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The Alabama-Coushatta Tribe has come under fire from the National Indian Gaming Commission (NIGC).
Specifically, the tribe failed to submit audited financial statements for its gaming operations in 2022 and 2023, breaching its Class II gaming ordinance, the Indian Gaming Regulatory Act (IGRA), and NIGC regulations.
In response, NIGC Acting Chairwoman Sharon M. Avery issued a Notice of Violation to the Alabama-Coushatta Tribe on Sept. 5, 2024, citing all counts of non-compliance.
The Alabama-Coushatta Tribe of Texas is part of a trend of gaming entities facing financial scrutiny. For example, Wynn Resorts faced a $130 million penalty for allegedly using an unlicensed financial service provider.
Key takeaways
- The NIGC has taken enforcement action against the Alabama-Coushatta Tribe of Texas for failing to submit audited financial statements for its gaming operations in 2022 and 2023.
- The tribe has been given a 10-day deadline to submit all overdue audited financial statements and has 30 days to appeal the Notice of Violation.
- If the violations are upheld, the tribe could face substantial fines of more than $63,992 per violation per day.
- Despite the ongoing regulatory disputes, the NIGC reported its highest revenue ever in fiscal year 2023.
Alabama-Coushatta Tribe documents overdue for over a year
In the Notice of Violation, Avery pointed out that the tribe had significant time to submit the required documents. It noted that the fiscal year 2022 submission is 493 days overdue (over a year late) and the fiscal year 2023 submission is 127 days overdue.
The deadlines for these submissions were May 1, 2023, and May 1, 2024, respectively.
As the Alabama-Coushatta Tribe of Texas had its Class II Tribal Gaming Ordinance approved by the NIGC chair on Oct. 8, 2015, it is mandated by sections 17 and 18 of the ordinance to fulfill certain requirements, including keeping accurate and up-to-date records for all gaming activities, such as:
- Financial transactions
- Gaming machine testing, malfunctions, maintenance, and repairs
- In-house investigations related to gaming operations
- Only an independent auditing firm chosen by the tribal council can perform the annual audit of Class II Gaming Operations on tribal land
NIGC issues multiple ‘Letters of Concern’ to Texas Tribe
One of the early lines of action the NIGC took was to send in a Letter of Concern for the fiscal year 2022 audited financial statement on Sept. 28, 2023. The letter instructed the tribe to submit the audited document in 10 days.
As we know, the Tribe failed to comply and challenged the NIGC’s authority over them stating:
“It remains our position that we are gaming under our Restoration Act, not IGRA, and the NIGC has no regulatory authority over that gaming.”
In a follow-up action, the NIGC issued a second Letter of Concern on July 12, 2024, specifically regarding the tribe’s fiscal year 2023 audited financial statement. However, the Tribe responded with a familiar defiance, disputing the NIGC’s authority.
“The tribe cannot agree to submit to the jurisdiction of NIGC.”
Notwithstanding the tribe’s claims of disputed authority, the NIGC has granted a 10-day deadline from issuing the Notice of Violation to the Alabama-Coushatta Tribe to submit all overdue audited financial statements.
Tribe has 30 days to appeal the NIGC violation notice
Following the Notice of Violation, the tribe has two options to appeal within 30 days of issuance:
- Request a hearing before a presiding official to present its case orally.
- Waive its right to an oral hearing and instead submit written arguments for the commission to review and decide.
If the tribe fails to take either of these options within the 30-day timeframe, it will forfeit its right to appeal.
Pending how this pans out, if the violations happen, the tribe could face substantial fines of more than $63,992 per violation per day.
The NIGC has been actively pursuing similar cases in recent months. For example, in April, the Commission issued a Notice of Violation against the Apache Tribe of Oklahoma for failing to submit timely and compliant financial statements and agreed-upon procedures (AUP) for four consecutive fiscal years.
Despite these back and forth, the Commission recorded its highest tribal gaming revenue in history for the fiscal year 2023 results, recording a whopping $1 billion increase from the fiscal year 2022.
