, another aspect to be aware of is that some tribal nations in the United States have a land-based operations over which they have jurisdiction in certain authorities. There are unique rules of the IGRA about what types of gaming can occur on Indian lands. But overall, that statute intends to create greater self-sufficiency for tribal governments by giving them the opportunity to improve the local economy and their capacity for regulation and governance in those areas. Also, many tribal governments have the ability to strengthen the relationship with neighboring jurisdictions, particularly state government jurisdictions, on terms that address their relationships for gaming, but also other areas of their intergovernmental relationships, environment, etc. Finally, an important aspect of what IGRA intended to provide for was to protect the industry against bad actors and to make sure that there was a regulatory framework in place that would allow for the public to have confidence in the gaming industry in an Indian country.
How has the Indian gaming evolved in business terms?
Since its origin, 35 years ago, the industry has grown from tens of millions of dollars to the size that it is today, which is slightly over a USD 40 billion a year industry. You have to consider that not all the tribes are engaged in gaming; in fact, only about 250 tribes are. It is a very diverse profile of what gaming looks like in different tribes. In some tribes, they may be very large enterprises that have multiple properties and employ thousands of individuals. In other communities, it might be because of their rural location or a decision by the tribal government in terms of how large the operation should be. There are also tribes in which gaming is one more activity, with a small regional economic impact that supplements other types of economic development.
What would you say were the main achievements of tribal gaming regulatory entities, like the NIGC?
The regulatory community, which we’re part of at the federal level, plays a key role in providing sound regulation, but particularly at the local tribal governmental level, having regulation to help ensure that the industry is of public’s confidence and that the assets are protected. A significant part of the reason for the growth has been the role of tribal governments as lawmakers, and working together with the operators and the regulators to have a strategy that makes sense for their communities. Whether that is identifying clear regulatory goals that the regulators must execute, or its decisions about the growth and the type of games they’re going to be offering. The responsibility and the opportunity exist with those tribal governmental leadership, which are different for each of those 250 tribes, to be responsible for defining the path on how they are going to accomplish their goals.
You have pointed out that there are three key areas for NIGC: a) skill-planning, b) strategic recruitment, and c) knowledge retention. How do you evaluate the current situation of each of them?
From the regulatory point of view, we think a lot on how Indian gaming regulatory community is preparing their workforce at the regulatory level to have the skills to meet the new changes and types of operations. I’m talking about operations around technology or new types of threats that might exist, so the regulators can provide an efficient and effective way of overseeing that operation. We’ve tried to discuss how is the tribal community identifying what we call a ‘pipeline,’ or a resource of feedstock, of new expertise and knowledge to serve in some of those key positions, like auditing and compliance, finance and oversight roles that help to make sure a ´property is well-regulated tribal casino. We analyze how they are developing that talent through education efforts, or through recruitment, or doing things to attract community members to participate in those roles. Another relevant is, as tribal gaming regulatory authorities, after years and years of expertise, what are they doing to pass on the knowledge to the next generation of regulators? We have to make sure they have systems in place that capture how their policies and procedures operate, that capture the best practices from some of their senior executives who might be retiring or leaving those roles, so that the knowledge on how to best regulate and be effective can build and continue to grow.
For the full year 2022, NIGA revealed a record breaking GGR of USD 40.9 billion. The contribution of tribal gaming to the United States economy is clear. However, to be honest, until a few years ago, tribal gaming and commercial gaming were separated, and not even the representatives visited each other at their respective shows. How was it that positions were brought closer, and integration was achieved between both sectors?
I think that, again, to reiterate the reason why in the United States there might be this distinction between those parts of the industry is because Indian gaming regulatory framework is based on a federal statute that really balances the responsibilities of the federal government to their relationship with tribal governments as being two separate governmental entities. Because of that, they have a distinct framework they established in the 1980s. The non-tribal gaming industry is also still regulated at the state government, the local provincial governmental level. There are differences between each of the states in terms of how they oversee and regulate their gaming activities. I think as regulators, both whether you’re at the state or federal regulatory level in Indian gaming, as an organization is an agency or a tribal regulatory body, we all have a common interest in protecting the assets that come from the operations. Both tribal and non-tribal find new and helpful ways to increase revenue or to chart a new strategy to help make it a better resource for their communities as regulators. Particularly in recent years, we are focusing on how we’re approaching and what best practices we can share to meet our responsibilities of protecting those assets, by monitoring, detecting and correcting risks within the operation. We share that responsibility, a common mission within our own organizations. There are opportunities to continue working together from the governmental regulatory side of the business to help the regulatory community grow together.
As you may know, in LatAm, there are many native communities that are poor, marginalized, forgotten by their Governments, and that only offer the crafts they produce to survive. How to take advantage of and transmit the successful experience of NIGC to the leaders of the tribal communities in countries such as Mexico, Peru, Colombia and Argentina, among others. Would you be willing to advise these groups if that possibility arose?
First, I say thank you for that bridge that you’re providing, because I think it’s really important to have that collaboration between operators, regulators and local governments. Within our regulatory community in North America and Indian country, we were able to learn and share different practices. No matter which country we are considering, there’s always a regulatory component to the gaming sector in order to assure the public that it is a reliable, safe way to meet their entertainment and commercial goals. Looking at lessons from Indian country and Indian gaming, the last few decades, there’s been an investment and a reinvestment to improve tribal governmental bodies capacity to be able to provide that regulatory oversight to meet those needs. We can mention workforce development or the advancement in learning about regulatory capacity, or making sure that there are educational opportunities for young people to learn different skills. That’s a rich resource in the local community. I’m sure indigenous people and communities in all parts of the world, including Latin America, can appreciate that. That is going to be a resource that can make not only regulation of operation of gaming, if that becomes the path they take, but other parts of their community strong and sustainable for the future. In tribal communities of the United States, gaming resources have caused a very positive impact in education, help and other areas of their economies. For the Indian Country, I would say it’s important to continue to build that capacity to regulate in a way that’s effective and efficient. The industry will always benefit from that.
What are the challenges that native communities face today, and that affect their sovereignty, their rights, and their businesses? How will NIGC work to continue defending the interests of its constituents in the future?
I think the main challenge is to empower the tribal government to always be ready and have the resources and knowledge about what their goals are at the local level for addressing their issues. By working to support leadership, to articulate those goals, then it provides a path and a mission for the regulators to be able to carry out and execute what they see for the future. In all those areas, it’s important for tribal leadership to educate, as well as to have the capacity to learn how they can articulate what their goals are going to be. That’s when an organization, a federal agency like us, takes its part, its mission to provide training and technical assistance that can help tribal government to the local level, to stand up their capacity to regulate and to have those conversations about how they’re going to innovate. It’s essential to look at the workforce and retain that knowledge, make it accessible and share it amongst the regulatory community. One of the things that the regulators can do is they can build on where we’ve taken up that issue in the past. By maintaining that knowledge, we can continue to build and learn more as regulators. That increases our body of ability. At the end of the day, as a regulator, the more efficient and effective and precise we are in the work that we do, we avoid unintended impacts from our regulation that would unnecessarily slow the industry’s growth. At the same time, we meet our mission and our responsibilities. We do that to make sure that the assets are protected and that it’s a sustainable resource for the future. The value of resources for native people has been collected for over three decades. It’s a true story of commitment and passion because we have witnessed the positive impact gaming has had on the Tribal Nation.