Level III Training Book NIGA MY 18

NIGA

CERTI Fl ED SEMINAR INSTITUTE COMMISSIONER CERTIFICATION TRAINING LEVEL Ill

September 25 - 27, 2018 Temecula . CA

NIGA Seminar Institute Commissioner Certification Training Level III AGENDA

September 25-27, 2018 Pechanga Resort and Casino

Tuesday, September 25 Breakfast to be provided

8:00 AM 9:00 AM

Effective Regulation of Gaming Elizabeth Homer, Homer Law CHTD

9:00 AM 10:30 AM

10:30 AM 10:45 AM

Break

Hearing and Appeals Elizabeth Homer, Homer Law CHTD

10:45 AM 12:30 PM

12:30 PM 2:00 PM

Lunch Break

Employment Issues for Gaming Regulators Charlene Jackson, Jackson Law

2:00 PM 3:15 PM

3:15 PM

3:30 PM

Break

Avoiding and Detecting Fraud: Active Investigation & Forensic Audits Sheryl Ashley, CPA Gaming & MICS Compliance AUP Partner, Blue Bird CPA's Wednesday, September 26

3:30 PM 5:00 PM

8:00 AM 9:00 AM

Breakfast to be provide d

Conflict Management Elizabeth Homer, Homer Law CHTD

9:00 AM 10:30 AM

10:30 AM 10:45 AM

Break

Title 31/OFAC Sheryl Ashley, CPA Gaming & MICS Compliance AUP Partner, Blue Bird CPA's

10:45 AM 12:30 PM

12:30 PM 2:00 PM

Lunch Break

Managing a Tribal Gaming Regulatory Agency Joseph Osterloh, Jamul Indian Village

2:00 PM 3:15 PM

3:15 PM

3:30 PM

Break

Network Risk Assessment Peter Nikiper, BMM Test Labs Thursday, September 27

3:30 PM 5:00 PM

8:00 AM 9:00 AM

Breakfast to be provided

Surveillance Frauds, Threats & Vulnerabilities, PT 1 Roy Hartog, Chickasaw Nation

9:00 AM 10:30 AM

10:30 AM 10:45 AM

Break

Surveillance Frauds, Threats & Vulnerabilities, PT 1 Roy Hartog, Chickasaw Nation

10:45 AM 12:15 PM

Please plan to stay for the entire class on each day to get your certificate of completion. Please be on time for sessions

9/14/17

The Effective Regulation of Gaming

What is Regulation? • Regulation in the broadest sense may be defined as a government measure or intervention intended to direct, alter, or otherwise affect the behavior of individuals or groups to produce a socially desirable outcome, e.g.: • Require individuals to wear seatbelts to reduce driving related mortality rates • Require businesses to pay taxes monthly to improve the collection of tax revenue

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What Purpose is Served by the Regulation of Tribal Gaming? Federal Perspective

Tribal Perspective • Realize fullest measure of tribal sovereignty • Improve the quality of life and standard of living of the tribal community • Take care of children, families, and elders • Achieve economic self-sufficiency • Create jobs and business opportunities • Provide quality health care • Provide adequate law enforcement • Provide adequate fire protection and suppression services • Protect tribal resources both human and natural • Preserve tribal identity and cultural existence for future generations

• Shield the Indian tribe from organized crime and other corrupting influences • Ensure that the Indian tribe is the prime beneficiary of the gaming operation

• Assure that gaming is conducted fairly and honestly by both the operator and players

I want to tell the Committee about a young Choctaw man, only 37 years old. He got sick and needed a new kidney, but they told him at the hospital it would cost $250,000 and they wouldn’t do it unless he could put up at least half of the money. When we heard about it, we gave him the money out of our gaming account. The trouble was that we didn’t get all the right approvals from the Tribal Council, so we went back to Council to get their approval of what we did. The Council listened and when we got through, you knowwhat they did? They enacted an ordinance that authorized me to spend the gaming money anytime a tribal member needs a transplant. They said from now on, no Choctaw will ever again die for lack of money.

This is what the gaming means to us.

Testimony of a Tribal Leader before the House Resources Committee on NIGC’s proposed Class II regulations, February 20, 2008, Miami, Oklahoma..

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How Does the Effective Regulation of Gaming Advance Tribal Goals? • Licensing screens out the people most likely to cheat and steal and keeps them out of tribal casinos and away from tribal cash • Internal Controls operate to ensure that casino managers and employees follow the procedures necessary to prevent fraud, theft & waste of tribal dollars • Monitoring serves to keep the staff honest • Auditing serves to keep management honest • Enforcement signals that the Tribe means business when it comes to safeguarding its assets • Regulations clarify the meaning of the statutory law and establish the standards of conduct that must be met • Hearing and Appeals ensure fairness and protect people from abuses of power What Makes Regulation Effective? Regulatory Agency • Independence • Sound Organizational Structure • Proper Delegation of Authority • Adequate Funding • Proper Balance of Power • Oversight • Governmental Support of the Regulatory System Regulator • Understands the Law • Understands Role • Understands Scope of Authority • Ethical, Principled, & Fair • Possesses Sound Judgment • High Work Ethic • Good Management Skills • Good Interpersonal Skills

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Regulatory Structure “Independence” An Independent Regulatory Agency is a governmental instrumentality created to interpret, implement, administer, monitor, and enforce statutory law within the limits of its delegated authority and to act and make decisions based on law and legal considerations ---

NOT POLITICAL CONSIDERATIONS

“Independent”

• Does not mean:

• “Separate and Apart From” • “Free of Constraints” • “Unaccountable for its Acts & Decisions” • It Means: • Reasonably Insulated from Political Interference with its Decision making Processes in the Implementation and Enforcement of Civil Regulatory Law.

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Why is Independence Important?

• To regulate effectively, the regulator must apply the law to facts on the basis of legal and regulatory policy considerations in much the same way as a judicial body operates, but for the purpose of achieving the regulatory objective: Enforcing Compliance with the Law

Independence • Regulatory bodies are responsible for making hard decisions that may be politically unpopular, e.g. • Denial of a gaming license to someone well- liked in the community • Imposition of a fine or sanction • Order to suspend use of or remove equipment

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The Case for Independence • When politically unpopular decisions are made, those aggrieved by such decisions often resort to political tactics and seek to bring political pressure on the agency. • The principle of independence is intended to shield both political and regulator officials from these situations in order to ensure that regulatory objectives are not undermined by political considerations.

Regulatory v. Political Processes • The Enactment of Law is a Political Process • The Promulgation of Regulations is Largely Political in Nature, but • The Implementation and Enforcement of the Law is a Regulatory Process • Hence the Concept of Independence is much stronger in the Context of Implementation and Enforcement than in the Context of Rulemaking

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How is the Framework Supposed to Work? • The Legislature Enacts the Law through the Political Process • Establishing the “Independent Regulatory Agency” • Specifying the Functions, Duties, and Responsibilities of the Agency • Delegating the Agency the Necessary Authority to Implement and Enforce the Law • Imposing Standards for Agency Conduct • Providing for Agency Oversight Agency Authority & Functions, Duties, and Responsibilities • Typically, an Independent Regulatory Agency is Delegated Broad Authority to: • Interpret & Implement the Law through the Promulgation of Regulations (Quasi-Legislative Power) • Monitor Compliance and Enforce the Law (Quasi-Executive Power) • Apply the Law to Facts to Determine whether the Law has been Offended and Assess Sanctions (Quasi-Judicial Power)

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Making the Framework Work: Balance of Power Legislate + Execute + Adjudicate = “Basic Powers of Government” In the Constitution, the Framers Carefully Divided These Powers and Assigned them to the Three Branches of Government WHY?

Why??? • To Provide a Strong Governmental Structure with Proper Checks & Balances • To Secure the Basic Rights and Fundamental Freedoms of the Citizenry Guaranteed by the Constitution • To Constrain Governmental Power • To Prevent Governmental Abuses of Power • To Ensure Fundamental Fairness and Due Process of Law

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How are these Objectives Achieved in Relation to Regulatory Agencies? • Regulatory Agencies may Possess Broad Powers, but they are Limited in Nature • A Regulatory Agency may not Act so as to Exceed the Scope of its Delegated Authority • Standards are Applied: An Agency is Prohibited from Acting in an Arbitrary & Capricious Manner • Agencies must Faithfully Interpret and Apply the Law as Intended by the Legislature. • Agency Actions & Decisions are Subject to Political and Judicial Oversight

Effective Regulatory Structure

• May be Achieved through Various Organizational Models Structured to Meet the Particularly Structure of the Governmental Entity Creating the Agency • Structures may have Varying Degrees of Complexity from Basic to Complex • Structure of the Agency will Depend on the Organizational Components Necessary

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Citizenry (Electoral Process)

Legislature Legislates Confirms Executive Appointments

Executive Appointment

Judiciary Judicial Oversight

Regulatory Agency Legislative, Executive, Judicial

Gaming Operation

Tribal Court

Council Legislates

Enforcement

Licensing

Operation

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Tribal Governing Body

Tribal Gaming Commission Rulemaking Hearings & Appeals

Office of Tribal Gaming Compliance Day-to-Day Regulatory Activities

Tribal Gaming Enterprise

Electorate

Executive

Legislative

Judicial

Regulatory Agency

Gaming Enterprise

Gaming Facility

Gaming Facility

Gaming Facility

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Gaming Commission Commissioner or Commissioners

Legal Counsel

Audit & Enforcement Division

Office of Hearings And Appeals

Licensing Division

Gaming Enterprise

Gaming Commission Commissioner or Commissioners

Hearings & Appeals

Legal Counsel

Executive Director

Licensing Division

Audit Division

Enforcement Division

Employee Licenses Vendor Licenses Facility Licenses Background Investigations

Gaming Machines MICS: Operational Special Investigations IT

Internal Audits Title 31 MICS: Accounting

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All Models Can Be Effective • The Key to Effective Regulation is not in a Particular Organizational Framework • The Key to Effective Regulation is Selecting the Right Framework in terms of: • The Overall Institutional Structure of the Tribal Government; • The Size and Scope of the Regulated Activity; • Available Resources; and • An Unwavering Commitment to the Framework and Making it Work by Everyone within the System. Commitment to the System • Even if a Government has Adopted an Excellent Gaming Ordinance Establishing a Well-Funded, State-of-the-Art Regulatory Structure with Clearly Defined Authority, Powers, Responsibilities, and Functions, there is NO Guarantee that the Agency will be Effective • A Regulatory Agency Cannot Be Effective without the Trust and Support of the Government that Created it.

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The Importance of Oversight • Governmental Support and Trust are Prerequisites to Effective Regulatory Agencies • It is Antithetical to Human Nature, however, to Place a High Degree of Trust in an Entity that Possesses Tremendous Power over which one has Limited Capacity to Control, Particularly where the Entity has the Power to Affect the Financial Health of one’s Most Valuable Asset Effective Oversight is Essential to Accountability • The Most Effective Check Against Agency Abuses of Power is Oversight because it Operates to Effect Accountability • If Accountability Measures are Built Into the Regulatory Framework, it is much Easier to Place One’s Trust in the Agency

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Accountability Measures

• The Statute Provides for: • Clearly Defined Agency Roles & Responsibilities • Clear Delegation of Powers • Due Process of Law • Qualified Appointees & Staff • Standards to Guide Conduct & Decisionmaking Judicial Oversight • Appropriate Political Oversight

Principles for Oversight • No Person should ever be the Ultimate Arbiter of his or her Own Decisions • Political Processes are not Appropriate for Handling or Reviewing Civil or Criminal Law Enforcement Actions and Decisions in particular cases or matters because Political Processes Entail Political Considerations which are Inappropriate in the Context of the Application of the Law to a Particular Set of Facts • Judicial Bodies are the Appropriate Entities for Providing Oversight in the Context of Agency Action & Decisionmaking as the Interpretation of Law and the Application of the Law to Particular Facts is a Judicial Function

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Principles of Oversight • Decision Makers Make Better Decisions when they Understand that the Decision is Subject to Judicial Review • Judicial Review Serves as an Important Check Against Abuses of Power • Judicial Review Serves to Ensure the Proper Interpretation and Application of the Law • Judicial Review Serves as a Check Against Error, Bias, Poor Judgment in Decisionmaking, Misapplication of Law, and Misconduct • The Assurance of Due Process Increases Public Confidence in the Government and its Processes

To Trust and Support… • Improves Regulatory Effectiveness • Strengthens the Regulatory Framework • Advances Statutory Objectives • Decreases the Potential for Conflict and Power Struggles • Encourages Sound Decisionmaking

• Advances the Tribal Interest • Increases Political Stability • Represents Half of the Equation

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The Effective Regulator • Inspires Trust and Confidence in the Regulatory Process • Understands his or her Responsibilities, Duties, Obligations as well as the Agency’s Functions under the Law • Acts within the Scope of Authority Delegated • Fairly and Objectively Applies the Law • Exercises Good Judgment • Is Ethical, Reasonable, and Fair • Has a High Work Ethic • Exercises Discretion • Ensures that Subordinates are held to the Same Standards of Conduct

Primary Goal of the Regulator

• To Effect Compliance • With the Law Through • Fair and Reasonable Regulation • In Order to Ensure the Integrity of the

Regulated Industry without stifling its growth & profitability so as to • Foster Public Confidence and Achieve • All Regulatory Objectives

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End

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The Hearing Process

The Nature of a Hearing

l Foremost, an agency must determine: u The nature of the proceeding u The requisite degree of formality applicable to the proceeding u The authority of the agency to conduct the proceeding l How are these determination made?

SEE THE GAMING ORDINANCE

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Basic Principles

ž The authority of an agency to act is statutorily delegated ž An agency possesses only such authority as has been delegated to it and no more ž So long as the authority to conduct hearings is delegated, an agency may establish by rule or regulation, the procedures governing the hearing process

Basic Principles

ž An agency ’ s hearing procedures must be consistent with provisions of the gaming ordinance ž Any substantive provisions contained in the ordinance must be included in the agency ’ s rules/regulations governing the hearing process ž Agency rules and regulations cannot grant an agency powers it does not possess nor “ correct ” statutory “ defects ”

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Types of Hearings

l Evidentiary l Adjudicatory l Appellate

Evidentiary Hearing

ž An evidentiary hearing is not an adjudication ž It is an investigatory tool – in that may be used to determine whether additional steps are warranted given the availability of competent evidence ž In criminal law, examples of evidentiary hearings include: — Preliminary Hearing — Grand Jury

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Evidentiary Hearing

l In the context of civil law, an evidentiary hearing may be used as a means of determining whether to proceed with additional investigation or whether to proceed with an enforcement action l Such proceedings are basically a formalized procedure for “ fact finding ”

Evidentiary Hearing

ž Why might an agency choose to conduct an evidentiary hearing? — Where there are allegations of a serious violation(s) of law, but the evidence is weak and/or of questionable reliability — Evidentiary hearings are not common in the civil law context, but may be useful where serious allegations come from sources outside the agency rather than through the agency ’ s own investigation

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Adjudicatory Hearings

ž Are much more common types of hearings in the context of regulatory agencies ž An adjudication is simply a decision based on the application of the law to the facts in a specific matter as adduced upon hearing ž An adjudication upon hearing typically results in a decision of the matter in the first instance ž Common TGRA adjudications include license denials/suspensions, proceedings related to enforcement actions, prize claims and other patron complaints, for example

Adjudications

l May be formal or informal l Result in an action or decision of the agency l Are typically subject to appeal l Look to the gaming ordinance for guidance

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Appellate Hearing

l An appellate hearing is a type of proceeding that reviews actions or decisions made by persons or entities and subject to appeal. l The decision of a licensing official, for example, my be subject to appeal to a gaming commissioner or a gaming commission

Basic Principles

l Whether the proceeding is an adjudication or an appeal of an adjudication – the proceeding must provide for DUE PROCESS OF LAW.

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Due Process of Law

The exercise of governmental power within settled principles of law conducted in such a way so as to safeguard the rights of the individual.

Substantive Due Process Law must be: Reasonable

Not be “ arbitrary or capricious ” “ Rationally related ” to the object sought

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Procedural Due Process

l Notice l Opportunity to be Heard

Notice

l Date, Time, and Location of Hearing l Facts Asserted l Applicable Law l Sufficiency of Information Concerning Right of Appeal

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Hearing

l Jurisdiction

Authority of Tribunal l Burden of Proof Duty to Establish Facts l Evidence Species of Proof including testimony, records, exhibits, documents, objects, etc.) l Standard of Review Principle governing judicial oversight of a subordinate decision maker

Jurisdiction of TGRAs

l Licensing Appeals l Patron Dispute Appeals l Enforcement Appeals l Classification Determinations l Employee Disputes

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Rights of Parties at Hearing

ž Fair opportunity to respond and present evidence. ž Right to appear and/or be represented by counsel ž Right to hear evidence against appellant ž Right to inspect evidence ž Right to call witnesses ž Right to cross-examine witnesses against appellant ž Right to present other evidence (documents, letters, etc.)

Discovery

l Use of Subpoenas l Methods u Witness Interviews u Depositions

u Interrogatories l What discovery is available to appellant? u See Ordinance or Regulations

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Evidentiary Issues

ž Evidentiary Rules ž What kind of evidence should be admitted? — Relevant — Competent — Material ž What kind of evidence should be denied? — Irrelevant — Immaterial — Duplicative — Incompetent

Other considerations with regard to admissibility of Evidence

l Recognized privileges u Attorney/client privilege u Doctor/patient privilege u Clergy l Use of Experts l Stipulation of Facts

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Evidence

l Formal rules of evidence are not common in administrative proceedings l Administrative Hearing Officers are typically more lenient in determining admissibility and relevance than courts l Look to gaming ordinance and/or regulations to determine evidentiary issues.

Hearings l Degree of formality u Formal u Informal u Oral

u Written l Type of Record (Transcripts, voice recording, minutes l Objections l Oath

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The Record l Pleadings, motions, intermediate rulings; l Evidence received and considered; l A statement of matters officially noticed; l Questions and offers of proof, objections, and rulings thereon

Findings and Conclusions

l A written determination of the findings of fact and conclusion of law

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HEARING WORKSHOP

In the Matter of the Gaming License of Jill Smythe

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Threshold Questions

l Does the Commission have jurisdiction over this matter? l What informs this decision? u The Tribal Gaming Ordinance l What type of proceeding is this? u This is an appellate proceeding u A review of the decision of an agency official

Due Process Issues

l Is the notice effective? u Time, Date, Place of Hearing u Contains clear statement of facts asserted u References applicable law

u Describes basis for decision l Was the notice properly served? u How is this determined? • See ordinance and/or regulations

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What Witnesses are Needed?

What Facts Can these Witnesses Competently Provide?

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What Issues Are Presented?

l Underpayment of Taxes l Failure to Disclose l Associations l Checking Account Irregularities

Your Decision

l What facts are important to these issues? l What laws govern these issues l Apply the law to the facts l Should the Commission sustain the decision of the licensing officials or reverse the decision? l Is any other recourse available?

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Prepare Your Findings of Fact and Conclusions of Law

-END-

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FACTS

Jill Smythe, a tribal member, was initially employed by the Tribal Gaming Operation (TGO) in June of 2007 as a cage cashier. Her license was issued after a routine background investigation that revealed no negative information. Since then she has been promoted twice and now serves as the count room supervisor. Her employment record has been excellent. All of her annual performance appraisals have been outstanding and she was selected for the “employee of the month” award on four occasions. Two years ago she received the “employee of the year” award. Shortly after being hired, Jill met Larry, a limousine driver, at the casino. They dated for a couple of years before getting married in the fall of 2009. About two years ago Jill and Larry began experience some difficulty in their marriage and formally separated in April of 2014, but have not instituted divorce proceedings. It is rumored that Jill and Larry are attempting to reconcile. When Jill’s license came up for renewal, the Commission instituted a routine background check. It revealed that Jill and Larry’s joint tax return for 2013 had been audited. The audit resulted in a large penalty assessment for underpayment of taxes. The investigation also revealed that Larry had been charged with writing bad checks on the couple’s joint account, but the cases were still pending in district court. Concerned, the Commission investigator ran a Lexis search on both Jill and Larry, and learned that in 2006 Larry had been a government witness in a federal racketeering case against John Williams, a notorious St. Louis mobster. Though Larry was never charged, newspaper accounts alleged that Larry, who had worked for Williams as an accountant for several years, was granted immunity in exchange for his testimony. Williams was convicted of federal racketeering, tax evasion, and money laundering charges. He remains incarcerated. On the renewal application, Jill disclosed that the couple had been required to pay a penalty to the IRS, but no details were provided. The application contained no information about the pending charges against Larry or his close association with Williams. The Tribal gaming investigator recommended non-renewal based on the omission of information on the application and her association with Larry. The recommendation was accepted by the Licensing Director. Jill has been suspended from work pending the outcome of her appeal to the Tribal Gaming Commission.

APPLICABLE PROVISIONS OF TRIBAL GAMING ORDINANCE

3.2 No person may be employed by the Tribal Gaming Operation as a key employee or primary management official without a valid and current gaming license from the Tribal Gaming Commission, which shall only issue such license upon a finding of suitability following a full investigation into the background of the applicant. 3.3 Any person whose prior activities, criminal record, reputation, habits and/or associations pose a threat to the public interest or to the effective regulation of gaming, or creates or enhances dangers of unsuitable, unfair, or illegal practices and methods and activities in the conduct of gaming, shall be deemed unsuitable for employment in the Tribal Gaming Operation. 3.4 For the purposes of this section, the following definitions apply: 1. Key employee means a person who performs one or more of the following functions: (1) Bingo caller; (2) Counting room supervisor (3) Chief of security; (4) Custodian of gaming supplies or cash; (5) Floor manager; (6) Pit boss; (7) Dealer; (8) Croupier; (9) Approver of credit; or (10) Custodian of gambling devices including persons with access to cash and accounting records within such devices; (11) Any other person whose total cash compensation is in excess of $50,000 per year; or the four most highly compensated persons in the gaming operation. 2. Primary management official means: (a) The person having management responsibility for a management contract; (b) Any person who has authority: (1) To hire and fire employees; or (2) To set up working policy for the gaming operation; or (c) The chief financial officer or other person who has financial management responsibility.

The Tribal Gaming Regulatory Agency Office of Licensing and Compliance

December 1, 2014

Jill Smythe 1313 Mockingbird Lane Anytown, Oklahoma 77777

Re:

Application for Renewal of Gaming License

Dear Ms. Smythe: The Director of Licensing and Compliance has completed its review of your application for renewal of your gaming license and hereby informs you that your application is denied based on a finding of unsuitability. Accordingly, you are not eligible for continued employment with the Tribal Gaming Operation. As you are aware, Tribal law requires that all tribal gaming licenses must be renewed every two (2) years. In the course of completing your background investigation for license renewal, the Commission discovered facts and circumstances that should have been disclosed on your application for renewal. Based on these facts, the Office of Licensing and Compliance finds that your financial history and associations creates or enhances dangers of unsuitable, unfair, or illegal practices and methods and activities in the conduct of gaming is inappropriate for employees of the Tribe’s gaming facility. You have the right to file an appeal with the Gaming Commission within the next 60 days. Should you fail to file a timely appeal, this decision shall be deemed final. The process for appealing the Gaming Commission’s denial of your license is attached. If you decide to appeal this Gaming Commission’s decision, you must follow those procedures specifically.

Sincerely,

Stella Wright Director Enclosure

TRIBAL GAMING REGULATORY AGENCY SUITABILITY DETERMINATION

1.

APPLICANT INFORMATION

EMPLOYEE NAME: DATE OF BIRTH: TRIBAL AFFILIATION: SOCIAL SECURITY #:

Jill Smythe 12/25/76

Tribal Member

555-55-555

(X) ( )

APPLICANT STATUS:

KEY EMPLOYEE

PRIMARY MANAGEMENT OFFICAL

POSITION:

Count Room Supervisor

2.

SYNOPSIS OF BACKGROUND INVESTIGATION CONDUCTED

A routine background investigation of Jill Smythe was initiated pursuant to her application for renewal of her gaming license. The investigation included a criminal and credit history check and interviews with co- workers, friends, and family members. Since Ms. Smythe’s initial hire, she married Larry Smythe. During the investigation, I learned that Jill and Larry Smythe underpaid their income taxes for 2013 and they now owe the IRS approximately $30,000 in back taxes plus fines in the amount of $20,000. Additionally, I learned that Larry has been charged with writing bad checks on his joint account with Jill and the cases are now pending in district court. It was also discovered that in 2006 Larry was a government witness in a federal racketeering case against John Williams, a notorious St. Louis mobster. Though Larry was never charged, newspaper accounts alleged that Larry, who had worked for Williams as an accountant for several years, was granted immunity in exchange for his testimony. Williams was convicted of federal racketeering, tax evasion, and money laundering charges. He remains incarcerated. In relation to Jill Smythe, an FBI criminal history report was received and reviewed with the following findings:

No arrest history No record of conviction

3.

SUITABILITY DETERMINATION

Based upon the findings of background investigation and the confirmation of the applicant’s information and taking into consideration the applicant’s prior activities, criminal records (if any), reputation, habits and associations, it has been determined that the above named individual:

( ) Should be granted a gaming license (X) Should be denied renewal of a gaming license ( ) Should have gaming license revoked

________________________________________________ Stella Wright, Director of Licensing and Compliance

_______________________

Date

Tribal Gaming License Application Notice to Applicants

Authority Indian Gaming Regulatory Act, 25 U.S.C. 2701 et seq. and Tribal Gaming Ordinance and Regulations. Purpose To protect the tribe, employees, patrons, and public by ensuring that gaming activities are free from criminal activities and corruptive elements. The required information is used to determine the suitability of the applicant to be employed by or associated with the gaming activities. Burden of Proof An applicant is seeking the granting of a privilege. The burden of proving the applicant’s qualifications is at all times on the applicant. Disclosure of Information An applicant may be subject to denial or other action for failing to provide all information, documentation, and assurances as required or requested, or failing to reveal any material facts, or providing misleading or untrue information. The Tribal Gaming Agency reserves the right to request additional information at any time. Waiver or Claim for Damages An applicant accepts any risk of adverse reaction, financial loss, or public notice which may result from any action taken with respect to an application. By filing an application, an applicant expressly waives any claim for damages as a result of any action taken with respect to that application. Withdrawal of an Application An application may not be withdrawn without the permission of the Tribal Gaming Agency. Privacy Act Notice In compliance with the Privacy Act of 1974, the following information is provided: Solicitation of the information on this form is authorized by 25 U.S.C. 2701 et seq . The purpose of the requested information is to determine the eligibility of individuals to be employed in a gaming operation. The information will be used by the Tribal Gaming Agency and by National Indian

Gaming Commission members and staff who have need for the information in the performance of their official duties. The information may be disclosed to the appropriate federal, tribal, state, local, or foreign law enforcement and regulatory agencies when relevant to civil, criminal, or regulatory investigations or prosecutions, or when pursuant to a requirement by the Tribe or the National Indian Gaming Commission in connection with the hiring or firing of an employee, the issuance or revocation of a gaming operation. Failure to consent to the disclosures indicated in this notice will result in the Tribe’s being unable to hire you in a primary management official or key employee position, or other positions as determined by the Tribe. The disclosure of your Social Security Number (SSN) is voluntary. However, failure to supply a SSN may result in errors in processing your application. Notice Regarding False Statements In signing this application, I understand that a false statement on any part of the application may be grounds for not hiring me, or for firing me after I begin work. Also, I understand that I may be punished by fine or imprisonment. (U.S. Code, title 18, Section 1001) License Fees: The level of fees for issuance or renewal of a gaming license, and the payment of such fees, shall be in accordance with tribal regulations. Special Instructions • Complete each question. If not applicable, indicate so with “N/A” • Please type or print all answers. Do not use pencil. Failure to do so will cause delays and/or denial of your application. • If needed, attach additional documents or explanation sheets • Submit two current passport quality photographs. Ensure the photograph is a full facial view. Write your name and social security number on the back of each picture. Identification Requirements As part of your application, we will require that you provide positive proof of your identity; including one or more of the following official documents:

• Certification of birth; • Valid driver’s license; • State identification card; • Military identification card; • Valid passport; or • Alien registration card, if you are a registered alien.

Applicants initials_______

TRIBAL GAMING COMMISSION Administrative Hearing __________________________________________________________________________ Appeal of Denial of Renewal of Gaming License FINDINGS OF FACT AND Jill Smythe, Petitioner CONCLUSIONS OF LAW ______________________________________________________________________________ FINDINGS OF FACT 1. Petitioner, Ms. Smythe, __________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ 2. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________ 3. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________

4. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________ 5. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________ 6. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________ 7. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________

CONCLUSIONS OF LAW Based upon the above Findings of Fact and the laws that apply to the requirements for a person to be eligible for a Happy Tribe Gaming License, the Happy Gaming Commission does hereby: ____(affirm/reverse)____ the finding that Petitioner, Jill Smythe, is suitable/unsuitable for a Gaming License on the following grounds: 1. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________ 2. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________ 3. _____________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________

4. _____________________________________________________________________ ___________________________________________________________________________

___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ ___________________________________________________________________________ __________________________________________________________________________

Based upon the above, the Tribal Gaming Commission hereby finds that Jill Smythe is ___(suitable/unsuitable)___to hold a gaming license, and therefore determines that her gaming license ___shall/shall not)____ be renewed.

This Decision is hereby Confirmed by:

___________________________________

________________________

CHAIR

DATE

___________________________________

________________________

VICE-CHAIR

DATE

___________________________________

________________________

COMMISSIONER

DATE

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Tribal Employment Law Issues for Gaming Regulators NIGA Indian Gaming Level III September 25, 2018 ©Charlene D. Jackson – Jackson Law Firm PLLC

We Know …. IGRA ü Establishes NIGC as the independent agency responsible for regulation of gaming and gaming operations ü Establishes standards for gaming including licensing, operations, regulation, and investigation ü Recognizes conditions for Class III gaming ü Recognizes tribal authority to regulate gaming and establishes minimum standards for tribal regulation of gaming operations

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But … What Does this Mean? Tribal Gaming Commissions have regulatory oversight of Gaming Operations ◦Compliance with applicable law, regulations and policies and procedures ◦License employees and those who conduct business with the Gaming Operations ◦Surveillance of operations including gaming and money Mission : Maintain integrity, fairness and security of gaming operations

It also means … You Avoid Operational Issues Commissions do not engage in operational activities ◦Human Resource Related Issues ◦ Suitability or qualification for a particular position ◦ Hire/Terminate/Discipline ◦Business Decisions ◦ Game selection ◦Marketing ◦ Expansion No Monday morning arm chair quarterbacking

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Commission Activity and Employment Law? While IGRA does not specifically impose federal employment laws on gaming operations, however IGRA impacts employment thus implicating employment law ◦Employees must have a gaming license ◦Tribal-State compacts may reference employment related law or issues Issuance, Denial or Revocation of license directly impacts employment eligibility thus Commission activity is related to employment

Another Aspect: Commission Management How does Commission fit within overall structure? How is the Commission managed and supervised? ◦Organizational chart ◦Commission Executive Director and employees Separate Policies and Procedures?

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The Conflict IGRA requires Tribes to be sole proprietors Responsibility: ◦Operations – Maximize profits ◦Regulation – Compliance with law and regulation to protect tribal assets

Suggested Solution Separate operations from regulation Commission, like NIGC should have some autonomy Gaming Ordinance should delegate independent regulatory authority ◦ Regulate licensure of employees ◦ Issuance, Denial, Renewal, Revocation ◦ Hearing ◦ Regulate operations ◦ Investigations ◦ Audits ◦ Compliance reviews

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Why the Separation? Protect the Owner (Tribe) from employment related claims Commission is not the employer so work is not credited to the employer Licensing decisions are not made by employer Commission does not decide to hire, discipline, terminate or retain an employee However actions licensing actions could impact employment eligibility

What About Tribal Sovereign Immunity Remember: IGRA does not specifically impose federal employment laws on gaming operations, however IGRA impacts employment thus implicating employment law Remember: As a general rule, statutes by their own terms “applying to persons” includes Tribes and their “property interests” ◦ Federal Power Commission v. Tuscarora Nation , 362 U.S. 99 (1960)

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Exceptions to the General Rule Exclusive rights of self-governance; purely intramural matters Application of the law abrogates treaty rights Proof that Congress intended the law would not apply to tribes ◦ Donovan v. Coeur d’ Alene Tribal Farms , 751 F.2d 1113 (9 th Cir. 1985)

Examples Title VII of Civil Rights Act of 1964 – specifically excludes corporations owned by US and Tribes ◦Indian Preference in Hiring on or near reservation – permitted but cannot have preference for members of a particular tribe over another (case law) Age Discrimination In Employment – silent ◦Applies in capacity as proprietor when claimant is not a tribal member (case law)

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More Examples Americans with Disabilities ◦ Title I - Equal employment opportunities – excludes tribal corporations ◦ Title II – Equal opportunity to benefit from programs – no mention of tribes – sovereign immunity may apply ◦ Title III – Public accommodations and commercial facilities – prohibit exclusion, segregation or unequal treatment ◦ Can apply to public accommodations run by tribe (case law)

More Examples Fair Labor Standards Act – silent National Labor Relations Act – no express applicability or exemption for tribes ◦Has been applied to tribal gaming operations since about 2002 ◦Courts analysis – no treaty rights involved and not an issue of self-governance ◦Tribal Labor Sovereignty Act – attempt to exempt tribes from NLRA – was not enacted

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NLRA Protects “concerted activity” – employees working to improve conditions NLRB ◦Members appointed by the President - partisan ◦High discretion ◦Words of caution: “protected activity” has been interpreted very broadly

Tribal-State Compacts May Impose Employment Laws Workers’ Compensation and Unemployment Compensation Human Rights Laws Compliance with Federal Employment Laws

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Employee Licensing

“Adequate System” - Background Investigations Background investigations on primary management officials and key employees and oversight on an ongoing basis and Tribal license for primary management officials and key employees with notice to NIGC Minimum Standards: any person – prior activities, criminal record, reputation, habits/associations pose a threat to public interest or effective regulation or create, enhance dangers of unsuitable, unfair or illegal practices shall not be eligible for employment Notice to NIGC of background investigation results prior to issuance of tribal license Subject to continuous review

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Investigations Lengthy application – separate and distinct from Human Resource background check Due diligence Procedural safeguards ◦Due Process ◦Issuance/denial/revocation of license

Action on License Key Management or Office ◦ Notice to NIGC ◦ Chair has time to review ◦ Can suspend/revoke

◦ Tribe must provide hearing to licensee ◦ NIGC has own standards/regulations Ordinance should include similar hearing process for any

employee required to have a license Must have Due Process protections

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Due Process – What is It? Basic sense: Notice ◦Basic information about negative action ◦Any rights a licensee might have (representation, witnesses, documents/evidence) ◦Hearing date Meaningful opportunity to be heard

Perceptions of Fairness Challenges

◦ Small Communities ◦ Familial Relations ◦ Politics Procedural Fairness ◦ Defendants will take a negative decision better if: ◦ Treated with respect ◦ Communication/knowledge of what to expect ◦ Opportunity to tell their side of the story ◦ Explanation of decision

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Somethings to Consider Review hearing policies and procedures ◦Address fairness concerns

◦Includes clear procedures – manage expectations Understand and implement procedural fairness

Human Resource Terminology At-Will Employment

For Cause Termination ◦Employer has a reason to terminate ◦Could include loss of gaming license

◦Employer or employee may terminate employment for no reason but not an illegal reason ◦Excludes contract employees

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One case: The Interplay Facts: Bob, the employee is employed as the Pit Boss. He is the CEOs first cousin, he is constantly late for work, calls out sick often, is constantly complaining about his low wages, has poor performance reviews. He attended a recent Tribal Council meeting to complain about the low wages tribal members are paid compared to non-tribal members. On his way home, he was stopped, arrested and held on felony DUI and drug charges for possession of marijuana. At the time of the incident he was riding in the car with his girlfriend, who is the known drug dealer. Because he could not post bond, he missed several days of work and did not call in and he was terminated.

What do we have here? Human Resource issues Potential licensing issues Potential criminal issues Who investigates? What happens in one could impact the other

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Possible Outcomes Human Resources ◦ Terminate for cause – ability to file grievance ◦ Terminate ”at-will” – possible unemployment claim Commission ◦ Suspension or revocation of license - hearing Criminal case

◦ Guilty - loss of job and license ◦ Not Guilty – process is slow

Let’s Complicate Things Human Resources takes action and terminates him “for cause”. Bob files a lawsuit in a court with jurisdiction claiming the casino discriminated against him because he is “disabled” due to alcohol addiction and he claims he has a medical marijuana charge to alleviate back pain caused by working conditions of having to stand at the pits for several hours without rest. He also claims the Commission unfairly suspended his license without due process on the basis of criminal charges that have not been proven beyond a reasonable doubt and because the Commission Chairman doesn’t like his cousin, the CEO.

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