Accompanied By

Mr. Robert A. Rosette, Counsel, Lake Superior Chippewa Indian Tribe

My name is Richard Williams, and I am the elected Chairman of the Lac Vieux Desert Band of Lake Superior Chippewa Indians. I first would like to respectfully request that I reserve five minutes of my time so that my counsel, Robert Rosette, may address you as to some of the legal complexities of my testimony.

As you know, H.R. 3125, the Goodlatte Bill, which is intended to prohibit Internet gaming, is steadily progressing through the House process, and Indian tribal leaders have had no opportunity to testify as to the negative effects of H.R. 3125 on Indian Nations or the Indian Gaming Regulatory Act (IGRA). Therefore, I am thankful that the Sub-committee has the fairness and fortitude to acknowledge the government-to-government relationship that exists between the U.S. and Indian tribes, and grant my Tribe this opportunity to testify before you today.

That being said, I have attached a resolution from the oldest, largest and most respected Indian organization, the National Congress of American Indians, which fully supports what I present to you today. I have also attached resolutions from the Midwest Alliance of Sovereign Tribes and the United South and Eastern Tribes to demonstrate my support from the broad spectrum of Indian Country.

It should be first noted that H.R. 3125's sponsors in the House have made an effort to address some of the concerns of Indian Country by enacting language that negatively amends the IGRA. The Goodlatte amendment that was added to H.R. 3125 at the full Judiciary Committee mark-up, which purports to protect Indian Gaming, is in fact a roll back of current federal law and is fundamentally unfair to Indian tribes. As such, it is unacceptable as a compromise in the present legislation.

Specifically, the Goodlate amendment is inadequate for three reasons, to wit: i) It may violate the Equal Protection Clause of the Constitution; ii) It makes otherwise legal games under federal policy and the IGRA illegal, thus representing a fundamental departure from the delicate balance struck by tribes, states and the federal government under the IGRA; and iii) It does not consistently apply policy considerations for granting carve-outs for certain types of special interests.

II. H.R. 3125 MAY VIOLATE EQUAL PROTECTION FOR TRIBES

It is the Tribes contention that carve-outs within H.R. 3125 will be available to the private sector but the exact same carve-outs are not available to legitimate Indian tribal government gaming. For example, H.R. 3125 includes a novel carve-out for pari-mutual horse and dog racing. At the same time, however, the Goodlatte amendment has a very strict blanket prohibition against Indian tribes lawfully conducting these same games, even though many tribes have secured the right to legally conduct pari-mutual horse and dog racing through the IGRA, and accordingly, Tribal-State Compacts.

For example, many Tribal-State Compacts allow tribes to offer simulcast wagering to horse and dog racing enthusiasts, which is the same privilege as other U.S. horse racing simulcast and gaming companies within the same states. These tribes are now at a tremendous competitive disadvantage because they can not utilize the Internet to expand player participation like their non-tribal counterparts. For example, pursuant to H.R. 3125, U.S. companies like YouBet and Ladbrooke can offer simulcast horse wagering to a player in the player's own home via the Internet. Meanwhile, tribes can not market to these same players or enjoy the same in-home wagering benefits because players for the tribes must be "physically located on Indian lands".

Therefore, H.R. 3125 does not treat tribes equally because while it expands in-home gambling opportunities for U.S. companies, it restricts tribes from legally conducting the very same in-home opportunities solely because they are Indian tribes and the U.S. companies are not.

III. H.R. 3125 MAKES OTHERWISE LEGAL CLASS II BINGO ILLEGAL FOR TRIBES

Even though H.R.3125 expands currently illegal in-home wagering for horse, dog, and jai-alai wagering for U.S. companies, it at the same time takes away existing legal Internet Class II Bingo from Indian tribal governments. For example, my Tribe invested millions of dollars and countless hours developing a Class II Bingo game that utilizes Internet technology to expand its audience. My Tribe legally developed this game based on IGRA, and with the encouragement of Congress. (Please see the attached legal analysis, which provides a detailed legal description of the Tribe's Class II Bingo game). We developed this game because we are located in the Upper Peninsula of Michigan, which is very rural, and in order to provide for our future. We carefully developed the game so that it fell squarely within the purview of existing law.

As you know, Congress contemplated the use of technological aids to link participating individuals to play Bingo from remote locations in order to increase player participation for Tribes when it enacted IGRA. It is clear the use of telecommunication devices, including the Internet, are technological aids available to Class II Bingo operations on Indian lands. My Tribe's Class II Bingo game is designed so that all elements of the game are played entirely on the Reservation. In summary, when applying Class II Internet Bingo to the language, design, and object of IGRA, the statute clearly demonstrates that Class II Internet Bingo is protected by the preemptive effect of IGRA.

What is most disappointing is that the Goodlatte amendment is deliberately taking away this otherwise legal Class II Bingo from tribes, but at the same time, H.R. 3125 is expanding illegal in-home Internet gambling for other U.S. gaming interests by allowing gambling on-line that is not currently allowed in any other medium.

IV. H.R. 3125 AVOIDS POLICY CONSIDERATIONS FOR CLASS II BINGO

Notwithstanding the Equal Protection and IGRA implications set forth above, the Tribe respectfully requests that you analyze our Class II Bingo game from the same policy perspective that you analyzed the carve-outs. With the special interest carve-outs in H.R.3125, the legislation creates two groups: i) gaming that is prohibited on the Internet (such as off-shore video slots and black-jack), and ii) gaming that is allowed on the Internet (such as horse and dog racing). An analysis of the characteristics of these respective groups demonstrates that Indian Class II Bingo better fits into the group that is granted carve-outs.

For example, off-shore gaming interests are either unregulated, or are regulated within questionable jurisdictions outside of the U.S.. Due to this inadequate regulation, most companies offer illegal games in many states such as video slot machines and video blackjack. Many Internet gaming companies receive bets from minors or fraudulent credit cards. The U.S. also can not adequately protect consumers from the unscrupulous business practices of these off-shore companies.

Class II Bingo, however, avoids these problems and has similar characteristics to the carve-out games that receive an exception under H.R 3125. Like horse and dog racing for example, Class II Bingo is regulated by the federal government, which ensures the integrity of the game, and further, protects consumers from unscrupulous operators. Second, Class II Bingo must be played pursuant to state laws and is only offered in those state jurisdictions where it is legal to play. Third, Class II Bingo is pari-mutual, meaning the players play against each other trying to win a portion of a money pool, rather than against a machine. And finally, like the carve-outs, Class II Bingo is conducted live, whereby players may witness results.

In analyzing these respective groups from a policy perspective, I ask you one simple question: Which group does Indian Class II Bingo best belong? Clearly, the answer is that it better fits with the carve-outs under H.R. 3125. Therefore, if Congress prohibits the Tribe's Class II Bingo game--even in light of its similarities to the carve-outs--then we respectfully request that the House provide rationale for placing Class II Bingo in the prohibited group and not the carve-out group. It is extremely unfair and unjustifiable that Indian tribal governments are not granted the same protection as other gaming interests, especially because the Class II Bingo game developed by the Tribe falls squarely within the statutory regulations of state and federal laws.

V. CONCLUSION

Since H.R. 3125 treats Indian tribal governments unfair, prohibits tribes from conducting gaming that it allows to other U.S. companies, and prohibits many tribally operated games that are currently legal under IGRA, I would like to recommend language as an Amendment to H.R. 3125:

Insert the following new section and renumber accordingly:

SEC. 4. INDIAN GAMING REGULATION ACT

"...any otherwise lawful wager for Class II or Class III gaming as defined in Section 4 of the Act of October 17, 1988 102 Stat. 2467, conducted by an Indian Tribe on Indian lands."

This Amendment prohibits tribal governments from conducting internet gambling that is not allowed by Tribal-State compacts or that is not allowed by H.R. 3125. Thus, this language would enable Tribes to enjoy the same benefits that H.R. 3125 confers upon other private sector companies such as simulcast horse racing, and also preserves current legal gaming so long as the gaming is allowed pursuant to a Tribal-State Compact and legal under H.R. 3125. The Amendment also requires that Indian gaming occur entirely on Indian lands, which means for example, that tribes could not offer any Class III (Las Vegas style) gaming over the Internet. Also, the amendment recognizes the carefully constructed regulatory framework that IGRA provides for states and the federal government. The Congressionally approved framework of IGRA is the best vehicle to regulate Indian gaming.

Because my testimony is legally complex, I would encourage you and your legislative counsels to review the attached legal analysis before coming to any conclusions about prohibiting Class II gaming. If you have any questions or comments, please do not hesitate to contact me or Robert Rosette at (916) 441-2700. Thank you for your time and consideration.