Gambling change worries tribes

A technical debate over electronic bingo machines found in American Indian casinos could shut down tribal gaming operations in Washington, including the Tulalip Tribes’ bingo hall.

The problem is looming for many tribes around the country.

The National Indian Gaming Commission late last year proposed new regulations that would redefine Class II gaming, which consists mainly of machines for bingo and other competitive games.

Because of technology, many Class II machines feature fast-paced play similar to Class III machines, which are mainly slot-style machines.

Slot-style machines are closely supervised and limited through gaming compacts each tribe negotiates with state governments.

“Technology has blurred the industry to where it’s difficult to distinguish between Class II and Class III,” said Shawn Pensoneau, a spokesman for the National Indian Gaming Commission.

The proposed regulations would define Class II machines as those that require player participation on bingo or lottery-style games and use the machine only as an “electronic aid,” according to the commission.

That’s different from a Class III machine, which is an “electronic or electromechanical facsimile,” in which players gamble using in a randomly-generated game that requires little interaction on their part.

That means some previous Class II machines will be considered Class III machines, said Ron Allen, chairman of the Washington Indian Gaming Association.

Washington tribes are each allowed to own up to 975 Class III machines. They can lease Class III machines from other tribes who aren’t using their full 975-machine allotment and operate up to 3,500 Class III machines in their gambling operations, depending on their gaming compact with the state.

Washington imposes no limit on the number of Class II machines each tribe can operate. They’re not as lucrative as Class III, slot-style machines, but many tribes use them to supplement their businesses and offer different styles of gambling.

If the proposed regulations go into effect and a tribe has reached its maximum for Class III machines, they’ll likely have to pull the plug on their fast Class II machines, Allen said. For some tribes, that means entire facilities could go dark, he said.

“This jeopardizes thousands of jobs and economic opportunities,” he said.

Allen also argues that the commission has exceeded its authority. The 1988 Indian Gaming Regulatory Act set forth the structure for Indian gaming, and only Congress should be able to change it, he said.

The fact that a commission designed to supervise and support Indian gaming is setting forth proposals that could severely truncate its revenue potential is surprising, he said, adding that the proposals are likely fueled by political pressure.

“The non-Indian gaming industry has a high interest in seeing these casinos shut down.” Allen said.

The commission is likely trying to do what’s best, but “sometimes the best of intention gets lost in the details,” Tulalip Tribes Chairman Mel Sheldon said.

“That’s why Indian Country is approaching this proposal with caution,” he said.

The commission says the new definition isn’t a change; it simply creates a rule where one is needed.

“Indian gaming is the only gaming where there are two different classes,” Pensoneau said. “Right now, there’s no real measurement to determine what is Class II. This is something we feel is necessary.”

The commission has argued that tribes will benefit from the proposed regulation because they’ll be able to purchase gaming machines with certainty that they’re not violating their gaming compacts.

But for tribes that rely on revenue from Class II machines, especially those that operate facilities entirely made up of Class II machines, the regulations could be devastating, Allen said.

Of the 29 federally-recognized tribes in Washington State, 28 tribes have gaming compacts with the state to operate Class III machines, according to the Washington State Gambling Commission. The Cowlitz tribe is currently negotiating a compact and plans to build a casino along I-5 south of Olympia.

The Nooksack Tribe’s Northwood Casino, which opened late last year, has only Class II machines.

The Tulalip Tribes offers a mix of Class II and Class III machines in the Tulalip and Quil Ceda Creek casinos, but Tulalip Bingo has only Class II machines.

Sheldon said his tribe is analyzing the potential impact of the proposal and plans to ask for an extension of the official comment period, which now ends Jan. 24.

The Stillaguamish Tribe only has about 60 Class II machines on the floor in its Angel of the Winds Casino, but tribal Executive Director Eddie Goodridge said the proposed regulations would mean that the Class II machines they’ve purchased would be worthless.

Class II machines aren’t as lucrative as Class III machines, Goodridge said, “but people like them.”

“The reason the machines work is because, for all intents and purposes, they have the look and feel of a slot machine,” he said. “The commission wants to slow it down so you’d be sitting there for moments on end waiting to play another game.”

Certain states, including Florida and Oklahoma, don’t allow Class III gaming, Allen said. Tribes in those states would bear the brunt of the proposed regulations, perhaps being forced to shut down altogether.

“The commission is just not in the real world if they say this regulation will have only a negligible impact,” Allen said.

Reporter Krista J. Kapralos: 425-339-3422 or kkapralos@heraldnet.com.