Proposed Rule to Amend 25 C.F.R. Part 293 – IGRA Compacting On December 6, 2022, the Interior Department published a proposal to amend the regulations governing the IGRA compacting process at 25 C.F.R. Part 293. The proposed rule stems from draft revisions to Part 293 that the Department released in March of 2022. The Department hosted four Tribal Leader consultation sessions on the draft revisions and accepted written comments. The Department's current Part 293 regulations were promulgated in 2008. The 2008 regulations were designed to "address the process for submission by Tribes and States and consideration by the Secretary of Class III Tribal-State Gaming Compacts, and [were] not intended to address substantive issues ." The proposed rule would address these substantive issues by codifying Departmental policy developed since 1988 through decision letters and federal case law. These decisions address the appropriate scope of class III gaming compacts, revenue sharing provisions, and other factors. In publishing the proposed rule, Interior acknowledged that “the Indian gaming industry remains one of the most significant sources of Tribal economic development in Indian Country. The changes proposed to 25 C.F.R. Part 293 … would provide clarity on the criteria the Department would consider when deciding whether to approve compacts by clarifying boundaries as to allowable topics of negotiation, better defining key terms, and clearly outlining when the Department must review a gaming compact.” The most substantive provisions in the proposed rule are located at Subpart D, which examines the "Scope of Tribal-State Gaming Compacts." This Subpart clarifies provisions/topics deemed permissible and impermissible for purposes of Tribal-State gaming compact negotiations. For example, permissible provisions include those relating to the application of laws or regulations or that address Tribal or State jurisdiction "that are directly related to, and necessary for, the licensing and regulation of gaming activity" (Part 293.17-18) and provisions "directly related to the operation of gaming activities" (Part 293.23). Proposed Part 293.24 will govern how the Department will determine whether a provision is "directly related to the operation of gaming activities." Part 293.25 would codify the Department's policy governing whether "revenue sharing" provisions in Tribal-State gaming compacts are lawful under IGRA. The proposal states that compacts may include "revenue sharing in exchange for a State's meaningful concessions resulting in a substantial economic benefit for the Tribe." The term "meaningful concession" is defined at Part 293.2(h). Proposed Part 293.27 would clarify that “If the State allows any form of class III gaming, then the State is regulating all forms of class III gaming. A State’s refusal to negotiate in a compact over all forms of class III gaming, not prohibited in the State, is considered evidence of a violation of IGRA.” This position is referred to as the “class-based test” and has been adopted by the Second Circuit in Mashantucket Pequot Tribe v. Connecticut and the Tenth Circuit in Northern Arapahoe Tribe v. Wyoming . Regarding the emerging market of online gaming, proposed Part 293.29 would make clear that compacts may include provisions allocating State and Tribal jurisdiction that deem remote wagers to take place at the location of the server accepting the wager that is located on the Tribe's Indian lands. The Federal Register notice explains that "the overwhelming majority of commenters agreed that the Department should include provisions related to i-gaming," noting the need for Tribes to be able to compete in the digital industry. However, the notice also acknowledged that "a handful of commenters opposed the Department addressing i-gaming in the draft revisions." Text of the Federal Register notice of the proposed rule, executive summary, and summary of comments received can be found at this link: https://www.govinfo.gov/content/pkg/FR-2022-12- 06/pdf/2022-25741.pdf. The Department hosted an in-person consultation on January 13, 2023, and held two virtual consultations on January 19 and January 30, 2023. The comment deadline was March 1, 2023. The Interior Department is reviewing comments and may issue a final rule in the coming weeks or months.
4
Made with FlippingBook - Online catalogs