INTERNET GAMING:MR. GLENN FELDMAN

Statement of Mr. Glenn Feldman Attorney Mariscal, Weeks, McIntyre & Friedlander,
Phoenix, AZ Committee on Senate Indian Affairs February 9, 2012 Mr. Chairman
and members of the Committee: I appreciate the opportunity to testify here
today on this important issue. By way of background, I am a lawyer in private
practice in Phoenix, Arizona. For more than 30 years, my practice has been
devoted exclusively to federal Indian law, representing tribes and tribal
entities around the country. Among other things, I have served as outside
General Counsel to the Cabazon Band of Mission Indians since 1979, and
it was my great good fortune to argue - and win - California v. Cabazon
Band (the so- called "Cabazon case") before the U.S. Supreme Court in 1987.
Since that time, I have been actively involved in negotiating tribal-state
gaming compacts for tribes in a number of states as well as litigating
a variety of other Indian gaming issues. A more complete biography is attached
to this testimony. Let me begin by saying that I am not here as any sort
of self- appointed spokesman for Indian Country. Given the complexity of
the internet gaming issue and the wide divergence of opinion among tribes
on the subject (including among my own tribal clients), I'm not sure that
anyone can - or should - try to perform that role. Nor am I here as an
advocate for or against federal legislation in the area of internet gaming.
Rather, what I hope to do is provide the Committee with some thoughts on
how it, and Congress as a whole, might want to proceed as it considers
this difficult issue. Let me say at the outset that I believe that lawful
internet gaming in the United States is inevitable. I don't see how anyone
can look at the technological advances of recent years and not understand
that the internet is going to become an important component of the gaming
industry in the future. The only real questions are how and when. And so,
the advice that I give all my tribal clients is the same: just saying "no"
is not an effective strategy for dealing with inevitable change. In my
view, tribes need to be at the table; need to be active participants in
the development of the legislation and the systems; and need to be flexible
and smart in their thinking in order to be sure that they share in the
benefits and avoid the problems that internet gaming will bring. Part of
my message today, however, is that there is no need to rush to enact federal
internet gaming legislation. I do not share the views of those who suggest
that the recent Justice Department opinion is immediately going to open
the floodgates of unlicensed and unregulated internet gaming in the United
States. While such gaming may not be prohibited by the federal Wire Act
under the Justice Department's recent opinion, interstate internet gaming
is still subject to the proscriptions of UIGEA and may well run afoul of
the Unlawful Gambling Business Act, RICO and other civil and criminal forfeiture
statutes. As a result, I think Congress would be making a serious mistake
if it rushed into enacting federal legislation without the careful, deliberative
process the subject deserves. In this connection, I think there are some
useful parallels to be drawn between where Congress finds itself today
with respect to internet gaming and where Congress was in the late 1980's,
when it was considering Indian gaming legislation after the Cabazon decision.
Both situations presented a complex and controversial mix of federal, tribal,
state and commercial interests and both tribal gaming then, and internet
gaming now, are likely to have important economic, political and societal
consequences. But despite these facts, Congress did not rush to enact Indian
gaming legislation in the 80's. Twenty months elapsed between the time
of the Cabazon decision, in February, 1987 and the enactment of the Indian
Gaming Regulatory Act in October, 1988. But what must be kept in mind is
that Congress had been actively considering Indian gaming legislation as
early as 1984, a full three years before Cabazon. So by the time IGRA was
signed into law by President Reagan in 1988, Congress had devoted more
than four full years to that legislative process. Now, I'm not suggesting
that Congress necessarily needs to devote that much time to the internet
gaming issue and I'm not proposing that Congress "study the issue to death."
Nor do I want to minimize the difficulty or complexity of the negotiations
that resulted in the final version of the Indian Gaming Regulatory Act.
As Professor Skibine recalls, all of us left blood, sweat and tears on
the floors of those meeting rooms. But in the end, that long, deliberative
process worked and produced a legislative framework that, despite its flaws,
has proven to be a pretty good compromise that is now pumping more than
$25 billion annually into Indian Country. The situation involving internet
gaming today presents a very similar challenge. It involves many moving
parts and potentially competing interests. But precisely for those reasons,
the issue deserves thoughtful attention and not a rush to judgment. Authorizing
the use of this technology in gaming to maximize its benefits and minimize
its potential problems requires no less. While I'm talking about parallels,
let me mention one more. In IGRA, and particularly in the definition of
"class II gaming," Congress in 1988 declared that tribes were entitled
to incorporate future technologic advancements (or what the statute calls
"electronic, computer or other technologic aids") into their gaming activities.
As this Committee's Report on S.555 plainly stated, [t]he Committee specifically
rejects any inference that tribes should restrict class II games to ...
current technology. The Committee intends that tribes be given the opportunity
to take advantage of modern methods of conducting class II games and the
language regarding technology is designed to proved maximum flexibility.
I think the parallel here is obvious. If Congress is going to continue
to keep that promise it made to tribes about allowing them to incorporate
technologic advances into their gaming activities, then that same commitment
needs to apply to internet gaming now. This leads me to the final premise
of my testimony. Indian tribal governments need to be full and active participants
in all processes by which federal internet gaming legislation is developed,
and tribes are entitled to have the full right to develop, use and benefit
from internet gaming to the extent they wish to do so. Legislation that
limits or restricts the ability of tribal governments to reap the benefits
of internet gaming is simply unacceptable. Admittedly, not all tribes will
choose to make this leap across the digital divide. And for those that
do, there will be any number of potential models as to how that involvement
might be structured. The IGRA format - involving tribal ownership, operation
and regulation of the gaming operation - has proven its worth over the
last 25 years and could be one option for some tribes. But that is certainly
not the only model. In California, for example, a group of 29 gaming and
non-gaming tribes has joined forces with an equal number of commercial
cardrooms to form the California Online Poker Association. That group is
promoting state legislation under which California would create, license,
regulate and derive state revenues from an intrastate internet poker system.
Again, this may not be the right answer for every tribe, but for those
that choose that path, they ought to have that right. Internet gaming today,
like Indian gaming 25 years ago, is complicated and controversial. But
it's coming, and so tribal governments need to be smart and flexible in
their thinking on the issue, and Congress needs to recognize that tribes
must have a seat - in fact, given the wide diversity of opinions on the
subject in Indian Country, they are probably entitled to several seats
- at the tables where these decisions are going to be made. That concludes
my testimony and I would be happy to respond to any questions the Committee
members may have.