	Interior Uses a Multistep Review Process to Help Ensure that Tribal- State Compacts Comply with IGRA and Has Approved Most Compacts

In our June 2015 report, we found that Interior uses a multistep review  process to help ensure that tribal-state compacts, and any compact  amendments, comply with IGRA, other federal laws not related to  jurisdiction over gaming on Indian lands, and the trust obligation of the  United States to Indians. From 1998 through fiscal year 2014, Interior reviewed and approved most  of the 516 compacts and compact amendments that states and tribes  submitted. Interior did not approve or disapprove 60 of the 516 compacts submitted  by tribes and states within the 45-day review period. States and Selected Tribes Regulate Indian Gaming Based on Compacts and Tribal Ordinances, Depending on Gaming Class

As we found in our June 2015 report, the roles of states and tribes in  regulating Indian gaming are established in two key documents:  (1) compacts for class III gaming and (2) tribal gaming ordinances for  both class II and class III gaming. IGRA allows states and tribes to agree on how each party will regulate  class III gaming, and we found that regulatory roles vary among the  24 states that have class III Indian gaming operations. These states  monitor gaming operations at least weekly, with most having a daily  on-site presence. Eight  percent (32 of 406) of class III Indian gaming operations are located in  these states, and the operations accounted for about 4 percent of  gross Indian gaming revenue in fiscal year 2013. Tribes take on the primary day-to-day role of regulating Indian gaming. The tribes’  regulatory agencies were similar in their approaches to regulating their  gaming operations. The Commission Has Limited Authority for Class III Gaming, but It Provides Some Services, as Requested, Using Standards Last Updated in 2006

In our June 2015 report, a key difference we found between class II and  class III gaming is that IGRA authorizes the Commission to issue and  enforce minimum internal controls standards for class II gaming but not  for class III gaming. States involved in the regulation of Indian gaming are also impacted by  the Commission’s proposal to draft updated guidance and withdraw its  2006 regulations; however, the Commission’s plans for obtaining state  input on this proposal are unclear. Standards for Internal Control in the Federal  Government call for management to ensure that there are adequate  means of communicating with, and obtaining information from, external  stakeholders that may have a significant impact on the agency achieving  its goals. According to a Commission official, the Commission is  considering conducting outreach to the states on its proposal but did not  have any specific plan for doing so. The Commission Performs Various Activities to Help Ensure Tribes’ Compliance with IGRA and Commission Regulations, but the Effectiveness of Some Activities Is Unclear

		Commission’s Monitoring Activities

To help ensure compliance with IGRA and Commission regulations, the  Commission conducts a broad array of monitoring activities—such as  reviewing independent audit reports submitted annually by tribes,  conducting site visits to tribal gaming operations to examine compliance  with applicable Commission regulations, and assessing tribes’  compliance with minimum internal control standards as part of  Commission-led audits. However, the effectiveness of the Commission’s training and technical  assistance efforts remains unclear. In addition, they do not correlate such  compliance with the Commission’s training and technical assistance  efforts. Additional outcome-oriented performance measures would enable  the Commission to better assess the effectiveness of its training and  technical assistance efforts and its ACE initiative. In our June 2015 report,recommended that the Commission review and revise, as needed, its  performance measures to include additional outcome-oriented measures. Without guidance or documented procedures  to inform its staff about how to complete letters of concern or maintain  documentation tracking tribal actions, the Commission cannot ensure  consistency in the letters that it sends to tribes, and it may be difficult to  measure the effectiveness of the letters in encouraging tribal actions to  address potential issues. As a result of these findings, we recommended   and in its comment letter the Commission  in our June 2015 report,generally agreed, that the Commission should develop documented  procedures and guidance for letters of concern to (1) clearly identify  letters of concern as such and to specify the type of information to be  contained in them, such as time periods for a response; and (2) maintain  and track tribes’ responses to the Commission on potential compliance  issues.
Why GAO Did This Study

Over the past 25 years, Indian gaming has become a significant source of revenue for many tribes, reaching $28 billion in fiscal year 2013. IGRA, the primary federal statute governing Indian gaming, provides a statutory basis for the regulation of Indian gaming. Tribes, states, Interior, and the Commission have varying roles in Indian gaming.
This testimony highlights the key findings of GAO's June 2015 report ( GAO-15-355 ). Accordingly, it addresses (1) Interior's review process to help ensure that tribal-state compacts comply with IGRA; (2) how states and selected tribes regulate Indian gaming; (3) the Commission's authority to regulate Indian gaming; and (4) the Commission's efforts to ensure tribes' compliance with IGRA and Commission regulations. For the June 2015 report, GAO analyzed compacts and Commission data on training, compliance, and enforcement; and interviewed officials from Interior, the Commission, states with Indian gaming, and 12 tribes in six states GAO visited based on geography and gaming revenues generated.

What GAO Found

In its June 2015 report, GAO found that the Department of the Interior (Interior) has a multistep review process to help ensure that compacts—agreements between a tribe and state that govern the conduct of the tribe's class III (or casino) gaming—comply with the Indian Gaming Regulatory Act (IGRA). From 1998 through fiscal year 2014, Interior approved 78 percent of compacts; Interior did not act to approve or disapprove 12 percent; and the other 10 percent were disapproved, withdrawn, or returned.
GAO also found that states and selected tribes regulate Indian gaming in accordance with their roles and responsibilities established in tribal-state compacts for class III gaming, and tribal gaming ordinances, which provide the general framework for day-to-day regulation of class II (or bingo) and class III gaming. In addition, the 24 states with class III Indian gaming operations vary in their approaches for regulating Indian gaming, from active (e.g., daily or weekly on-site monitoring) to limited (e.g., no regular monitoring). Further, all 12 selected tribes GAO visited had regulatory agencies responsible for the day-to-day operation of their gaming operations.
In GAO's June 2015 report, GAO found that the National Indian Gaming Commission (Commission)—an independent agency within Interior created by IGRA—has authority to regulate class II gaming, but not class III gaming, by issuing and enforcing gaming standards. The Commission is considering issuing guidance with class III standards that may be used voluntarily by tribes and has held consultation meetings to obtain tribal input. However, in June 2015, GAO found the Commission does not have a clear plan for conducting outreach to affected states on its proposal. Federal internal control standards call for managers to obtain information from external stakeholders that may have a significant impact on the agency achieving its goals. Along with tribes, state input could aid the Commission in making an informed decision.
Even with differences in its authority for class II and class III gaming, GAO found that the Commission helps ensure that tribes comply with IGRA and applicable federal and tribal regulations through various activities, including monitoring gaming operations during site visits to Indian gaming operations and Commission-led audits. In addition, since 2011, the Commission has emphasized efforts that encourage voluntary compliance with regulations, including providing training and technical assistance and alerting tribes of potential compliance issues using letters of concern. However, the effectiveness of these two approaches is unclear. GAO found in June 2015 that the Commission had a limited number of performance measures that assess outcomes achieved. With such additional measures, the Commission would be better positioned to assess the effectiveness of its training and technical assistance. Further, GAO found the Commission does not have documented procedures, consistent with federal internal control standards, about how to complete or track letters of concern to help ensure their effectiveness in encouraging tribal actions to address identified potential compliance issues. Without documented procedures, the Commission cannot ensure consistency or effectiveness of the letters it sends.

What GAO Recommends

In its June 2015 report, GAO recommended that the Commission: (1) obtain input from states on its plans to issue guidance on class III minimum internal control standards; (2) review and revise, as needed, its performance measures to better assess its training and technical assistance efforts; and (3) develop documented procedures and guidance to improve the use of letters of concern. The Commission generally agreed with GAO's recommendations.