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Level II - NM Training Book

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Level II - NM Training Book

Aug 28 - 30 , 201 9 Santa Ana Casino Hotel

Albuquerque , N ew Mexico

NIGA Seminar Institue Commissioner Certification Level II August 28-30 Santa Ana, New Mexico

NIGA CERTIFIED GAMING COMMISSIONER

NATIONAL INDIANGAMINGASSOCIATION

Wednesday, August 28

8:00 AM 9:00 AM

Breakfast to be provided History of Class II Gaming Liz Homer, Homer Law Break Employment Issues for Regulators Charlene Jackson, Jackson Law Lunch Break Tribal Sovereign Immunity and The Gaming Regulator Liz Homer, Homer Law Break Effective Regulatory Writing

9:00 AM 10:30 AM

10:30 AM 10:45 AM

10:45 AM 12:15 PM

12:15 PM 1:15 PM

1:15 PM 2:45 PM

2:45 PM 3:00 PM

3:00 PM 4:30 PM

Liz Homer, Homer Law Thursday, August 29 Breakfast to be provided

8:00 AM 9:00 AM

Licensing: Key Employees & Primary Officials Billy David, Bo-Co-Pa & Associates

9:00 AM 10:30 AM

10:30 AM 10:45 AM

Break

Licensing: Vendors & Facilities Billy David, Bo-Co-Pa & Associates

10:45 AM 12:15 PM

12:15 PM 1:15 PM

Lunch Break

Internal Auditing-What's Required & How it Should Be Approached Sheryl Ashley, Director of Risk Consulting, Blue Bird CPA's

1:15 PM 2:45 PM

2:45 PM 3:00 PM

Break

Financial Controls & Accounting Standards Sheryl Ashley, Director of Risk Consulting, Blue Bird CPA's Friday, August 30

3:00 PM 4:30 PM

8:00 AM 9:00 AM

Breakfast to be provided

Roles of Surveillance Cheats & Scams George Joseph, Worldwide Casino Consulting, Inc.

9:00 AM 10:30 AM

10:30 AM 10:45 AM

Break

Roles of Surveillance Cheats & Scams George Joseph, Worldwide Casino Consulting, Inc .

10:45 AM 12:15 PM

8/20/19

CLASS II GAMING A Brief Legal History

BEFORE IGRA • There was the Johnson Act, 15 U.S.C. § 1175. • Federal criminal statute enacted in 1962. • Prohibits the manufacture, possession, use, sale, or transportation of any “ gambling device, except in accordance with a state regulatory scheme. ” • Includes Indian Country, the District of Columbia, and possessions of the United States. • Requires all persons manufacturing, using, selling, transporting, or providing for the use of others to register with the US Department of Justice and certain disclosures when gambling devices are shipped.

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THE JOHNSON ACT: GAMBLING DEVICE The Johnson Act defines a “gambling device” as any: Slot machine ... and other machine or mechanical device (including but not limited to, roulette wheels and similar devices) designed and manufactured primarily for use in connection with gambling, and (A) which when operated may deliver, as the result of the application of an element of chance, any money or property, or (B) by the operation of which a person may become entitled to receive, as the result of the application of an element of chance, any money or property. Any subassembly or essential part intended to be used in connection with any such machine or mechanical device, but which is not attached to any such machine or mechanical device as a constituent part.

IN OTHER WORDS…

Just about any item or equipment that facilitates gambling from slot machines to roulette wheels and even component parts or sub-assemblies

And, the Johnson Act was broadly construed in this manner.

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THE BEGINNING… • Beginning in the 1970s and increasing through the 1980s, several state governments began making permanent cuts to their property tax base. • Credited with kicking off this modern tax rebellion was Proposition 13 adopted on June 6th, 1978, with the approval of nearly two-thirds of California’s voters, cutting property tax rates on homes, businesses and farms by about 57%. • Numerous other states and even the United States were caught up in the anti-tax movement, which remains a major feature of the political landscape up even today.

SO WHAT’S A STATE TO DO???

• Foremost, find a new revenue source palatable to voters . • So began the advent of the state lotteries. • By 1999, 37 states and the District of Columbia operated a lottery. • Today, only 6 states do not have a lottery. • States earned a total of $19.4 billion on lottery sales of $68.8 billion in 2012, according to the North American Association of State and Provincial Lotteries.

8/20/19

Where tribal governments had never had a viable tax base, leaders began taking notice of these developments. For many tribes, bingo games were quite common in the community, but on a small scale and on a limited basis. This relatively common community activity had heretofore garnered little attention, but some tribal leaders began viewing bingo as a potential source of revenue for cash strapped tribal governments. Soon a number of tribal governments, including the Seminole, Eastern Band of Cherokee and the Cabazon Tribe, among others, introduced high stakes bingo, something that proved highly popular and lucrative.

IN INDIAN COUNTRY

STATE CHALLENGES

• Bingo in Indian Country, proved so successful in such a short time that state governments soon took notice. • In particular, the states took the position that these bingo games were illegal under state law.

8/20/19

THE FIRST SALVO

• Seminole v. Butterworth • Upon learning of the Tribe’s plans to contract with a private limited partnership to build and operate a bingo hall on the reservation in exchange for a percentage of the profits as management fees, Butterworth, the local Sheriff, informed the tribe that he would make arrests for any violations of the Florida gambling laws. • Thereupon, the Tribe brought an action under 28 U.S.C. §§ 2201 and 2202, seeking a declaratory judgment and injunctive relief against Butterworth. • The Florida attorney general filed a petition on behalf of the state seeking leave to participate in the case as amicus curiae, and leave was granted.

SEMINOLE V. BUTTERWORTH

• The district judge granted the Tribe's motion for summary judgment on the ground that the statute in question was regulatory in nature and therefore could not be enforced against the Indian tribe. • The district court enjoined the sheriff from enforcing the statute against the plaintiff. • Sheriff Butterworth of Broward County and the State of Florida appealed the district court's decision to the Fifth Circuit, which affirmed the District Court ’ s decision.

8/20/19

SEMINOLE V. BUTTERWORTH

• The Circuit court, relying on Bryan v. Itasca County , a Supreme Court decision unrelated to gaming, held: • The states lack jurisdiction over Indian reservation activity until granted that authority by the federal government. • Pursuant to the former Public Law 280, the State of Florida assumed criminal jurisdiction over reservation Indians to the full extent allowed by the law. • Although P.L. 280 granted states the right to exercise limited civil jurisdiction over the Indian tribes, such civil jurisdiction extends only to the extent necessary to resolve private disputes between Indians and Indians and private citizens. • P.L. 280 did not grant the state general civil regulatory jurisdiction. • The question thus becomes whether the statute in question represents an exercise of the state's regulatory or prohibitory authority. THE CABAZON DECISION The Cabazon and Morongo Bands of Mission Indians conduct bingo games open to the public. The Cabazon Band also operates a card club for playing draw poker and other card games. California sought to apply to the Tribes its statute governing the operation of bingo games. Riverside County also sought to apply its ordinances regulating bingo, poker, and other card games. The Tribes instituted an action for declaratory relief in Federal District Court, which entered summary judgment for the Tribes, holding that neither the State nor the county had any authority to enforce its gambling laws within the reservations.

8/20/19

THE CABAZON DECISION

• In Pub. L. 280, the primary concern of which was combating lawlessness on reservations, California was granted broad criminal jurisdiction over offenses committed by or against Indians within all Indian country within the State but more limited, non-regulatory civil jurisdiction. • When a State seeks to enforce a law within an Indian reservation under the authority of Pub. L. 280, it must be determined whether the state law is criminal in nature and thus fully applicable to the reservation, or civil in nature and applicable only as it may be relevant to private civil litigation in state court.

CONGRESS RESPONDS TO CABAZON • On Oct. 18, 1988, the Indian Gaming Regulatory Act was adopted. • IGRA divides gaming activities into three Classes – I, II, and III and establishes a regulatory framework for each category • It establishes the National Indian Gaming Commission to administer and enforce the statute. • It requires Tribes to adopt and submit for approval a gaming ordinance by the NIGC • It requires a compact for Class III gaming to be approved by the Secretary of the Interior and includes an exemption from the Johnson Act for such gaming.

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CLASS I GAMING

• The term "class I gaming" means social games solely for prizes of minimal value or traditional forms of Indian gaming engaged in by individuals as a part of, or in connection with, tribal ceremonies or celebrations.

CLASS II GAMING • The game of chance commonly known as bingo ( whether or not electronic, computer, or other technologic aids are used in connection therewith ) – • which is played for prizes, including monetary prizes, with cards bearing numbers or other designations, • in which the holder of the card covers such numbers or designations when objects, similarly numbered or designated, are drawn or electronically determined, and • in which the game is won by the first person covering a previously designated arrangement of numbers or designations on such cards, including (if played in the same location) pull-tabs, lotto, punch boards, tip jars, instant bingo, and other games similar to bingo, and (ii) card games that – • are explicitly authorized by the laws of the State, or • are not explicitly prohibited by the laws of the State and are played at any location in the State, but only if such card games are played in conformity with those laws and regulations (if any) of the State regarding hours or periods of operation of such card games or limitations on wagers or pot sizes in such card games.

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CLASS II GAMING • The term "class II gaming" does not include • any banking card games, including baccarat, chemin de fer, or blackjack (21), or • electronic or electromechanical facsimiles of any game of chance or slot machines of any kind…

CLASS III GAMING

• The term "class III gaming" means all forms of gaming that are not class I gaming or class II gaming.

8/20/19

SIMPLE, RIGHT? WRONG!

• So What Happened? The NIGC ’ s 1992 Regulatory Definitions: • Electronic , computer or other technologic aid was defined as “a device such as a computer, telephone, cable, television, satellite or bingo blower and that when used: • (a) Is not a game of chance but merely assists a player or the playing of a game; • (b) is readily distinguishable from the playing of a game of chance on an electronic or electromechanical facsimile; and • (c) is operated according to applicable Federal communications law. ” • Electronic or electromechanical facsimile was defined by reference to the Johnson Act to mean “ any gambling device as defined in 15 U.S.C. 1117(a)(2) or (3). ” • Game similar to bingo was defined by reference to the definition of bingo elsewhere in the regulations. In other words, a game similar to bingo is bingo.

EVOLUTION OF INDIAN GAMING

• In the period between the enactment of IGRA in 1988 and the issuance of NIGC’s first regulations in 1992, Indian Gaming was flourishing. • In those early years, a number of innovations were introduced, including the introduction of electronics in Class II gaming, particularly bingo and pull-tab games. • In the beginning these innovations were relatively modest, such as the introduction of computerized random number generators for bingo games, pull tab dispensers, but very quickly there began appearing machines housed in cabinets that were linked together by bingo-based software programs that allowed players to compete against one another for prizes with video screens that displayed spinning reels.

8/20/19

EARLY GAME- CLASSIFICATION WARS

Early on, federal regulators and prosecutors viewed the visual similarity between the electronically aided bingo games and traditional slot machines as blurring the line of game classification. A number of cases were filed by the federal government based on the following theories: Because Class II games look and act like slot machines(i.e., they’re faster-paced than traditional/manual bingo; require more investment; and involve a greater risk of loss), they are electronic facsimiles/Class III. Congress intended Class II gaming to be less lucrative than Class III gaming. There is no implied exemption to the Johnson Act with regard to Class II technological aids.

LACK OF JUDICIAL ENDORSEMENT

In the early game-classification cases, the 1992 definitions of “electronic aid” and “electronic/electromechanical facsimile” proved unhelpful. In fact, federal courts, including at least 3 Circuit Courts of Appeal, implicitly rejected the Commission’s definitions: “ Boiled down to their essence, the regulations tell us little more than that a class II aid is something that is not a class III facsimile. ” Diamond Game Enterprises v. Reno , 230 F.3d 365, 369 (D.C. Cir. 2000). “ The decision is a ‘ simple one that may be accomplished solely by examining the statute itself (that is, without looking to the Commission ’ s rules). ’” Cabazon Band of Mission Indians v. National Indian Gaming Commission , 14 F.3d 633 (D.C. Cir. 1994).

8/20/19

LACK OF JUDICIAL ENDORSEMENT

• Federal courts also rejected the notion that the Johnson Act extends to technologic aids to the play of bingo • “The text of IGRA quite explicitly indicates that Congress did not intend to allow the Johnson Act to reach bingo aids. . . . Reading the Johnson Act to forbid such aids would render the quoted language a nullity. Why would Congress carefully protect such technologic aids through the text of [IGRA], yet leave them to the wolves of a Johnson Act forfeiture action?” United States v. 103 Electronic Gambling Devices , 223 F.3d 1091, 1102 (9th Cir. 2000). • “We further conclude Congress did not intend the Johnson Act to apply if the game at issue fits within the definition of a Class II game and is played with the use of an electronic aid.” U.S. v. 162 MegaMania Gambling Devices, 231 F.3d 713 (10th Cir. 2000). • “[W]hile complete, self-contained electronic or mechanical facsimiles of a game of chance, including bingo, may indeed be forbidden by the Johnson act after the enactment of IGRA, . . . We hold that mere technologic aids to bingo . . . are not.” Diamond Game Enterprises v. Reno, 230 F.3d 365 (D.C. Cir. 2000).

DEVELOPMENT OF FEDERAL CASE LAW

• Rather than focusing on the equipment itself, the courts adopted the following 2-step analysis for game classification issues, which provided the guidance missing from the 1992 regulations: • Is it a Class II game under IGRA – i.e., does it meet the statutory criteria for a Class II game? • If so, is it a technological aid to a Class II game or a Class III electronic/electromechanical facsimile?

8/20/19

FILLING IN THE BLANKS

• Courts relied on the Senate Report on IGRA for guidance on distinguishing between a “Technologic Aid” and “Electronic or Electromechanical Facsimile”: • “[T]ribes should be given the opportunity to take advantage of modern methods of conducting class II games and the language regarding technology is designed to provide maximum flexibility . . . . For example, linking participant players at various reservations whether in the same or different States , by means of telephone, cable, television or satellite may be a reasonable approach for the tribes to take . Simultaneous games participation between and among reservations can be made practical by use of computers and telecommunications technology as long as the use of such technology does not change the fundamental characteristics of the bingo or lotto games.... In other words, such technology would merely broaden the potential participation levels and is readily distinguishable from the use of electronic facsimiles in which a single participant plays a game with or against a machine rather than with or against other players.

DEFINING A “TECHNOLOGIC AID”

Courts recognized a technological aid must possess at least two characteristics: The Game Must Operate to Broaden the Participation Levels of Participants in a Common Game “An ‘electronic aid’ to a class II game can be viewed as a device that offers some sort of communications technology to permit broader participation in the basic game being played.” Cabazon Band of Mission Indians v. National Indian Gaming Comm’n , 14 F.3d 633, 637 (D.C. Cir. 1994). The Participant Must Play With or Against a Machine Rather than With or Against Other Players “[B]ecause each player competes against other players to achieve a “bingo” rather than with or against a machine or the “house,” the machines are an aid to bingo, rather than a facsimile.” U.S. v. 162 MegaMania Gambling Devices , 231 F.3d 713, 725 (10th Cir. 2000).

8/20/19

DEFINING A “FACSIMILE”

Courts chose to ignore the Commission’s definitions and adopt a plain- meaning interpretation to “facsimile”: “The first dictionary definition of ‘facsimile’ is ‘an exact and detailed copy of something.’” Sycuan Band of Mission Indians v. Roache, 54 F.3d 535, 542 (9th Cir. 1994). “[A]s commonly understood, facsimiles are exact copies, or duplicates.” Cabazon Band of Mission Indians v. National Indian Gaming Comm’n, 14 F.3d 633, 636 (D.C. Cir. 1994). “Courts have adopted a plain-meaning interpretation of the term ‘facsimile’ and recognized a facsimile of a game is one that replicates the characteristics of the underlying game .” U.S. v. 162 MegaMania Gambling Devices, 231 F.3d 713, 724 (10th Cir. 2000).

EXAMPLE OF A FACSIMILE

In U.S. v. Santee Sioux Tribe of Nebraska , the court found that the following elements rendered the “Lucky Tab II” machine a technologic aid and not a Class III facsimile:

The video does not determine the winner or loser Theoretically, the game could be played without the machine No cash prizes are dispensed by the machine No credits are accumulated, or prizes awarded by the machine The machine only dispenses paper pull-tabs There is no random generation performed by the machine Aid adds to the entertainment value Use of the machines in theory facilitates greater participation, since more participants are able to play at the same time The machines do not determine chance, and the player is not playing against the machine The machines are not an exact replica of pull-tabs

8/20/19

A TIME FOR CHANGE

To bring stability and predictability to issues of game classification, the Commission revised the 1992 definitions of “electronic aid”’; “electronic facsimile”; and “other games similar to bingo.”

NEW REGULATORY DEFINITIONS In the preamble to the final rule, the Commission wrote: “[I]n hindsight, and with the guidance of the courts, the inconsistencies in purpose between IGRA and the Johnson Act are more readily apparent. The federal courts, including no less than three United States circuit courts of appeal, have been virtually unanimous in concluding that the Commission's definitions are not useful in distinguishing between technologic aids and facsimiles. . . . The uncomfortable result is that the Commission cannot faithfully apply its own regulations and reach decisions that conform with the decisions of the courts. Such inconsistency frustrates the Commission's ability to properly discharge its duties under IGRA.”

8/20/19

NEW REGULATORY DEFINITIONS

• In the preamble to the final rule, the Commission noted that:

“The Johnson Act is intended to determine whether something is a “gambling device.”' IGRA, on the other hand, is intended to distinguish between classes of games. Within the context of IGRA, there is no question as to “gambling” per se--all Indian gaming is “gambling.” Accordingly, determining whether the Johnson Act covers a particular device simply does not answer the question relevant to Indian gaming: whether the game is class II or class III.”

ON GAME CLASSIFICATIONS • In the preamble to the final rule, the Commission noted that: “The appropriate threshold for a game classification analysis under IGRA has to be whether or not the game played utilizing a gambling device is class II. If the device is an aid to the play of a class II game, the game remains class II; if the device meets the definition of a facsimile, the game becomes class III. . . . Because Congress intended to permit the use of electronic technology in class II gaming . . . the important factor in a game classification analysis is whether the technology is assisting a player or the play of a class II game.”

8/20/19

TECHNOLOGIC AID (a) Electronic, computer or other technologic aid means any machine or device that: (1) Assists a player or the playing of a game; (2) Is not an electronic or electromechanical facsimile; and (3) Is operated in accordance with applicable Federal communications law. (b) Electronic, computer or other technologic aids include, but are not limited to, machines or devices that: (1) Broaden the participation levels in a common game; (2) Facilitate communication between and among gaming sites; or (3) Allow a player to play a game with or against other players rather than with or against a machine. (c) Examples of electronic, computer or other technologic aids include pull tab dispensers and/or readers, telephones, cables, televisions, screens, satellites, bingo blowers, electronic player stations, or electronic cards for participants in bingo games.” 25 C.F.R. § 502.7

ELECTROMECHANICAL FACSIMILE • An “electronic or electromechanical facsimile” is: [A] game played in an electronic or electromechanical format that replicates a game of chance by incorporating all of the characteristics of the game, except when, for bingo, lotto, and other games similar to bingo, the electronic or electromechanical format broadens participation by allowing multiple players to play with or against each other rather than with or against a machine.” 25 C.F.R. § 502.7

8/20/19

OTHER GAMES SIMILAR TO BINGO

• The term “other games similar to bingo” is defined as: Any game played in the same location as bingo (as defined in 25 U.S.C.

2703(7)(A)(i) constituting a variant on the game of bingo, provided that such game is not house banked and permits players to compete against each other for a common prize or prizes.” 25 C.F.R. § 502.8

JUDICIAL DEFERENCE…FINALLY! The 2002 Class II definitions were applied by the federal courts of appeal for the 8 th and 10 th Circuits in 2 separate game classification decisions. The 8 th Circuit applied the 2002 definitions to find that the equipment at issue did not constitute a Johnson Act gambling device. The court stated: “Furthermore, the regulations effective July 17, 2002 . . . seem to expressly contemplate the use of Lucky Tab II pull-tab dispensers/readers, suggesting that the NIGC has now given its imprimatur to these types of machines. . . Based on our review of the record and of the case law, the NIGC's conclusion that Lucky Tab II is a permissible class II gaming device seems to be a reasonable interpretation of the IGRA.” United States v. Santee Sioux Tribe of Nebraska , 324 F.3d 607 (8th Cir. 2003).

8/20/19

JUDICIAL DEFERENCE… FINALLY! The 10 th Circuit scrutinized the 2002 definitions and found that they were a “permissible construction of the statute” and accorded them “controlling weight” based on at least six factors, including that:

[T]he NIGC’s relatively inclusive reading of § 2703 has some support in IGRA’s legislative history . . . the NIGC’s construction is not an unreasonable choice in the sense that the NIGC has adopted the reading of an ambiguous statute that is ostensibly more likely to expand the pool of tribal revenue through greater gaming variety and offerings . . . the NIGC may also wish to interpret ambiguities in IGRA so as to narrow its demanding oversight mandate . . . [and] perhaps the best evidence of the reasonableness of the NIGC’ construction is the favorable reception it has already received in the federal courts.” Seneca-Cayuga Tribe of Oklahoma v. National Indian Gaming Commission , 327 F.3d 1019 (10th Cir. 2003).

NIGC “BLESSING” OF ELECTRONIC CLASS II GAMING

• The Class II Technical Standards at 25 C.F.R. Part 547 set forth the minimum technical standards governing the use of electronic, computer, or other technologic aids in connection with the play of Class II games. • The promulgation of the Class II Technical Standards made clear that Class II gaming in an electronic format is lawful and permitted under IGRA.

8/20/19

WHAT’ LEFT???

• Under IGRA, Class II gaming includes non-banked card games that are (1) explicitly authorized by the laws of the State,” or (2) not explicitly prohibited by the laws of the State and are played at any location in the State.” 25 U.S.C. § 2703(7).

GAME CLASSIFICATION DISPUTES…

State of Wisconsin vs. Ho-Chunk Nation State argued that poker is Class III in Wisconsin based on the state constitution, which provides that the “legislature may not authorize gambling in any form,” except for the games listed in the constitution. Because poker is not one of the listed exceptions, it is “explicitly prohibited by the laws of the state.” Tribe argued that meaning of “explicitly prohibited” must be read in conjunction with 25 U.S.C. § 2710(b)(1), which allows Class II games if played in a state that “permits such gaming for any purpose by any person, organization, or entity.” The Court ruled for the Tribe. State of Idaho v. Coeur D’Alene Tribe State of Idaho prohibits all forms of gambling other than a state lottery, pari-mutuel betting, and certain bingo and raffle games. Tribe argued that poker does not fall within “gambling” definition because it is a game of skill rather than a game of chance. The Court ruled for the State.

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END

Elizabeth L. Homer 1730 Rhode Island Ave., NW Suite 501 Washington, DC 20036 (202) 955-5601 [email protected]

8/20/19

Employment Issues and Gaming Regulators

NIGA Level II Commissioner Training August 28, 2019

Charlene D. Jackson

Objective Generalized overview of employment law Things to consider ◦Jurisdiction ◦Applicability of law ◦Interpretation ◦Regulatory authority Law cannot be read in a vacuum

8/20/19

Scenario: Edward Employee Edward Employee – resign or be terminated Card dealer, required to stand for long periods of time

Reasonable accommodation requested and granted on paper but not implemented; required to resume normal duties, HR complaint Routine drug test - failed Reinjured back at work; ambulance transported, hospitalized and missed work Resign or be terminated – NC/NS; failed drug test – impact gaming license He says terminated because of union activity

Long term employee and union rep; currently working on increasing wages Hurt on the job when he picked up something heavy Medical care; off work; return to work with limitations and on pain medication Workmen’s compensation paperwork not submitted

Reading the Law – Important Considerations Mandatory versus Discretionary Terms ◦ Must and shall ◦ May and can Qualifiers ◦ Notwithstanding ◦ Except ◦ Provided, however ◦ Commas ◦ And/or Legislative Intent Definitions

8/20/19

Some Examples Fry Bread: Combine flour, salt and baking powder Combine flour, salt or baking powder The power of the comma:

Qualifying language: “That’s not something I’m expecting.” “That’s not something I’m expecting right now.”

Let’s eat Grandma! Let’s eat, Grandma!

Companion Reading Constitution ◦ Bill of Rights, Civil Rights, Indian Civil Rights, Tribal Constitutions Treaties Law ◦ Applicable federal law: IGRA and employment laws ◦ Applicable state law ◦ Tribal Codes and Ordinances, including the Gaming Ordinance Case Law Regulatory Agencies and Decisions Administrative and Human Resource Policies Gaming Compacts including Appendices

8/20/19

Relevant Question: Jurisdiction? Tribal? State? Federal? Regulatory Agency? Concurrent? *Do not assume tribal only jurisdiction Specific applicability

Applicability by terms of a different law, agreement, regulation or policy Interpreted applicability by case law and/or action or facts *Do not assume only tribal law applies *Do not assume state law doesn’t apply

But I’m a Regulator – I Don’t Need to Know this “HR Stuff” Overlap between HR Issues and Regulatory Issues

1 2 3 4 5 6 7 8 9

◦ HR – Suitability for employment and job performance within policy (operational) ◦ Commission – Threat to public interest; regulation of gaming; creation of unfair or illegal practices in conduct of gaming (Regulatory) Stay in your lane – but understand your lanes will overlap or cross Awareness is critical

TRIBAL COURT INDIAN COUNTRY, USA

EDWARD EMPLOYEE, Plaintiff, vs.

Case No.: TC-CV-2017-876

COMPLAINT

TRIBAL CASINO, TRIBAL CASINO CEO, in his individual and as CEO, TRIBAL GAMING BOARD MEMBERS and DEFENDANTS 1-6, unnamed spouses in their professional and individual capacities, TRIBAL GAMING COMMISSIONER and DEFEDANTS 7-14, unnamed spouses, in their professional and individual capacities. Defendant

10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

COMPLAINT - 1

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Federal Employment Laws

Applicability to Tribes – The General Rule General statutes by their own terms “applying to all persons” includes Tribes and their “property interests.” ◦ Federal Power Commission v. Tuscarora Indian Nation, 362 U.S. 99 (1960) Exceptions: ◦ Exclusive rights of self governance - intramural matters ◦ Application of the law abrogates treaty rights ◦ Proof that Congress intended the law not to apply ◦ Donovan v. Coeur d’ Alene Tribal Farms , 751 F.2d 1113, 1116 (9 th Cir. 1985)

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Title VII of the Civil Rights Act of 1964 42 U.S.C. §§ 2000e – 2000e-17 (2000); Executive Order 11246 Prohibits discrimination due to race, color, religion, gender or national origin Applies to employers with 15+ employees for each working day in 20+ calendar weeks Excludes US, corporations owned by US or Indian Tribes . However, exemption does not extend to enterprises with mixed ownership (Tribe and non-Indian owner) ◦ Myrick v. Devils Lake Sioux Manufacturing Corp ., 718 F. Supp. 753 (D.N.D. 1989)

Indian Preference Under Title VII Indian preference in hiring is expressly permitted for employers on or near reservations Exceptions: ◦ No preference for members of a particular tribe over other tribes ◦ Dawavendewa v. Salt River Project Agricultural Improvement Power Dist ., 154 Fed.3d 117 (9 th Cir. 1998), See also Dawavendewa v. Salt River Project , 276 F.3d 1150 (9 th Cir 2001) ◦ Note: SRP is not a tribally owned corporation

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Age Discrimination in Employment Act 29 U.S.C. §§ 621-634 (2000) Prohibits discrimination on basis of age Employees/applicants protected if over 40 Liability may be avoided if employer can show bona fide occupational qualification requiring an employee to be younger Silent on applicability to tribes

Case Law ADEA applies to the tribe “in its capacity as proprietor” of bingo facility, at least when claimant is not a tribal member. ◦ EEOC v. Forest County Potawatomi Community , No. 2:2013mc00061 (E.D. Wis. 2014) ADEA does not apply when dispute ◦ Involves treaty rights ◦ EEOC v. Cherokee Nation , 971 F.2d 937 (10 th Cir. 1989) ◦ Intramural affairs ◦ EEOC v. Fond du Lac Heavy Equipment and Construction Co. , 986 F.2d 246 (8 th Cir. 1993) ◦ EEOC v. Karuk Tribe Housing Authority , 260 F.3d 1071 (9 th Cir. 2001)

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Americans with Disabilities Act of 1990 42 U.S.C. § 12101 et. seq. National mandate with enforceable standards for elimination of discrimination against individuals with disabilities Federal enforcement Invoke congressional authority, including the power of the 14 th Amendment and to regulate commerce to address discrimination Disability specifically defined term

Nondiscrimination Title I : Employment opportunities and requires reasonable accommodations for employers with 15+ employees ◦ Excludes: US, corporations owned by US or Indian tribes Title II: State and local government - equal opportunity to benefit from programs, services and activities ◦ No mention of tribes but tribal sovereignty may exempt tribes Title III: Public accommodations and commercial facilities that prohibit exclusion, segregation or unequal treatment ◦ Can apply to public accommodations run by a tribe, but cannot be enforced by private person against tribe in non-Indian forum due to sovereign immunity. However compliance can be compelled by US Attorney General. Florida Paraplegic Assoc. v. Miccosukee Tribe of Indians of Florida, 166 F.3d 1126 (11 th Cir. 1999)

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Fair Labor Standards Act 29 U.S.C. §§ 201-219 (2000 and 2016) Standards for minimum wages and terms of payment for overtime No specific mention of tribes 2016 Amendments ◦ Increases minimum salary levels necessary for an employee to be classified as exempt ◦ Rises the highly compensated employee threshold ◦ Automatic updates every 3 years ◦ Effective December 1, 2016

FLSA Case Law LEO not entitled to protections because tribal law enforcement is traditional governmental function. ◦ Snyder v. Navajo Nation , 371 F.3d 658 (9 th Cir. 2004)

In a case involving tribal consortium to protect native game and fishing rights, the court opted not to apply FLSA as a matter of comity and sovereignty because FLSA would not apply to state or local governments. However, government employees exercising powers of tribal government are exempt from FLSA. ◦ Reich v. Great Lakes Indian Fish and Wildlife Commission, 4 F3d 490 (7 th Cir. 1993)

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More FLSA Case Law FLSA applies to business operated on tribal land and owned by tribal member. ◦ Chao v. Matheson , 2007-WL-1830738, No. C-06-5361 (W.D. Wash., June 25, 2007)

National Labor Relations Act 29 U.S.C. §§ 141-187 (2000) Authorizes employees to form unions for collective bargaining and engaging in “protected concerted activity” Prohibits employers from prohibiting exercise of rights or engaging in conduct that may have a “chilling effect” Applies to employers with $50,000 in annual business Applies to private employers operating on or near reservations No express applicability or exemption for tribal governments but does exempt the US

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Protected Concerted Activity 2+ people acting together to improve working conditions or wages; also 1 person if

Excludes reckless or malicious behavior – sabotaging equipment, lies about a product, revealing trade secrets may cause action to lose protection May also exclude “hate speech”

he/she involves others before acting or acts on behalf of others Does not require union membership

Some Examples Social media comments Sharing own confidential information, including wages, corrective actions, etc. Rules restricting criticism of management Rules requiring employees to be respectful or that prohibit an employee from poking fun, denigrate or defame co-works and others Rules prohibiting resistance to proper work related orders or discipline, even though not overt insubordination

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Tribal Challenges Tribal law prohibiting union membership as a condition of employment did not violate NLRA. It is an exercise of sovereign authority of tribe to govern its own territory. ◦ National Labor Relations Board v. Pueblo of San Juan , 276 F.3d 1187 (10 th Cir. 2002) NLRA applies to casino wholly owned and operated by tribe on tribal reservation because the operation of a casino is not an exercise of self-governance or a governmental function. ◦ San Manuel Indian Bingo and Casino v. NL RB, 475 F.3d 1306 (D.C.Cir. Feb. 2007), reh’g en banc denied (D.C. Cir. June 8, 2007)

NLRA v. Little River Band of Ottawa Indians, No. 14-2239, (6 th Cir. June 9, 2015) Facts: Tribe operates casino under IGRA. Tribe enacted tribal law giving the tribe authority over collective bargaining, including prohibition over certain topics and banned strike activity. NLRB found the tribal law violated the NLRA and issued a cease and desist order. The tribe challenged jurisdiction on basis of sovereignty. 6 th Circuit affirmed the NLRB jurisdiction.

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Reasoning and Current Status Court found the the NLRA is a law of general applicability, that no treaty rights were involved, the issue was not one of internal self governance and affirmed NLRB jurisdiction. Petition for Writ of Certiorari denied without reasoning at same time a similar petition involving Saginaw Chippewa was denied

Far Reaching Effects Year end bonuses for labor members reduced without notice violated NLRA. ◦ Viejas Band of Kumeyaay and United Food and Commercial Workers International , 21-CA-166290, NLRB, October 11, 2016.

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Casino Pauma (9 th Circuit – 2018) NLRA applies to tribal gaming establishment owned and managed by the tribe and operated on tribal land. Violation of NLRA to try to stop distribution of union literature

Tribal Labor Sovereignty Act Legislation to exclude Indian Tribes from the definition of employer under NLRA

Introduced but no traction

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Family Medical Leave Act 29 U.S.C. §§ 2601-2654 (2000) Employers with 50+ must provide 12 weeks of unpaid leave in a year for family and medical reasons ◦ Birth, adoption, placement of child in foster care ◦ Care of seriously ill child, spouse or parent; or ◦Own serious illness ◦ Return to same or equivalent position upon return Law does not specifically mention tribes – DOL position that the law applies to tribes ◦ Eligible employee requirements ◦ employed for 12 months and 1,250 hours

FMLA Case Law Exhaustion of tribal court remedies required ◦ Sharber v. Spirit Mountain Gaming, Inc ., 343 F.2d, 724 (9 th Cir. 2003) Tribe has sovereign immunity from suit that is not abrogated by FMLA. Likewise, gaming compacts and tribes policies did not waive immunity, so none would be inferred. ◦ Muller v. Morongo Casino Resort & Spa, ED-CV-14-02308-VAP (KK)(C.D. Cal., July 17, 2015)

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Employee Retirement Income Security Act 29 U.S.C. §§1001 et. seq. Standards for voluntarily established pension or welfare-benefit plans Not applicable to tribal employer benefit plans if the plan covers only tribal employees employed in traditional governmental roles but applicable to tribes engaged in commercial activities (2006 amendment)

Consolidated Omnibus Budget Reconciliation Act 29 U.S.C. §§ 1161 et seq . (2000) Requires continuation of health insurance coverage for up to 18 months after an employee leaves Not applicable to insurance plans maintained by tribes if ◦Tribal employees employed in traditional governmental roles Insurance plans for commercial tribal enterprises are subject to COBRA

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Workers’ Compensation General Rule: State labor and employment laws do not apply to employers operating solely on Indian reservation ◦ California v. Cabazon Band of Mission Indians, 480 U.S. 202, 208 (1987) Except : 40 U.S.C. § 290 provides state authority to apply workers’ compensation laws to all lands owned or held by the US within the state. Interpretation – state workers’ compensation laws may apply

The Take Away – When law is silent TRIBAL GOVERNMENT Tribal internal issue Tribal treaty Tribal members with no applicability to non- members Law generally not applicable

COMMERCIAL INTERESTS Effect on non-tribal members Not a governmental function - even though profits will be used to fund government Law probably applicable

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Scenario: Edward Employee Edward Employee – resign or be terminated Card dealer, required to stand for long periods of time

Charlene Jackson [email protected] (480) 785-6196

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TRIBAL SOVEREIGN IMMUNITY AND THE GAMING REGULATOR

Elizabeth L. Homer Homer Law Chartered

Tribal Sovereign Immunity: General Principles

u Sovereign immunity is a fundamental aspect of an Indian tribe’s inherent sovereignty q As noted by the Supreme Court, tribal sovereign immunity “is a necessary corollary to Indian sovereignty and self-governance.” u Tribal governments are immune from lawsuits in

both federal and state courts UNLESS: q 1) Congress has authorized the suit; or q 2) The tribe has waived its immunity

u Sovereign immunity also extends to commercial activities conducted by tribal entities that are “arms” of the tribe

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