Voluntary Compliance and the Letter of Concern
Stamping out small regulatory infractions before they become big problems
By E . Sequoya Simermeyer
When tribes think of the National Indian Gaming Commission ’ s compliance efforts , they might only think about the Notice of Violation ( NOV ) and assume it is the agency ’ s go-to enforcement tool to obtain compliance with IGRA . As I have written previously , any enforcement action I take is based on an exhaustive investigation and analysis of the unique circumstances involved , and it is not something I take lightly .
When NIGC must take enforcement action , we do so to preserve the integrity of the industry and protect the valuable tool Indian gaming represents for many tribes . But it is critically important for the Indian gaming community to understand that the majority of NIGC compliance efforts do not result in the issuance of an NOV and a subsequent Civil Fine Assessment that may result in an operation ’ s closure or a daily penalty of over $ 57,000 for each violation .
NOVs are rare . It is far more likely that noncompliance is addressed first with technical assistance efforts followed by a Letter of Concern ( LOC ). The agency uses the LOC to alert tribes to concerns regarding compliance with IGRA or NIGC regulations that have not been resolved through technical assistance efforts . The LOC identifies the concern ( s ) and provides a time period for the tribe to respond with corrective actions . Often , the LOC process results in resolution of the matter without penalty .
NIGC ’ s record usage of LOCs in recent years underscores the agency ’ s dedication to engagement in its oversight responsibilities and to a collaborative resolution of potential enforcement matters . In FY2022 , NIGC issued 22 LOCs — only one resulted in an NOV . Of those remaining , 70 percent have been satisfied and 30 percent are working through their corrective action plan . This voluntary compliance approach is NIGC ’ s proactive and collaborative handshake with gaming tribes to meet IGRA ’ s mandates . The agency is committed to providing gaming
6 TRIBAL GOVERNMENT GAMING 2023 tribes with the best resources to help them successfully operate and regulate their gaming in a manner that sustains for generations what has become the lifeblood for many tribes ’ communities .
Below is a short journey into aspects of the agency ’ s compliance environment . These highlights point out that the agency would rather use voluntary compliance than enforcement actions when possible .
NIGC and Regulatory Compliance First , while tribes ’ regulatory bodies and NIGC may have distinct oversight responsibilities , there is a shared interest in protecting tribal assets derived from gaming . Through NIGC ’ s Division of Compliance , the agency monitors tribal gaming operations , provides technical assistance and training , cultivates local-level relationships and supports the work of more than 6,000 tribal gaming regulators .
The division includes eight regional offices , an Audit Program and an Environmental Public Health and Safety ( EPHS ) Program . The Region Offices are comprised of compliance and audit staff , who conduct routine site visits and assessments at tribal gaming facilities , and perform audits and investigations to monitor compliance with the IGRA , NIGC regulations and tribal gaming ordinances or resolutions approved by the NIGC chair .
In addition , other NIGC components , including the agency ’ s Finance , Technology , Public Affairs and General Counsel divisions , regularly provide a variety of assessment , advisory , planning and communication tools in coordination with the NIGC Compliance Division to encourage tribes ’ proactive efforts at compliance .
When technical assistance and training , intermediate communications and the LOC do not result in compliance with IGRA , NIGC regulations or the tribal gaming ordinance , the NIGC will undertake enforcement action . Enforcement actions may include imposing appropriate sanctions for violations , such as civil penalties , issuing orders for temporary closure and referring criminal matters to appropriate tribal , federal and state entities . Fortunately for both patron and operator alike , these measures are few and far between . A majority of the time , once alerted to a violation , gaming tribes and NIGC work with a tribe ’ s regulatory staff and their gaming operations to correct the problem . This is what NIGC calls “ voluntary compliance .”
The Letter of Concern NIGC has historically approached IGRA violations with the mindset that once alerted , tribes will remediate a violation in a reasonable time if given a chance to correct it . Voluntary compliance is the agency ’ s goal . The first step to voluntary compliance is to alert the tribe to a potential violation ; the agency codified that approach in 2012 .
Set forth in 25 C . F . R . 573 , an LOC describes the available facts and information , includes a preliminary assessment regarding the incident or condition and provides a tribe with a time period for its response . Voluntary compliance is often achieved when a tribe and the NIGC staff are able to resolve any potential enforcement issues prior to the chair issuing an enforcement action .
Over the past 10 years , LOCs have been used to address concerns such as a tribe not maintaining sole proprietary interest in and responsibility for the conduct of any gaming activity ; entering and operating under contracts that contain management provisions which have not been submitted and approved by the NIGC chair ; using net gaming revenues for purposes other than those set forth in IGRA ( commonly called a misuse of revenue ); instances where the construction , maintenance and operation of the gaming facility is conducted in a manner that does not adequately protect the environment , public health and safety of employees and patrons ; failing to submit timely audits ; failing to submit required licensing notices for facilities or employees ; and instances where internal controls do not protect the integrity of gaming and