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Tribal Leaders Continue Internet Gaming Dialogue at Mystic Lake Casino

The National Indian Gaming Association hosted a one-day Internet gaming subcommittee meeting for tribal leaders and gaming industry professionals at the Mystic Lake Casino and Resort in Prior Lake, Minnesota on the Shakopee Mdewakanton Sioux Reservation.

Chairman Ernie Stevens convened the meeting with a strong reminder that the Internet gaming debate and NIGA’s dialogue on this issue will be driven by Tribal leaders and their representatives.

“We are hosting this meeting as to receive tribal leader input. I can say, that our NIGA principles regarding Internet gaming have guided the organization for the past two years, and those principles were debated and developed by our tribal leadership,” Chairman Stevens said to a full banquet room of about 200 people. “NIGA and our Member Tribes have been engaged in this debate for 12 years. We will continue to on top of this issue, inform our Members, and, working as a united front, Indian Country will work hard to ensure that any Internet legislation coming out of Congress will fully respect tribal sovereignty, provide equal access to Tribal operations, and protect the rights of tribes under IGRA and in existing compacts.”

The meeting began with a briefing from Chairwoman Carrie Jones, the newly elected leader of the Leech Lake Band of Ojibwe Indians.  She presented a powerful presentation on “Stopping the Federal Taxation of Tribal Government Benefits.” The Chairwoman’s presentation outlined the recent encroachments by the IRS on her tribe and tribes across the Country.  Tribal leaders shared their own perspective on the IRS’ rash inspections of Tribal Government general welfare programs.

“Tribes are stepping up where the United States has failed to meet its treaty obligations. These governmental actions should be fostered, not investigated. I urge all tribal leaders to educate our Congress and continue to report what the IRS is doing to Indian Country.”  Tribal leaders agreed that Congress must enact a provision to exempt tribal government benefit programs from federal taxation.  “We also need to urge the Treasury Department to amend its guidance to apply to the General Welfare Doctrine to include benefits that tribal governments provide to our members.”

Jason Giles, Executive Director of NIGA added, “The IRS is asking for expansive and minute documentation, and regardless of how well your tribal agencies are run, these requests are almost impossible to comply with. We are in dialog with the Treasury Department and the Obama Administration, but the positive message coming from these entities is not filtering down to the IRS field level.”

“We need a legislative solution soon because Leech Lake is not the only one affected, but so are the Sac & Fox in Kansas, the Sioux Tribes in South Dakota, and many more of our tribes across the country. The IRS double standard for Tribal Governments needs to stop.”

As the discussion shifted to Internet gaming, Ehren Richardson, of Joseph Eve, a CPA specializing in internal financial performance for Indian gaming, stressed to tribal leaders that Internet gaming is imminent in the United States even if we don’t have a specific time frame.

“As of August 2, the Pokerstars company have agreed to repay $731 million to end a Department of Justice lawsuit as a way to possibly re-enter the U.S. when Internet gaming is legalized.  Illinois has launched Internet ticket sales. Playstudios and MGM Resorts have launched MyVegas on Facebook.  The Muckeshoot and Pasqua Yaqui Tribes have announced their launched of social gaming as well. Zynga has spent more and more money to lobby states and federal governments for Internet gaming. Facebook UK recently launched Internet gaming for slots and bingo in their country.”

The morning session concluded with an analysis of the online gaming discussion draft that was released by the Senate Committee on Indian Affairs at NIGA’s Legislative Summit in July.  Tribal leaders were advised that the Committee’s discussion draft bill attempts to adhere to NIGA’s core principles, but falls short in several places.

John Harte, of the Mapetsi Policy Group, presented a section-by-section analysis of the Senate Committee on Indian Affairs draft bill and compared certain sections to the 2010 Senator Reid poker bill. He also highlighted those points in the draft bill that comport and conflict with NIGA’s principles. Mr. Harte stated that the Committee is accepting comments on the draft, and urged tribal leaders to begin weighing in on the bill. He also said the committee will hold at least one listening session to receive additional comments and reminded that Tribal leaders and Tribes have to be engaged and be ready if at all a gaming bill will be proposed during this upcoming lame duck session.

The day concluded with a discussion on Internet gaming regulation. Elizabeth Homer and Steven Gunn provided a briefing on the development of a tribal ordinance for tribal regulators to discuss with their gaming commissions and begin preparing for Internet gaming. This included a discussion on regulatory issues specific to iGaming.

As the meeting drew to a close, the committee encouraged tribal leaders to bring their regional and individual tribal concerns to their state representatives and Congress to educate them about the future of Internet gaming and its impact on tribal gaming operations.

NIGA will continue to facilitate these tribal leader and industry gaming meetings through the remainder of the year. The next discussion will take place at NIGA’s Mid-Year Conference in Hollywood, Florida, September 18-19, 2012 at the Seminole Hard Rock Casino & Hotel.

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