§ 2711. — Management contracts.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 25USC2711]
TITLE 25--INDIANS
CHAPTER 29--INDIAN GAMING REGULATION
Sec. 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.
(Pub. L. 100-497, Sec. 12, Oct. 17, 1988, 102 Stat. 2479.)
Section Referred to in Other Sections
This section is referred to in sections 2704, 2705, 2710, 2712, 2714
of this title.
