The Potential Economic Impact of the October 2007 Proposed Class II Gaming Regulations Submitted to: National Indian Gaming Commission Submitted by: Alan Meister, Ph.D. Analysis Group, Inc. 601 S. Figueroa Street, Suite 1300 Los Angeles, CA 90017 213-896-4500 (phone) 213-623-4112 (fax)
[email protected] February 1, 2008 The Potential Economic Impact of the October 2007 Proposed Class II Gaming Regulations Executive Summary In May 2006, the National Indian Gaming Commission (NIGC) proposed regulations of Class II Indian gaming. The proposed regulations, which included game classification standards and a revision to the definition of “electronic or electromechanical facsimile,” were intended to more clearly distinguish Class II gaming from Class III gaming.1 Generally, the proposed regulations were expected to be more restrictive than existing practices and likely to limit the types of gaming machines that would be considered to be Class II devices.2,3 In February 2007, after careful consideration of the potential economic hardship that would be incurred by tribes and Class II system manufacturers, the NIGC withdrew the proposed regulations. However, in October 2007, the NIGC proposed revised versions of the withdrawn proposed regulations. While these revised regulations are expected to be less stringent than the withdrawn proposed regulations in some ways, they are still expected to be more restrictive than existing practices. I was commissioned by the NIGC to conduct a second independent study of the potential economic impact of the proposed Class II regulations on Indian tribes. Specifically, I was asked to identify the potential economic impacts of the October 2007 proposed regulations and, to the extent possible, quantify them on an aggregate nationwide basis.