Casino Gaming Regulation:

Roles of Five States and the National Indian Gaming Commission

RCED-98-97: Published: May 15, 1998. Publicly Released: Jun 15, 1998.

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Pursuant to a congressional request, GAO reviewed the roles of the National Indian Gaming Commission and states in casino gaming regulation, focusing on: (1) information on the Commission's organization, staffing, funding, and responsibilities from 1991 through 1997; (2) similar information on state gaming agencies in Arizona, Michigan, Nevada, New Jersey, and Washington, as it relates to casino gaming; and (3) views of the heads of the gaming agencies from the five states on the elements critical to regulating gaming.

GAO noted that: (1) in 1991, the Commission's organization consisted of three commissioners and six other staff; (2) by 1997, the Commission's staffing had increased to 37 and included two oversight offices--the Office of Contracts and Audits and the Office of Enforcement; (3) funding for the Commission, which comes from fees assessed on Indian bingo operations, appropriations, or cost reimbursements, increased from $1.6 million in 1991 to $4.6 million in 1997; (4) expenditures were greater than revenue during the last 4 fiscal years, but the use of carryover balances from prior years sustained the Commission; (5) during the early 1990s, the Commission promulgated regulations for the Indian gaming; (6) later, it focused on its responsibilities to: (a) monitor gaming operations; and (b) review or approve various gaming reports and submissions for both bingo and casino gaming; (7) the gaming agencies in the five states GAO reviewed vary considerably in their organization, staffing, and funding for casino gaming, a situation that reflects the differences in the scope and level of the responsibilities that state agencies have; (8) in fiscal year 1997, Nevada and New Jersey, the two states that almost exclusively regulate non-Indian casino gaming, had the largest organizations, in part, because they regulate all or almost all of the casino gaming in their states; (9) New Jersey had a staff of about 700 and a budget of about $54 million to license, monitor, and enforce the gaming requirements for 12 non-Indian casinos in Atlantic City; (10) Nevada had a staff of about 400 and a budget of $22 million to regulate over 2,400 gaming operations; (11) Arizona, Michigan, and Washington had smaller organizations and shared responsibilities with the tribes; (12) although these three states oversee about the same number of Indian gaming operations, staffing and funding levels varied; (13) licensing, monitoring, and enforcement activities also differed in these three states; (14) in all five states, gaming operations fund each state's regulatory or oversight program; (15) the heads of the gaming agencies in all five states GAO visited cited the importance of ensuring the integrity of gaming and identified what they viewed as critical regulatory elements; and (16) from their perspective, the critical elements are: (a) the use of accounting, administrative, and internal controls to assist the regulators and casinos in monitoring gaming operations; and (b) the licensing process, because it helps to identify and deter organized crime.

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