25 U.S.C. § 2711 : US Code - Section 2711: Management contracts

Search 25 U.S.C. § 2711 : US Code - Section 2711: Management contracts

(a) Class II gaming activity; information on operators
(1) Subject to the approval of the Chairman, an Indian tribe may
enter into a management contract for the operation and management
of a class II gaming activity that the Indian tribe may engage in
under section 2710(b)(1) of this title, but, before approving such
contract, the Chairman shall require and obtain the following
information:
(A) the name, address, and other additional pertinent
background information on each person or entity (including
individuals comprising such entity) having a direct financial
interest in, or management responsibility for, such contract,
and, in the case of a corporation, those individuals who serve on
the board of directors of such corporation and each of its
stockholders who hold (directly or indirectly) 10 percent or more
of its issued and outstanding stock;
(B) a description of any previous experience that each person
listed pursuant to subparagraph (A) has had with other gaming
contracts with Indian tribes or with the gaming industry
generally, including specifically the name and address of any
licensing or regulatory agency with which such person has had a
contract relating to gaming; and
(C) a complete financial statement of each person listed
pursuant to subparagraph (A).
(2) Any person listed pursuant to paragraph (1)(A) shall be
required to respond to such written or oral questions that the
Chairman may propound in accordance with his responsibilities under
this section.
(3) For purposes of this chapter, any reference to the management
contract described in paragraph (1) shall be considered to include
all collateral agreements to such contract that relate to the
gaming activity.
(b) Approval
The Chairman may approve any management contract entered into
pursuant to this section only if he determines that it provides at
least -
(1) for adequate accounting procedures that are maintained, and
for verifiable financial reports that are prepared, by or for the
tribal governing body on a monthly basis;
(2) for access to the daily operations of the gaming to
appropriate tribal officials who shall also have a right to
verify the daily gross revenues and income made from any such
tribal gaming activity;
(3) for a minimum guaranteed payment to the Indian tribe that
has preference over the retirement of development and
construction costs;
(4) for an agreed ceiling for the repayment of development and
construction costs;
(5) for a contract term not to exceed five years, except that,
upon the request of an Indian tribe, the Chairman may authorize a
contract term that exceeds five years but does not exceed seven
years if the Chairman is satisfied that the capital investment
required, and the income projections, for the particular gaming
activity require the additional time; and
(6) for grounds and mechanisms for terminating such contract,
but actual contract termination shall not require the approval of
the Commission.
(c) Fee based on percentage of net revenues
(1) The Chairman may approve a management contract providing for
a fee based upon a percentage of the net revenues of a tribal
gaming activity if the Chairman determines that such percentage fee
is reasonable in light of surrounding circumstances. Except as
otherwise provided in this subsection, such fee shall not exceed 30
percent of the net revenues.
(2) Upon the request of an Indian tribe, the Chairman may approve
a management contract providing for a fee based upon a percentage
of the net revenues of a tribal gaming activity that exceeds 30
percent but not 40 percent of the net revenues if the Chairman is
satisfied that the capital investment required, and income
projections, for such tribal gaming activity require the additional
fee requested by the Indian tribe.
(d) Period for approval; extension
By no later than the date that is 180 days after the date on
which a management contract is submitted to the Chairman for
approval, the Chairman shall approve or disapprove such contract on
its merits. The Chairman may extend the 180-day period by not more
than 90 days if the Chairman notifies the Indian tribe in writing
of the reason for the extension. The Indian tribe may bring an
action in a United States district court to compel action by the
Chairman if a contract has not been approved or disapproved within
the period required by this subsection.
(e) Disapproval
The Chairman shall not approve any contract if the Chairman
determines that -
(1) any person listed pursuant to subsection (a)(1)(A) of this
section -
(A) is an elected member of the governing body of the Indian
tribe which is the party to the management contract;
(B) has been or subsequently is convicted of any felony or
gaming offense;
(C) has knowingly and willfully provided materially important
false statements or information to the Commission or the Indian
tribe pursuant to this chapter or has refused to respond to
questions propounded pursuant to subsection (a)(2) of this
section; or
(D) has been determined to be a person whose prior
activities, criminal record if any, or reputation, habits, and
associations pose a threat to the public interest or to the
effective regulation and control of gaming, or create or
enhance the dangers of unsuitable, unfair, or illegal
practices, methods, and activities in the conduct of gaming or
the carrying on of the business and financial arrangements
incidental thereto;
(2) the management contractor has, or has attempted to, unduly
interfere or influence for its gain or advantage any decision or
process of tribal government relating to the gaming activity;
(3) the management contractor has deliberately or substantially
failed to comply with the terms of the management contract or the
tribal gaming ordinance or resolution adopted and approved
pursuant to this chapter; or
(4) a trustee, exercising the skill and diligence that a
trustee is commonly held to, would not approve the contract.
(f) Modification or voiding
The Chairman, after notice and hearing, shall have the authority
to require appropriate contract modifications or may void any
contract if he subsequently determines that any of the provisions
of this section have been violated.
(g) Interest in land
No management contract for the operation and management of a
gaming activity regulated by this chapter shall transfer or, in any
other manner, convey any interest in land or other real property,
unless specific statutory authority exists and unless clearly
specified in writing in said contract.
(h) Authority
The authority of the Secretary under section 81 of this title,
relating to management contracts regulated pursuant to this
chapter, is hereby transferred to the Commission.
(i) Investigation fee
The Commission shall require a potential contractor to pay a fee
to cover the cost of the investigation necessary to reach a
determination required in subsection (e) of this section.