Last updated on March 31st, 2023 at 07:50 am
Title 25—Indians–Volume 2
CHAPTER II—INDIAN ARTS AND CRAFTS BOARD, DEPARTMENT OF THE INTERIOR
PART 300 [RESERVED]
PART 301—NAVAJO, PUEBLO, AND HOPI SILVER AND TURQUOISE PRODUCTS; STANDARDS
§ 301.1 Eligibility for use of Government stamp.
Subject to the detailed requirements that follow, the Government stamp shall be affixed only to work individually produced and to work entirely hand-made. No object produced under conditions resembling a bench work system, and no object in whose manufacture any power-driven machinery has been used, shall be eligible for the use of the Government stamp.
§ 301.2 Specifications of material.
Silver slugs of 1 ounce weight or other silver objects may be used, provided their fineness is at least 900, and provided further that no silver sheet shall be used. Unless cast, the slug or other object is to be hand hammered to thickness and shape desired. The only exceptions here are pins on brooches or similar objects; ear screws for earrings; backs for tie clasps and chains which may be of silver of different fineness and mechanically made.
§ 301.3 Specifications of dies.
Dies used are to be entirely hand-made, with no tools more mechanical than hand tools and vise. Dies shall contain only a single element of the design.
§ 301.4 Application of dies.
Dies are to be applied to the object with the aid of nothing except hand tools.
§ 301.5 Applique elements in design.
All such parts of the ornament are to be hand-made. If wire is used, it is to be hand-made with no tool other than a hand-made draw plate. These requirements apply to the boxes for stone used in the design.
§ 301.6 Stone for ornamentation.
In addition to turquoise, the use of other local stone is permitted. Turquoise, if used, must be genuine stone, uncolored by any artificial means.
§ 301.7 Stonecutting.
All stone used, including turquoise, is to be hand-cut and polished. This permits the use of hand- or foot-driven wheels.
§ 301.8 Finish.
All silver is to be hand polished.
PART 304—NAVAJO, PUEBLO, AND HOPI SILVER, USE OF GOVERNMENT MARK
The use of Government trade-marks in an unauthorized manner, or the colorable imitation of such marks, is subject to the criminal penalties imposed by section 5 of the said act (49 Stat. 892; 25 U.S.C. 305d).
§ 304.2 Marking and ownership of dies.
All dies used to mark silver will be provided by and owned by the Indian Arts and Crafts Board.
§ 304.3 Classifying and marking of silver.
For the present the Indian Arts and Crafts Board reserves to itself the sole right to judge what silver complying with its standards shall bear the Government mark. All such marking of silver shall, for the present, be done by an agent of the Indian Arts and Crafts Board.
§ 304.4 Standards and additional requirements.
No piece of silver, though made in compliance with the standards set forth by the Indian Arts and Crafts Board, shall bear the Government mark unless:
(a) Its weight is substantially in accord with Indian usage and custom.
(b) Its design elements are substantially in accord with Indian usage and tradition.
(c) Its workmanship is substantially that expected in good hand craftsmanship.
§ 304.5 Dies to identify tribe.
Dies are marked with name of tribe. A Navajo stamp will be used where the marker is a Navajo Indian; similarly, for Zuni, Hopi, and Rio Grande Pueblo.
§ 304.6 Responsibility of dealer.
All dies will be numbered, and each wholesaler or dealer will be held responsible for any violation of standards in silver that bears his mark. Until such time as the Board relinquishes its sole right to mark silver, the responsibility of the dealer for whom silver is marked will be confined to misrepresentations as to quality of silver and of stones used for ornament and to methods of production.
§ 304.7 Eligibility of silver meeting standards.
In addition to silver currently made in compliance with the standards of the Indian Arts and Crafts Board, other silver products made prior to the promulgation of the regulations in this part may be stamped, provided the maker thereof is known to be an Indian, and the product satisfies the requirements in § 304.4.
§ 304.8 Use of label by dealer.
Any dealer offering for sale silver bearing the Government mark may, if he wishes, attach to silver so marked a label or ticket calling attention to the Government mark.
§ 304.9 Placards; display of regulations.
Every dealer offering for sale silver bearing the Government mark may display in a prominent place a placard setting forth the standards and the regulations in this part, such placard to be furnished by the Indian Arts and Crafts Board.
PART 307—NAVAJO ALL-WOOL WOVEN FABRICS; USE OF GOVERNMENT CERTIFICATE OF GENUINENESS
§ 307.1 Penalties.
The use of Government trade-marks in an unauthorized manner, or the colorable imitation of such marks, is subject to the criminal penalties imposed by section 5 of the said act (49 Stat. 892; 25 U.S.C. 305d), which provides:
Any person who shall counterfeit or colorably imitate any Government trade-mark used or devised by the Board as provided in section 305a of this chapter, or shall, except as authorized by the Board, affix any such Government trade-mark, or shall knowingly, willfully, and corruptly affix any reproduction, counterfeit, copy, or colorable imitation thereof upon any products, Indian or otherwise, or to any labels, signs, prints, packages, wrappers, or receptacles intended to be used upon or in connection with the sale of such products, or any person who shall knowingly make any false statement for the purpose of obtaining the use of any such Government trade-mark shall be guilty of a misdemeanor, and upon conviction thereof shall be enjoined from further carrying on the act or acts complained of and shall be subject to a fine not exceeding $20,000, or imprisonment not exceeding six months, or both such fine and imprisonment.
§ 307.2 Certificates of genuineness; by whom affixed.
Government certificates of genuineness for Navajo all-wool woven fabrics may be affixed to fabrics meeting the conditions specified in § 307.4 by persons duly authorized to affix such certificates, under license issued by the Indian Arts and Crafts Board.
§ 307.3 Granting of licenses, contract, and bond requirements.
A license may be granted to any person desiring to use the Government certificate of genuineness for Navajo all-wool woven fabrics who shall make application therefor and shall execute a contract acceptable to the Indian Arts and Crafts Board providing for the use of such certificates in conformity with the regulations in this part, which contract shall be accompanied by an indemnity bond acceptable to the Indian Arts and Crafts Board, in the amount of $500, conditioned upon faithful performance of such contract.
§ 307.4 Standards for fabrics.
No fabric may carry the Government certificate of genuineness for Navajo all-wool woven fabric unless all of the following conditions are met:
(a) The fabric is made entirely of local wool that is locally hand-spun and is entirely woven on a native Navajo loom;
(b) The fabric is made by a member of the Navajo Tribe working under conditions not resembling a workshop or factory system;
(c) The size of the fabric is indicated in the certificate;
(d) The licensee signs the certificate.
§ 307.5 Hand seal press and certificates to be furnished.
Each licensee will be furnished, upon payment of the registration and license fees specified in § 307.6 one hand seal press and a supply of blank Government certificates, which shall be used only in accordance with this license, and shall remain at all times the property of the Board.
§ 307.6 Fees.
Each licensee shall pay a registration fee of $2, together with a license fee which shall be determined on the basis of $1 for each 40 Government certificates ordered by the licensee from the Board.
§ 307.7 Suspension of license.
In the event that complaint is made to the Board that any provision of any license or of the regulations in this part has been violated by any licensee, the Board may suspend the license and all authority conferred thereby, in its discretion, for a period of 30 days, by notifying the licensee of such suspension, by mail, by telegraph, or in any other manner.
§ 307.8 Revocation of license.
In the event that the Board, after giving a licensee written notice of charges and affording an opportunity to reply to such charges, orally or in writing, is satisfied that any provision of any license or of the regulations in this part has been violated by any licensee, the Board may revoke the license by notifying the licensee of such revocation, by mail, by telegraph, or in any other manner. Upon notice of such revocation all authority conferred by the license so revoked shall forthwith terminate, but the validity of actions taken while the license was in force shall not be affected.
§ 307.9 Surrender of license.
Any license may be surrendered by the licensee at any time by surrendering to the Board the Government hand seal press and unused certificates of genuineness entrusted to the licensee, accompanied by a copy of the license marked “surrendered” and signed by the licensee. Such surrender shall take effect as of the time that such property and document have been received by the Board.
§ 307.10 Period of license.
Each license shall be in effect from the date of execution thereof and until 1 year thereafter, unless sooner surrendered or canceled in accordance with the foregoing provisions.
§ 307.11 Certificates fastened to fabrics.
Certificates shall be fastened to the woven fabric by wire caught in a lead seal disc that shall be impressed and made fast with the hand seal press furnished by the Indian Arts and Crafts Board.
§ 307.12 Certificates, dating, and signing thereof.
When the certificate is first affixed the lower of the two spaces provided for the purpose shall be signed by the licensee. In the event the ultimate retailer of any fabric so marked is not the person who originally attached the certificate, that ultimate retailer may sign the upper of the two spaces provided for the purpose and detach the original signature.
§ 307.13 Licensee’s responsibility.
Certificates may be attached only to products which are in the ownership or possession of the licensee. Certificates will be consecutively numbered and records of the allocation of such certificates will be maintained by the Indian Arts and Crafts Board. Each licensee will be held responsible for the proper use of such certificates and of the Government hand seal press furnished to such licensee.
PART 308—REGULATIONS FOR USE OF CERTIFICATES OF THE INDIAN ARTS AND CRAFTS BOARD TO BE ATTACHED TO THEIR TRADE-MARKS BY INDIAN ENTERPRISES CONCERNED WITH THE PRODUCTION AND SALE OF GENUINE HANDICRAFTS
§ 308.1 Penalties.
The use of Government trade-marks in an unauthorized manner, or the colorable imitation of such marks, is subject to the criminal penalties imposed by section 5 of the said act (49 Stat. 892; 25 U.S.C. 305d), which provides:
Any person who shall counterfeit or colorably imitate any Government trade-mark used or devised by the Board as provided in section 305a of this chapter, or shall, except as authorized by the Board, affix any such Government trade-mark, or shall knowingly, willfully, and corruptly affix any reproduction, counterfeit, copy, or colorable imitation thereof upon any products Indian or otherwise, or to any labels, signs, prints, packages, wrappers, or receptacles intended to be used upon or in connection with the sale of such products, or any person who shall knowingly make any false statement for the purpose of obtaining the use of any such Government trade-mark, shall be guilty of a misdemeanor, and upon conviction thereof shall be enjoined from further carrying on the act or acts complained of and shall be subject to a fine not exceeding $2,000, or imprisonment not exceeding six months, or both such fine and imprisonment.
§ 308.2 Certificates of genuineness to be attached to trade-marks.
(a) To insure the widest distribution of genuine Indian handicraft products, and to protect the various enterprises organized by individual Indian craftsmen, or by groups of Indian craftsmen, for the purpose of the production and sale of such handicraft products, the Indian Arts and Crafts Board offers each such enterprise the privilege of attaching to its trademark a certificate declaring that it is recognized by the Indian Arts and Crafts Board as an Indian enterprise dealing in genuine Indian-made handicraft products, and that its trade-mark has the approval of the Board.
(b) The certificate shall consist of a border around the trade-mark bearing the words “Certified Indian Enterprise Genuine Handicrafts, U.S. Indian Arts and Crafts Board, Department of the Interior,” and these words may be used wherever the trade-mark appears.
§ 308.3 Conditions of eligibility to attach certificates.
To be eligible to attach the certificate, an enterprise must meet the following conditions:
(a) It must offer for sale only Indian-made genuine handicraft products, i.e., objects produced by Indian craftsmen with the help of only such devices as allow the manual skill of the maker to condition the shape and design of each individual product.
(b) It must be entirely Indian owned and organized either by individual Indians or by groups of Indians.
(c) It must agree to apply certificates of genuineness only to such products as meet the standards of quality prescribed by the Indian Arts and Crafts Board at the time of the application of the enterprise for the privilege of attaching the certificate.
(d) It must agree to obtain the approval of the Indian Arts and Crafts Board as to the manner of production of the certificates.
§ 308.4 Revocation of privilege of attaching certificates.
If an enterprise, after securing the privilege of attaching the certificates, should fail to meet the above-named conditions, the Board reserves the right to revoke the privilege.
PART 309—PROTECTION OF INDIAN ARTS AND CRAFTS PRODUCTS
§ 309.1 How do the regulations in this part carry out the Indian Arts and Crafts Act of 1990?
These regulations define the nature and Indian origin of products protected by the Indian Arts and Crafts Act of 1990 (18 U.S.C. 1159, 25 U.S.C. 305 et seq.) from false representations, and specify how the Indian Arts and Crafts Board will interpret certain conduct for enforcement purposes. The Act makes it unlawful to offer or display for sale or sell any good in a manner that falsely suggests it is Indian produced, an Indian product, or the product of a particular Indian, or Indian tribe, or Indian arts and crafts organization resident within the United States.
§ 309.2 What are the key definitions for purposes of the Act?
(a) Indian as applied to an individual means a person who is a member of an Indian tribe or for purposes of this part is certified by an Indian tribe as a non-member Indian artisan (in accordance with the provisions of § 309.4).
(b) Indian artisan means an individual who is certified by an Indian tribe as a non-member Indian artisan.
(c) Indian arts and crafts organization means any legally established arts and crafts marketing organization composed of members of Indian tribes.
(d) Indian product—(1) In general. The term “Indian product” means any art or craft product made by an Indian. For this purpose, the term “made by an Indian” means that an Indian has provided the artistic or craft work labor necessary to implement an artistic design through a substantial transformation of materials to produce the art or craft work. This may include more than one Indian working together. The labor component of the product, however, must be entirely Indian for the Indian art or craft object to be an “Indian product.”
(2) Illustrations. The term “Indian product” includes, but is not limited to:
(i) Art made by an Indian that is in a traditional or non-traditional style or medium;
(ii) Craft work made by an Indian that is in a traditional or non-traditional style or medium;
(iii) Handcraft made by an Indian, i.e. an object created with the help of only such devices as allow the manual skill of the maker to condition the shape and design of each individual product.
(3) Examples of non-qualifying products. An “Indian product” under the Act does not include any of the following, for example:
(i) A product in the style of an Indian art or craft product made by non-Indian labor;
(ii) A product in the style of an Indian art or craft product that is designed by an Indian but produced by non-Indian labor;
(iii) A product in the style of an Indian art or craft product that is assembled from a kit;
(iv) A product in the style of an Indian art or craft product originating from a commercial product, without substantial transformation provided by Indian artistic or craft work labor;
(v) Industrial products, which for this purpose are defined as goods that have an exclusively functional purpose, do not serve as a traditional artistic medium, and that do not lend themselves to Indian embellishment, such as appliances and vehicles. An industrial product may not become an Indian product.
(vi) A product in the style of an Indian art or craft product that is produced in an assembly line or related production line process using multiple workers not all whom are Indians. For example, if twenty people make up the labor to create the product(s), and one person is not Indian, the product is not an “Indian product.”
(e) Indian tribe means—
(1) Any Indian tribe, band, nation, Alaska Native village, or any organized group or community which is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians; or
(2) Any Indian group that has been formally recognized as an Indian tribe by a State legislature or by a State commission or similar organization legislatively vested with State tribal recognition authority.
(f) Product of a particular Indian tribe or Indian arts and crafts organization means that the origin of a product is identified as a named Indian tribe or named Indian arts and crafts organization.
§ 309.6 When does a commercial product become an Indian product?
In addressing Indian embellishments to originally commercial products, the Indian labor expended to add art or craft work to those objects must be sufficient to substantially transform the qualities and appearance of the original commercial item. “Commercial products,” under this part, are consumer goods designed for profit and mass distribution that lend themselves to Indian embellishment, for example clothing and accessories. Through substantial transformation due to Indian labor, a product changes from a commercial product to an Indian product. Examples of formerly commercial products that become Indian products include tennis shoes to which an Indian applies beadwork and denim jackets to which an Indian applies ribbon appliqués.
§ 309.7 How should a seller disclose the nature and degree of Indian labor when selling, offering, or displaying art and craft work for sale?
The Indian Arts and Crafts Act is a truth-in-marketing law. Those who produce and market art and craft work should honestly represent and clarify the degree of Indian involvement in the production of the art and craft work when it is sold, displayed or offered for sale. The following guidelines illustrate the way in which art and craft work may be characterized for marketing purposes and gives examples of products that may be marketed as Indian products.
| If . . . | then . . . |
|---|---|
| (a) An Indian conceives, designs, and makes the art or craft work | it is an “Indian product.” |
| (b) An Indian produces a product that is “handcrafted,” as explained in 309.3(d)(iii) | it can be marketed as such and it meets the definition of “Indian product.” |
| (c) An Indian makes an art or craft work using some machine made parts | it is “Indian made” and meets the definition of “Indian product.” |
| (d) An Indian designs a product, such as a bracelet, which is then produced by non-Indians | it does not meet the definition of “Indian product” under the Act. |
| (e) A product, such as jewelry, is made with non-artistic Indian labor, from assembled or “fit together parts” | it does not meet the definition of “Indian product” under the Act. 1 |
| (f) A product in the style of an Indian product is assembled by non-Indian labor from a kit | it does not meet the definition of “Indian product” under the Act. |
| (g) A product is in the style of an Indian art or craft product, but not made by an Indian | it does not meet the definition of “Indian product” under the Act. |
| (h) An Indian and a non-Indian jointly undertake the art or craft work to produce an art or craft product, for example a concho belt | less than all of the labor is Indian and hence it does not meet the definition of “Indian product” under the Act. 2 |
1 For example, a necklace strung with overseas manufactured fetishes or heshi. If an Indian assembled the necklace, in keeping with the truth-in-marketing focus of the Act, it can be marketed as “Indian assembled.” It does not meet the definition of “Indian product” under the Act. Similarly, if a product, such as a dream catcher is assembled by an Indian from a kit, it can be marketed as “Indian assembled.” It does not meet the definition of “Indian product” under the Act.
2 In order to be an “Indian product,” the labor component of the product must be entirely Indian. In keeping with this truth-in-marketing law, a collaborative work should be marketed as such. Therefore, it should be marketed as produced by “X” (name of artist or artisan), “Y” (Tribe of individual’s enrollment) or (name of Tribe providing official written certification the individual is a non-member Indian artisan and date upon which such certification was issued by the Tribe), and “Z” (name of artist or artisan with no Tribe listed) to avoid providing false suggestions to consumers.
§ 309.8 For marketing purposes, what is the recommended method of identifying authentic Indian products?
(a) The recommended method of marketing authentic Indian products is to include the name of the artist or artisan, the name of the Tribe in which the artist or artisan is enrolled, and the individual’s Tribal enrollment number. If the individual is a certified non-member Indian artisan, rather than an enrolled Tribal member, the product identification should include the name of the Tribe providing official written certification that the individual is a non-member Indian artisan and the date upon which such certification was issued by the Tribe. In order for an individual to be certified by an Indian Tribe as a non-member Indian artisan, the individual must be of Indian lineage of one or more members of such Indian Tribe and the certification must be issued in writing by the governing body of an Indian Tribe or by a certifying body delegated this function by the governing body of the Indian Tribe.
(b) For example, the Indian product should include a label, hangtag, provenance card, or similar identification that includes W (name of the artist or artisan), and X (name of the Tribe in which the individual is enrolled) and Y (individual’s Tribal enrollment number), or a statement that the individual is a certified non-member Indian artisan of Z (name of the Tribe providing certification and the date upon which the certification was issued by the Tribe).
§ 309.9 When can non-Indians make and sell products in the style of Indian arts and crafts?
A non-Indian can make and sell products in the style of Indian art or craft products only if the non-Indian or other seller does not falsely suggest to consumers that the products have been made by an Indian.
§ 309.10 What are some sample categories and examples of Indian products?
What constitutes an Indian product is potentially very broad. However, to provide guidance to persons who produce, market, or purchase items marketed as Indian products, §§ 309.11 through 309.22 contain a sample listing of “specific examples” of objects that meet the definition of Indian products. There is some repetition, due to the interrelated nature of many Indian products when made by Indian artistic labor. The lists in these sections contain examples and are not intended to be all-inclusive. Additionally, although the Indian Arts and Crafts Act of 1990 and the Indian Arts and Crafts Enforcement Act of 2000 do not address materials used in Indian products, some materials are included for their descriptive nature only. This is not intended to restrict materials used or to exclude materials not listed.
§ 309.11 What are examples of jewelry that are Indian products?
(a) Jewelry and related accessories made by an Indian using a wide variety of media, including, but not limited to, silver, gold, turquoise, coral, lapis, jet, nickel silver, glass bead, copper, wood, shell, walrus ivory, whale baleen, bone, horn, horsehair, quill, seed, and berry, are Indian products.
(b) Specific examples include, but are not limited to: ivory and baleen scrimshaw bracelets, abalone shell necklaces, nickel silver scissortail pendants, silver sand cast bracelets, silver overlay bolos, turquoise channel inlay gold rings, cut glass bead rosette earrings, wooden horse stick pins, and medicine wheel quilled medallions.
§ 309.12 What are examples of basketry that are Indian products?
(a) Basketry and related weavings made by an Indian using a wide variety of media, including, but not limited to, birchbark, black ash, brown ash, red cedar, yellow cedar, alder, vine maple, willow, palmetto, honeysuckle, river cane, oak, buck brush, sumac, dogwood, cattail, reed, raffia, horsehair, pine needle, spruce root, rye grass, sweet grass, yucca, bear grass, beach grass, rabbit brush, fiber, maidenhair fern, whale baleen, seal gut, feathers, shell, devil’s claw, and porcupine quill, are Indian products.
(b) Specific examples include, but are not limited to: double weave river cane baskets, yucca winnowing trays, willow burden baskets, honeysuckle sewing baskets, black ash picnic baskets, cedar capes and dresses, pine needle/raffia effigy baskets, oak splint and braided sweet grass fancy baskets, birchbark containers, baleen baskets, rye grass dance fans, brown ash strawberry baskets, sumac wedding baskets, cedar hats, fiber basket hats, yucca wicker basketry plaques, and spruce root tobacco pouches.
§ 309.13 What are examples of other weaving and textiles that are Indian products?
(a) Weavings and textiles made by an Indian using a wide variety of media, including, but not limited to, cornhusk, raffia, tule, horsehair, cotton, wool, fiber, linen, rabbit skin, feather, bison fur, and qiviut (musk ox) wool, are Indian products.
(b) Specific examples include, but are not limited to: corn husk bags, twined yarn bags, cotton mantas, willow cradle boards, horsehair hatbands, Chiefs Blankets, Two Grey Hills rugs, horse blankets, finger woven sashes, brocade table runners, star quilts, pictorial appliqué wall hangings, fiber woven bags, embroidered dance shawls, rabbit skin blankets, and feather blankets.
§ 309.14 What are examples of beadwork, quillwork, and moose hair tufting that are Indian products?
(a) Beadwork, quillwork, and moose hair tufting made by an Indian to decorate a wide variety of materials, including, but not limited to, bottles, baskets, bags, pouches, and other containers; belts, buckles, jewelry, hatbands, hair clips, barrettes, bolos, and other accessories; moccasins, vests, jackets, and other articles of clothing; and dolls and other toys and collectibles, are Indian products.
(b) Specific examples include, but are not limited to: quilled pipe stems, loom beaded belts, pictorial bags adorned with cut glass beads, deer skin moccasins decorated with moose hair tufting, beaded miniature dolls, and quilled and beaded amulets.
§ 309.15 What are examples of apparel that are Indian products?
(a) Apparel made or substantially decorated by an Indian, including, but not limited to, parkas, jackets, coats, moccasins, boots, slippers, mukluks, mittens, gloves, gauntlets, dresses, and shirts, are Indian products.
(b) Specific examples include, but are not limited to: seal skin parkas, ribbon appliqué dance shawls, smoked moose hide slippers, deer skin boots, patchwork jackets, calico ribbon shirts, wing dresses, and buckskin shirts.
§ 309.16 What are examples of regalia that are Indian products?
(a) Regalia are ceremonial clothing, modern items with a traditional theme, and accessories with historical significance made or significantly decorated by an Indian, including, but not limited to, that worn to perform traditional dances, participate in traditional socials, used for dance competitions, and worn on special occasions of tribal significance. If these items are made or significantly decorated by an Indian, they are Indian products.
(b) Specific examples include, but are not limited to: hide leggings, buckskin dresses, breech cloths, dance shawls, frontlets, shell dresses, button blankets, feather bustles, porcupine roaches, beaded pipe bags, nickel silver stamped armbands, quilled breast plates, coup sticks, horse sticks, shields, headdresses, dance fans, and rattles.
§ 309.17 What are examples of woodwork that are Indian products?
(a) Woodwork items made by an Indian, including, but not limited to, sculpture, drums, furniture, containers, hats, and masks, are Indian products.
(b) Specific examples include, but are not limited to: hand drums, totem poles, animal figurines, folk carvings, kachinas, embellished long house posts, clan house carved doors, chairs, relief panels, bentwood boxes, snow goggles, red and yellow cedar seagoing canoe paddles, hunting hats, spirit masks, bows and arrows, atlatls, redwood dug out canoes, war clubs, flutes, dance sticks, talking sticks, shaman staffs, cradles, decoys, spiral pipe stems, violins, Native American Church boxes, and maple ladles, spoons, and soup bowls.
§ 309.18 What are examples of hide, leatherwork, and fur that are Indian products?
(a) Hide, leatherwork, and fur made or significantly decorated by an Indian, including, but not limited to, parfleches, tipis, horse trappings and tack, pouches, bags, and hide paintings, are Indian products.
(b) Specific examples include, but are not limited to: narrative painted hides, martingales, saddles, bonnet cases, drapes, quirts, forelocks, rosettes, horse masks, bridles, head stalls, cinches, saddle bags, side drops, harnesses, arm bands, belts, and other hand crafted items with studs and tooling.
§ 309.19 What are examples of pottery and ceramics that are Indian products?
(a) Pottery, ceramics, and related arts and crafts items made or significantly decorated by an Indian, including, but not limited to, a broad spectrum of clays and ceramic material, are Indian products.
(b) Specific examples include, but are not limited to: ollas, pitch vessels, pipes, raku bowls, pitchers, canteens, effigy pots, wedding vases, micaceous bean pots, seed pots, masks, incised bowls, blackware plates, redware bowls, polychrome vases, and storytellers and other figures.
§ 309.20 What are examples of sculpture, carving, and pipes that are Indian products?
(a) Sculpture, carving, and pipes made by an Indian, including, but not limited to, wood, soapstone, alabaster, pipestone, argillite, turquoise, ivory, baleen, bone, antler, and shell, are Indian products.
(b) Specific examples include, but are not limited to: kachina dolls, fetishes, animal figurines, pipestone pipes, moose antler combs, argillite bowls, ivory cribbage boards, whalebone masks, elk horn purses, and clamshell gorgets.
§ 309.21 What are examples of dolls and toys that are Indian products?
Dolls, toys, and related items made by an Indian, including, but not limited to, no face dolls, corn husk dolls, patchwork and palmetto dolls, reindeer horn dolls, lacrosse sticks, stick game articles, gambling sticks, gaming dice, miniature cradle boards, and yo-yos, are Indian products.
§ 309.22 What are examples of painting and other fine art forms that are Indian products?
Painting and other fine art forms made by an Indian including but, not limited to, works on canvas, photography, sand painting, mural, computer generated art, graphic art, video art work, printmaking, drawing, bronze casting, glasswork, and art forms to be developed in the future, are Indian products.
§ 309.23 Does this part apply to products made before 1935?
The provisions of this part do not apply to any art or craft products made before 1935.
§ 309.24 How will statements about Indian origin of art or craft products be interpreted?
(a) In general. The unqualified use of the term “Indian” or of the term “Native American” or the unqualified use of the name of an Indian tribe, in connection with an art or craft product, is interpreted to mean for purposes of this part that—
(1) The maker is a member of an Indian tribe, is certified by an Indian tribe as a non-member Indian artisan, or is a member of the particular Indian tribe named; and
(2) The art or craft product is an Indian product.
(b) Products of Indians of foreign tribes—(1) In general. The unqualified use of the term “Indian” or of the term “Native American” or the unqualified use of the name of a foreign tribe, in connection with an art or craft product, regardless of where it is produced and regardless of any country-of-origin marking on the product, is interpreted to mean for purposes of this part that—
(i) The maker is a member of an Indian tribe, is certified by an Indian tribe as a non-member Indian artisan, or is a member of the particular Indian tribe named;
(ii) The tribe is resident in the United States; and
(iii) The art or craft product is an Indian product.
(2) Exception where country of origin is disclosed. Paragraph (b) of this section does not apply to any art or craft for which the name of the foreign country of tribal ancestry is clearly disclosed in conjunction with marketing of the product.
§ 309.25 How can an individual be certified as an Indian artisan?
(a) In order for an individual to be certified by an Indian tribe as a non-member Indian artisan for purposes of this part—
(1) The individual must be of Indian lineage of one or more members of such Indian tribe; and
(2) The certification must be documented in writing by the governing body of an Indian tribe or by a certifying body delegated this function by the governing body of the Indian tribe.
(b) As provided in section 107 of the Indian Arts and Crafts Act of 1990, Public Law 101–644, a tribe may not impose a fee for certifying an Indian artisan.
§ 309.26 What penalties apply?
A person who offers or displays for sale or sells a good, with or without a Government trademark, in a manner that falsely suggests it is Indian produced, an Indian product, or the product of a particular Indian or Indian tribe or Indian arts and crafts organization, resident within the United States:
(a) Is subject to the criminal penalties specified in section 1159, title 18, United States Code; and
(b) Is subject to the civil penalties specified in section 305e, title 25, United States Code.
§ 309.27 How are complaints filed?
Complaints about protected products alleged to be offered or displayed for sale or sold in a manner that falsely suggests they are Indian products should be made in writing and addressed to the Director, Indian Arts and Crafts Board, Room 4004–MIB, U.S. Department of the Interior, 1849 C Street, NW, Washington, DC 20240.
PART 310—USE OF GOVERNMENT MARKS OF GENUINENESS FOR ALASKAN INDIAN AND ALASKAN ESKIMO HAND-MADE PRODUCTS
§ 310.1 Penalties.
The use of Government trade-marks in an unauthorized manner, or the colorable imitation of such marks, is subject to the criminal penalties imposed by section 5 of the said act (49 Stat. 892; 25 U.S.C., 305d), which provides:
Any person who shall counterfeit or colorably imitate any Government trade-mark used or devised by the Board as provided in section 305a of this chapter, or shall, except as authorized by the Board, affix any such Government trade-mark, or shall knowingly, willfully, and corruptly affix any reproduction, counterfeit, copy, or colorable imitation thereof upon any products, Indian or otherwise, or to any labels, signs, prints, packages, wrappers, or receptacles intended to be used upon or in connection with the sale of such products, or any person who shall knowingly make any false statement for the purpose of obtaining the use of any such Government trade-mark, shall be guilty of a misdemeanor, and upon conviction thereof shall be enjoined from further carrying on the act or acts complained of and shall be subject to a fine not exceeding $2,000 or imprisonment not exceeding six months or both such fine and imprisonment.
Alaskan Indian
Government marks of genuineness for Alaskan Indian hand-made products may be affixed to articles meeting the conditions specified in § 310.3 by persons duly authorized by the Indian Arts and Crafts Board to affix such marks.
§ 310.3 Conditions.
No article may carry the Government mark of genuineness for Alaskan Indian hand-made products unless all of the following conditions are met:
(a) The article is hand-made by an Alaskan Indian.
(b) The article is hand-made under conditions not resembling a workshop or factory system.
(c) All raw materials used in carving, basketry and mat making, and all furs and hides used in the manufacture of hand-made artifacts, must be of native origin.
§ 310.4 Application of mark.
All marks shall be applied to the article with a rubber stamp to be furnished by the Indian Arts and Crafts Board. Each stamp shall bear a distinctive letter and may be used only by the person to whom it has been issued. With the addition of the distinctive letter, each stamp shall read:
On baskets and fabrics which offer no surface for the application of such a rubber stamp, the stamp shall be placed on a paper tag attached to the article by a wire caught in a lead seal disc that shall be impressed and made fast with a hand seal press furnished by the Indian Arts and Crafts Board.
Government marks of genuineness for Alaskan Eskimo hand-made products may be affixed to articles meeting the conditions specified in § 310.6 by persons duly authorized by the Indian Arts and Crafts Board to affix such marks.
§ 310.6 Conditions.
No article may carry the Government mark of genuineness for Alaskan Eskimo hand-made products unless all of the following conditions are met:
(a) The article is hand-made by an Alaskan Eskimo.
(b) The article is hand-made under conditions not resembling a workshop or factory system.
(c) All raw materials used in the making of the articles are of native origin except:
(1) Commercial fasteners.
(2) Calfskin trimmings for decorative borders on parkas and mukluks.
(3) Tops for mukluks made of commercial fabric.
(4) Commercially made draw-cords for mukluks.
(5) Commercial fabrics for parka linings.
(6) Sewing thread and glass beads.
§ 310.7 Application of mark.
All marks shall be applied to the article with a rubber stamp to be furnished by the Indian Arts and Crafts Board. Each stamp shall bear a distinctive letter and may be used only by the person to whom it has been issued. With the addition of the distinctive letter, each stamp shall read:
On baskets and fabrics which offer no surface for the application of such a rubber stamp, the stamp shall be placed on a paper tag attached to the article by a wire caught in a lead seal disc that shall be impressed and made fast with a hand seal press furnished by the Indian Arts and Crafts Board.
PARTS 311–399 [RESERVED]
CHAPTER III—NATIONAL INDIAN GAMING COMMISSION, DEPARTMENT OF THE INTERIOR
SUBCHAPTER A—GENERAL PROVISIONS
PART 500 [RESERVED]
PART 501—PURPOSE AND SCOPE OF THIS CHAPTER
§ 501.1 Purpose.
This chapter implements the Indian Gaming Regulatory Act (Pub. L. 100–497, 102 Stat. 2467).
§ 501.2 Scope.
(a) Tribes and other operators of class II and class III gaming operations on Indian lands shall conduct gaming operations according to the requirements of the Indian Gaming Regulatory Act, the regulations of this chapter, tribal law and, where applicable, the requirements of a compact or procedures prescribed by the Secretary under 25 U.S.C. 2710(d).
(b) Class I gaming on Indian lands is within the exclusive jurisdiction of the Indian tribes and shall not be subject to the provisions of the Indian Gaming Regulatory Act or this chapter.
(c) Class II gaming on Indian lands shall continue to be within the jurisdiction of an Indian tribe, but shall be subject to the provisions of the Indian Gaming Regulatory Act and this chapter.
(d) Nothing in the Indian Gaming Regulatory Act or this chapter shall impair the right of an Indian tribe to regulate class III gaming on its Indian lands concurrently with a State, except to the extent that such regulation is inconsistent with, or less stringent than, the State laws and regulations made applicable by a Tribal-State compact that is entered into by an Indian tribe under the Indian Gaming Regulatory Act and that is in effect.
PART 502—DEFINITIONS OF THIS CHAPTER
§ 502.1 Chairman (Chair).
Chairman (Chair) means the Chairman of the National Indian Gaming Commission or his or her designee.
§ 502.2 Class I gaming.
Class I gaming means:
(a) Social games played solely for prizes of minimal value; or
(b) Traditional forms of Indian gaming when played by individuals in connection with tribal ceremonies or celebrations.
§ 502.3 Class II gaming.
Class II gaming means:
(a) Bingo or lotto (whether or not electronic, computer, or other technologic aids are used) when players:
(1) Play for prizes with cards bearing numbers or other designations;
(2) Cover numbers or designations when object, similarly numbered or designated, are drawn or electronically determined; and
(3) Win the game by being the first person to cover a designated pattern on such cards;
(b) If played in the same location as bingo or lotto, pull-tabs, punch boards, tip jars, instant bingo, and other games similar to bingo;
(c) Nonbanking card games that:
(1) State law explicitly authorizes, or does not explicitly prohibit, and are played legally anywhere in the state; and
(2) Players play in conformity with state laws and regulations concerning hours, periods of operation, and limitations on wagers and pot sizes;
(d) Card games played in the states of Michigan, North Dakota, South Dakota, or Washington if:
(1) An Indian tribe actually operates the same card games as played on or before May 1, 1988, as determined by the Chairman; and
(2) The pot and wager limits remain the same as on or before May 1, 1988, as determined by the Chariman;
(e) Individually owned class II gaming operations—
(1) That were operating on September 1, 1986;
(2) That meet the requirements of 25 U.S.C. 2710(b)(4)(B);
(3) Where the nature and scope of the game remains as it was on October 17, 1988; and
(4) Where the ownership interest or interests are the same as on October 17, 1988.
§ 502.4 Class III gaming.
Class III gaming means all forms of gaming that are not class I gaming or class II gaming, including but not limited to:
(a) Any house banking game, including but not limited to—
(1) Card games such as baccarat, chemin de fer, blackjack (21), and pai gow (if played as house banking games);
(2) Casino games such as roulette, craps, and keno;
(b) Any slot machines as defined in 15 U.S.C. 1171(a)(1) and electronic or electromechanical facsimiles of any game of chance;
(c) Any sports betting and parimutuel wagering including but not limited to wagering on horse racing, dog racing or jai alai; or
(d) Lotteries.
§ 502.5 Collateral agreement.
Collateral agreement means any contract, whether or not in writing, that is related, either directly or indirectly, to a management contract, or to any rights, duties or obligations created between a tribe (or any of its members, entities, or organizations) and a management contractor or subcontractor (or any person or entity related to a management contractor or subcontractor).
§ 502.6 Commission.
Commission means the National Indian Gaming Commission.
§ 502.7 Electronic, computer or other technologic aid.
(a) Electronic, computer or other technologic aid means any machine or device that:
(1) Assists a player or the playing of a game;
(2) Is not an electronic or electromechanical facsimile; and
(3) Is operated in accordance with applicable Federal communications law.
(b) Electronic, computer or other technologic aids include, but are not limited to, machines or devices that:
(1) Broaden the participation levels in a common game;
(2) Facilitate communication between and among gaming sites; or
(3) Allow a player to play a game with or against other players rather than with or against a machine.
(c) Examples of electronic, computer or other technologic aids include pull tab dispensers and/or readers, telephones, cables, televisions, screens, satellites, bingo blowers, electronic player stations, or electronic cards for participants in bingo games.
§ 502.8 Electronic or electromechanical facsimile.
Electronic or electromechanical facsimile means a game played in an electronic or electromechanical format that replicates a game of chance by incorporating all of the characteristics of the game, except when, for bingo, lotto, and other games similar to bingo, the electronic or electromechanical format broadens participation by allowing multiple players to play with or against each other rather than with or against a machine.
§ 502.9 Other games similar to bingo.
Other games similar to bingo means any game played in the same location as bingo (as defined in 25 U.S.C. 2703(7)(A)(i)) constituting a variant on the game of bingo, provided that such game is not house banked and permits players to compete against each other for a common prize or prizes.
§ 502.10 Gaming operation.
Gaming operation means each economic entity that is licensed by a tribe, operates the games, receives the revenues, issues the prizes, and pays the expenses. A gaming operation may be operated by a tribe directly; by a management contractor; or, under certain conditions, by another person or other entity.
§ 502.11 House banking game.
House banking game means any game of chance that is played with the house as a participant in the game, where the house takes on all players, collects from all losers, and pays all winners, and the house can win.
§ 502.12 Indian lands.
Indian lands means:
(a) Land within the limits of an Indian reservation; or
(b) Land over which an Indian tribe exercises governmental power and that is either—
(1) Held in trust by the United States for the benefit of any Indian tribe or individual; or
(2) Held by an Indian tribe or individual subject to restriction by the United States against alienation.
§ 502.13 Indian tribe.
Indian tribe means any Indian tribe, band, nation, or other organized group or community of Indians that the Secretary recognizes as—
(a) Eligible for the special programs and services provided by the United States to Indians because of their status as Indians; and
(b) Having powers of self-government.
§ 502.14 Key employee.
Key employee means:
(a) A person who performs one or more of the following functions:
(1) Bingo caller;
(2) Counting room supervisor;
(3) Chief of security;
(4) Custodian of gaming supplies or cash;
(5) Floor manager;
(6) Pit boss;
(7) Dealer;
(8) Croupier;
(9) Approver of credit; or
(10) Custodian of gambling devices including persons with access to cash and accounting records within such devices;
(b) If not otherwise included, any other person whose total cash compensation is in excess of $50,000 per year; or,
(c) If not otherwise included, the four most highly compensated persons in the gaming operation.
(d) Any other person designated by the tribe as a key employee.
§ 502.15 Management contract.
Management contract means any contract, subcontract, or collateral agreement between an Indian tribe and a contractor or between a contractor and a subcontractor if such contract or agreement provides for the management of all or part of a gaming operation.
§ 502.16 Net revenues.
Net revenues means gross gaming revenues of an Indian gaming operation less—
(a) Amounts paid out as, or paid for, prizes; and
(b) Total gaming-related operating expenses, including all those expenses of the gaming operation commonly known as operating expenses and non-operating expenses consistent with professional accounting pronouncements, excluding management fees.
§ 502.17 Person having a direct or indirect financial interest in a management contract.
Person having a direct or indirect financial interest in a management contract means:
(a) When a person is a party to a management contract, any person having a direct financial interest in such management contract;
(b) When a trust is a party to a management contract, any beneficiary or trustee;
(c) When a partnership is a party to a management contract, any partner;
(d) When a corporation is a party to a management contract, any person who is a director or who holds at least 5% of the issued and outstanding stock alone or in combination with another stockholder who is a spouse, parent, child or sibling when the corporation is publicly traded or the top ten (10) shareholders for a privately held corporation;
(e) When an entity other than a natural person has an interest in a trust, partnership or corporation that has an interest in a management contract, all parties of that entity are deemed to be persons having a direct financial interest in a management contract; or
(f) Any person or entity who will receive a portion of the direct or indirect interest of any person or entity listed above through attribution, grant, pledge, or gift.
§ 502.18 Person having management responsibility for a management contract.
Person having management responsibility for a management contract means the person designated by the management contract as having management responsibility for the gaming operation, or a portion thereof.
§ 502.19 Primary management official.
Primary management official means:
(a) The person having management responsibility for a management contract;
(b) Any person who has authority:
(1) To hire and fire employees; or
(2) To set up working policy for the gaming operation; or
(c) The chief financial officer or other person who has financial management responsibility.
(d) Any other person designated by the tribe as a primary management official.
§ 502.20 Secretary.
Secretary means the Secretary of the Interior.
§ 502.21 Tribal-State compact.
Tribal-State compact means an agreement between a tribe and a state about class III gaming under 25 U.S.C. 2710(d).
§ 502.23 Facility license.
Facility license means a separate license issued by a tribe to each place, facility, or location on Indian lands where the tribe elects to allow class II or III gaming.
§ 502.24 Enforcement action.
Enforcement action means any action taken by the Chair under 25 U.S.C. 2713 against any person engaged in gaming, for a violation of any provision of IGRA, the regulations of this chapter, or tribal regulations, ordinances, or resolutions approved under 25 U.S.C. 2710 or 2712 of IGRA, including, but not limited to, the following: A notice of violation; a civil fine assessment; or an order for temporary closure. Enforcement action does not include any action taken by NIGC staff, including but not limited to, the issuance of a letter of concern under § 573.2 of this chapter.
PART 503—COMMISSION INFORMATION COLLECTION REQUIREMENTS UNDER THE PAPERWORK REDUCTION ACT: OMB CONTROL NUMBERS AND EXPIRATION DATES
§ 503.1 Purpose of this part.
This part displays the control numbers and expiration dates assigned to information collection requirements of the National Indian Gaming Commission (NIGC, or the Commission) assigned by the Director of the Office of Management and Budget (OMB) pursuant to the Paperwork Reduction Act of 1980, 44 U.S.C. 3501 et seq.
§ 503.2 Display of control numbers and expiration dates.
| Part or section number of title 25 CFR | Currently assigned OMB control numbers | Expiration date |
|---|---|---|
| § 514.1 (submission of fee reports) | 3141–0007 | 6/30/94 |
| § 515.3 (request for access to records) | 3141–0002 | 10/31/95 |
| § 515.5 (request for amendment to records) | 3141–0002 | 10/31/95 |
| § 515.7 (appeals) | 3141–0002 | 10/31/95 |
| Part 519 (designation of agent for service) | 3141–0003 | 10/31/95 |
| § 522.2 (submission and approval of new ordinances) | 3141–0003 | 10/31/95 |
| § 522.3 (amendment) | 3141–0003 | 10/31/95 |
| § 522.12 (revocation of class III gaming) | 3141–0003 | 10/31/95 |
| § 523.2 (submission and approval of existing ordinances) | 3141–0003 | 10/31/95 |
| § 523.4 (amendment) | 3141–0003 | 10/31/95 |
| Part 524 (appeals) | 3141–0003 | 10/31/95 |
| § 533.3 (approval of management contracts) | 3141–0004 | 10/31/95 |
| § 533.5 (modifications) | 3141–0004 | 10/31/95 |
| § 535.1 (post-approval procedures) | 3141–0004 | 10/31/95 |
| Part 537 (background investigations) | 3141–0004 | 10/31/95 |
| Part 539 (appeals) | 3141–0004 | 10/31/95 |
| § 556.4 (background investigations for class II gaming) | 3141–0003 | 10/31/95 |
| § 556.5 (background investigations) | 3141–0003 | 10/31/95 |
| Part 558 (gaming licenses) | 3141–0003 | 10/31/95 |
| § 571.7 (maintenance of records) | 3141–0001 | 7/31/95 |
| § 571.12 (audits) | 3141–0001 | 7/31/95 |
| § 571.13 (audits) | 3141–0001 | 7/31/95 |
| § 571.14 (audit reconciliation) | 3141–0001 | 7/31/95 |
| § 575.5 (information to Chairman) | 3141–0001 | 7/31/95 |
| § 575.6 (penalty reduction) | 3141–0001 | 7/31/95 |
| § 577.3 (notice of appeal) | 3141–0001 | 7/31/95 |
| § 577.8 (confidentiality) | 3141–0001 | 7/31/95 |
| § 577.12 (intervention) | 3141–0001 | 7/31/95 |
| § 577.14 (objections) | 3141–0001 | 7/31/95 |
PARTS 504–512 [RESERVED]
PART 513—DEBT COLLECTION
Subpart A—General Provisions
§ 513.1 What definitions apply to the regulations in this part?
As used in this part:
(a) Administrative offset means the withholding of funds payable by the United States (including funds payable by the United States on behalf of a State government) to any person, or the withholding of funds held by the United States for any person, in order to satisfy a debt owed to the United States.
(b) Agency means a department, agency, court, court administrative office, or instrumentality in the executive, judicial, or legislative branch of government, including a government corporation.
(c) Chairman means the Chairman of the Commission, or his or her designee.
(d) Commission means the National Indian Gaming Commission.
(e) Creditor agency means a Federal agency that is owed a debt.
(f) Day means calendar day. To count days, include the last day of the period unless it is a Saturday, Sunday, or Federal legal holiday.
(g) Debt and claim are synonymous and interchangeable. They refer to, among other things, fines, fees, and penalties that a Federal agency has determined are due the United States from any person, organization, or entity, except another Federal agency. For the purposes of administrative offset under 31 U.S.C. 3716 and subpart B of this part, the terms “debt” and “claims” include money, funds, or property owed to a State, the District of Columbia, American Samoa, Guam, the U.S. Virgin Islands, the Commonwealth of the Northern Mariana Islands, or the Commonwealth of Puerto Rico.
(h) Debtor means a person, contractor, Tribe, or other entity that owes a debt to the Commission.
(i) Delinquent debt means a debt that has not been paid within the time limit prescribed by the applicable Act, law, or contract.
(j) Disposable pay means the part of an employee’s pay that remains after deductions that must be withheld by law have been made (other than deductions to execute garnishment orders for child support and/or alimony, in accordance with 5 CFR part 581, and for commercial garnishment of federal employees’ pay, in accordance with 5 CFR part 582). “Pay” includes current basic pay, special pay, incentive pay, retired pay, and retainer pay.
(k) Employee means a current employee of an agency, including a current member of the Armed Forces or Reserve of the Armed Forces of the United States.
(l) DOJ means the U.S. Department of Justice.
(m) FCCS means the Federal Claims Collection Standards, which are published at 31 CFR parts 900–904.
(n) FMS means the Federal Management Service, a bureau of the U.S. Department of the Treasury.
(o) Paying agency means the agency that makes payment to an individual who owes a debt to the United States.
(p) Payroll office means the office in an agency that is primarily responsible for payroll records and the coordination of pay matters with the appropriate personnel office.
(q) Person includes a natural person or persons, profit or non-profit corporation, partnership, association, trust, estate, consortium, tribe, or other entity that owes a debt to the United States, excluding the United States.
(r) Salary offset means a payroll procedure to collect debt under 5 U.S.C. 5514 and 31 U.S.C. 3716 by deduction(s) at one or more officially established pay intervals from the current pay account of an employee, without the employee’s consent.
(s) Tax refund offset means the reduction of a tax refund by the amount of a past-due legally enforceable debt.
(a) The Commission has authority to issue these regulations under 25 U.S.C. 2713(a)(1) of the Indian Gaming Regulatory Act. The Commission is issuing the regulations in this part under the authority of: The FCCS, the Debt Collection Act of 1982 and the Debt Collection Improvement Act of 1996, 31 U.S.C. 3711, 3716–3718, and 3720A. In addition, the salary offset provisions are issued in conformity with 5 U.S.C. 5514 and its implementing regulations published at 5 CFR part 550, subpart K.
(b) The Commission hereby adopts the provisions of the FCCS (31 CFR parts 900–904). The Commission’s regulations supplement the FCCS as necessary.
§ 513.3 What happens to delinquent debts owed to the Commission?
(a) The Commission will collect debts in accordance with these regulations in this part.
(b) The Commission will transfer to the Department of the Treasury any past due, legally enforceable nontax debt that has been delinquent for 180 days or more so that Treasury may take appropriate action to collect the debt or terminate collection action in accordance with 5 U.S.C. 5514, 26 U.S.C. 6402, 31 U.S.C. 3711 and 3716, the FCCS, 5 CFR 550.1108, and 31 CFR part 285.
(c) The Commission may transfer any past due, legally enforceable nontax debt that has been delinquent for fewer than 180 days to the Department of Treasury for collection in accordance with 5 U.S.C. 5514, 26 U.S.C. 6402, 31 U.S.C. 3711 and 3716, the FFCS, 5 CFR 550.1108, and 31 CFR part 285.
§ 513.4 What notice will the Commission give to a debtor of the Commission’s intent to collect debts?
(a) When the Chairman determines that a debt is owed to the Commission, the Chairman will send a written notice (Notice), also known as a demand letter. The Notice will be sent by facsimile or mail to the most current address known to the Commission. The Notice will inform the debtor of the following:
(1) The amount, nature, and basis of the debt;
(2) The methods of offset that may be employed;
(3) The debtor’s opportunity to inspect and copy agency records related to the debt;
(4) The debtor’s opportunity to enter into a written agreement with the Commission to repay the debt;
(5) The Commission’s policy concerning interest, penalty charges, and administrative costs, as set out in § 513.5, including a statement that such assessments must be made against the debtor unless excused in accordance with the FCCS and this part;
(6) The date by which payment should be made to avoid late charges and enforced collection;
(7) The name, address, and telephone number of a contact person or office at the Commission that is available to discuss the debt; and
(8) The debtor’s opportunity for review.
(b) A debtor whose debt arises from a notice of violation and/or civil fine assessment that has become a final order and that was subject to the Commission’s appeal procedures at 25 CFR parts 580 through 585 may not re-litigate matters that were the subject of the final order.
§ 513.5 What is the Commission’s policy on interest, penalty charges, and administrative costs?
(a) Interest.
(1) The Commission will assess interest on all delinquent debts unless prohibited by statute, regulation, or contract.
(2) Interest begins to accrue on all debts from the date that the debt becomes delinquent. The Commission will assess interest at the rate established annually by the Secretary of the Treasury under 31 U.S.C. 3717.
(b) Penalties. The Commission will assess a penalty charge of 6 percent a year on any portion of a delinquent debt.
(c) Administrative costs. The Commission will assess charges to cover administrative costs incurred as a result of the debtor’s failure to pay a debt before it becomes delinquent. Administrative costs include the cost of providing a copy of the file to the debtor and costs incurred in processing and handling the debt because it became delinquent, such as costs incurred in obtaining a credit report or in using a private collection contractor, or service fees charged by a Federal agency for collection activities undertaken on behalf of the Commission.
(d) Interest, penalties, and administrative costs will continue to accrue throughout any appeal process.
(e) Allocation of payments. A partial or installment payment by a debtor will be applied first to outstanding penalty assessments, second to administrative costs, third to accrued interest, and fourth to the outstanding debt principal.
(f) Additional authority. The Commission may assess interest, penalty charges, and administrative costs on debts that are not subject to 31 U.S.C. 3717 to the extent authorized under common law or other applicable statutory authority.
(g) Waiver. (1) Regardless of the amount of the debt, the Chairman may decide to waive collection of all or part of the accrued interest, penalty charges, or administrative costs if collection of these charges would be against equity and good conscience or not in the Commission’s best interest.
(2) A decision to waive interest, penalty charges, or administrative costs may be made at any time before a debt is paid. However, when charges have been collected before the waiver decision, they will not be refunded. The Chairman’s decision whether to waive collection of these charges is final and not subject to further review.
§ 513.6 What are the requirements for offset review?
(a) The Commission will provide the debtor with a reasonable opportunity for an oral hearing when the debtor requests reconsideration of the debt and the Commission determines that the question of indebtedness cannot be resolved by review of the documentary evidence.
(b) Unless otherwise required by law, an oral hearing is not required to be a formal evidentiary hearing, although the Commission will carefully document all significant matters discussed at the hearing.
(c) When an oral hearing is not required, the Commission will review the request for reconsideration based on the written record.
§ 513.7 What is the Commission’s policy on revoking a debtor’s ability to engage in Indian gaming for failure to pay a debt?
The Chairman of the Commission may revoke a debtor’s ability to operate, manage, or otherwise participate in the operation of an Indian gaming facility if the debtor inexcusably or willfully fails to pay a debt. The revocation of ability to engage in gaming may last only as long as the debtor’s indebtedness.
Subpart B—Administrative and Tax Refund Offset
§ 513.20 What debts can the Commission refer to Treasury for collection by administrative and tax refund offset?
(a) The Commission may refer any past due, legally enforceable nonjudgment debt of a person to the Treasury for administrative and tax refund offset if the debt:
(1) Has been delinquent for at least three months and will not have been delinquent more than 10 years at the time the offset is made;
(2) Is at least $25.00 or another amount established by Treasury.
(b) Debts reduced to judgment may be referred to Treasury for tax refund offset at any time.
§ 513.21 What notice will a debtor be given of the Commission’s intent to collect a debt through administrative and tax refund offset?
(a) The Commission will give the debtor written notice of its intent to offset before initiating the offset. Notice will be mailed to the debtor at the debtor’s last known address as determined by the Commission.
(b) The notice will state the amount of the debt and notify the debtor that:
(1) The debt is past due and, unless repaid within 60 days after the date of the notice, the Commission will refer the debt to Treasury for administrative and tax refund offset;
(2) The debtor has 60 calendar days to present evidence that all or part of the debt is not past-due or legally enforceable; and
(3) The debtor has an opportunity to make a written agreement to repay the debt.
Subpart C—Salary Offset
§ 513.30 When may the Commission use salary offset to collect debts?
(a) The Commission collects debts owed by employees to the Federal Government by means of salary offset under the authority of: 5 U.S.C. 5514; 31 U.S.C. 3716; 5 CFR part 550, subpart K; 31 CFR 285.7; and this subpart. Salary offset is applicable when the Commission is attempting to collect a debt owed by an individual employed by the Commission or another agency.
(b) Nothing in the regulations in this subpart precludes the compromise, suspension, or termination of collection actions under the Federal Claims Collection Act of 1966, as amended, or the Federal Claims Collection Standards.
(c) A levy pursuant to the Internal Revenue Code takes precedence over a salary offset under this subpart, as provided in 5 U.S.C. 5514(d) and 31 U.S.C. 3716.
(d) The regulations in this subpart do not apply to any case where collection of a debt by salary offset is explicitly prohibited by another statute.
(e) This subpart’s regulations covering notice, hearing, written responses, and final decisions do not apply to:
(1) Any routine intra-agency adjustment in pay that is attributable to clerical or administrative error or delay in processing pay documents that have occurred within the four pay periods preceding the adjustment, or any adjustment to collect a debt amounting to $50 or less. However, at the time of any adjustment, or as soon thereafter as possible, the Commission’s payroll agency will provide the employee with a written notice of the nature and amount of the adjustment and a contact point for appealing the adjustment.
(2) Any negative adjustment to pay that arises from the debtor’s election of coverage or a change in coverage under a Federal benefits program requiring periodic deductions from pay, if the amount to be recovered was accumulated over four or fewer pay periods. However, at the time of the adjustment, the Commission’s payroll agent will provide in the debtor’s earnings statement a clear statement informing the debtor of the previous overpayment.
(f) An employee’s involuntary payment of all or any of the debt through salary offset will not be construed as a waiver of any rights that the employee may have under the law, unless there are statutory or contractual provisions to the contrary.
§ 513.31 What notice will the Commission, as the creditor agency, give a debtor that salary offset will occur?
(a) Deductions from a debtor’s salary will not be made unless the Commission sends the debtor a written Notice of Intent at least 30 calendar days before the salary offset is initiated.
(b) The Notice of Intent will include the following:
(1) Notice that the Commission has reviewed the records relating to the debt and has determined that the employee owes the debt;
(2) Notice that, after a 30-day period, the Commission will begin to collect the debt by deductions from the employee’s current disposable pay account and the date on which deductions from salary will start;
(3) The amount of the debt and the facts giving rise to it;
(4) The frequency and the amount of the intended deduction stated as a fixed dollar amount or as a percentage of pay not to exceed 15 percent of the disposable pay, and the intention to continue the deductions until the debt and all accumulated interest are paid in full or resolved;
(5) The name, address, and telephone number of the person to whom the debtor may propose a written alternative schedule for voluntary repayment in lieu of salary offset. The debtor must include a justification for the alternative schedule in the proposal;
(6) The Commission’s policy concerning interest, penalties, and administrative costs, set out at § 513.5, and a statement that assessments will be made unless excused in accordance with the FCCS;
(7) Notice of the employee’s right to inspect and copy all Commission records pertaining to the debt and the name, address, and telephone number of the Commission employee to whom requests for access must be made;
(8) Notice of the employee’s opportunity to a hearing conducted by an individual who does not work for the Commission on the Commission’s determination of the existence or amount of the debt and the terms of the repayment schedule;
(9) Notice that filing a request for a hearing on or before the 15th calendar day following the debtor’s receiving the Notice of Intent will stay collection proceedings and that a final decision will be issued at the earliest practical date, but not later than 60 days after the filing of the petition for hearing, unless the employee requests, and a hearing official grants, a delay in proceedings;
(10) An explanation of the effect of submitting knowingly false or frivolous statements; and
(11) Notice that amounts paid on or deducted from debts that are later waived or found not to be owed will be promptly refunded to the employee.
§ 513.32 What are the hearing procedures when the Commission is the creditor agency?
(a) To request a hearing, the debtor must file, within 15 days of receiving the Commission’s notice of intent to offset, a written petition signed by the debtor and addressed to the Commission stating why the debtor believes the Commission’s determination of the existence or amount of the debt is in error. The Commission may waive the 15-day time limit for filing a request for hearing if the employee shows that the delay was due to circumstances beyond his or her control or because the employee did not receive notice of the 15-day time limit. A debtor who has previously obtained a hearing to contest a debt that arose from a notice of violation or proposed civil fine assessment matters under 25 CFR parts 580 through 585 may not re-litigate matters that were at issue in that hearing.
(b) Regardless of whether the debtor is a Commission employee, the Commission will provide a prompt and appropriate hearing before a hearing official who is not from the Commission.
(c) The hearing will be conducted according to the FCCS review requirements at 31 CFR 901.3(e).
(d) Unless the employee requests, and a hearing official grants, a delay in proceedings, within 60 days after the petition for hearing the hearing official will issue a written decision on:
(1) The determination of the creditor agency concerning the existence or amount of the debt; and
(2) The repayment schedule, if a schedule was not established by written agreement between the employee and the creditor agency.
(e) If the hearing official determines that a debt may not be collected by salary offset but the Commission has determined that the debt is valid, the Commission may seek collection of the debt through other means in accordance with applicable law and regulations.
(f) The form of hearings, written responses, and final decisions will be according to the Commission’s review requirements at § 513.7. Written decisions regarding salary offset that are provided after a request for hearing must state: The facts purported to evidence the nature and origin of the alleged debt; the hearing official’s analysis, findings, and conclusions as to the employee’s or creditor agency’s grounds; the amount and validity of the alleged debt; and, where applicable, the repayment schedule.
§ 513.33 Will the Commission issue a certification when the Commission is the creditor agency?
Yes. Upon completion of the procedures established in this subpart and pursuant to 5 U.S.C. 5514, the Commission will submit a certification to Treasury or to a paying agency in the form prescribed by the paying agency.
§ 513.34 What opportunity is there for a voluntary repayment agreement when the Commission is the creditor agency?
(a) In response to a Notice of Intent, an employee may propose to repay the debt voluntarily in lieu of salary offset by submitting a written proposed repayment schedule to the Commission. A proposal must be received by the Commission within 15 calendar days after the employee is sent the Notice of Intent.
(b) The Commission will notify the employee whether, within the Commission’s discretion, the proposed repayment schedule is acceptable.
(c) If the proposed repayment schedule is unacceptable, the employee will have 15 calendar days from the date the notice of the decision is received in which to file a request for a hearing.
(d) If the proposed repayment schedule is acceptable or the employee agrees to a modification proposed by the Commission, the agreement will be put in writing and signed by the employee and the Commission.
§ 513.35 What special review is available when the Commission is the creditor agency?
(a)(1) An employee subject to salary offset or a voluntary repayment agreement may, at any time, request a special review by the Commission of the amount of the salary offset or voluntary repayment, based on materially changed circumstances, including, but not limited to, catastrophic illness, divorce, death, or disability.
(2) The request for special review must include an alternative proposed offset or payment schedule and a detailed statement, with supporting documents, that shows why the current salary offset or payment results in extreme financial hardship to the employee, spouse, or dependents. The statement must indicate:
(i) Income from all sources;
(ii) Assets;
(iii) Liabilities;
(iv) Number of dependents;
(v) Expenses for food, housing, clothing, and transportation;
(vi) Medical expenses; and
(vii) Exceptional expenses, if any.
(b) The Commission will evaluate the statement and documentation and determine whether the current offset or repayment schedule imposes extreme financial hardship on the employee. The Commission will notify the employee in writing within 30 calendar days of its determination, including, if appropriate, a revised offset or payment schedule. If the special review results in a revised offset or repayment schedule, the Commission will provide a new certification to the paying agency.
§ 513.36 Under what conditions will the Commission refund amounts collected by salary offset?
(a) As the creditor agency, the Commission will promptly refund any amount deducted under the authority of 5 U.S.C. 5514, when:
(1) The Commission determines that the debt is not owed; or
(2) An administrative or judicial order directs the Commission to make a refund.
(b) Unless required or permitted by law or contract, refunds under this section will not bear interest.
§ 513.37 What will the Commission do as the paying agency?
(a) When the Commission receives a certification from a creditor agency that has complied with the Office of Personnel Management’s requirements set out at 5 CFR 550.1109, the Commission will send the employee a written notice of salary offset.
(b) If the Commission receives an incomplete certification from a creditor agency, the Commission will return the certification with notice that the procedures under 5 U.S.C. 5514 and 5 CFR 550.1104 must be followed and a properly certified claim submitted before the Commission will take action to collect the debt from the employee’s current pay account.
(c) Notice to a debtor will include:
(1) The Commission’s receipt of a certification from a creditor agency;
(2) The amount of the debt and the deductions to be made, which may be stated as a percentage of disposable pay; and
(3) The date and pay period when the salary offset will begin.
(d) The Commission will provide a copy of the notice of salary offset to a creditor agency.
(e) The Commission will coordinate salary deductions under this subpart as appropriate.
(f) The Commission’s payroll officer will determine the amount of the debtor’s disposable pay and will implement the salary offset.
(g) The Commission may use the following types of salary debt collection:
(1) Lump sum offset. If the amount of the debt is equal to or less than 15 percent of disposable pay, the debt generally will be collected through one lump sum offset.
(2) Installment deductions. The amount deducted from any period will not exceed 15 percent of the disposable pay from which the deduction is made unless the debtor has agreed in writing to the deduction of a greater amount. If possible, installment payments will liquidate the debt in three years or less.
(3) Deductions from final check. A deduction exceeding the 15 percent of disposable pay limitation may be made from any final salary payment under 31 U.S.C. 3716 and the Federal Claims Collection Standards, in order to liquidate the debt, whether the employee is leaving voluntarily or involuntarily.
(4) Deductions from other sources. If an employee subject to salary offset is leaving the Commission and the balance of the debt cannot be liquidated by offset of the final salary check, then the Commission may offset later payments of any kind against the balance of the debt, as allowed by 31 U.S.C. 3716 and the Federal Claims Collection Standards.
(h) When two or more creditor agencies are seeking salary offsets, the Commission’s payroll office may, in its discretion, determine whether one or more debts should be offset simultaneously within the 15 percent limitation.
(i) The Commission is not authorized to review the merits of the creditor agency’s determination with respect to the amount or validity of the debt certified by the creditor agency.
Subpart D—Administrative Wage Garnishment
§ 513.40 How will the Commission handle debt collection through administrative wage garnishment?
This part adopts all the provisions of the administrative wage garnishment regulations contained in 31 CFR 285.11, promulgated by Treasury, which allow Federal agencies to collect debts from a debtor’s non-Federal pay by means of administrative wage garnishment authorized by 31 U.S.C. 3720D, and in 5 CFR parts 581 and 582, promulgated by the Office of Personnel Management, which provides for garnishment orders for child support and/or alimony and commercial garnishment of federal employees’ pay.
PART 514—FEES
§ 514.1 What is the purpose of this part?
Each gaming operation under the jurisdiction of the Commission, including a gaming operation operated by a tribe with a certificate of self-regulation, shall pay to the Commission annual fees as established by the Commission. The Commission, by a vote of not less than two of its members, shall adopt the rates of fees to be paid.
§ 514.2 When will the annual rates of fees be published?
(a) The Commission shall adopt the rates of fees no later than November 1st of each year.
(b) The Commission shall publish the rates of fees in a notice in the
§ 514.3 What is the maximum fee rate?
(a) The rates of fees imposed shall be—
(1) No more than 2.5% of the first $1,500,000 of the assessable gross revenues from each gaming operation; and
(2) No more than 5% of amounts in excess of the first $1,500,000 of the assessable gross revenues from each gaming operation.
(b) If a tribe has a certificate of self-regulation, the rate of fees imposed on assessable gross revenues from the class II gaming activity shall be no more than 0.25%.
(c) The total amount of all fees imposed on assessable gross revenues during any fiscal year shall not exceed 0.08% of the assessable gross gaming revenues of all gaming operations.
§ 514.4 How does a gaming operation calculate the amount of the annual fee it owes?
(a) The amount of annual fees owed shall be computed using:
(1) The most recent rates of fees adopted by the Commission; and
(2) The assessable gross revenues for the gaming operation’s assessed fiscal year.
(b) Assessed fiscal year means the gaming operation’s fiscal year ending prior to January 1 of the year the Commission adopted fee rates.
(c) For purposes of computing fees, assessable gross revenues for each gaming operation are the total amount of money wagered on class II and III games, plus entry fees (including table or card fees), less any amounts paid out as prizes or paid for prizes awarded, less any amounts wagered that the gaming operation issued as promotional credits, and less an allowance for capital expenditures for structures as reflected in the gaming operation’s audited financial statements.
(d) Tier 1 assessable gross revenues are the first $1,500,000 of the assessable gross revenues from each gaming operation. Tier 2 assessable gross revenues are the amounts in excess of the first $1,500,000 of the assessable gross revenues from each gaming operation.
(e) The allowance for capital expenditures for structures shall be either:
(1) An amount not to exceed 5% of the cost of structures in use throughout the assessed fiscal year and 2.5% of the cost of structures in use during only a part of the assessed fiscal year; or
(2) An amount not to exceed 10% of the total amount of depreciation expenses for the assessed fiscal year.
(f) Unless otherwise provided by regulation, generally accepted accounting principles shall be used.
§ 514.5 When must a gaming operation pay its annual fees?
(a) Annual fees are payable to the Commission on a quarterly basis. The annual fee payable to the Commission optionally may be paid in full in the first quarterly payment.
(b) Each gaming operation shall calculate the amount of fees to be paid, if any, and remit them with the quarterly statement required in § 514.6 within three (3) months, six (6) months, nine (9) months, and twelve (12) months of the end of the gaming operation’s fiscal year.
§ 514.6 What are the quarterly statements that must be submitted with the fee payments?
(a) Each gaming operation shall file with the Commission quarterly statements showing its assessable gross revenues for the assessed fiscal year.
(b) These statements shall show the amounts derived from each type of game, the amounts deducted for prizes, and the amounts deducted for the allowance for capital expenditures for structures.
(c) The quarterly statements shall identify an individual or individuals to be contacted should the Commission need to communicate further with the gaming operation. A telephone number and email address for each individual identified shall be included.
(d) Each quarterly statement shall include the computation of the fees payable, showing all amounts used in the calculations. The required calculations are as follows:
(1) Multiply the Tier 1 assessable gross revenues by the rate for those revenues adopted by the Commission.
(2) Multiply the Tier 2 assessable gross revenues by the rate for those revenues adopted by the Commission.
(3) Add (total) the results (products) obtained in paragraphs (d)(1) and (2) of this section.
(4) Multiply the total obtained in paragraph (d)(3) of this section by
(5) Adjust for prior amounts paid and credits received, if applicable. The gaming operation shall provide a detailed justification for the adjustment.
(6) The amount computed in paragraph (d)(5) of this section is the amount to be remitted.
(e) As required by part 571 of this chapter, quarterly statements must be reconciled with a tribe’s audited or reviewed financial statements for each gaming location. These reconciliations must be made available upon the request of any authorized representative of the Commission.
§ 514.7 What should a gaming operation do if it changes its fiscal year or ceases operations?
(a) If a gaming operation changes its fiscal year, it shall notify the Commission of the change within thirty (30) days. The Commission may request that the gaming operation prepare and submit to the Commission fees and statements for the period from the end of the previous fiscal year to the beginning of the new fiscal year. The submission must be sent to the Commission within ninety (90) days of its request.
(b) If a gaming operation ceases operations, it shall notify the Commission within (30) days. The Commission may request that the gaming operation, using the most recent rates of fees adopted by the Commission, prepare and submit to the Commission fees and statements for the period from the end of the most recent quarter for which fees have been paid to the date operations ceased. The submission must be sent to the Commission within (90) days of its request.
§ 514.8 Where should fees, quarterly statements, and other communications about fees be sent?
Remittances, quarterly statements, and other communications about fees shall be sent to the Commission by the methods provided for in the rates of fees notice published in the
§ 514.9 What happens if a gaming operation submits its fee payment or quarterly statement late?
(a) In the event that a gaming operation fails to submit a fee payment or quarterly statement in a timely manner, the Chair of the Commission may issue a notice specifying:
(1) The date the statement and/or payment was due;
(2) The number of calendar days late the statement and/or payment was submitted;
(3) A citation to the federal or tribal requirement that has been or is being violated;
(4) The action being considered by the Chair; and
(5) Notice of rights of appeal pursuant to subchapter H of this chapter.
(b) Within fifteen (15) days of service of the notice, the recipient may submit written information about the notice to the Chair. The Chair shall consider any information submitted by the recipient as well as the recipient’s history of untimely submissions or failure to file statements and/or fee payments over the preceding five (5) years in determining the amount of the late fee, if any.
(c) When practicable, within thirty (30) days of issuing the notice described in paragraph (a) of this section to a recipient, the Chair of the Commission may assess a proposed late fee against a recipient for each failure to file a timely quarterly statement and/or fee payment:
(1) For statements and/or fee payments one (1) to thirty (30) calendar days late, the Chair may propose a late fee of up to, but not more than 10% of the fee amount for that quarter;
(2) For statements and/or fee payments thirty-one (31) to sixty (60) calendar days late, the Chair may propose a late fee of up to, but not more than 15% of the fee amount for that quarter; and
(3) For statements and/or fee payments sixty-one (61) to ninety (90) calendar days late, the Chair may propose a late fee of up to, but not more than 20% of the fee amount for that quarter.
§ 514.10 When does a late payment or quarterly statement submission become a failure to pay?
Statements and/or fee payments over ninety (90) calendar days late constitute a failure to pay the annual fee, as set forth in IGRA, 25 U.S.C. 2717(a)(4), and Commission regulations, 25 CFR 573.4(a)(2). In accordance with 25 U.S.C. 2717(a)(4), failure to pay fees shall be grounds for revocation of the approval of the Chair of any license, ordinance or resolution required under IGRA for the operation of gaming. In accordance with § 573.4(a)(2) of this chapter, if a tribe, management contractor, or individually owned gaming operation fails to pay the annual fee, the Chair may issue a notice of violation and, simultaneously with or subsequently to the notice of violation, a temporary closure order.
§ 514.11 Can a proposed late fee be appealed?
(a) Proposed late fees assessed by the Chair may be appealed under subchapter H of this chapter.
(b) At any time prior to the filing of a notice of appeal under subchapter H of this chapter, the Chair and the recipient may agree to settle the notice of late submission, including the amount of the proposed late fee. In the event a settlement is reached, a settlement agreement shall be prepared and executed by the Chair and the recipient. If a settlement agreement is executed, the recipient shall be deemed to have waived all rights to further review of the notice or late fee in question, except as otherwise provided expressly in the settlement agreement. In the absence of a settlement of the issues under this paragraph (b), the recipient may contest the proposed late fee before the Commission in accordance with subchapter H of this chapter.
§ 514.12 When does a notice of late submission and/or a proposed late fee become a final order of the Commission and final agency action?
If the recipient fails to appeal under subchapter H of this chapter, the notice and the proposed late fee shall become a final order of the Commission and final agency action.
§ 514.13 How are late submission fees paid, and can interest be assessed?
(a) Late fees assessed under this part shall be paid by the person or entity assessed and shall not be treated as an operating expense of the operation.
(b) The Commission shall transfer the late fee paid under this subchapter to the U.S. Treasury.
(c) Interest shall be assessed at rates established from time to time by the Secretary of the Treasury on amounts remaining unpaid after their due date.
§ 514.14 What happens if the fees imposed exceed the statutory maximum or if the Commission does not expend the full amount of fees collected in a fiscal year?
(a) The total amount of all fees imposed during any fiscal year shall not exceed the statutory maximum imposed by Congress. The Commission shall credit pro-rata any fees collected in excess of this amount against amounts otherwise due.
(b) To the extent that revenue derived from fees imposed under the rates of fees established under § 514.2 are not expended or committed at the close of any fiscal year, such funds shall remain available until expended to defray the costs of operations of the Commission.
§ 514.15 May tribes submit fingerprint cards to the Commission for processing?
Tribes may submit fingerprint cards to the Commission for processing by the Federal Bureau of Investigation and the Commission may charge a fee to process fingerprint cards on behalf of the tribes.
§ 514.16 How does the Commission adopt the fingerprint processing fee?
(a) The Commission shall review annually the costs involved in processing fingerprint cards and, by a vote of not less than two of its members, shall adopt the fingerprint processing fee no later than November 1st of each year.
(b) The Commission shall publish the fingerprint processing fee in a notice in the
(c) The fingerprint processing fee shall be based on fees charged by the Federal Bureau of Investigation and costs incurred by the Commission. Commission costs include Commission personnel, supplies, equipment costs, and postage to submit the results to the requesting tribe.
§ 514.17 How are fingerprint processing fees collected by the Commission?
(a) Fees for processing fingerprint cards will be billed monthly to each Tribe for cards processed during the prior month. Tribes shall pay the amount billed within forty-five (45) days of the date of the bill.
(b) The Chair may suspend fingerprint card processing for a tribe that has a bill remaining unpaid for more than forty-five (45) days.
(c) Remittances and other communications about fingerprint processing fees shall be sent to the Commission by the methods provided for in the rates of fees notice published in the
PART 515—PRIVACY ACT PROCEDURES
§ 515.1 Purpose and scope.
This part contains the regulations the National Indian Gaming Commission (Commission) follows in implementing the Privacy Act of 1974. These regulations should be read together with the Privacy Act, which provides additional information about records maintained on individuals. The regulations in this part apply to all records contained within systems of records maintained by the Commission that are retrieved by an individual’s name or personal identifier. They describe the procedures by which individuals may request access to records about themselves, request amendment or correction of those records, and request an accounting of disclosures of those records by the Commission. The Commission shall also process all Privacy Act requests for access to records under the Freedom of Information Act (FOIA), 5 U.S.C. 552, and the Commission’s FOIA regulations contained in 25 CFR part 517, which gives requesters maximum disclosure.
§ 515.2 Definitions.
For the purposes of this subpart:
(a) Individual means a citizen of the United States or an alien lawfully admitted for permanent residence.
(b) Maintain means store, collect, use, or disseminate.
(c) Record means any item, collection, or grouping of information about an individual that is maintained by the Commission, including education, financial transactions, medical history, and criminal or employment history, and that contains the individual’s name, or identifying number, symbol, or other identifier assigned to the individual, such as social security number, finger or voice print, or photograph.
(d) System of records means a group of any records under the control of the Commission from which information is retrieved by the name of the individual or by some identifying number, symbol, or other identifier assigned to the individual.
(e) Routine use means use of a record for a purpose that is compatible with the purpose for which it was collected.
(f) Working day means a Federal workday that does not include Saturdays, Sundays, or Federal holidays.
§ 515.3 Request for access to records.
(a) How made and addressed. Any individual may make a request to the Commission for access to records about him or herself. Such requests shall conform to the requirements of this section. The request may be made in person at 90 K Street NE., Suite 200, Washington, DC 20002 during the hours of 9 a.m. to 12 noon and 2 p.m. to 5 p.m. Monday through Friday, in writing at NIGC Attn: Privacy Act Office, 1849 C Street NW., Mail Stop #1621, Washington, DC 20240, or via electronic mail addressed to [email protected].
(b) Description of records sought. Each request for access to records must describe the records sought in enough detail to enable Commission personnel to locate the system of records containing them with a reasonable amount of effort. Whenever possible, the request should describe the records sought, the time periods in which the records were compiled, any tribal gaming facility with which they were associated, and the name or identifying number of each system of records in which the records are kept.
(c) Agreement to pay fees. Requests shall also include a statement indicating the maximum amount of fees the requester is willing to pay to obtain the requested information. The requester must send acknowledgment to the Privacy Act Officer indicating his/her willingness to pay the fees. Absent such an acknowledgment within the specified time frame, the request will be considered incomplete, no further work shall be done, and the request will be administratively closed.
(d) Verification of identity. When making a request for access to records the individual seeking access must provide verification of identity. The requester must provide a full name, current address, and date and place of birth. The request must be signed and must either be notarized or submitted under 28 U.S.C. 1746, which is a law that permits statements to be made under penalty of perjury as a substitute for notarization. In order to assist in the identification and location of requested records, a request may also, at the requester’s option, include a social security number.
(e) Verification of guardianship. When making a request as a parent or guardian of a minor or as the guardian of someone determined by a court to be incompetent, for access to records about that individual, the request must establish:
(1) The identity of the individual who is the subject of the record by stating the name, current address, date and place of birth, and, at the requester’s option, the social security number of the individual;
(2) The requester’s own identity, as required in paragraph (d) of this section;
(3) That the requester is the parent or guardian of the individual and proof of such relationship by providing a birth certificate showing parentage or a court order establishing guardianship; and
(4) That the requester is acting on behalf of that individual in making the request.
(f) Verification in the case of third party information requests. Any individual who desires to have a record covered by this part disclosed to or mailed to another person may designate such person and authorize such person to act as his or her agent for that specific purpose. The authorization shall be in writing, signed by the individual whose record is requested, and notarized or witnessed as provided in paragraph (d) of this section.
(g) In-person disclosures. An individual to whom a record is to be disclosed in person, pursuant to this section, may have a person of his or her own choosing accompany him or her when the record is disclosed. If a requester is accompanied by another individual, the requester shall be required to authorize in writing any discussion of the records in the presence of the other person.
§ 515.4 Responsibility for responding to requests.
(a) In general. In determining which records are responsive to a request, the Commission ordinarily will include only records in its possession as of the date it begins its search for records. If any other date is used, the Privacy Act Officer shall inform the requester of that date.
(b) Authority to grant or deny requests. The Privacy Act Officer shall make initial determinations either to grant or deny in whole or in part access to records.
(c) Consultations and referrals. When the Commission receives a request for a record in its possession, the Privacy Act Officer shall determine whether another agency of the Federal Government is better able to determine whether the record is exempt from disclosure under the Privacy Act. If the Privacy Act Officer determines that it is best able to process the record in response to the request, then it shall do so. If the Privacy Act Officer determines that it is not best able to process the record, then it shall either:
(1) Respond to the request regarding that record, after consulting with the agency best able to determine whether to disclose it and with any other agency that has a substantial interest in it; or
(2) Refer the responsibility for responding to the request regarding that record to the agency best able to determine whether to disclose it, or to another agency that originated the record. Ordinarily, the agency that originated a record will be presumed to be best able to determine whether to disclose it.
(d) Notice of referral. Whenever the Privacy Act Officer refers all or any part of the responsibility for responding to a request to another agency, it ordinarily shall notify the requester of the referral and inform the requester of the name of each agency to which the request has been referred and of the part of the request that has been referred.
§ 515.5 Responses to requests for access to records.
(a) Acknowledgement of requests. Upon receipt of a request, the Privacy Act Officer ordinarily shall, within 20 working days, send an acknowledgement letter which shall confirm the requester’s agreement to pay fees under § 515.9 and provide an assigned request number.
(b) Grants of requests for access. Once the Privacy Act Officer makes a determination to grant a request for access in whole or in part, it shall notify the requester in writing. The notice shall inform the requester of any fee charged under § 515.9 of this part and the Privacy Act Officer shall disclose records to the requester promptly on payment of any applicable fee. If a request is made in person, the Privacy Act Officer will disclose the records to the requester directly, in a manner not unreasonably disruptive of its operations, on payment of any applicable fee and with a written record made of the grant of the request. If a requester is accompanied by another individual, the requester shall be required to authorize in writing any discussion of the records in the presence of the other person.
(c) Adverse determinations of requests for access. If the Privacy Act Officer makes any adverse determination denying a request for access in any respect, it shall notify the requester of that determination in writing. The notification letter shall be signed by the official making the determination and include:
(1) The name and title of the person responsible for the denial;
(2) A brief statement of the reason(s) for the denial, including any Privacy Act exemption(s) applied to the denial;
(3) A statement that the denial may be appealed under § 515.7 and a description of the requirements of § 515.7.
§ 515.6 Request for amendment or correction of records.
(a) How made and addressed. An individual may make a request for an amendment or correction to a Commission record about that individual by writing directly to the Privacy Act Officer, following the procedures in § 515.3. The request should identify each particular record in question, state the amendment or correction that is sought, and state why the record is not accurate, relevant, timely, or complete. The request may include any documentation that would be helpful to substantiate the reasons for the amendment sought.
(b) Privacy Act Officer response. The Privacy Act Officer shall, not later than 10 working days after receipt of a request for an amendment or correction of a record, acknowledge receipt of the request and provide notification of whether the request is granted or denied. If the request is granted in whole or in part, the Privacy Act Officer shall describe the amendment or correction made and shall advise the requester of the right to obtain a copy of the amended or corrected record. If the request is denied in whole or in part, the Privacy Act Officer shall send a letter signed by the denying official stating:
(1) The reason(s) for the denial; and
(2) The procedure for appeal of the denial under paragraph (c) of this section.
(c) Appeals. A requester may appeal a denial of a request for amendment or correction in the same manner as a denial of a request for access as described in § 515.7. If the appeal is denied, the requester shall be advised of the right to file a Statement of Disagreement as described in paragraph (d) of this section and of the right under the Privacy Act for judicial review of the decision.
(d) Statements of Disagreement. If the appeal under this section is denied in whole or in part, the requester has the right to file a Statement of Disagreement that states the reason(s) for disagreeing with the Privacy Act Officer’s denial of the request for amendment or correction. Statements of Disagreement must be concise, must clearly identify each part of any record that is disputed, and should be no longer than one typed page for each fact disputed. The Statement of Disagreement shall be placed in the system of records in which the disputed record is maintained and the record shall be marked to indicate a Statement of Disagreement has been filed.
(e) Notification of amendment, correction, or disagreement. Within 30 working days of the amendment or correction of the record, the Privacy Act Officer shall notify all persons, organizations, or agencies to which it previously disclosed the record, and if an accounting of that disclosure was made, that the record has been amended or corrected. If a Statement of Disagreement was filed, the Commission shall append a copy of it to the disputed record whenever the record is disclosed and may also append a concise statement of its reason(s) for denying the request to amend the record.
(f) Records not subject to amendment. Section 515.13 lists the records that are exempt from amendment or correction.
§ 515.7 Appeals of initial adverse agency determination.
(a) Adverse determination. An initial adverse agency determination of a request may consist of: A determination to withhold any requested record in whole or in part; a determination that a requested record does not exist or cannot be located; a determination that the requested record is not a record subject to the Privacy Act; a determination that a record will not be amended; a determination to deny a request for an accounting; a determination on any disputed fee matter; and any associated denial of a request for expedited treatment under the Commission’s FOIA regulations.
(b) Appeals. If the Privacy Act Officer issues an adverse determination in response to a request, the requester may file a written notice of appeal. The notice shall be accompanied by the original request, the initial adverse determination that is being appealed, and a statement describing why the adverse determination was in error. The appeal shall be addressed to the Privacy Act Appeals Officer at the locations listed in § 515.3 of this part no later than 90 calendar days after the date of the letter denying the request. Both the appeal letter and envelope should be marked “Privacy Act Appeal.” Any Privacy Act appeals submitted via electronic mail should state “Privacy Act Appeal” in the subject line.
(c) Responses to appeals. The decision on appeal will be made in writing within 20 working days of receipt of the notice of appeal by the Privacy Act Appeals Officer. For good cause shown, however, the Privacy Act Appeals Officer may extend the 20 day working period. If such an extension is taken, the requester shall be promptly notified of such extension and the anticipated date of decision. A decision affirming an adverse determination in whole or in part will include a brief statement of the reason(s) for the determination, including any Privacy Act exemption(s) applied. If the adverse determination is reversed or modified in whole or in part, the requester will be notified in a written decision and the request will be reprocessed in accordance with that appeal decision. The response to the appeal shall also advise of the right to institute a civil action in a federal district court for judicial review of the decision.
(d) When appeal is required. In order to institute a civil action in a federal district court for judicial review of an adverse determination, a requester must first appeal it under this section.
§ 515.8 Requests for an accounting of record disclosure.
(a) How made and addressed. Subject to the exceptions listed in paragraph (b) of this section, an individual may make a request for an accounting of the disclosures of any record about that individual that the Commission has made to another person, organization, or agency. The accounting contains the date, nature and purpose of each disclosure, as well as the name and address of the person, organization, or agency to which the disclosure was made. The request for an accounting should identify each particular record in question and should be made in writing to the Commission’s Privacy Act Officer, following the procedures in § 515.3.
(b) Where accountings are not required. The Commission is not required to provide an accounting where they relate to:
(1) Disclosures for which accountings are not required to be kept, such as those that are made to employees of the Commission who have a need for the record in the performance of their duties and disclosures that are made under section 552 of title 5;
(2) Disclosures made to law enforcement agencies for authorized law enforcement activities in response to written requests from those law enforcement agencies specifying the law enforcement activities for which the disclosures are sought; or
(3) Disclosures made from law enforcement systems of records that have been exempted from accounting requirements.
(c) Appeals. A requester may appeal a denial of a request for an accounting in the same manner as a denial of a request for access as described in § 515.7 of this part and the same procedures will be followed.
(d) Preservation of accountings. All accountings made under this section will be retained for at least five years or the life of the record, whichever is longer, after the disclosure for which the accounting is made.
§ 515.9 Notice of court-ordered and emergency disclosures.
(a) Court-ordered disclosures. When a record pertaining to an individual is required to be disclosed by a court order, the Privacy Act Officer shall make reasonable efforts to provide notice of this to the individual. Notice shall be given within a reasonable time after the Privacy Act Officer’s receipt of the order—except that in a case in which the order is not a matter of public record, the notice shall be given only after the order becomes public. This notice shall be mailed to the individual’s last known address and shall contain a copy of the order and a description of the information disclosed. Notice shall not be given if disclosure is made from a criminal law enforcement system of records that has been exempted from the notice requirement.
(b) Emergency disclosures. Upon disclosing a record pertaining to an individual made under compelling circumstances affecting health or safety, the Privacy Act Officer shall, within a reasonable time, notify that individual of the disclosure. This notice shall be mailed to the individual’s last known address and shall state the nature of the information disclosed; the person, organization, or agency to which it was disclosed; the date of disclosure; and the compelling circumstances justifying disclosure.
§ 515.10 Fees.
The Commission shall charge fees for duplication of records under the Privacy Act in the same way in which it charges duplication fees under § 517.9 of this chapter. No search or review fee may be charged for any record. Additionally, when the Privacy Act Officer makes a copy of a record as a necessary part of reviewing the record or granting access to the record, the Commission shall not charge for the cost of making that copy. Otherwise, the Commission may charge a fee sufficient to cover the cost of duplicating a record.
§ 515.11 Penalties.
Any person who makes a false statement in connection with any request for access to a record, or an amendment thereto, under this part, is subject to the penalties prescribed in 18 U.S.C. 494 and 495.
§ 515.12 [Reserved]
§ 515.13 Specific exemptions.
(a) The following systems of records are exempt from 5 U.S.C. 552a(c)(3), (d), (e)(1) and (f):
(1) Indian Gaming Individuals Records System.
(2) Management Contract Individuals Record System.
(b) The exemptions under paragraph (a) of this section apply only to the extent that information in these systems is subject to exemption under 5 U.S.C. 552a(k)(2). When compliance would not appear to interfere with or adversely affect the overall responsibilities of the Commission, with respect to licensing of key employees and primary management officials for employment in an Indian gaming operation or verifying the suitability of an individual who has a financial interest in, or management responsibility for a management contract, the applicable exemption may be waived by the Commission.
(c) Exemptions from the particular sections are justified for the following reasons:
(1) From 5 U.S.C. 552a(c)(3), because making available the accounting of disclosures to an individual who is the subject of a record could reveal investigative interest. This would permit the individual to take measures to destroy evidence, intimidate potential witnesses, or flee the area to avoid the investigation.
(2) From 5 U.S.C. 552a(d), (e)(1), and (f) concerning individual access to records, when such access could compromise classified information related to national security, interfere with a pending investigation or internal inquiry, constitute an unwarranted invasion of privacy, reveal a sensitive investigative technique, or pose a potential threat to the Commission or its employees or to law enforcement personnel. Additionally, access could reveal the identity of a source who provided information under an express promise of confidentiality.
(3) From 5 U.S.C. 552a(d)(2), because to require the Commission to amend information thought to be incorrect, irrelevant, or untimely, because of the nature of the information collected and the length of time it is maintained, would create an impossible administrative and investigative burden by continually forcing the Commission to resolve questions of accuracy, relevance, timeliness, and completeness.
(4) From 5 U.S.C. 552a(e)(1) because:
(i) It is not always possible to determine relevance or necessity of specific information in the early stages of an investigation.
(ii) Relevance and necessity are matters of judgment and timing in that what appears relevant and necessary when collected may be deemed unnecessary later. Only after information is assessed can its relevance and necessity be established.
(iii) In any investigation the Commission may receive information concerning violations of law under the jurisdiction of another agency. In the interest of effective law enforcement and under 25 U.S.C. 2716(b), the information could be relevant to an investigation by the Commission.
(iv) In the interviewing of individuals or obtaining evidence in other ways during an investigation, the Commission could obtain information that may or may not appear relevant at any given time; however, the information could be relevant to another investigation by the Commission.
PART 516—TESTIMONY OF COMMISSIONERS AND EMPLOYEES AND FORMER COMMISSIONERS AND FORMER EMPLOYEES RESPECTING OFFICIAL DUTIES; RESPONSE TO SUBPOENA
§ 516.1 What is the purpose of this part and to whom does it apply?
(a) The purpose of this part is to promulgate regulations regarding the release of official National Indian Gaming Commission information and provision of testimony by National Indian Gaming Commission personnel with respect to litigation or potential litigation and to prescribe conduct on the part of National Indian Gaming Commission personnel in response to a litigation-related request or demand.
(b) This part applies to requests or demands that are litigation-related or otherwise arise out of judicial, administrative or other legal proceedings (including subpoena, order or other demand) for interview, testimony (including by deposition) or other statement, or for production of documents relating to the business of the National Indian Gaming Commission, whether or not the National Indian Gaming Commission or the United States is a party to the litigation. It does not, however, apply to document requests covered by 25 CFR parts 515 and 517.
(c) To the extent the request or demand seeks official information or documents, the provisions of this part are applicable to Commissioners, employees, and former Commissioners and former employees, of the National Indian Gaming Commission.
§ 516.2 When may a person to whom this part applies give testimony, make a statement or submit to interview?
(a) No person to whom this part applies, except as authorized by the Chairman or the General Counsel pursuant to this regulation, shall provide testimony, make a statement or submit to interview.
(b) Whenever a subpoena commanding the giving of any testimony has been lawfully served upon a person to whom this part applies, such individual shall, unless otherwise authorized by the Chairman or the General Counsel, appear in response thereto and respectfully decline to testify on the grounds that it is prohibited by this regulation.
(c) A person who desires testimony or other statement from any person to whom this part applies may make written request therefor, verified by oath, directed to the Chairman setting forth his or her interest in the matter to be disclosed and designating the use to which such statement or testimony will be put in the event of compliance with such request: provided, that a written request therefor by an official of any federal, state or tribal entity, acting in his or her official capacity need not be verified by oath. If it is determined by the Chairman or the General Counsel that such statement or testimony will be in the public interest, the request may be granted. Where a request for a statement or testimony is granted, one or more persons to whom this part applies may be authorized or designated to appear and testify or give a statement with respect thereto.
§ 516.3 When may a person to whom this part applies produce records?
(a) Any request for records of the National Indian Gaming Commission shall be handled pursuant to the procedures established in 25 CFR parts 515 and 517 and shall comply with the rules governing public disclosure as provided in 25 CFR parts 515 and 517.
(b) Whenever a subpoena duces tecum commanding the production of any record has been lawfully served upon a person to whom this part applies, such person shall forward the subpoena to the General Counsel. If commanded to appear in response to any such subpoena, a person to whom this part applies shall respectfully decline to produce the record on the ground that production is prohibited by this part and state that the production of the record(s) of the National Indian Gaming Commission is a matter to be determined by the Chairman or the General Counsel.
§ 516.4 How are records certified or authenticated?
(a) Upon request, the person having custody and responsibility for maintenance of records which are to be released under this part or 25 CFR parts 515 or 517 may certify the authenticity of copies of records that are requested to be provided in such format.
(b) A request for certified copies of records or for authentication of copies of records shall be sent to the following address: NIGC Attn: Freedom of Information Act Officer, C/O Department of the Interior, 1849 C Street NW., Mail Stop #1621, Washington, DC 20240.
PART 517—FREEDOM OF INFORMATION ACT PROCEDURES
§ 517.1 General provisions.
This part contains the regulations the National Indian Gaming Commission (Commission) follows in implementing the Freedom of Information Act (FOIA), 5 U.S.C. 552. These regulations provide procedures by which you may obtain access to records compiled, created, and maintained by the Commission, along with procedures the Commission must follow in response to such requests for records. These regulations should be read together with the FOIA, which provides additional information about access to records maintained by the Commission. Requests made by individuals for records about themselves under the Privacy Act of 1974, 5 U.S.C. 552(a), are processed in accordance with the Commission’s Privacy Act regulations, 25 CFR part 515, as well as under this part.
§ 517.2 Public reading room.
Records that are required to be maintained by the Commission shall be available for public inspection and copying at 90 K Street NE, Suite 200, Washington, DC 20002. Reading room records created on or after November 1, 1996, shall be made available electronically via the Commission’s website.
§ 517.3 Definitions.
(a) Commercial use requester means a requester seeking information for a use or purpose that furthers the commercial, trade, or profit interests of himself or the person on whose behalf the request is made, which can include furthering those interests through litigation. In determining whether a request properly belongs in this category, the FOIA Officer shall determine the use to which the requester will put the documents requested. Where the FOIA Officer has reasonable cause to doubt the use to which the requester will put the records sought, or where that use is not clear from the request itself, the FOIA Officer shall contact the requester for additional clarification before assigning the request to a specific category.
(b) Confidential commercial information means records or information provided to the government by a submitter that arguably contains material exempt from disclosure under Exemption 4 of the FOIA.
(c) Direct costs mean those expenditures by the Commission actually incurred in searching for and duplicating (and, in the case of commercial use requests, reviewing) records in response to the FOIA request. Direct costs include the salary of the employee or employees performing the work (i.e., the basic rate of pay for the employee plus 16 percent of that rate to cover benefits) and the cost of operating computers and other electronic equipment, such as photocopiers and scanners. Direct costs do not include overhead expenses, such as the cost of space, heating, or lighting of the facility in which the records are stored.
(d) Duplication refers to the process of making a copy of a record, or the information contained in it, necessary to respond to a FOIA request. Such copies can take the form of, among other things, paper copy, microfilm, audio-visual materials, or electronic records (e.g., compact discs or USB flash drives). The copies provided shall be in a form that is reasonably usable by the requester.
(e) Educational institution refers to a preschool, a public or private elementary school, an institute of undergraduate higher education, an institute of graduate higher education, an institute of professional education, or an institute of vocational education which operates a program of scholarly research. To qualify for this category, the requester must show that the request is authorized by and is made under the auspices of a qualifying institution and that the records are not sought for a commercial use, but are sought to further scholarly research.
(f) Freedom of Information Act Officer means the person designated by the Chairman to administer the FOIA.
(g) Non-commercial scientific institution refers to an institution that is not operated on a “commercial” basis as that term is used in paragraph (a) of this section, and which is operated solely for the purpose of conducting scientific research the results of which are not intended to promote any particular product or industry. To qualify for this category, the requester must show that the request is authorized by and is made under the auspices of a qualifying institution and that the records are not sought for a commercial use, but are sought to further scholarly research.
(h) Record means an agency record that is either created or obtained by an agency and is under agency control at the time of the FOIA request.
(i) Representative of the news media means any person or entity that gathers information of potential interest to a segment of the public, uses editorial skills to turn the raw materials into a distinct work, and distributes that work to an audience. The term “news” means information that is about current events or that would be of current interest to the public. Examples of news media entities include television or radio stations that broadcast “news” to the public at large and publishers of periodicals that disseminate “news” and make their products available for purchase by or free distribution to the general public, including news organizations that disseminate solely on the internet. For a “freelance journalist” to be regarded as working for a news organization, the requester must demonstrate a solid basis for expecting publication through that organization, such as a publication contract. Absent such showing, the requester may provide documentation establishing the requester’s past publication record. To qualify for this category, the requester must not be seeking the requested records for a commercial use. However, a request for records supporting a news-dissemination function shall not be considered to be for a commercial use.
(j) Requester means any person, including an individual, Indian tribe, partnership, corporation, association, or public or private organization other than a Federal agency, that requests access to records in the possession of the Commission.
(k) Review means the process of examining a record in response to a FOIA request to determine if any portion of that record may be withheld under one or more of the FOIA Exemptions. It also includes processing any record for disclosure, for example, redacting information that is exempt from disclosure under the FOIA. Review time includes time spent considering any formal objection to disclosure made by a business submitter under § 517.7(c). Review time does not include time spent resolving general legal or policy issues regarding the use of FOIA Exemptions.
(l) Search refers to the time spent looking for material that is responsive to a request, including page-by-page or line-by-line identification of material within a document and also includes reasonable efforts to locate and retrieve information from records maintained in electronic form or format. The FOIA Officer shall ensure that searches are conducted in the most efficient and least expensive manner reasonably possible.
(m) Submitter means any person or entity who provides information directly or indirectly to the Commission. The term includes, but is not limited to, corporations, Indian tribal governments, state governments and foreign governments.
(n) Working day means a Federal workday that does not include Saturdays, Sundays, or Federal holidays.
§ 517.4 Requirements for making requests.
(a) How to make a FOIA request. Requests for records made pursuant to the FOIA must be in writing. Requests may be mailed, dropped off in person, or faxed to (202) 632–7066 (not a toll free number). Requests that are dropped off in person should be made at 90 K Street NE, Suite 200, Washington, DC 20002 during the hours of 9 a.m. to 12 noon and 2 p.m. to 5 p.m. Requests that are mailed should be sent to NIGC Attn: FOIA Officer, 1849 C Street NW, Mail Stop #1621, Washington, DC 20240. Requests may also be sent via electronic mail addressed to [email protected] or submitted through the Commission’s website.
(b) First person requests for records. If the requester is making a request for records about himself/herself, the requester must provide verification of identity. Verification requirements are described in 25 CFR 515.3.
(c) Requests for records about another individual. If the requester is making a request for records about another individual, the requester may receive greater access by submitting either a notarized authorization signed by that individual, a declaration made in compliance with the requirements set forth in 28 U.S.C. 1746 by that individual authorizing disclosure of the records to the requester or by submitting proof that the individual is deceased (for example, a copy of the death certificate or a copy of the obituary).
(d) Description of records sought. Requests for records shall describe the records requested with as much specificity as possible to enable Commission employees to locate the information requested with a reasonable amount of effort. Whenever possible, the request should describe the subject matter of the records sought, the time periods in which the records were generated, and any tribe or tribal gaming facility with which they were associated. Before submitting a request, requesters may contact the Commission’s FOIA contact or FOIA Public Liaison to discuss the records being sought and receive assistance describing the records. If after receiving a request the FOIA Officer determines that it does not reasonably describe the records sought, the FOIA Officer must inform the requester of what additional information is needed or why the request is otherwise insufficient. Requesters who are attempting to reformulate or modify such a request may discuss their request with the Commission’s FOIA contact or FOIA Public Liaison. If a request does not reasonably describe the records sought, the agency’s response to the request may be delayed.
(e) Agreement to pay fees. Requests shall also include a statement indicating the maximum amount of fees the requester is willing to pay to obtain the requested information, or a request for a waiver or reduction of fees. If the requester is requesting a waiver or reduction of fees the requester must include justification for such waiver or reduction (see § 517.9(c) for more information). If the request for a fee waiver is denied, the requester will be notified of this decision and advised that fees associated with the processing of the request will be assessed. The requester must send an acknowledgment to the FOIA Officer indicating his/her willingness to pay the fees. Absent such acknowledgment within the specified time frame, the request will be considered incomplete, no further work shall be done, and the request will be administratively closed.
(f) Form or format of records requested. Requesters may specify their preferred form or format (including electronic formats) for the records sought. The Commission will accommodate such requests where the record is readily reproducible in that form or format.
(g) Types of records not available. The FOIA does not require the Commission to:
(1) Compile or create records solely for the purpose of satisfying a request for records;
(2) Provide records not yet in existence, even if such records may be expected to come into existence at some future time; or
(3) Restore records destroyed or otherwise disposed of, except that the FOIA Officer must notify the requester that the requested records have been destroyed or disposed.
§ 517.5 Responsibility for responding to requests.
(a) In general. In determining which records are responsive to a request, the Commission ordinarily will include only records in its possession as of the date it begins its search for records. If any other date is used, the FOIA Officer shall inform the requester of that date.
(b) Authority to grant or deny requests. The FOIA Officer shall make initial determinations either to grant or deny in whole or in part a request for records.
(c) Granting of requests. When the FOIA Officer determines that the requested records shall be made available, the FOIA Officer shall notify the requester in writing and provide copies of the requested records in whole or in part. Records disclosed in part shall be marked or annotated to show the exemption applied to the withheld information and the amount of information withheld unless to do so would harm the interest protected by an applicable exemption. If a requested record contains exempted material along with nonexempt material, all reasonable segregable material shall be disclosed.
(d) Adverse Determinations. If the FOIA Officer makes an adverse determination denying a request in any respect, it must notify the requester of that adverse determination in writing. Adverse determinations include decisions that: The requested record is exempt from release, in whole or in part; the request does not reasonably describe the records sought; the information requested is not a record subject to the FOIA; the requested record does not exist, cannot be located, or has been destroyed; or the requested record is not readily reproducible in the form or format sought by the requester; denials involving fees or fee waiver matters; and denials of requests for expedited processing.
(e) Content of adverse determination. Any adverse determination issued by the FOIA Officer must include:
(1) A brief statement of the reasons for the adverse determination, including any FOIA exemption applied by the agency in denying access to a record unless to do so would harm the interest protected by an applicable exemption;
(2) An estimate of the volume of any records or information withheld, such as the number of pages or other reasonable form of estimation, although such an estimate is not required if the volume is otherwise indicated by deletions marked on records that are disclosed in part or if providing an estimate would harm an interest protected by an applicable exemption;
(3) A statement that the adverse determination may be appealed under § 517.8 of this part and a description of the appeal requirements; and
(4) A statement notifying the requester of the assistance available from the Commission’s FOIA Public Liaison and the dispute resolution services offered by the Office of Government Information Services.
(f) Consultation, referral, and coordination. When reviewing records located in response to a request, the FOIA Officer will determine whether another agency of the Federal Government is better able to determine whether the record is exempt from disclosure under the FOIA. As to any record determined to be better suited for review by another Federal Government agency, the FOIA Officer must proceed in one of the following ways.
(1) Consultation. When records originating with the Commission contain information of interest to another Federal Government agency, the FOIA Officer should typically consult with that other entity prior to making a release determination.
(2) Referral. (i) When the FOIA Officer believes that a different Federal Government agency is best able to determine whether to disclose the record, the FOIA Officer should typically refer the responsibility for responding to the request regarding that record to that agency. Ordinarily, the agency that originated the record is presumed to be the best agency to make the disclosure determination. If the Commission and another Federal Government agency jointly agree that the agency processing the request is in the best position to respond regarding the record, then the record may be handled as a consultation.
(ii) Whenever the FOIA Officer refers any part of the responsibility for responding to a request to another agency, he or she must document the referral, maintain a copy of the record that it refers, and notify the requester of the referral.
(iii) After the FOIA Officer refers a record to another Federal Government agency, the agency receiving the referral shall make a disclosure determination and respond directly to the requester. The referral of a record is not an adverse determination and no appeal rights accrue to the requester by this act.
(3) Coordination. The standard referral procedure is not appropriate where disclosure of the identity of the agency to which the referral would be made could harm an interest protected by an applicable exemption, such as the exemptions that protect personal privacy interests. For example, if the FOIA Officer in responding to a request for records on a living third party locates records originating with a criminal law enforcement agency, and if the existence of that law enforcement interest in the third party was not publicly known, then to disclose that law enforcement interest could cause an unwarranted invasion of the personal privacy of the third party. In such instances, in order to avoid harm to an interest protected by an applicable exemption, the FOIA Officer should coordinate with the originating agency to obtain its views on whether the record may be disclosed. The FOIA Officer should then convey the determination as to whether the record will be released to the requester.
§ 517.6 Timing of responses to requests.
(a) In general. The FOIA Officer ordinarily shall respond to requests according to their order of receipt. All statutory and regulatory timelines will commence on the date that the request is received by the Commission’s Headquarters FOIA Office that is designated to receive requests in § 517.4(a). In instances of requests misdirected to Commission field offices, the response time will commence on the date that the request is received by the Commission’s Headquarters FOIA Office, but in any event no later than 10 working days after the request is first received by any Commission office.
(b) Multitrack processing. (1) The FOIA Officer may use multi-track processing in responding to requests. Multi-track processing means placing simple requests requiring rather limited review in one processing track and placing more voluminous and complex requests in one or more other tracks. Requests in either track are processed on a first-in/first-out basis.
(2) The FOIA Officer may provide requesters in its slower track(s) with an opportunity to limit the scope of their requests in order to qualify for faster processing within the specified limits of faster track(s). The FOIA Officer will do so either by contacting the requester by letter, telephone, electronic mail, or facsimile whichever is more efficient in each case. When providing a requester with the opportunity to limit the scope of their request, the FOIA Officer shall also advise the requester of the availability of the Commission’s FOIA Public Liaison to aid in the resolution of any dispute arising between the requester and the Commission as well as the requester’s right to seek dispute resolution services from the Office of Government Information Services.
(c) Initial determinations. (1) The FOIA Officer shall make an initial determination regarding access to the requested information and notify the requester within twenty (20) working days after receipt of the request. This 20 day period may be extended if unusual circumstances arise. If an extension is necessary, the FOIA Officer shall promptly notify the requester of the extension, briefly stating the reasons for the extension, and estimating when the FOIA Officer will respond. Unusual circumstances warranting extension are:
(i) The need to search for and collect the requested records from field facilities or other establishments that are separate from the office processing the request;
(ii) The need to search for, collect, and appropriately examine a voluminous amount of records which are demanded in a single request; or
(iii) The need for consultation with another agency having a substantial interest in the determination of the request, which consultation shall be conducted with all practicable speed.
(2) If the FOIA Officer decides that an initial determination cannot be reached within the time limits specified in paragraph (c)(1) of this section, the FOIA Officer shall notify the requester of the reasons for the delay and include an estimate of when a determination will be made. The requester will then have the opportunity to modify the request or arrange for an alternative time frame for completion of the request. To assist in this process, the FOIA Officer shall advise the requester of the availability of the Commission’s FOIA Public Liaison to aid in the resolution of any disputes between the requester and the Commission, and notify the requester of his or her right to seek dispute resolution services from the Office of Government Information Services.
(3) If no initial determination has been made at the end of the 20 day period provided for in paragraph (c)(1) of this section, including any extension, the requester may appeal the action to the FOIA Appeals Officer.
(d) Expedited processing of request. (1) A requester may make a request for expedited processing at any time.
(2) When a request for expedited processing is received, the FOIA Officer must determine whether to grant the request for expedited processing within ten (10) calendar days of its receipt. Requests will receive expedited processing if one of the following compelling needs is met:
(i) The requester can establish that failure to receive the records quickly could reasonably be expected to pose an imminent threat to the life or physical safety of an individual; or
(ii) The requester is primarily engaged in disseminating information and can demonstrate that an urgency to inform the public concerning actual or alleged Federal Government activity exists.
(3) A requester who seeks expedited processing must submit a statement, certified to be true and correct, explaining in detail the basis for making the request for expedited processing. As a matter of administrative discretion, the FOIA Officer may waive the formal certification requirement.
(4) Administrative appeals of denials of expedited processing will be given expeditious consideration. If the denial of expedited processing is upheld by the FOIA Appeals Officer, that decision is immediately subject to judicial review in the appropriate Federal district court.
§ 517.7 Confidential commercial information.
(a) Notice to submitters. The FOIA Officer shall, to the extent permitted by law, provide a submitter who provides confidential commercial information to the Commission, with prompt notice of a FOIA request or administrative appeal encompassing the confidential commercial information if the Commission may be required to disclose the information under the FOIA. Such notice shall either describe the exact nature of the information requested or provide copies of the records or portions thereof containing the confidential commercial information. The FOIA Officer shall also notify the requester that notice and opportunity to object has been given to the submitter.
(b) Where notice is required. Notice shall be given to a submitter when:
(1) The information has been designated by the submitter as confidential commercial information protected from disclosure. Submitters of confidential commercial information shall use good faith efforts to designate, either at the time of submission or a reasonable time thereafter, those portions of their submissions they deem protected from disclosure under Exemption 4 of the FOIA. Such designation shall be deemed to have expired ten years after the date of submission, unless the requester provides reasonable justification for a designation period of greater duration; or
(2) The FOIA Officer has reason to believe that the information may be protected from disclosure under Exemption 4 of the FOIA.
(c) Where notice is discretionary. If the FOIA Officer has reason to believe that information submitted to the Commission may be protected from disclosure under any other exemption of the FOIA, the FOIA Officer may, in his or her discretion, provide the submitter with notice and an opportunity to object to the release of that information.
(d) Opportunity to object to disclosure. The FOIA Officer shall afford a submitter a reasonable period of time to provide the FOIA Officer with a detailed written statement of any objection to disclosure. The statement shall specify all grounds for withholding any of the information under any exemption of the FOIA, and if Exemption 4 applies, shall demonstrate the reasons the submitter believes the information to be confidential commercial information that is exempt from disclosure. Whenever possible, the submitter’s claim of confidentiality shall be supported by a statement or certification by an officer or authorized representative of the submitter. In the event a submitter fails to respond to the notice in the time specified, the submitter will be considered to have no objection to the disclosure of the information. Information provided by the submitter that is received after the disclosure decision has been made will not be considered. Information provided by a submitter pursuant to this paragraph may itself be subject to disclosure under the FOIA.
(e) Notice of intent to disclose. The FOIA Officer shall carefully consider a submitter’s objections and specific grounds for nondisclosure prior to determining whether to disclose the information requested. Whenever the FOIA Officer determines that disclosure is appropriate, the FOIA Officer shall, within a reasonable number of days prior to disclosure, provide the submitter with written notice of the intent to disclose which shall include a statement of the reasons for which the submitter’s objections were overruled, a description of the information to be disclosed, and a specific disclosure date. The FOIA Officer shall also notify the requester that the requested records will be made available.
(f) Notice of lawsuit. If the requester files a lawsuit seeking to compel disclosure of confidential commercial information, the FOIA Officer shall promptly notify the submitter of this action. If a submitter files a lawsuit seeking to prevent disclosure of confidential commercial information, the FOIA Officer shall notify the requester.
(g) Exceptions to the notice requirements under this section. The notice requirements under paragraphs (a) and (b) of this section shall not apply if:
(1) The FOIA Officer determines that the information should not be disclosed pursuant to Exemption 4 and/or any other exemption of the FOIA;
(2) The information lawfully has been published or officially made available to the public;
(3) Disclosure of the information is required by law (other than the FOIA);
(4) The information requested is not designated by the submitter as exempt from disclosure in accordance with this part, when the submitter had the opportunity to do so at the time of submission of the information or within a reasonable time thereafter, unless the agency has substantial reason to believe that disclosure of the information would result in competitive harm; or
(5) The designation made by the submitter in accordance with this part appears obviously frivolous. When the FOIA Officer determines that a submitter was frivolous in designating information as confidential, the FOIA Officer must provide the submitter with written notice of any final administrative disclosure determination within a reasonable number of days prior to the specified disclosure date, but no opportunity to object to disclosure will be offered.
§ 517.8 Appeals.
(a) Right of appeal. The requester has the right to appeal to the FOIA Appeals Officer any adverse determination.
(b) Notice of Appeal—(1) Time for appeal. To be considered timely, an appeal must be postmarked, or in the case of electronic submissions, transmitted, no later than ninety (90) calendar days after the date of the response or after the time limit for response by the FOIA Officer has expired. Prior to submitting an appeal any outstanding fees associated with FOIA requests must be paid in full.
(2) Form of appeal. An appeal shall be initiated by filing a written notice of appeal. The notice shall be accompanied by copies of the original request and adverse determination. To expedite the appellate process and give the requester an opportunity to present his/her arguments, the notice should contain a brief statement of the reasons why the requester believes the adverse determination to have been in error. Requesters may submit appeals by mail, facsimile, or electronically. Appeals sent by mail shall be addressed to the National Indian Gaming Commission, Attn: FOIA Appeals Officer, 1849 C Street NW, Mailstop #1621, Washington, DC 20240. Appeals may also be submitted via electronic mail at [email protected] or through the NIGC’s website. To facilitate handling, the requester should mark both the appeal letter and envelope, or subject line of the electronic transmission “Freedom of Information Act Appeal.”
(c) Final agency determinations. The FOIA Appeals Officer shall issue a final written determination, stating the basis for its decision, within twenty (20) working days after receipt of a notice of appeal. If the determination is to provide access to the requested records, the FOIA Officer shall make those records immediately available to the requester. If the determination upholds the adverse determination, the FOIA Appeals Officer shall notify the requester of the determination, the ability to obtain mediation services offered by the Office of Government Information Services as a non-exclusive alternative to litigation, and the right to obtain judicial review in the appropriate Federal district court.
(d) When appeal is required. Before seeking review by a court of the FOIA Officer’s adverse determination, a requester generally must first submit a timely administrative appeal.
§ 517.9 Fees.
(a) In general. Fees pursuant to the FOIA shall be assessed according to the schedule contained in paragraph (b) of this section for services rendered by the Commission in response to requests for records under this part. All fees shall be charged to the requester, except where the charging of fees is limited under paragraph (d) or (e) of this section or where a waiver or reduction of fees is granted under paragraph (c) of this section. Payment of fees should be by check or money order made payable to the Treasury of the United States.
(b) Charges for responding to FOIA requests. The following fees shall be assessed in responding to requests for records submitted under this part, unless a waiver or reduction of fees has been granted pursuant to paragraph (c) of this section:
(1) Duplication. The FOIA Officer will honor a requester’s preference for receiving a record in a particular form or format where he or she can readily reproduce the record in the form or format requested. When photocopies are supplied, the FOIA Officer shall charge $0.15 per page for copies of documents up to 8
(2) Searches—(i) Manual searches. Whenever feasible, the FOIA Officer will charge at the salary rate (basic pay plus 16% percent for benefits) of the employee or employees performing the search. However, where a homogenous class of personnel is used exclusively in a search (e.g., all administrative/clerical or all professional/executive), the FOIA Officer shall charge $4.45 per quarter hour for clerical time and $7.75 per quarter hour for professional time. Charges for search time less than a full hour will be in increments of quarter hours.
(ii) Computer searches. The FOIA Officer will charge the actual direct costs of conducting computer searches. These direct costs shall include the cost of operating the central processing unit for that portion of operating time that is directly attributable to searching for requested records, as well as the costs of operator/programmer salary apportionable to the search. For requests that require the creation of a new computer program to locate requested records, the Commission will charge the direct costs associated with such program’s creation. The FOIA Officer must notify the requester of the costs associated with creating such a program, and the requester must agree to pay the associated costs before the costs may be incurred.
(3) Review fees. Review fees shall be assessed only with respect to those requesters who seek records for a commercial use under paragraph (d)(1) of this section. Review fees shall be assessed at the same rates as those listed under paragraph (b)(2)(i) of this section. Review fees shall be assessed only for the initial record review, for example, review undertaken when the FOIA Officer analyzes the applicability of a particular exemption to a particular record or portion thereof at the initial request level. No charge shall be assessed at the administrative appeal level of an exemption already applied.
(c) Statutory waiver. Documents shall be furnished without charge or at a charge below that listed in paragraph (b) of this section where it is determined, based upon information provided by a requester or otherwise made known to the FOIA Officer, that disclosure of the requested information is in the public interest. Disclosure is in the public interest if it is likely to contribute significantly to public understanding of government operations and is not primarily for commercial purposes. Requests for a waiver or reduction of fees shall be considered on a case by case basis. In order to determine whether the fee waiver requirement is met, the FOIA Officer shall consider the following six factors:
(1) The subject of the request. Whether the subject of the requested records concerns the operations or activities of the government;
(2) The informative value of the information to be disclosed. Whether the disclosure is likely to contribute to an understanding of government operations or activities;
(3) The contribution to an understanding of the subject by the general public likely to result from disclosure. Whether disclosure of the requested information will contribute to public understanding;
(4) The significance of the contribution to public understanding. Whether the disclosure is likely to contribute significantly to public understanding of government operations or activities;
(5) The existence and magnitude of commercial interest. Whether the requester has a commercial interest that would be furthered by the requested disclosure; and, if so
(6) The primary interest in disclosure. Whether the magnitude of the identified commercial interest of the requester is sufficiently large, in comparison with the public interest in disclosure, that disclosure is primarily in the commercial interest of the requester.
(d) Types of requesters. There are four categories of FOIA requesters: Commercial use requesters, educational and non-commercial scientific institutional requesters; representative of the news media; and all other requesters. These terms are defined in § 517.3. The following specific levels of fees are prescribed for each of these categories:
(1) Commercial use requesters. The FOIA Officer shall charge commercial use requesters the full direct costs of searching for, reviewing, and duplicating requested records.
(2) Educational and non-commercial scientific institutions requesters. The FOIA Officer shall charge educational and non-commercial scientific institution requesters for document duplication only, except that the first 100 pages of copies shall be provided without charge.
(3) News media requesters. The FOIA Officer shall charge news media requesters for document duplication costs only, except that the first 100 pages of paper copies shall be provided without charge.
(4) All other requesters. The FOIA Officer shall charge requesters who do not fall into any of the categories in paragraphs (d)(1) through (3) of this section fees which cover the full reasonable direct costs incurred for searching for and reproducing records if that total costs exceeds $15.00, except that the first 100 pages and the first two hours of manual search time shall not be charged. To apply this term to computer searches, the FOIA Officer shall determine the total hourly cost of operating the central processing unit and the operator’s salary (plus 16 percent for benefits). When the cost of the search equals the equivalent dollar amount of two hours of the salary of the person performing the search, the FOIA Officer will begin assessing charges for the computer search.
(e) Restrictions on charging fees. (1) Ordinarily, no charges will be assessed when requested records are not found or when records located are withheld as exempt. However, if the requester has been notified of the estimated cost of the search time and has been advised specifically that the requested records may not exist or may be withheld as exempt, fees may be charged.
(2) If the Commission fails to comply with the FOIA’s time limits for responding to a request, it may not charge search fees or, in cases where records are not sought for commercial use and the request is made by an educational institution, non-commercial scientific institution, or representative of the news media, duplication fees, except as described in paragraphs (e)(2)(i)–(iii) of this section.
(i) If the FOIA Officer determines that unusual circumstances, as defined by the FOIA, apply and provides timely written notice to the requester in accordance with the FOIA, then a failure to comply with the statutory time limit shall be excused for an additional 10 days.
(ii) If the FOIA Officer determines that unusual circumstances, as defined by the FOIA, apply and more than 5,000 pages are necessary to respond to the request, then the Commission may charge search fees and duplication fees, where applicable, if the following steps are taken. The FOIA Officer must:
(A) Provide timely written notice of unusual circumstances to the requester in accordance with the FOIA and
(B) Discuss with the requester via written mail, email, or telephone (or made not less than three good-faith attempts to do so) how the requester could effectively limit the scope of the request in accordance with 5 U.S.C. 552(a)(6)(B)(ii).
(iii) If a court determines that exceptional circumstances exist, as defined by the FOIA, then a failure to comply with the time limits shall be excused for the length of time provided by the court order.
(f) Charges for interest. The FOIA Officer may assess interest charges on an unpaid bill, accrued under previous FOIA request(s), starting the 31st day following the day on which the bill was sent to you. A fee received by the FOIA Officer, even if not processed will result in a stay of the accrual of interest. The Commission shall follow the provisions of the Debt Collection Act of 1982, as amended, its implementing procedures, and the Commission’s debt collection regulations located in 25 CFR part 513 to recover any indebtedness owed to the Commission.
(g) Aggregating requests. The requester or a group of requesters may not submit multiple requests at the same time, each seeking portions of a document or documents solely in order to avoid payment of fees. When the FOIA Officer reasonably believes that a requester is attempting to divide a request into a series of requests to evade an assessment of fees, the FOIA Officer may aggregate such request and charge accordingly.
(h) Advance payment of fees. Fees may be paid upon provision of the requested records, except that payment may be required prior to that time if the requester has previously failed to pay fees or if the FOIA Officer determines that total fee will exceed $250.00. When payment is required in advance of the processing of a request, the time limits prescribed in § 517.6 shall not be deemed to begin until the FOIA Officer has received payment of the assessed fee.
(i) Payment of fees. Where it is anticipated that the cost of providing the requested record will exceed $25.00 after the free duplication and search time has been calculated, and the requester has not indicated in advance a willingness to pay a fee greater than $25.00, the FOIA Officer shall promptly notify the requester of the amount of the anticipated fee or a portion thereof, which can readily be estimated. The notification shall offer the requester an opportunity to confer with agency representatives for the purpose of reformulating the request so as to meet the requester’s needs at a reduced cost.
PART 518—SELF-REGULATION OF CLASS II GAMING
§ 518.1 What does this part cover?
This part sets forth requirements for obtaining a certificate of self-regulation of Class II gaming operations under 25 U.S.C. 2710(c). When the Commission issues a certificate of self-regulation, the certificate is issued to the tribe, not to a particular gaming operation. The certificate applies to all Class II gaming activity conducted by the tribe holding the certificate.
§ 518.2 Who will administer the self-regulation program for the Commission?
The self-regulation program will be administered by the Office of Self–Regulation. The Chair shall appoint a Director to administer the Office of Self–Regulation.
§ 518.3 Who is eligible to petition for a certificate of self-regulation?
A tribe is eligible to petition the Commission for a certificate of self-regulation of Class II gaming if, for a three (3)-year period immediately preceding the date of its petition:
(a) The tribe has continuously conducted such gaming;
(b) All gaming that the tribe has engaged in, or has licensed and regulated, on Indian lands within the tribe’s jurisdiction, is located within a State that permits such gaming for any purpose by any person, organization or entity (and such gaming is not otherwise specifically prohibited on Indian lands by Federal law), in accordance with 25 U.S.C. 2710(b)(1)(A);
(c) The governing body of the tribe has adopted an ordinance or resolution that the Chair has approved, in accordance with 25 U.S.C. 2710(b)(1)(B);
(d) The tribe has otherwise complied with the provisions of 25 U.S.C. 2710; and
(e) The gaming operation and the tribal regulatory body have, for the three (3) years immediately preceding the date of the petition, maintained all records required to support the petition for self-regulation.
§ 518.4 What must a tribe submit to the Commission as part of its petition?
A petition for a certificate of self-regulation is complete under this part when it contains:
(a) Two copies on 8
(b) A description of how the tribe meets the eligibility criteria in § 518.3, which may include supporting documentation; and
(c) The following information with supporting documentation:
(1) A brief history of each gaming operation(s), including the opening dates and periods of voluntary or involuntary closure;
(2) An organizational chart of the tribal regulatory body;
(3) A brief description of the criteria tribal regulators must meet before being eligible for employment as a tribal regulator;
(4) A brief description of the process by which the tribal regulatory body is funded, and the funding level for the three years immediately preceding the date of the petition;
(5) A list of the current regulators and employees of the tribal regulatory body, their complete resumes, their titles, the dates they began employment, and, if serving limited terms, the expiration date of such terms;
(6) A brief description of the accounting system(s) at the gaming operation which tracks the flow of the gaming revenues;
(7) A list of gaming activity internal controls at the gaming operation(s);
(8) A description of the record keeping system(s) for all investigations, enforcement actions, and prosecutions of violations of the tribal gaming ordinance or regulations, for the three (3)-year period immediately preceding the date of the petition; and
(9) The tribe’s current set of gaming regulations, if not included in the approved tribal gaming ordinance.
§ 518.5 What criteria must a tribe meet to receive a certificate of self-regulation?
(a) The Commission shall issue a certificate of self-regulation if it determines that for a three (3)-year period, the tribe has:
(1) Conducted its gaming activity in a manner that:
(i) Has resulted in an effective and honest accounting of all revenues;
(ii) Has resulted in a reputation for safe, fair, and honest operation of the activity; and
(iii) Has been generally free of evidence of criminal or dishonest activity;
(2) Conducted its gaming operation on a fiscally and economically sound basis;
(3) Conducted its gaming activity in compliance with the IGRA, NIGC regulations in this chapter, and the tribe’s gaming ordinance and gaming regulations; and
(4) Adopted and is implementing adequate systems for:
(i) Accounting of all revenues from the gaming activity;
(ii) Investigating, licensing and monitoring of all employees of the gaming activity;
(iii) Investigating, enforcing, prosecuting, or referring for prosecution violations of its gaming ordinance and regulations; and
(iv) Prosecuting criminal or dishonest activity or referring such activity for prosecution.
(b) A tribe may illustrate that it has met the criteria listed in paragraph (a) of this section by addressing factors such as those listed in paragraphs (b)(1) through (9) of this section. The list of factors is not all-inclusive; other factors not listed here may also be addressed and considered.
(1) The tribe adopted and is implementing minimum internal control standards which are at least as stringent as those promulgated by the Commission;
(2) The tribe requires tribal gaming regulators to meet the same suitability requirements as those required for key employees and primary management officials of the gaming operation(s);
(3) The tribe’s gaming operation utilizes an adequate system for accounting of all gaming revenues from Class II gaming activity;
(4) The tribe has a dispute resolution process for gaming operation customers and has taken steps to ensure that the process is adequately implemented;
(5) The tribe has a gaming regulatory body which:
(i) Monitors gaming activities to ensure compliance with Federal and tribal laws and regulations;
(ii) Monitors the gaming revenues accounting system for continued effectiveness;
(iii) Performs routine operational or other audits of the Class II gaming activities;
(iv) Routinely receives and reviews gaming revenue accounting information from the gaming operation(s);
(v) Has access to, and may inspect, examine, photocopy and audit, all papers, books, and records of the gaming operation(s) and Class II gaming activities;
(vi) Monitors compliance with minimum internal control standards for the gaming operation;
(vii) Has adopted and is implementing an adequate system for investigating, licensing, and monitoring of all employees of the gaming activity;
(viii) Maintains records on licensees and on persons denied licenses, including persons otherwise prohibited from engaging in gaming activities within the tribe’s jurisdiction;
(ix) Establishes standards for, and issues, vendor licenses or permits to persons or entities who deal with the gaming operation, such as manufacturers and suppliers of services, equipment and supplies;
(x) Establishes or approves the rules governing Class II games, and requires their posting;
(xi) Has adopted and is implementing an adequate system for the investigation of possible violations of the tribal gaming ordinance and regulations, and takes appropriate enforcement actions; and
(xii) Takes testimony and conducts hearings on regulatory matters, including matters related to the revocation of primary management officials, key employee and vendor licenses;
(6) The tribe allocates and appropriates a sufficient source of permanent and stable funding for the tribal regulatory body;
(7) The tribe has adopted and is implementing a conflict of interest policy for the regulators/regulatory body and their staff;
(8) The tribe has adopted and is implementing a system for adequate prosecution of violations of the tribal gaming ordinance and regulations or referrals for prosecution; and
(9) The tribe demonstrates that the operation is being conducted in a manner which adequately protects the environment and the public health and safety.
(c) The tribe assists the Commission with access and information-gathering responsibilities during the certification process.
(d) The burden of establishing self-regulation is upon the tribe filing the petition.
§ 518.6 What are the responsibilities of the Office of Self-Regulation in the certification process?
The Office of Self-Regulation shall be responsible for directing and coordinating the certification process. It shall provide a written report and recommendation to the Commission as to whether a certificate of self-regulation should be issued or denied, and a copy of the report and recommendation to the petitioning tribe.
§ 518.7 What process will the Commission use to review and certify petitions?
(a) Petitions for self-regulation shall be submitted by tribes to the Office of Self-Regulation.
(1) Within 30 days of receipt of a tribe’s petition, the Office of Self-Regulation shall conduct a review of the tribe’s petition to determine whether it is complete under § 518.4.
(2) If the tribe’s petition is incomplete, the Office of Self-Regulation shall notify the tribe by letter, certified mail or return receipt requested, of any obvious deficiencies or significant omissions in the petition. A tribe with an incomplete petition may submit additional information and/or clarification within 30 days of receipt of notice of an incomplete petition.
(3) If the tribe’s petition is complete, the Office of Self-Regulation shall notify the tribe in writing.
(b) Once a tribe’s petition is complete, the Office of Self-Regulation shall conduct a review to determine whether the tribe meets the eligibility criteria in § 518.3 and the approval criteria in § 518.5. During its review, the Office of Self-Regulation:
(1) May request from the tribe any additional material it deems necessary to assess whether the tribe has met the criteria for self-regulation.
(2) Will coordinate an on-site review and verification of the information submitted by the petitioning tribe.
(c) Within 120 days of notice of a complete petition under § 518.4, the Office of Self-Regulation shall provide a recommendation and written report to the full Commission and the petitioning tribe.
(1) If the Office of Self-Regulation determines that the tribe has satisfied the criteria for a certificate of self-regulation, it shall recommend to the Commission that a certificate be issued to the tribe.
(2) If the Office of Self-Regulation determines that the tribe has not met the criteria for a certificate of self-regulation, it shall recommend to the Commission that it not issue a certificate to the tribe.
(3) The Office of Self-Regulation shall make all information, on which it relies in making its recommendation and report, available to the tribe, subject to the confidentiality requirements in 25 U.S.C. 2716(a), and shall afford the tribe an opportunity to respond.
(4) The report shall include:
(i) Findings as to whether each of the eligibility criteria is met, and a summary of the basis for each finding;
(ii) Findings as to whether each of the approval criteria is met, and a summary of the basis for each finding;
(iii) A recommendation to the Commission as to whether it should issue the tribe a certificate of self-regulation; and
(iv) A list of any documents and other information received in support of the tribe’s petition.
(5) A tribe shall have 30 days from the date of issuance of the report to submit to the Office of Self-Regulation a response to the report.
(d) After receiving the Office of Self-Regulation’s recommendation and report, and a tribe’s response to the report, the Commission shall issue preliminary findings as to whether the eligibility and approval criteria are met. The Commission’s preliminary findings will be provided to the tribe within 45 days of receipt of the report.
(e) Upon receipt of the Commission’s preliminary findings, the tribe can request, in writing, a hearing before the Commission, as set forth in § 518.8. Hearing requests shall be made to the Office of Self-Regulation, and shall specify the issues to be addressed by the tribe at the hearing and any proposed oral or written testimony the tribe wishes to present.
(f) The Commission shall issue a final determination within 30 days after issuance of its preliminary findings if the tribe has informed the Commission in writing that the tribe does not request a hearing or within 30 days after the conclusion of a hearing, if one is held. The decision of the Commission to approve or deny a petition shall be a final agency action.
(g) A tribe may withdraw its petition and resubmit it at any time prior to the issuance of the Commission’s final determination.
§ 518.8 What is the hearing process?
(a) Within 10 days of receipt of the request for a hearing, the Office of Self-Regulation shall notify the tribe of the date and place of the hearing. The notice shall also set a hearing schedule, the time allotted for testimony and oral argument, and the order of the presentation.
(1) To the extent possible, the hearing will be scheduled not later than 60 days after the notice is issued, and the hearing schedule will be issued at least 30 days prior to the hearing.
(2) [Reserved]
(b) The Commission shall issue a decision on the petition within 30 days after the hearing’s conclusion. The decision shall set forth, with particularity, findings regarding the tribe’s satisfaction of the self-regulation standards in this Part. If the Commission determines that a certificate will issue, it will do so in accordance with § 518.9 of this part.
(c) The decision of the Commission to approve or deny a petition shall be a final agency action.
§ 518.9 When will a certificate of self-regulation become effective?
A certificate of self-regulation shall become effective on January 1 of the year following the year in which the Commission determines that a certificate will issue. Petitions will be reviewed in chronological order based on the date of receipt of a complete petition.
§ 518.10 What must a self-regulating tribe provide the Commission to maintain its self-regulatory status?
Each tribe that holds a certificate of self-regulation shall be required to submit the following information by April 15 of each year following the first year of self-regulation, or within 120 days after the end of each fiscal year of the gaming operation, as required by 25 CFR 571.13:
(a) An annual independent audit, to be filed with the Commission, as required by 25 U.S.C. 2710(b)(2)(C); and
(b) A complete resume for all employees of the tribal regulatory body hired and licensed by the tribe subsequent to its receipt of a certificate of self-regulation, to be filed with the Office of Self-Regulation.
Failure to submit the information required by this section may result in revocation of a certificate of self-regulation.
§ 518.11 Does a tribe that holds a certificate of self-regulation have a continuing duty to advise the Commission of any additional information?
Yes. A tribe that holds a certificate of self-regulation has a continuing duty to advise the Office of Self-Regulation within 10 business days of any changes in circumstances that are material to the approval criteria in § 518.5 and may reasonably cause the Commission to review and revoke the tribe’s certificate of self-regulation. Failure to do so is grounds for revocation of a certificate of self-regulation. Such circumstances may include, but are not limited to, a change of primary regulatory official; financial instability; or any other factors that are material to the decision to grant a certificate of self-regulation.
§ 518.12 Which investigative or enforcement powers of the Commission are inapplicable to self-regulating tribes?
During any time in which a tribe has a certificate of self-regulation, the powers of the Commission, as set forth in 25 U.S.C. 2706(b)(1)–(4), shall be inapplicable.
§ 518.13 When may the Commission revoke a certificate of self-regulation?
If the Office of Self-Regulation determines that the tribe no longer meets or did not comply with the eligibility criteria of § 518.3, the approval criteria of § 518.5, the requirements of § 518.10, or the requirements of § 518.11, the Office of Self-Regulation shall prepare a written recommendation to the Commission and deliver a copy of the recommendation to the tribe. The Office of Self-Regulation’s recommendation shall state the reasons for the recommendation and shall advice the tribe of its right to a hearing under part 584 of this chapter or right to appeal under part 585 of this chapter. The Commission may, after an opportunity for a hearing, revoke a certificate of self-regulation by a majority vote of its members if it determines that the tribe no longer meets the eligibility criteria of § 518.3, the approval criteria of § 518.5, the requirements of § 518.10 or the requirements of § 518.11.
§ 518.14 May a tribe request a hearing on the Commission’s proposal to revoke its certificate of self-regulation?
Yes. A tribe may request a hearing regarding the Office of Self-Regulation’s recommendation that the Commission revoke a certificate of self-regulation. Such a request shall be filed with the Commission pursuant to part 584 of this chapter. Failure to request a hearing within the time provided by part 584 of this chapter shall constitute a waiver of the right to a hearing. At any hearing where the Commission considers revoking a certificate, the Office of Self-Regulation bears the burden of proof to support its recommendation by a preponderance of the evidence. The decision to revoke a certificate is a final agency action and is appealable to Federal District Court pursuant to 25 U.S.C. 2714.
PART 519—SERVICE
§ 519.1 Designation of an agent by a tribe.
By written notification to the Commission, a tribe shall designate an agent for service of any official determination, order, or notice of violation.
§ 519.2 Designation of an agent by a management contractor or a tribal operator.
By written notification to the Commission, a management contractor or a tribal operator shall designate an agent for service of any official determination, order, or notice of violation.
§ 519.3 Methods of service.
(a) The Chairman shall serve any official determination, order, or notice of violation by:
(1) Delivering a copy to a designated agent;
(2) Delivering a copy to the person who is the subject of the official determination, order, or notice of violation;
(3) Delivering a copy to the individual who, after reasonable inquiry, appears to be in charge of the gaming operation that is the subject of the official determination, order, or notice of violation;
(4) Mailing to the person who is the subject of the official determination, order, or notice of violation or to his or her designated agent at the last known address. Service by mail is complete upon mailing; or
(5) Transmitting a facsimile to the person who is the subject of the official determination, order, or notice of violation or to his or her designated agent at the last known facsimile number. Service by facsimile is complete upon transmission.
(b) Delivery of a copy means: Handing it to the person or designated agent (or attorney for either); leaving a copy at the person’s, agent’s or attorney’s office with a clerk or other person in charge thereof; if there is no one in charge, leaving it in a conspicuous place therein; or, if the office is closed or the person to be served has no office, leaving it at the person’s dwelling house or usual place of abode with some person of suitable age and discretion then residing therein.
(c) Service shall not be deemed incomplete because of refusal to accept.
§ 519.4 Copy of any official determination, order, or notice of violation.
The Commission shall transmit a copy of any official determination, order, or notice of violation to the tribal chairman, the designated tribal agent under § 519.1, and to the relevant tribal gaming authority. The Commission shall transmit such copy as expeditiously as possible. Service under § 519.3 shall not depend on a copy being sent to the appropriate tribal chairman, the designated tribal agent or to the relevant tribal gaming authority.
SUBCHAPTER B—APPROVAL OF CLASS II AND CLASS III ORDINANCES AND RESOLUTIONS
PARTS 520–521 [RESERVED]
PART 522—SUBMISSION OF GAMING ORDINANCE OR RESOLUTION
§ 522.1 Scope of this part.
This part applies to any class II or class III gaming ordinance or resolution, or amendment thereto adopted by a tribe.
§ 522.2 Submission requirements.
A tribe shall submit to the Chair via electronic or physical mail all of the following information with a request for approval of a class II or class III ordinance or resolution, or amendment thereto:
(a) One copy of an ordinance or resolution certified as authentic by an authorized tribal official that meets the approval requirements in § 522.5(b) or § 522.7.
(b) A copy of the procedures to conduct or cause to be conducted background investigations on key employees and primary management officials and to ensure that key employees and primary management officials are notified of their rights under the Privacy Act as specified in § 556.2 of this chapter;
(c) A copy of the procedures to issue tribal licenses to primary management officials and key employees promulgated in accordance with § 558.3 of this chapter;
(d) When an ordinance or resolution concerns class III gaming, a copy of any approved tribal-state compact or class III procedures as prescribed by the Secretary that are in effect at the time the ordinance or amendment is passed;
(e) A copy of the procedures for resolving disputes between the gaming public and the tribe or the management contractor;
(f) A copy of the designation of an agent for service under § 519.1 of this chapter; and
(g) Identification of the entity that will take fingerprints and a copy of the procedures for conducting a criminal history check. Such a criminal history check shall include a check of criminal history records information maintained by the Federal Bureau of Investigation.
(h) A tribe shall provide Indian lands or tribal gaming regulations or environmental and public health and safety documentation that the Chair may request in the Chair’s discretion. The tribe shall have 30 days from receipt of a request for additional documentation to respond.
§ 522.3 Amendment.
(a) Within 15 days after adoption, a tribe shall submit for the Chair’s approval, via electronic or physical mail, any amendment to an ordinance or resolution.
(b) A tribe shall submit to the Chair all of the following information with a request for approval of an amendment:
(1) One copy of the amendment certified as authentic by an authorized tribal official;
(2) Any submission under § 522.2(b) through (h) that has been modified since it prior conveyance to the Chair for an ordinance, resolution, or amendment approval; and
(3) A conforming copy of the entire ordinance or resolution.
§ 522.4 Amendment approvals and disapprovals.
(a) No later than 90 days after the submission of any amendment to a class II ordinance or resolution the Chair shall approve the amendment if the Chair finds that:
(1) A tribe meets the amendment submission requirements of § 522.3(b); and
(2) The amendment complies with § 522.5(b).
(b) No later than 90 days after a tribe submits any amendment to a class II ordinance for approval, the Chair may disapprove the amendment if the Chair determines—
(1) A tribe failed to comply with the amendment submission requirements of § 522.3; or
(2) The amendment does not comply with § 522.5(b).
(c) No later than 90 days after the submission of any amendment to a class III ordinance or resolution, the Chair shall approve the amendment if the Chair finds that—
(1) A tribe meets the amendment submission requirements of § 522.3(b); and
(2) The amendment complies with § 522.7(b) and (c).
(d) No later than 90 days after a tribe submits any amendment to a class III ordinance for approval, the Chair may disapprove the amendment if the Chair determines that—
(1) A tribal governing body did not adopt the amendment in compliance with the governing documents of the tribe;
(2) The amendment does not comply with § 522.7(b) and (c); or
(3) A tribal governing body was significantly and unduly influenced in the adoption of the amendment by a person having a direct or indirect financial interest in a management contract, a person having management responsibility for a management contract, or their agents.
(e) The Chair shall notify a tribe of its right to appeal a disapproval under part 582 of this chapter. A disapproval shall be effective immediately unless appealed under part 582 of this chapter.
§ 522.5 Approval requirements for class II ordinances.
No later than 90 days after the submission to the Chair including all materials required under § 522.2, the Chair shall approve the class II ordinance or resolution if the Chair finds that:
(a) A tribe meets the submission requirements contained in § 522.2; and
(b) The class II ordinance or resolution provides that—
(1) The tribe shall have the sole proprietary interest in and responsibility for the conduct of any gaming operation unless it elects to allow individually owned gaming under either § 522.11 or § 522.12;
(2) A tribe shall use net revenues from any tribal gaming or from any individually owned games only for one or more of the following purposes:
(i) To fund tribal government operations or programs;
(ii) To provide for the general welfare of the tribe and its members (if a tribe elects to make per capita distributions, the plan must be approved by the Secretary of the Interior under 25 U.S.C. 2710(b)(3));
(iii) To promote tribal economic development;
(iv) To donate to charitable organizations; or
(v) To help fund operations of local government agencies;
(3) A tribe shall cause to be conducted independent audits of gaming operations annually and shall submit the results of those audits to the Commission;
(4) All gaming related contracts that result in purchases of supplies, services, or concessions for more than $25,000 in any year (except contracts for professional legal or accounting services) shall be specifically included within the scope of the audit conducted under paragraph (b)(3) of this section;
(5) A tribe shall perform background investigations and issue licenses for key employees and primary management officials according to requirements that are at least as stringent as those in parts 556 and 558 of this chapter;
(6) A tribe shall issue a separate license to each place, facility, or location on Indian lands where a tribe elects to allow class II gaming; and
(7) A tribe shall construct, maintain and operate a gaming facility in a manner that adequately protects the environment and the public health and safety.
(c) A tribe that subsequently amends a gaming ordinance pending before the Chair shall also provide an authentic resolution withdrawing the pending submission and resubmitting the revised submission.
§ 522.6 Disapproval of a class II ordinance.
(a) No later than 90 days after a tribe submits an ordinance for approval under § 522.2, the Chair may disapprove an ordinance if it determines that a tribe failed to comply with the requirements of § 522.2 or § 522.5(b).
(b) The Chair shall notify a tribe of its right to appeal under part 582 of this chapter. A disapproval shall be effective immediately unless appealed under part 582 of this chapter.
§ 522.7 Approval requirements for class III ordinances.
No later than 90 days after the submission to the Chair under § 522.2, the Chair shall approve the class III ordinance or resolution if:
(a) A tribe meets the submission requirements contained in § 522.2;
(b) The ordinance or resolution meets the requirements contained in § 522.5(b)(2) through (7); and
(c) The tribe shall have the sole proprietary interest in and responsibility for the conduct of any gaming operation unless it elects to allow individually owned gaming under § 522.11.
§ 522.8 Disapproval of a class III ordinance.
(a) Notwithstanding compliance with the requirements of § 522.7 and no later than 90 days after a submission under § 522.2, the Chair shall disapprove an ordinance or resolution if the Chair determines that:
(1) A tribal governing body did not adopt the ordinance or resolution in compliance with the governing documents of the tribe; or
(2) A tribal governing body was significantly and unduly influenced in the adoption of the ordinance or resolution by a person having a direct or indirect financial interest in a management contract, a person having management responsibility for a management contract, or their agents.
(b) The Chair shall notify a tribe of its right of appeal a disapproval under part 582 of this chapter. A disapproval shall be effective immediately unless appealed under part 582 of this chapter.
§ 522.9 Publication of class III ordinance and approval.
The Chair shall publish notice of approval of class III tribal gaming ordinances or resolutions in the
§ 522.10 Approval by operation of law.
If the Chair fails to approve or disapprove an ordinance, resolution, or amendment thereto submitted under § 522.2 or § 522.3 within 90 days after the date of submission to the Chair, the tribal ordinance, resolution, or amendment thereto shall be considered to have been approved by the Chair but only to the extent that such ordinance, resolution, or amendment thereto is consistent with the provisions of the Indian Gaming Regulatory Act (IGRA or Act) and this chapter.
§ 522.11 Individually owned class II and class III gaming operations other than those operating on September 1, 1986.
For licensing of individually owned gaming operations other than those operating on September 1, 1986 (addressed under § 522.12), a tribal ordinance shall require:
(a) That the gaming operation be licensed and regulated under an ordinance or resolution approved by the Chair;
(b) That income to the tribe from an individually owned gaming operation be used only for the purposes listed in § 522.4(b)(2);
(c) That not less than 60 percent of the net revenues be income to the tribe;
(d) That the owner pay an assessment to the Commission under § 514.1 of this chapter;
(e) Licensing standards that are at least as restrictive as those established by State law governing similar gaming within the jurisdiction of the surrounding State; and
(f) Denial of a license for any person or entity that would not be eligible to receive a State license to conduct the same activity within the jurisdiction of the surrounding State. State law standards shall apply with respect to purpose, entity, pot limits, and hours of operation.
§ 522.12 Individually owned class II gaming operations operating on September 1, 1986.
For licensing of individually owned gaming operations operating on September 1, 1986, under § 502.3(e) of this chapter, a tribal ordinance shall contain the same requirements as those in § 522.11(a) through (d).
§ 522.13 Revocation of class III gaming.
A governing body of a tribe, in its sole discretion and without the approval of the Chair, may adopt an ordinance or resolution revoking any prior ordinance or resolution that authorizes class III gaming.
(a) A tribe shall submit to the Chair one copy of any revocation ordinance or resolution certified as authentic by an authorized tribal official.
(b) The Chairman shall publish such ordinance or resolution in the
(c) Notwithstanding any other provision of this section, any person or entity operating a class III gaming operation on the date of publication in the
(d) A revocation shall not affect:
(1) Any civil action that arises during the one-year period following publication of the revocation; or
(2) Any crime that is committed during the one-year period following publication of the revocation.
PARTS 523–529 [RESERVED]
SUBCHAPTER C—MANAGEMENT CONTRACT PROVISIONS
PART 530 [RESERVED]
PART 531—CONTENT OF MANAGEMENT CONTRACTS
§ 531.1 Required provisions.
Management contracts shall conform to all of the requirements contained in this section in the manner indicated.
(a) Governmental authority. Provide that all gaming covered by the contract will be conducted in accordance with the Indian Gaming Regulatory Act (IGRA, or the Act) and governing tribal ordinance(s).
(b) Assignment of responsibilities. Enumerate the responsibilities of each of the parties for each identifiable function, including:
(1) Maintaining and improving the gaming facility;
(2) Providing operating capital;
(3) Establishing operating days and hours;
(4) Hiring, firing, training, and promoting employees;
(5) Maintaining the gaming operation’s books and records;
(6) Preparing the gaming operation’s financial statements and reports;
(7) Paying for the services of the independent auditor engaged pursuant to § 571.12 of this chapter;
(8) Hiring and supervising security personnel;
(9) Providing fire protection services;
(10) Setting advertising budget and placing advertising;
(11) Paying bills and expenses;
(12) Establishing and administering employment practices;
(13) Obtaining and maintaining insurance coverage, including coverage of public liability and property loss or damage;
(14) Complying with all applicable provisions of the Internal Revenue Code;
(15) Paying the cost of any increased public safety services; and
(16) If applicable, supplying the Commission with all information necessary for the Commission to comply with the regulations of the Commission issued pursuant to the National Environmental Policy Act (NEPA).
(c) Accounting. Provide for the establishment and maintenance of satisfactory accounting systems and procedures that shall, at a minimum:
(1) Include an adequate system of internal accounting controls;
(2) Permit the preparation of financial statements in accordance with generally accepted accounting principles;
(3) Be susceptible to audit;
(4) Allow a gaming operation, the tribe, and the Commission to calculate the annual fee under § 514.1 of this chapter;
(5) Permit the calculation and payment of the manager’s fee; and
(6) Provide for the allocation of operating expenses or overhead expenses among the tribe, the tribal gaming operation, the contractor, and any other user of shared facilities and services.
(d) Reporting. Require the management contractor to provide the tribal governing body not less frequently than monthly with verifiable financial reports or all information necessary to prepare such reports.
(e) Access. Require the management contractor to provide immediate access to the gaming operation, including its books and records, by appropriate tribal officials, who shall have:
(1) The right to verify the daily gross revenues and income from the gaming operation; and
(2) Access to any other gaming-related information the tribe deems appropriate.
(f) Guaranteed payment to tribe. Provide for a minimum guaranteed monthly payment to the tribe in a sum certain that has preference over the retirement of development and construction costs.
(g) Development and construction costs. Provide an agreed upon maximum dollar amount for the recoupment of development and construction costs.
(h) Term limits. Be for a term not to exceed five (5) years, except that upon the request of a tribe, the Chairman may authorize a contract term that does not exceed seven (7) years if the Chairman is satisfied that the capital investment required, and the income projections, for the particular gaming operation require the additional time. The time period shall begin running no later than the date when the gaming activities authorized by an approved management contract begin.
(i) Compensation. Detail the method of compensating and reimbursing the management contractor. If a management contract provides for a percentage fee, such fee shall be either:
(1) Not more than thirty (30) percent of the net revenues of the gaming operation if the Chairman determines that such percentage is reasonable considering the circumstances; or
(2) Not more than forty (40) percent of the net revenues if the Chairman is satisfied that the capital investment required and income projections for the gaming operation require the additional fee.
(j) Termination provisions. Provide the grounds and mechanisms for amending or terminating the contract (termination of the contract shall not require the approval of the Chairman).
(k) Dispute provisions. Contain a mechanism to resolve disputes between:
(1) The management contractor and customers, consistent with the procedures in a tribal ordinance;
(2) The management contractor and the tribe; and
(3) The management contractor and the gaming operation employees.
(l) Assignments and subcontracting. Indicate whether and to what extent contract assignments and subcontracting are permissible.
(m) Ownership interests. Indicate whether and to what extent changes in the ownership interest in the management contract require advance approval by the tribe.
(n) Effective date. State that the contract shall not be effective unless and until it is approved by the Chairman, date of signature of the parties notwithstanding.
§ 531.2 Prohibited provisions.
A management contract shall not 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 the contract.
PART 532 [RESERVED]
PART 533—APPROVAL OF MANAGEMENT CONTRACTS
§ 533.1 Requirement for review and approval.
Subject to the Chairman’s approval, an Indian tribe may enter into a management contract for the operation of a class II or class III gaming activity.
(a) Such contract shall become effective upon approval by the Chairman.
(b) Contract approval shall be evidenced by a Commission document dated and signed by the Chairman. No other means of approval shall be valid.
§ 533.2 Time for submitting management contracts and amendments.
A tribe or a management contractor shall submit a management contract to the Chairman for review within sixty (60) days of execution by the parties. The Chairman shall notify the parties of their right to appeal the approval or disapproval of the management contract under part 583 of this chapter.
§ 533.3 Submission of management contract for approval.
A tribe shall include in any request for approval of a management contract under this part:
(a) A contract containing:
(1) Original signatures of an authorized official of the tribe and the management contractor and;
(2) A representation that the contract as submitted to the Chairman is the entirety of the agreement among the parties.
(b) A letter, signed by the tribal chairman, setting out the authority of an authorized tribal official to act for the tribe concerning the management contract.
(c) Copies of documents evidencing the authority under paragraph (b) of this section.
(d) A list of all persons and entities identified in §§ 537.1(a) and 537.1(c)(1) of this chapter, and either:
(1) The information required under § 537.1(b)(1) of this chapter for class II gaming contracts and § 537.1(b)(1)(i) of this chapter for class III gaming contracts; or
(2) The dates on which the information was previously submitted.
(e)(1) For new contracts and new operations, a three (3)-year business plan which sets forth the parties’ goals, objectives, budgets, financial plans, and related matters; or
(2) For new contracts for existing operations, a three (3)-year business plan which sets forth the parties’ goals, objectives, budgets, financial plans, and related matters, and income statements and sources and uses of funds statements for the previous three (3) years.
(f) If applicable, a justification, consistent with the provisions of § 531.1(h) of this chapter, for a term limit in excess of five (5) years, but not exceeding seven (7) years.
(g) If applicable, a justification, consistent with the provisions of § 531.1(i) of this chapter, for a fee in excess of thirty (30) percent, but not exceeding forty (40) percent.
(h) A legal description for the site on which the gaming operation to be managed is, or will be, located.
§ 533.4 Action by the Chairman.
(a) The Chairman shall approve or disapprove a management contract, applying the standards contained in § 533.6 of this part, within 180 days of the date on which the Chairman receives a complete submission under § 533.3 of this part, unless the Chairman notifies the tribe and management contractor in writing of the need for an extension of up to ninety (90) days.
(b) A tribe may bring an action in a U.S. district court to compel action by the Chairman:
(1) After 180 days following the date on which the Chairman receives a complete submission if the Chairman does not approve or disapprove the contract under this part; or
(2) After 270 days following the Chairman’s receipt of a complete submission if the Chairman has told the tribe and management contractor in writing of the need for an extension and has not approved or disapproved the contract under this part.
§ 533.5 [Reserved]
§ 533.6 Approval and disapproval.
(a) The Chairman may approve a management contract if it meets the standards of part 531 of this chapter and § 533.3 of this part. Failure to comply with the standards of part 531 of this chapter or § 533.3 may result in the Chairman’s disapproval of the management contract.
(b) The Chairman shall disapprove a management contract for class II gaming if he or she determines that—
(1) Any person with a direct or indirect financial interest in, or having management responsibility for, a management contract:
(i) Is an elected member of the governing body of the tribe that is party to the management contract;
(ii) Has been convicted of any felony or any misdemeanor gaming offense;
(iii) Has knowingly and willfully provided materially false statements or information to the Commission or to a tribe;
(iv) Has refused to respond to questions asked by the Chairman in accordance with his or her responsibilities under this part; or
(v) Is determined by the Chairman 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 related business and financial arrangements;
(2) The management contractor or its agents have unduly interfered with or influenced for advantage, or have tried to unduly interfere with or influence for advantage, any decision or process of tribal government relating to the gaming operation;
(3) The management contractor or its agents has deliberately or substantially failed to follow the terms of the management contract or the tribal gaming ordinance or resolution adopted and approved pursuant to the Act; or
(4) A trustee, exercising the skill and diligence to which a trustee is commonly held, would not approve the contract.
(c) The Chairman may disapprove a management contract for class III gaming if he or she determines that a person with a financial interest in, or management responsibility for, a management contract is 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 related business and financial arrangements.
§ 533.7 Void agreements.
Management contracts and changes in persons with a financial interest in or management responsibility for a management contract, that have not been approved by the Chairman in accordance with the requirements of part 531 of this chapter and this part, are void.
PART 534 [RESERVED]
PART 535—POST-APPROVAL PROCEDURES
§ 535.1 Amendments.
(a) Subject to the Chairman’s approval, a tribe may enter into an amendment of a management contract for the operation of a class II or class III gaming activity.
(b) A tribe shall submit an amendment to the Chairman within thirty (30) days of its execution.
(c) A tribe shall include in any request for approval of an amendment under this part:
(1) An amendment containing original signatures of an authorized official of the tribe and the management contractor and terms that meet the applicable requirements of part 531 of this chapter;
(2) A letter, signed by the tribal chairman, setting out the authority of an authorized tribal official to act for the tribe concerning the amendment;
(3) Copies of documents evidencing the authority under paragraph (c)(2) of this section;
(4) A list of all persons and entities identified in § 537.1(a) and § 537.1(c)(1) of this chapter:
(i) If the amendment involves a change in person(s) having a direct or indirect financial interest in the management contract or having management responsibility for the management contract, a list of such person(s) and either:
(A) The information required under § 537.1(b)(1) of this chapter for class II gaming contracts or § 537.1(b)(1)(i) of this chapter for class III gaming contracts; or
(B) The dates on which the information was previously submitted;
(ii) [Reserved]
(5) If applicable, a justification, consistent with the provisions of § 531.1(h) of this chapter, for a term limit in excess of five (5) years, but not exceeding seven (7) years; and
(6) If applicable, a justification, consistent with the provisions of § 531.1(i) of this chapter, for a management fee in excess of thirty (30) percent, but not exceeding forty (40) percent.
(d)(1) The Chairman shall approve or disapprove an amendment within thirty (30) days from receipt of a complete submission if the amendment does not require a background investigation under part 537 of this chapter, unless the Chairman notifies the parties in writing of the need for an extension of up to thirty (30) days.
(2) The Chairman shall approve or disapprove an amendment as soon as practicable but no later than 180 days from receipt of a complete submission if the amendment requires a background investigation under part 537 of this chapter.
(3) A party may appeal the Chairman’s approval or disapproval of an amendment under part 583 of this chapter. If the Chairman does not approve or disapprove an amendment within the timelines of paragraph (d)(1) or (d)(2) of this section, the amendment shall be deemed disapproved and a party shall have thirty (30) days to appeal the decision under part 583 of this chapter.
(e)(1) The Chairman may approve an amendment to a management contract if the amendment meets the submission requirements of paragraph (c) of this section. Failure to comply with the submission requirements of paragraph (c) of this section may result in the Chairman’s disapproval of an amendment.
(2) The Chairman shall disapprove an amendment of a management contract for class II gaming if he or she determines that the conditions contained in § 533.6(b) of this chapter apply.
(3) The Chairman may disapprove an amendment of a management contract for class III gaming if he or she determines that the conditions contained in § 533.6(c) of this chapter apply.
(f) Amendments that have not been approved by the Chairman in accordance with the requirements of this part are void.
§ 535.2 Assignments.
Subject to the approval of the Chairman, a management contractor may assign its rights under a management contract to the extent permitted by the contract. A tribe or a management contractor shall submit such assignment to the Chairman upon execution. The Chairman shall approve or disapprove an assignment applying the standards of, and within the time provided by §§ 535.1(d) and 535.1(e) of this part.
§ 535.3 Post-approval noncompliance.
If the Chairman learns of any action or condition that violates the standards contained in parts 531, 533, 535, or 537 of this chapter, the Chairman may require modifications of, or may void, a management contract or amendment approved by the Chairman under such sections, after providing the parties an opportunity for a hearing before the Chairman and a subsequent appeal to the Commission as set forth in part 584 or part 585 of this chapter. The Chairman will initiate modification or voiding proceedings by serving the parties, specifying the grounds for the modification or voiding. The parties will have thirty (30) days to request a hearing or respond with objections. Within thirty (30) days of receiving a request for a hearing, the Chairman will hold a hearing and receive oral presentations and written submissions. The Chairman will make a decision on the basis of the developed record and notify the parties of the decision and of their right to appeal.
PART 536 [RESERVED]
PART 537—BACKGROUND INVESTIGATIONS FOR PERSONS OR ENTITIES WITH A FINANCIAL INTEREST IN, OR HAVING MANAGEMENT RESPONSIBILITY FOR, A MANAGEMENT CONTRACT
§ 537.1 Applications for approval.
(a) For each management contract for class II gaming, the Chairman shall conduct or cause to be conducted a background investigation of:
(1) Each person with management responsibility for a management contract;
(2) Each person who is a director of a corporation that is a party to a management contract;
(3) All persons who have 10 percent or more or indirect financial interest in a management contract;
(4) All entities with 10 percent or more financial interest in a management contract; and
(5) Any other person or entity with a direct or indirect financial interest in a management contract otherwise designated by the Commission.
(b) For each natural person identified in paragraph (a) of this section, the management contractor shall provide to the Commission the following information:
(1) Required information. (i) Full name, other names used (oral or written), social security number(s), birth date, place of birth, citizenship, and gender;
(ii) A current photograph, driver’s license number, and a list of all languages spoken or written;
(iii) Business and employment positions held, and business and residence addresses currently and for the previous ten (10) years; the city, state and country of residence from age eighteen (18) to the present;
(iv) The names and current addresses of at least three (3) personal references, including one personal reference who was acquainted with the person at each different residence location for the past five (5) years;
(v) Current business and residence telephone numbers;
(vi) A description of any existing and previous business relationships with Indian tribes, including ownership interests in those businesses;
(vii) A description of any existing and previous business relationships with the gaming industry generally, including ownership interests in those businesses;
(viii) The name and address of any licensing or regulatory agency with which the person has filed an application for a license or permit relating to gaming, whether or not such license or permit was granted;
(ix) For each gaming offense and for each felony for which there is an ongoing prosecution or a conviction, the name and address of the court involved, the charge, and the dates of the charge and of the disposition;
(x) For each misdemeanor conviction or ongoing misdemeanor prosecution (excluding minor traffic violations) within ten (10) years of the date of the application, the name and address of the court involved, and the dates of the prosecution and the disposition;
(xi) A complete financial statement showing all sources of income for the previous three (3) years, and assets, liabilities, and net worth as of the date of the submission; and
(xii) For each criminal charge (excluding minor traffic charges) regardless of whether or not it resulted in a conviction, if such criminal charge is within 10 years of the date of the application and is not otherwise listed pursuant to paragraphs (b)(1)(ix) or (b)(1)(x) of this section, the name and address of the court involved, the criminal charge, and the dates of the charge and the disposition.
(2) Fingerprints. The management contractor shall arrange with an appropriate federal, state, or tribal law enforcement authority to supply the Commission with a completed form FD–258, Applicant Fingerprint Card, (provided by the Commission), for each person for whom background information is provided under this section.
(3) Responses to Questions. Each person with a direct or indirect financial interest in a management contract or management responsibility for a management contract shall respond within thirty (30) days to written or oral questions propounded by the Chairman.
(4) Privacy notice. In compliance with the Privacy Act of 1974, each person required to submit information under this section shall sign and submit the following statement:
Solicitation of the information in this section is authorized by 25 U.S.C. 2701 et seq. The purpose of the requested information is to determine the suitability of individuals with a financial interest in, or having management responsibility for, a management contract. The information will be used by the National Indian Gaming Commission members and staff and Indian tribal officials who have need for the information in the performance of their official duties. The information may be disclosed to appropriate federal, tribal, state, or foreign law enforcement and regulatory agencies in connection with a background investigation or when relevant to civil, criminal or regulatory investigations or prosecutions or investigations of activities while associated with a gaming operation. Failure to consent to the disclosures indicated in this statement will mean that the Chairman of the National Indian Gaming Commission will be unable to approve the contract in which the person has a financial interest or management responsibility.
The disclosure of a person’s Social Security Number (SSN) is voluntary. However, failure to supply a SSN may result in errors in processing the information provided.
(5) Notice regarding false statements. Each person required to submit information under this section shall sign and submit the following statement:
A false statement knowingly and willfully provided in any of the information pursuant to this section may be grounds for not approving the contract in which I have a financial interest or management responsibility, or for disapproving or voiding such contract after it is approved by the Chairman of the National Indian Gaming Commission. Also, I may be punished by fine or imprisonment (U.S. Code, title 18, section 1001).
(c) For each entity identified in paragraph (a)(4) of this section, the management contractor shall provide to the Commission the following information:
(1) List of individuals. (i) Each of the ten (10) largest beneficiaries and the trustees when the entity is a trust;
(ii) Each of the ten (10) largest partners when the entity is a partnership;
(iii) Each person who is a director or who is one of the ten (10) largest holders of the issued and outstanding stock alone or in combination with another stockholder who is a spouse, parent, child or sibling when the entity is a corporation; and
(iv) For any other type of entity, the ten (10) largest owners of that entity alone or in combination with any other owner who is a spouse, parent, child or sibling and any person with management responsibility for that entity.
(2) Required information. (i) The information required in paragraph (b)(1)(i) of this section for each individual identified in paragraph (c)(1) of this section;
(ii) Copies of documents establishing the existence of the entity, such as the partnership agreement, the trust agreement, or the articles of incorporation;
(iii) Copies of documents designating the person who is charged with acting on behalf of the entity;
(iv) Copies of bylaws or other documents that provide the day-to-day operating rules for the organization;
(v) A description of any existing and previous business relationships with Indian tribes, including ownership interests in those businesses;
(vi) A description of any existing and previous business relationships with the gaming industry generally, including ownership interest in those businesses;
(vii) The name and address of any licensing or regulatory agency with which the entity has filed an application for a license or permit relating to gaming, whether or not such license or permit was granted;
(viii) For each gaming offense and for each felony for which there is an ongoing prosecution or a conviction, the name and address of the court involved, the charge, and the dates of the charge and disposition;
(ix) For each misdemeanor conviction or ongoing misdemeanor prosecution within ten (10) years of the date of the application, the name and address of the court involved, and the dates of the prosecution and disposition;
(x) Complete financial statements for the previous three (3) fiscal years; and
(xi) For each criminal charge (excluding minor traffic charges) whether or not there is a conviction, if such criminal charge is within 10 years of the date of the application and is not otherwise listed pursuant to paragraph (c)(1)(viii) or (c)(1)(ix) of this section, the criminal charge, the name and address of the court involved and the dates of the charge and disposition.
(3) Responses to questions. Each entity with a direct or indirect financial interest in a management contract shall respond within thirty (30) days to written or oral questions propounded by the Chairman.
(4) Notice regarding false statements. Each entity required to submit information under this section shall sign and submit the following statement:
A false statement knowingly and willfully provided in any of the information pursuant to this section may be grounds for not approving the contract in which we have a financial interest, or for disapproving or voiding such contract after it is approved by the Chairman of the National Indian Gaming Commission. Also, we may be punished by fine or imprisonment (U.S. Code, title 18, section 1001).
(d) For any of the following entities, or individuals associated with the following entities, the Chair may, upon request or unilaterally, exercise discretion to reduce the scope of the information to be furnished and background investigation to be conducted:
(1) Tribe as defined at 25 CFR 502.13;
(2) Wholly owned Tribal entity;
(3) National bank; or
(4) Institutional investor that is federally regulated or is required to undergo a background investigation and licensure by a State or Tribe pursuant to a Tribal-State compact.
§ 537.2 Submission of background information.
A management contractor shall submit the background information required in § 537.1 of this part:
(a) In sufficient time to permit the Commission to complete its background investigation by the time the individual is to assume management responsibility for, or the management contractor is to begin managing, the gaming operation; and
(b) Within ten (10) days of any proposed change in financial interest.
§ 537.3 Fees for background investigations.
(a) A management contractor shall pay to the Commission or the contractor(s) designated by the Commission the cost of all background investigations conducted under this part.
(b) The management contractor shall post a deposit with the Commission to cover the cost of the background investigations as follows:
(1) Management contractor (party to the contract)—$25,000
(2) Each individual and entity with a financial interest in the contract—$10,000
(c) The management contractor shall be billed for the costs of the investigation as it proceeds; the investigation shall be suspended if the unpaid costs exceed the amount of the deposit available.
(1) An investigation will be terminated if any bills remain unpaid for more than thirty (30) days.
(2) A terminated investigation will preclude the Chairman from making the necessary determinations and result in a disapproval of a management contract.
(d) Any remaining balance of the deposit will be returned to the management contractor when all bills have been paid and the investigations have been completed or terminated.
§ 537.4 Determinations.
The Chair shall determine whether the results of a background investigation preclude the Chair from approving a management contract because of the individual disqualifying factors contained in § 533.6(b)(1) of this chapter. The Chair shall promptly notify the tribe and management contractor if any findings preclude the Chair from approving a management contract or a change in financial interest.
PARTS 538–539 [RESERVED]
SUBCHAPTER D—HUMAN SERVICES
PARTS 540–541 [RESERVED]
PART 542—MINIMUM INTERNAL CONTROL STANDARDS
§ 542.1 What does this part cover?
(a) This part previously established the minimum internal control standards for gaming operations on Indian land.
(b) This part is suspended pursuant to the decision in Colorado River Indian Tribes v. Nat’l Indian Gaming Comm’n, 466 F.3d 134 (D.C. Cir. 2006). Updated non-binding guidance on Class III Minimum Internal Control Standards may be found at www.nigc.gov.
§ 542.2 What are the definitions for this part?
The definitions in this section shall apply to all sections of this part unless otherwise noted.
Account access card means an instrument used to access customer accounts for wagering at a gaming machine. Account access cards are used in connection with a computerized account database. Account access cards are not “smart cards.”
Accountability means all items of cash, chips, coins, tokens, plaques, receivables, and customer deposits constituting the total amount for which the bankroll custodian is responsible at a given time.
Accumulated credit payout means credit earned in a gaming machine that is paid to a customer manually in lieu of a machine payout.
Actual hold percentage means the percentage calculated by dividing the win by the drop or coin-in (number of credits wagered). Can be calculated for individual tables or gaming machines, type of table games, or gaming machines on a per day or cumulative basis.
Ante means a player’s initial wager or predetermined contribution to the pot before the dealing of the first hand.
Betting station means the area designated in a pari-mutuel area that accepts wagers and pays winning bets.
Betting ticket means a printed, serially numbered form used to record the event upon which a wager is made, the amount and date of the wager, and sometimes the line or spread (odds).
Bill acceptor means the device that accepts and reads cash by denomination in order to accurately register customer credits.
Bill acceptor canister means the box attached to the bill acceptor used to contain cash received by bill acceptors.
Bill acceptor canister release key means the key used to release the bill acceptor canister from the bill acceptor device.
Bill acceptor canister storage rack key means the key used to access the storage rack where bill acceptor canisters are secured.
Bill acceptor drop means cash contained in bill acceptor canisters.
Bill-in meter means a meter included on a gaming machine accepting cash that tracks the number of bills put in the machine.
Boxperson means the first-level supervisor who is responsible for directly participating in and supervising the operation and conduct of a craps game.
Breakage means the difference between actual bet amounts paid out by a racetrack to bettors and amounts won due to bet payments being rounded up or down. For example, a winning bet that should pay $4.25 may be actually paid at $4.20 due to rounding.
Cage means a secure work area within the gaming operation for cashiers and a storage area for the gaming operation bankroll.
Cage accountability form means an itemized list of the components that make up the cage accountability.
Cage credit means advances in the form of cash or gaming chips made to customers at the cage. Documented by the players signing an IOU or a marker similar to a counter check.
Cage marker form means a document, signed by the customer, evidencing an extension of credit at the cage to the customer by the gaming operation.
Calibration module means the section of a weigh scale used to set the scale to a specific amount or number of coins to be counted.
Call bets means a wager made without cash or chips, reserved for a known customer and includes marked bets (which are supplemental bets made during a hand of play). For the purpose of settling a call bet, a hand of play in craps is defined as a natural winner (e.g., seven or eleven on the come-out roll), a natural loser (e.g., a two, three or twelve on the come-out roll), a seven-out, or the player making his point, whichever comes first.
Card game means a game in which the gaming operation is not party to wagers and from which the gaming operation receives compensation in the form of a rake, a time buy-in, or other fee or payment from a player for the privilege of playing.
Card room bank means the operating fund assigned to the card room or main card room bank.
Cash-out ticket means an instrument of value generated by a gaming machine representing a cash amount owed to a customer at a specific gaming machine. This instrument may be wagered at other machines by depositing the cash-out ticket in the machine bill acceptor.
Chips means cash substitutes, in various denominations, issued by a gaming operation and used for wagering.
Coin-in meter means the meter that displays the total amount wagered in a gaming machine that includes coins-in and credits played.
Coin meter count machine means a device used in a coin room to count coin.
Coin room means an area where coins and tokens are stored.
Coin room inventory means coins and tokens stored in the coin room that are generally used for gaming machine department operation.
Commission means the National Indian Gaming Commission.
Complimentary means a service or item provided at no cost, or at a reduced cost, to a customer.
Count means the total funds counted for a particular game, gaming machine, shift, or other period.
Count room means a room where the coin and cash drop from gaming machines, table games, or other games are transported to and counted.
Count team means personnel that perform either the count of the gaming machine drop and/or the table game drop.
Counter check means a form provided by the gaming operation for the customer to use in lieu of a personal check.
Counter Game means a game in which the gaming operation is a party to wagers and wherein the gaming operation documents all wagering activity. The term includes, but is not limited to, bingo, keno, and pari-mutuel race books. The term does not include table games, card games and gaming machines.
Credit means the right granted by a gaming operation to a customer to defer payment of debt or to incur debt and defer its payment.
Credit limit means the maximum dollar amount of credit assigned to a customer by the gaming operation.
Credit slip means a form used to record either:
(1) The return of chips from a gaming table to the cage; or
(2) The transfer of IOUs, markers, or negotiable checks from a gaming table to a cage or bankroll.
Customer deposits means the amounts placed with a cage cashier by customers for the customers’ use at a future time.
Deal means a specific pull tab game that has a specific serial number associated with each game.
Dealer means an employee who operates a game, individually or as a part of a crew, administering house rules and making payoffs.
Dedicated camera means a video camera required to continuously record a specific activity.
Deskman means a person who authorizes payment of winning tickets and verifies payouts for keno games.
Draw ticket means a blank keno ticket whose numbers are punched out when balls are drawn for the game. Used to verify winning tickets.
Drop (for gaming machines) means the total amount of cash, cash-out tickets, coupons, coins, and tokens removed from drop buckets and/or bill acceptor canisters.
Drop (for table games) means the total amount of cash, chips, and tokens removed from drop boxes, plus the amount of credit issued at the tables.
Drop box means a locked container affixed to the gaming table into which the drop is placed. The game type, table number, and shift are indicated on the box.
Drop box contents keys means the key used to open drop boxes.
Drop box release keys means the key used to release drop boxes from tables.
Drop box storage rack keys means the key used to access the storage rack where drop boxes are secured.
Drop bucket means a container located in the drop cabinet (or in a secured portion of the gaming machine in coinless/cashless configurations) for the purpose of collecting coins, tokens, cash-out tickets, and coupons from the gaming machine.
Drop cabinet means the wooden or metal base of the gaming machine that contains the gaming machine drop bucket.
Drop period means the period of time that occurs between sequential drops.
Earned and unearned take means race bets taken on present and future race events. Earned take means bets received on current or present events. Unearned take means bets taken on future race events.
EPROM means erasable programmable read-only memory or other equivalent game software media.
Fill means a transaction whereby a supply of chips, coins, or tokens is transferred from a bankroll to a table game or gaming machine.
Fill slip means a document evidencing a fill.
Flare means the information sheet provided by the manufacturer that sets forth the rules of a particular pull tab game and that is associated with a specific deal of pull tabs. The flare shall contain the following information:
(1) Name of the game;
(2) Manufacturer name or manufacturer’s logo;
(3) Ticket count; and
(4) Prize structure, which shall include the number of winning pull tabs by denomination, with their respective winning symbols, numbers, or both.
Future wagers means bets on races to be run in the future (e.g., Kentucky Derby).
Game server means an electronic selection device, utilizing a random number generator.
Gaming machine means an electronic or electromechanical machine that allows a player to play games of chance, some of which may be affected by skill, which contains a microprocessor with random number generator capability for outcome selection or computer terminal that accesses an outcome that is subsequently and randomly selected in drawings that are electronically conducted by central computer or other such methods of chance selection, whether mechanical or electronic. The machine is activated by the insertion of cash or cash equivalents and which awards cash, cash equivalents, merchandise, or a written statement of the player’s accumulated credits, which written statements may be redeemable for cash.
Gaming machine analysis report means a report prepared that compares theoretical to actual hold by a gaming machine on a monthly or other periodic basis.
Gaming machine booths and change banks means a booth or small cage in the gaming machine area used to provide change to players, store change aprons and extra coin, and account for jackpot and other payouts.
Gaming machine count means the total amount of coins, tokens, and cash removed from a gaming machine. The amount counted is entered on the Gaming Machine Count Sheet and is considered the drop. Also, the procedure of counting the coins, tokens, and cash or the process of verifying gaming machine coin and token inventory.
Gaming machine pay table means the reel strip combinations illustrated on the face of the gaming machine that can identify payouts of designated coin amounts.
Gaming operation accounts receivable (for gaming operation credit) means credit extended to gaming operation customers in the form of markers, returned checks, or other credit instruments that have not been repaid.
Gross gaming revenue means annual total amount of cash wagered on class II and class III games and admission fees (including table or card fees), less any amounts paid out as prizes or paid for prizes awarded.
Hold means the relationship of win to coin-in for gaming machines and win to drop for table games.
Hub means the person or entity that is licensed to provide the operator of a pari-mutuel wagering operation information related to horse racing that is used to determine winners of races or payoffs on wagers accepted by the pari-mutuel wagering operation.
Internal audit means persons who perform an audit function of a gaming operation that are independent of the department subject to audit. Independence is obtained through the organizational reporting relationship, as the internal audit department shall not report to management of the gaming operation. Internal audit activities should be conducted in a manner that permits objective evaluation of areas examined. Internal audit personnel may provide audit coverage to more than one operation within a Tribe’s gaming operation holdings.
Issue slip means a copy of a credit instrument that is retained for numerical sequence control purposes.
Jackpot payout means the portion of a jackpot paid by gaming machine personnel. The amount is usually determined as the difference between the total posted jackpot amount and the coins paid out by the machine. May also be the total amount of the jackpot.
Lammer button means a type of chip that is placed on a gaming table to indicate that the amount of chips designated thereon has been given to the customer for wagering on credit before completion of the credit instrument. Lammer button may also mean a type of chip used to evidence transfers between table banks and card room banks.
Linked electronic game means any game linked to two (2) or more gaming operations that are physically separate and not regulated by the same Tribal gaming regulatory authority.
Main card room bank means a fund of cash, coin, and chips used primarily for poker and pan card game areas. Used to make even cash transfers between various games as needed. May be used similarly in other areas of the gaming operation.
Marker means a document, signed by the customer, evidencing an extension of credit to him by the gaming operation.
Marker credit play means that players are allowed to purchase chips using credit in the form of a marker.
Marker inventory form means a form maintained at table games or in the gaming operation pit that are used to track marker inventories at the individual table or pit.
Marker transfer form means a form used to document transfers of markers from the pit to the cage.
Master credit record means a form to record the date, time, shift, game, table, amount of credit given, and the signatures or initials of the persons extending the credit.
Master game program number means the game program number listed on a gaming machine EPROM.
Master game sheet means a form used to record, by shift and day, each table game’s winnings and losses. This form reflects the opening and closing table inventories, the fills and credits, and the drop and win.
Mechanical coin counter means a device used to count coins that may be used in addition to or in lieu of a coin weigh scale.
Meter means an electronic (soft) or mechanical (hard) apparatus in a gaming machine. May record the number of coins wagered, the number of coins dropped, the number of times the handle was pulled, or the number of coins paid out to winning players.
MICS means minimum internal control standards in this part 542.
Motion activated dedicated camera means a video camera that, upon its detection of activity or motion in a specific area, begins to record the activity or area.
Multi-game machine means a gaming machine that includes more than one type of game option.
Multi-race ticket means a keno ticket that is played in multiple games.
On-line gaming machine monitoring system means a system used by a gaming operation to monitor gaming machine meter readings and/or other activities on an on-line basis.
Order for credit means a form that is used to request the transfer of chips or markers from a table to the cage. The order precedes the actual transfer transaction that is documented on a credit slip.
Outstation means areas other than the main keno area where bets may be placed and tickets paid.
Par percentage means the percentage of each dollar wagered that the house wins (i.e., gaming operation advantage).
Par sheet means a specification sheet for a gaming machine that provides machine hold percentage, model number, hit frequency, reel combination, number of reels, number of coins that can be accepted, and reel strip listing.
Pari-mutuel wagering means a system of wagering on horse races, jai-alai, greyhound, and harness racing, where the winners divide the total amount wagered, net of commissions and operating expenses, proportionate to the individual amount wagered.
Payment slip means that part of a marker form on which customer payments are recorded.
Payout means a transaction associated with a winning event.
PIN means the personal identification number used to access a player’s account.
Pit podium means a stand located in the middle of the tables used by gaming operation supervisory personnel as a workspace and a record storage area.
Pit supervisor means the employee who supervises all games in a pit.
Player tracking system means a system typically used in gaming machine departments that can record the gaming machine play of individual customers.
Post time means the time when a pari-mutuel track stops accepting bets in accordance with rules and regulations of the applicable jurisdiction.
Primary and secondary jackpots means promotional pools offered at certain card games that can be won in addition to the primary pot.
Progressive gaming machine means a gaming machine, with a payoff indicator, in which the payoff increases as it is played (i.e., deferred payout). The payoff amount is accumulated, displayed on a machine, and will remain until a player lines up the jackpot symbols that result in the progressive amount being paid.
Progressive jackpot means deferred payout from a progressive gaming machine.
Progressive table game means table games that offer progressive jackpots.
Promotional payout means merchandise or awards given to players by the gaming operation based on a wagering activity.
Promotional progressive pots and/or pools means funds contributed to a table game or card game by and for the benefit of players. Funds are distributed to players based on a predetermined event.
Rabbit ears means a device, generally V-shaped, that holds the numbered balls selected during a keno or bingo game so that the numbers are visible to players and employees.
Rake means a commission charged by the house for maintaining or dealing a game such as poker.
Rake circle means the area of a table where rake is placed.
Random number generator means a device that generates numbers in the absence of a pattern. May be used to determine numbers selected in various games such as keno and bingo. Also commonly used in gaming machines to generate game outcome.
Reel symbols means symbols listed on reel strips of gaming machines.
Rim credit means extensions of credit that are not evidenced by the immediate preparation of a marker and does not include call bets.
Runner means a gaming employee who transports chips/cash to or from a gaming table and a cashier.
SAM means a screen-automated machine used to accept pari-mutuel wagers. SAM’s also pay winning tickets in the form of a voucher, which is redeemable for cash.
Series number means the unique identifying number printed on each sheet of bingo paper that identifies the bingo paper as a series or packet. The series number is not the free space or center space number located on the bingo paper.
Shift means an eight-hour period, unless otherwise approved by the Tribal gaming regulatory authority, not to exceed twenty-four (24) hours.
Shill means an employee financed by the house and acting as a player for the purpose of starting or maintaining a sufficient number of players in a game.
Short pay means a payoff from a gaming machine that is less than the listed amount.
Soft count means the count of the contents in a drop box or a bill acceptor canister.
Statistical drop means total amount of money, chips and tokens contained in the drop boxes, plus pit credit issued, minus pit credit payments in cash in the pit.
Statistical win means closing bankroll, plus credit slips for cash, chips or tokens returned to the cage, plus drop, minus opening bankroll, minus fills to the table, plus marker credits.
Sufficient clarity means use of monitoring and recording at a minimum of twenty (20) frames per second. Multiplexer tape recordings are insufficient to satisfy the requirement of sufficient clarity.
Surveillance room means a secure location(s) in a gaming operation used primarily for casino surveillance.
Surveillance system means a system of video cameras, monitors, recorders, video printers, switches, selectors, and other ancillary equipment used for casino surveillance.
Table games means games that are banked by the house or a pool whereby the house or the pool pays all winning bets and collects from all losing bets.
Table inventory means the total coins, chips, and markers at a table.
Table inventory form means the form used by gaming operation supervisory personnel to document the inventory of chips, coins, and tokens on a table at the beginning and ending of a shift.
Table tray means the container located on gaming tables where chips, coins, or cash are stored that are used in the game.
Take means the same as earned and unearned take.
Theoretical hold means the intended hold percentage or win of an individual gaming machine as computed by reference to its payout schedule and reel strip settings or EPROM.
Theoretical hold worksheet means a worksheet provided by the manufacturer for all gaming machines that indicate the theoretical percentages that the gaming machine should hold based on adequate levels of coin-in. The worksheet also indicates the reel strip settings, number of credits that may be played, the payout schedule, the number of reels and other information descriptive of the particular type of gaming machine.
Tier A means gaming operations with annual gross gaming revenues of more than $1 million but not more than $5 million.
Tier B means gaming operations with annual gross gaming revenues of more than $5 million but not more than $15 million.
Tier C means gaming operations with annual gross gaming revenues of more than $15 million.
Tokens means a coin-like cash substitute, in various denominations, used for gambling transactions.
Tribal gaming regulatory authority means the tribally designated entity responsible for gaming regulation.
Vault means a secure area within the gaming operation where tokens, checks, cash, coins, and chips are stored.
Weigh/count means the value of coins and tokens counted by a weigh machine.
Weigh scale calibration module means the device used to adjust a coin weigh scale.
Weigh scale interface means a communication device between the weigh scale used to calculate the amount of funds included in drop buckets and the computer system used to record the weigh data.
Weigh tape means the tape where weighed coin is recorded.
Wide area progressive gaming machine means a progressive gaming machine that is linked to machines in other operations and play on the machines affect the progressive amount. As wagers are placed, the progressive meters on all of the linked machines increase.
Win means the net win resulting from all gaming activities. Net win results from deducting all gaming losses from all wins prior to considering associated operating expenses.
Win-to-write hold percentage means win divided by write to determine hold percentage.
Wrap means the method of storing coins after the count process has been completed, including, but not limited to, wrapping, racking, or bagging. May also refer to the total amount or value of the counted and stored coins.
Write means the total amount wagered in keno, bingo, pull tabs, and pari-mutuel operations.
Writer means an employee who writes keno, bingo, pull tabs, or pari-mutuel tickets. A keno writer usually also makes payouts.
§ 542.3 How do I comply with this part?
(a) Compliance based upon tier. (1) Tier A gaming operations must comply with §§ 542.1 through 542.18, and §§ 542.20 through 542.23.
(2) Tier B gaming operations must comply with §§ 542.1 through 542.18, and §§ 542.30 through 542.33.
(3) Tier C gaming operations must comply with §§ 542.1 through 542.18, and §§ 542.40 through 542.43.
(b) Determination of tier. (1) The determination of tier level shall be made based upon the annual gross gaming revenues indicated within the gaming operation’s audited financial statements. Gaming operations moving from one tier to another shall have nine (9) months from the date of the independent certified public accountant’s audit report to achieve compliance with the requirements of the new tier.
(2) The Tribal gaming regulatory authority may extend the deadline by an additional six (6) months if written notice is provided to the Commission no later than two weeks before the expiration of the nine (9) month period.
(c) Tribal internal control standards. Within six (6) months of June 27, 2002, each Tribal gaming regulatory authority shall, in accordance with the Tribal gaming ordinance, establish and implement tribal internal control standards that shall:
(1) Provide a level of control that equals or exceeds those set forth in this part;
(2) Contain standards for currency transaction reporting that comply with 31 CFR part 103;
(3) Establish standards for games that are not addressed in this part; and
(4) Establish a deadline, which shall not exceed nine (9) months from June 27, 2002, by which a gaming operation must come into compliance with the tribal internal control standards. However, the Tribal gaming regulatory authority may extend the deadline by an additional six (6) months if written notice is provided to the Commission no later than two weeks before the expiration of the nine (9) month period.
(d) Gaming operations. Each gaming operation shall develop and implement an internal control system that, at a minimum, complies with the tribal internal control standards.
(1) Existing gaming operations. All gaming operations that are operating on or before June 27, 2002, shall comply with this part within the time requirements established in paragraph (c) of this section. In the interim, such operations shall continue to comply with existing tribal internal control standards.
(2) New gaming operations. All gaming operations that commence operations after August 26, 2002, shall comply with this part before commencement of operations.
(e) Submission to Commission. Tribal regulations promulgated pursuant to this part shall not be required to be submitted to the Commission pursuant to 25 CFR 522.3(b).
(f) CPA testing. (1) An independent certified public accountant (CPA) shall be engaged to perform “Agreed-Upon Procedures” to verify that the gaming operation is in compliance with the minimum internal control standards (MICS) set forth in this part or a Tribally approved variance thereto that has received Commission concurrence. The CPA shall report each event and procedure discovered by or brought to the CPA’s attention that the CPA believes does not satisfy the minimum standards or Tribally approved variance that has received Commission concurrence. The “Agreed-Upon Procedures” may be performed in conjunction with the annual audit. The CPA shall report its findings to the Tribe, Tribal gaming regulatory authority, and management. The Tribe shall submit two copies of the report to the Commission within 120 days of the gaming operation’s fiscal year end. This regulation is intended to communicate the Commission’s position on the minimum agreed-upon procedures to be performed by the CPA. Throughout these regulations, the CPA’s engagement and reporting are based on Statements on Standards for Attestation Engagements (SSAEs) in effect as of December 31, 2003, specifically SSAE 10 (“Revision and Recodification Agreed-Upon Procedures Engagements.”). If future revisions are made to the SSAEs or new SSAEs are adopted that are applicable to this type of engagement, the CPA is to comply with any new or revised professional standards in conducting engagements pursuant to these regulations and the issuance of the agreed-upon procedures report. The CPA shall perform the “Agreed-Upon Procedures” in accordance with the following:
(i) As a prerequisite to the evaluation of the gaming operation’s internal control systems, it is recommended that the CPA obtain and review an organization chart depicting segregation of functions and responsibilities, a description of the duties and responsibilities of each position shown on the organization chart, and an accurate, detailed narrative description of the gaming operation’s procedures in effect that demonstrate compliance.
(ii) Complete the CPA NIGC MICS Compliance checklists or other comparable testing procedures. The checklists should measure compliance on a sampling basis by performing walk-throughs, observations and substantive testing. The CPA shall complete separate checklists for each gaming revenue center, cage and credit, internal audit, surveillance, information technology and complimentary services or items. All questions on each applicable checklist should be completed. Work-paper references are suggested for all “no” responses for the results obtained during testing (unless a note in the “W/P Ref” can explain the exception).
(iii) The CPA shall perform, at a minimum, the following procedures in conjunction with the completion of the checklists:
(A) At least one unannounced observation of each of the following: Gaming machine coin drop, gaming machine currency acceptor drop, table games drop, gaming machine coin count, gaming machine currency acceptor count, and table games count. The AICPA’s “Audits of Casinos” Audit and Accounting Guide states that “observations of operations in the casino cage and count room should not be announced in advance * * *” For purposes of these procedures, “unannounced” means that no officers, directors, or employees are given advance information regarding the dates or times of such observations. The independent accountant should make arrangements with the gaming operation and Tribal gaming regulatory authority to ensure proper identification of the CPA’s personnel and to provide for their prompt access to the count rooms.
(1) The gaming machine coin count observation would include a weigh scale test of all denominations using pre-counted coin. The count would be in process when these tests are performed, and would be conducted prior to the commencement of any other walk-through procedures. For computerized weigh scales, the test can be conducted at the conclusion of the count, but before the final totals are generated.
(2) The checklists should provide for drop/count observations, inclusive of hard drop/count, soft drop/count and currency acceptor drop/count. The count room would not be entered until the count is in process and the CPA would not leave the room until the monies have been counted and verified to the count sheet by the CPA and accepted into accountability. If the drop teams are unaware of the drop observations and the count observations would be unexpected, the hard count and soft count rooms may be entered simultaneously. Additionally, if the gaming machine currency acceptor count begins immediately after the table games count in the same location, by the same count team, and using the same equipment, the currency acceptor count observation can be conducted on the same day as the table games count observation, provided the CPA remains until monies are transferred to the vault/cashier.
(B) Observations of the gaming operation’s employees as they perform their duties.
(C) Interviews with the gaming operation’s employees who perform the relevant procedures.
(D) Compliance testing of various documents relevant to the procedures. The scope of such testing should be indicated on the checklist where applicable.
(E) For new gaming operations that have been in operation for three months or less at the end of their business year, performance of this regulation, section 542.3(f), is not required for the partial period.
(2) Alternatively, at the discretion of the Tribe, the Tribe may engage an independent certified public accountant (CPA) to perform the testing, observations and procedures reflected in paragraphs (f)(1)(i), (ii), and (iii) of this section utilizing the Tribal internal control standards adopted by the Tribal gaming regulatory authority or Tribally approved variance that has received Commission concurrence. Accordingly, the CPA will verify compliance by the gaming operation with the Tribal internal control standards. Should the Tribe elect this alternative, as a prerequisite, the CPA will perform the following:
(i) The CPA shall compare the Tribal internal control standards to the MICS to ascertain whether the criteria set forth in the MICS or Commission approved variances are adequately addressed.
(ii) The CPA may utilize personnel of the Tribal gaming regulatory authority to cross-reference the Tribal internal control standards to the MICS, provided the CPA performs a review of the Tribal gaming regulatory authority personnel’s work and assumes complete responsibility for the proper completion of the work product.
(iii) The CPA shall report each procedure discovered by or brought to the CPA’s attention that the CPA believes does not satisfy paragraph (f)(2)(i) of this section.
(3) Reliance on Internal Auditors. (i) The CPA may rely on the work of an internal auditor, to the extent allowed by the professional standards, for the performance of the recommended procedures specified in paragraphs (f)(1)(iii)(B), (C), and (D) of this section, and for the completion of the checklists as they relate to the procedures covered therein provided that the internal audit department can demonstrate to the satisfaction of the CPA that the requirements contained within § 542.22, 542.32, or 542.42, as applicable, have been satisfied.
(ii) Agreed-upon procedures are to be performed by the CPA to determine that the internal audit procedures performed for a past 12-month period (includes two 6-month periods) encompassing a portion or all of the most recent business year has been properly completed. The CPA will apply the following Agreed-Upon Procedures to the gaming operation’s written assertion:
(A) Obtain internal audit department work-papers completed for a 12-month period (includes two 6-month periods) encompassing a portion or all of the most recent business year and determine whether the CPA NIGC MICS Compliance Checklists or other comparable testing procedures were included in the internal audit work-papers and all steps described in the checklists were initialed or signed by an internal audit representative.
(B) For the internal audit work-papers obtained in paragraph (f)(3)(ii)(A) of this section, on a sample basis, reperform the procedures included in CPA NIGC MICS Compliance Checklists or other comparable testing procedures prepared by internal audit and determine if all instances of noncompliance noted in the sample were documented as such by internal audit. The CPA NIGC MICS Compliance Checklists or other comparable testing procedures for the applicable Drop and Count procedures are not included in the sample reperformance of procedures because the CPA is required to perform the drop and count observations as required under paragraph (f)(1)(iii)(A) of this section of the Agreed-Upon Procedures. The CPA’s sample should comprise a minimum of 3 percent of the procedures required in each CPA NIGC MICS Compliance Checklist or other comparable testing procedures for the gaming machine and table game departments and 5 percent for the other departments completed by internal audit in compliance with the internal audit MICS. The reperformance of procedures is performed as follows:
(1) For inquiries, the CPA should either speak with the same individual or an individual of the same job position as the internal auditor did for the procedure indicated in their checklist.
(2) For observations, the CPA should observe the same process as the internal auditor did for the procedure as indicated in their checklist.
(3) For document testing, the CPA should look at the same original document as tested by the internal auditor for the procedure as indicated in their checklist. The CPA need only retest the minimum sample size required in the checklist.
(C) The CPA is to investigate and resolve any differences between their reperformance results and the internal audit results.
(D) Documentation is maintained for 5 years by the CPA indicating the procedures reperformed along with the results.
(E) When performing the procedures for paragraph (f)(3)(ii)(B) of this section in subsequent years, the CPA must select a different sample so that the CPA will reperform substantially all of the procedures after several years.
(F) Any additional procedures performed at the request of the Commission, the Tribal gaming regulatory authority or management should be included in the Agreed-Upon Procedures report transmitted to the Commission.
(4) Report Format. (i) The NIGC has concluded that the performance of these procedures is an attestation engagement in which the CPA applies such Agreed-Upon Procedures to the gaming operation’s assertion that it is in compliance with the MICS and, if applicable under paragraph (f)(2) of this section, the Tribal internal control standards and approved variances, provide a level of control that equals or exceeds that of the MICS. Accordingly, the Statements on Standards for Attestation Engagements (SSAE’s), specifically SSAE 10, issued by the Auditing Standards Board is currently applicable. SSAE 10 provides current, pertinent guidance regarding agreed-upon procedure engagements, and the sample report formats included within those standards should be used, as appropriate, in the preparation of the CPA’s agreed-upon procedures report. If future revisions are made to this standard or new SSAEs are adopted that are applicable to this type of engagement, the CPA is to comply with any revised professional standards in issuing their agreed upon procedures report. The Commission will provide an Example Report and Letter Formats upon request that may be used and contain all of the information discussed below:
(A) The report must describe all instances of procedural noncompliance regardless of materiality) with the MICS or approved variations, and all instances where the Tribal gaming regulatory authority’s regulations do not comply with the MICS. When describing the agreed-upon procedures performed, the CPA should also indicate whether procedures performed by other individuals were utilized to substitute for the procedures required to be performed by the CPA. For each instance of noncompliance noted in the CPA’s agreed-upon procedures report, the following information must be included:
(1) The citation of the applicable MICS for which the instance of noncompliance was noted.
(2) A narrative description of the noncompliance, including the number of exceptions and sample size tested.
(5) Report Submission Requirements. (i) The CPA shall prepare a report of the findings for the Tribe and management. The Tribe shall submit 2 copies of the report to the Commission no later than 120 days after the gaming operation’s business year. This report should be provided in addition to any other reports required to be submitted to the Commission.
(ii) The CPA should maintain the work-papers supporting the report for a minimum of five years. Digital storage is acceptable. The Commission may request access to these work-papers, through the Tribe.
(6) CPA NIGC MICS Compliance Checklists. In connection with the CPA testing pursuant to this section and as referenced therein, the Commission will provide CPA MICS Compliance Checklists upon request.
(g) Enforcement of Commission Minimum Internal Control Standards. (1) Each Tribal gaming regulatory authority is required to establish and implement internal control standards pursuant to paragraph (c) of this section. Each gaming operation is then required, pursuant to paragraph (d) of this section, to develop and implement an internal control system that complies with the Tribal internal control standards. Failure to do so may subject the Tribal operator of the gaming operation, and/or the management contractor, to penalties under 25 U.S.C. 2713.
(2) Recognizing that Tribes are the primary regulator of their gaming operation(s), enforcement action by the Commission will not be initiated under this part without first informing the Tribe and Tribal gaming regulatory authority of deficiencies in the internal controls of its gaming operation and allowing a reasonable period of time to address such deficiencies. Such prior notice and opportunity for corrective action is not required where the threat to the integrity of the gaming operation is immediate and severe.
§ 542.4 How do these regulations affect minimum internal control standards established in a Tribal-State compact?
(a) If there is a direct conflict between an internal control standard established in a Tribal-State compact and a standard or requirement set forth in this part, then the internal control standard established in a Tribal-State compact shall prevail.
(b) If an internal control standard in a Tribal-State compact provides a level of control that equals or exceeds the level of control under an internal control standard or requirement set forth in this part, then the Tribal-State compact standard shall prevail.
(c) If an internal control standard or a requirement set forth in this part provides a level of control that exceeds the level of control under an internal control standard established in a Tribal-State compact, then the internal control standard or requirement set forth in this part shall prevail.
§ 542.5 How do these regulations affect state jurisdiction?
Nothing in this part shall be construed to grant to a state jurisdiction in class II gaming or extend a state’s jurisdiction in class III gaming.
§ 542.6 Does this part apply to small and charitable gaming operations?
(a) Small gaming operations. This part shall not apply to small gaming operations provided that:
(1) The Tribal gaming regulatory authority permits the operation to be exempt from this part;
(2) The annual gross gaming revenue of the operation does not exceed $1 million; and
(3) The Tribal gaming regulatory authority develops and the operation complies with alternate procedures that:
(i) Protect the integrity of games offered; and
(ii) Safeguard the assets used in connection with the operation.
(b) Charitable gaming operations. This part shall not apply to charitable gaming operations provided that:
(1) All proceeds are for the benefit of a charitable organization;
(2) The Tribal gaming regulatory authority permits the charitable organization to be exempt from this part;
(3) The charitable gaming operation is operated wholly by the charitable organization’s employees or volunteers;
(4) The annual gross gaming revenue of the charitable gaming operation does not exceed $100,000;
(i) Where the annual gross gaming revenues of the charitable gaming operation exceed $100,000, but are less than $1 million, paragraph (a) of this section shall also apply; and
(ii) [Reserved]
(5) The Tribal gaming regulatory authority develops and the charitable gaming operation complies with alternate procedures that:
(i) Protect the integrity of the games offered; and
(ii) Safeguard the assets used in connection with the gaming operation.
(c) Independent operators. Nothing in this section shall exempt gaming operations conducted by independent operators for the benefit of a charitable organization.
§ 542.7 [Reserved]
§ 542.8 What are the minimum internal control standards for pull tabs?
(a) Computer applications. For any computer application utilized, alternate documentation and/or procedures that provide at least the level of control described by the standards in this section, as approved by the Tribal gaming regulatory authority, will be acceptable.
(b) Pull tab inventory. (1) Pull tab inventory (including unused tickets) shall be controlled to assure the integrity of the pull tabs.
(2) Purchased pull tabs shall be inventoried and secured by a person or persons independent of the pull tab sales.
(3) The issue of pull tabs to the cashier or sales location shall be documented and signed for by the person responsible for inventory control and the cashier. The document log shall include the serial number of the pull tabs issued.
(4) Appropriate documentation shall be given to the redemption booth for purposes of determining if the winner purchased the pull tab from the pull tabs issued by the gaming operation. Electronic verification satisfies this requirement.
(5) At the end of each month, a person or persons independent of pull tab sales and inventory control shall verify the accuracy of the ending balance in the pull tab control by reconciling the pull tabs on hand.
(6) A monthly comparison for reasonableness shall be made of the amount of pull tabs sold from the pull tab control log to the amount of revenue recognized.
(c) Access. Access to pull tabs shall be restricted to authorized persons.
(d) Transfers. Transfers of pull tabs from storage to the sale location shall be secured and independently controlled.
(e) Winning pull tabs. (1) Winning pull tabs shall be verified and paid as follows:
(i) Payouts in excess of a dollar amount determined by the gaming operation, as approved by the Tribal gaming regulatory authority, shall be verified by at least two employees.
(ii) Total payout shall be computed and recorded by shift.
(iii) The winning pull tabs shall be voided so that they cannot be presented for payment again.
(2) Personnel independent of pull tab operations shall verify the amount of winning pull tabs redeemed each day.
(f) Accountability form. (1) All funds used to operate the pull tab game shall be recorded on an accountability form.
(2) All funds used to operate the pull tab game shall be counted independently by at least two persons and reconciled to the recorded amounts at the end of each shift or session. Unverified transfers of cash and/or cash equivalents are prohibited.
(g) Standards for statistical reports. (1) Records shall be maintained, which include win, write (sales), and a win-to-write hold percentage as compared to the theoretical hold percentage derived from the flare, for each deal or type of game, for:
(i) Each shift;
(ii) Each day;
(iii) Month-to-date; and
(iv) Year-to-date or fiscal year-to-date as applicable.
(2) A manager independent of the pull tab operations shall review statistical information at least on a monthly basis and shall investigate any large or unusual statistical fluctuations. These investigations shall be documented, maintained for inspection, and provided to the Tribal gaming regulatory authority upon request.
(3) Each month, the actual hold percentage shall be compared to the theoretical hold percentage. Any significant variations (3%) shall be investigated.
(h) Electronic equipment. (1) If the gaming operation utilizes electronic equipment in connection with the play of pull tabs, then the following standards shall also apply.
(i) If the electronic equipment contains a bill acceptor, then § 542.21(e) and (f), § 542.31(e) and (f), or § 542.41(e) and (f) (as applicable) shall apply.
(ii) If the electronic equipment uses a bar code or microchip reader, the reader shall be tested periodically to determine that it is correctly reading the bar code or microchip.
(iii) If the electronic equipment returns a voucher or a payment slip to the player, then § 542.13(n)(as applicable) shall apply.
(iv) If the electronic equipment utilizes patron account access cards for activation of play, then § 542.13(o) (as applicable) shall apply.
(2) [Reserved]
§ 542.9 What are the minimum internal control standards for card games?
(a) Computer applications. For any computer applications utilized, alternate documentation and/or procedures that provide at least the level of control described by the standards in this section, as approved by the Tribal gaming regulatory authority, will be acceptable.
(b) Standards for drop and count. The procedures for the collection of the card game drop and the count thereof shall comply with § 542.21, § 542.31, or § 542.41 (as applicable).
(c) Standards for supervision. (1) Supervision shall be provided at all times the card room is in operation by personnel with authority equal to or greater than those being supervised.
(2) Exchanges between table banks and the main card room bank (or cage, if a main card room bank is not used) in excess of $100.00 shall be authorized by a supervisor. All exchanges shall be evidenced by the use of a lammer unless the exchange of chips, tokens, and/or cash takes place at the table.
(3) Exchanges from the main card room bank (or cage, if a main card room bank is not used) to the table banks shall be verified by the card room dealer and the runner.
(4) If applicable, transfers between the main card room bank and the cage shall be properly authorized and documented.
(5) A rake collected or ante placed shall be done in accordance with the posted rules.
(d) Standards for playing cards. (1) Playing cards shall be maintained in a secure location to prevent unauthorized access and to reduce the possibility of tampering.
(2) Used cards shall be maintained in a secure location until marked, scored, or destroyed, in a manner approved by the Tribal gaming regulatory authority, to prevent unauthorized access and reduce the possibility of tampering.
(3) The Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with a reasonable time period, which shall not exceed seven (7) days, within which to mark, cancel, or destroy cards from play.
(i) This standard shall not apply where playing cards are retained for an investigation.
(ii) [Reserved]
(4) A card control log shall be maintained that documents when cards and dice are received on site, distributed to and returned from tables and removed from play by the gaming operation.
(e) Plastic cards. Notwithstanding paragraph (d) of this section, if a gaming operation uses plastic cards (not plastic-coated cards), the cards may be used for up to three (3) months if the plastic cards are routinely inspected, and washed or cleaned in a manner and time frame approved by the Tribal gaming regulatory authority.
(f) Standards for shills. (1) Issuance of shill funds shall have the written approval of the supervisor.
(2) Shill returns shall be recorded and verified on the shill sign-out form.
(3) The replenishment of shill funds shall be documented.
(g) Standards for reconciliation of card room bank. (1) The amount of the main card room bank shall be counted, recorded, and reconciled on at least a per shift basis.
(2) At least once per shift, the table banks that were opened during that shift shall be counted, recorded, and reconciled by a dealer or other person, and a supervisor, and shall be attested to by their signatures on the check-out form.
(h) Standards for promotional progressive pots and pools. (1) All funds contributed by players into the pools shall be returned when won in accordance with the posted rules with no commission or administrative fee withheld.
(2) Rules governing promotional pools shall be conspicuously posted and designate:
(i) The amount of funds to be contributed from each pot;
(ii) What type of hand it takes to win the pool (e.g., what constitutes a “bad beat”);
(iii) How the promotional funds will be paid out;
(iv) How/when the contributed funds are added to the jackpots; and
(v) Amount/percentage of funds allocated to primary and secondary jackpots, if applicable.
(3) Promotional pool contributions shall not be placed in or near the rake circle, in the drop box, or commingled with gaming revenue from card games or any other gambling game.
(4) The amount of the jackpot shall be conspicuously displayed in the card room.
(5) At least once a day, the posted pool amount shall be updated to reflect the current pool amount.
(6) At least once a day, increases to the posted pool amount shall be reconciled to the cash previously counted or received by the cage by personnel independent of the card room.
(7) All decreases to the pool must be properly documented, including a reason for the decrease.
(i) Promotional progressive pots and pools where funds are displayed in the card room. (1) Promotional funds displayed in the card room shall be placed in a locked container in plain view of the public.
(2) Persons authorized to transport the locked container shall be precluded from having access to the contents keys.
(3) The contents key shall be maintained by personnel independent of the card room.
(4) At least once a day, the locked container shall be removed by two persons, one of whom is independent of the card games department, and transported directly to the cage or other secure room to be counted, recorded, and verified.
(5) The locked container shall then be returned to the card room where the posted pool amount shall be updated to reflect the current pool amount.
(j) Promotional progressive pots and pools where funds are maintained in the cage. (1) Promotional funds removed from the card game shall be placed in a locked container.
(2) Persons authorized to transport the locked container shall be precluded from having access to the contents keys.
(3) The contents key shall be maintained by personnel independent of the card room.
(4) At least once a day, the locked container shall be removed by two persons, one of whom is independent of the card games department, and transported directly to the cage or other secure room to be counted, recorded, and verified, prior to accepting the funds into cage accountability.
(5) The posted pool amount shall then be updated to reflect the current pool amount.
§ 542.10 What are the minimum internal control standards for keno?
(a) Computer applications. For any computer applications utilized, alternate documentation and/or procedures that provide at least the level of control described by the standards in this section, as approved by the Tribal gaming regulatory authority, will be acceptable.
(b) Game play standards. (1) The computerized customer ticket shall include the date, game number, ticket sequence number, station number, and conditioning (including multi-race if applicable).
(2) The information on the ticket shall be recorded on a restricted transaction log or computer storage media concurrently with the generation of the ticket.
(3) Keno personnel shall be precluded from having access to the restricted transaction log or computer storage media.
(4) When it is necessary to void a ticket, the void information shall be inputted in the computer and the computer shall document the appropriate information pertaining to the voided wager (e.g., void slip is issued or equivalent documentation is generated).
(5) Controls shall exist to prevent the writing and voiding of tickets after a game has been closed and after the number selection process for that game has begun.
(6) The controls in effect for tickets prepared in outstations (if applicable) shall be identical to those in effect for the primary keno game.
(c) Rabbit ear or wheel system. (1) The following standards shall apply if a rabbit ear or wheel system is utilized:
(i) A dedicated camera shall be utilized to monitor the following both prior to, and subsequent to, the calling of a game:
(A) Empty rabbit ears or wheel;
(B) Date and time;
(C) Game number; and
(D) Full rabbit ears or wheel.
(ii) The film of the rabbit ears or wheel shall provide a legible identification of the numbers on the balls drawn.
(iii) Keno personnel shall immediately input the selected numbers in the computer and the computer shall document the date, the game number, the time the game was closed, and the numbers drawn.
(iv) The Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with procedures that prevent unauthorized access to keno balls in play.
(v) Back-up keno ball inventories shall be secured in a manner to prevent unauthorized access.
(vi) The Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with procedures for inspecting new keno balls put into play as well as for those in use.
(2) [Reserved]
(d) Random number generator. (1) The following standards shall apply if a random number generator is utilized:
(i) The random number generator shall be linked to the computer system and shall directly relay the numbers selected into the computer without manual input.
(ii) Keno personnel shall be precluded from access to the random number generator.
(2) [Reserved]
(e) Winning tickets. Winning tickets shall be verified and paid as follows:
(1) The sequence number of tickets presented for payment shall be inputted into the computer, and the payment amount generated by the computer shall be given to the customer.
(2) The Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with procedures that preclude payment on tickets previously presented for payment, unclaimed winning tickets (sleepers) after a specified period of time, voided tickets, and tickets that have not been issued yet.
(3) All payouts shall be supported by the customer (computer-generated) copy of the winning ticket (payout amount is indicated on the customer ticket or a payment slip is issued).
(4) A manual report or other documentation shall be produced and maintained documenting any payments made on tickets that are not authorized by the computer.
(5) Winning tickets over a specified dollar amount (not to exceed $10,000 for locations with more than $5 million annual keno write and $3,000 for all other locations) shall also require the following:
(i) Approval of management personnel independent of the keno department, evidenced by their signature;
(ii) Review of the video recording and/or digital record of the rabbit ears or wheel to verify the legitimacy of the draw and the accuracy of the draw ticket (for rabbit ear or wheel systems only);
(iii) Comparison of the winning customer copy to the computer reports;
(iv) Regrading of the customer copy using the payout schedule and draw information; and
(v) Documentation and maintenance of the procedures in this paragraph.
(6) When the keno game is operated by one person, all winning tickets in excess of an amount to be determined by management (not to exceed $1,500) shall be reviewed and authorized by a person independent of the keno department.
(f) Check out standards at the end of each keno shift. (1) For each writer station, a cash summary report (count sheet) shall be prepared that includes:
(i) Computation of net cash proceeds for the shift and the cash turned in; and
(ii) Signatures of two employees who have verified the net cash proceeds for the shift and the cash turned in. Unverified transfers of cash and/or cash equivalents are prohibited.
(2) [Reserved]
(g) Promotional payouts or awards. (1) If a gaming operation offers promotional payouts or awards, the payout form/documentation shall include the following information:
(i) Date and time;
(ii) Dollar amount of payout or description of personal property (e.g., jacket, toaster, car, etc.), including fair market value;
(iii) Type of promotion; and
(iv) Signature of at least one employee authorizing and completing the transaction.
(2) [Reserved]
(h) Standards for statistical reports. (1) Records shall be maintained that include win and write by individual writer for each day.
(2) Records shall be maintained that include win, write, and win-to-write hold percentage for:
(i) Each shift;
(ii) Each day;
(iii) Month-to-date; and
(iv) Year-to-date or fiscal year-to-date as applicable.
(3) A manager independent of the keno department shall review keno statistical data at least on a monthly basis and investigate any large or unusual statistical variances.
(4) At a minimum, investigations shall be performed for statistical percentage fluctuations from the base level for a month in excess of ±3%. The base level shall be defined as the gaming operation’s win percentage for the previous business year or the previous twelve (12) months.
(5) Such investigations shall be documented, maintained for inspection, and provided to the Tribal gaming regulatory authority upon request.
(i) System security standards. (1) All keys (including duplicates) to sensitive computer hardware in the keno area shall be maintained by a department independent of the keno function.
(2) Personnel independent of the keno department shall be required to accompany such keys to the keno area and shall observe changes or repairs each time the sensitive areas are accessed.
(j) Documentation standards. (1) Adequate documentation of all pertinent keno information shall be generated by the computer system.
(2) This documentation shall be restricted to authorized personnel.
(3) The documentation shall include, at a minimum:
(i) Ticket information (as described in paragraph (b)(1) of this section);
(ii) Payout information (date, time, ticket number, amount, etc.);
(iii) Game information (number, ball draw, time, etc.);
(iv) Daily recap information, including:
(A) Write;
(B) Payouts; and
(C) Gross revenue (win);
(v) System exception information, including:
(A) Voids;
(B) Late pays; and
(C) Appropriate system parameter information (e.g., changes in pay tables, ball draws, payouts over a predetermined amount, etc.); and
(vi) Personnel access listing, including:
(A) Employee name or employee identification number; and
(B) Listing of functions employee can perform or equivalent means of identifying same.
(k) Keno audit standards. (1) The keno audit function shall be independent of the keno department.
(2) At least annually, keno audit shall foot the write on the restricted copy of the keno transaction report for a minimum of one shift and compare the total to the total as documented by the computer.
(3) For at least one shift every other month, keno audit shall perform the following:
(i) Foot the customer copy of the payouts and trace the total to the payout report; and
(ii) Regrade at least 1% of the winning tickets using the payout schedule and draw ticket.
(4) Keno audit shall perform the following:
(i) For a minimum of five games per week, compare the video recording and/or digital record of the rabbit ears or wheel to the computer transaction summary;
(ii) Compare net cash proceeds to the audited win/loss by shift and investigate any large cash overages or shortages (i.e., in excess of $25.00);
(iii) Review and regrade all winning tickets greater than or equal to $1,500, including all forms that document that proper authorizations and verifications were obtained and performed;
(iv) Review the documentation for payout adjustments made outside the computer and investigate large and frequent payments;
(v) Review personnel access listing for inappropriate functions an employee can perform;
(vi) Review system exception information on a daily basis for propriety of transactions and unusual occurrences including changes to the personnel access listing;
(vii) If a random number generator is used, then at least weekly review the numerical frequency distribution for potential patterns; and
(viii) Investigate and document results of all noted improper transactions or unusual occurrences.
(5) When the keno game is operated by one person:
(i) The customer copies of all winning tickets in excess of $100 and at least 5% of all other winning tickets shall be regraded and traced to the computer payout report;
(ii) The video recording and/or digital record of rabbit ears or wheel shall be randomly compared to the computer game information report for at least 10% of the games during the shift; and
(iii) Keno audit personnel shall review winning tickets for proper authorization pursuant to paragraph (e)(6) of this section.
(6) In the event any person performs the writer and deskman functions on the same shift, the procedures described in paragraphs (k)(5)(i) and (ii) of this section (using the sample sizes indicated) shall be performed on tickets written by that person.
(7) Documentation (e.g., a log, checklist, etc.) that evidences the performance of all keno audit procedures shall be maintained.
(8) A manager independent of the keno department shall review keno audit exceptions, and perform and document investigations into unresolved exceptions. These investigations shall be documented, maintained for inspection, and provided to the Tribal gaming regulatory authority upon request.
(9) When a multi-game ticket is part of the sample in paragraphs (k)(3)(ii), (k)(5)(i) and (k)(6) of this section, the procedures may be performed for ten (10) games or ten percent (10%) of the games won, whichever is greater.
(l) Access. Access to the computer system shall be adequately restricted (i.e., passwords are changed at least quarterly, access to computer hardware is physically restricted, etc.).
(m) Equipment standards. (1) There shall be effective maintenance planned to service keno equipment, including computer program updates, hardware servicing, and keno ball selection equipment (e.g., service contract with lessor).
(2) Keno equipment maintenance (excluding keno balls) shall be independent of the operation of the keno game.
(3) Keno maintenance personnel shall report irregularities to management personnel independent of the keno department.
(4) If the gaming operation utilizes a barcode or microchip reader in connection with the play of keno, the reader shall be tested at least annually by personnel independent of the keno department to determine that it is correctly reading the barcode or microchip.
(n) Document retention. (1) All documents (including computer storage media) discussed in this section shall be retained for five (5) years, except for the following, which shall be retained for at least seven (7) days:
(i) Video recordings and/or digital records of rabbit ears or wheel;
(ii) All copies of winning keno tickets of less than $1,500.00.
(2) [Reserved]
(o) Multi-race tickets. (1) Procedures shall be established to notify keno personnel immediately of large multi-race winners to ensure compliance with standards in paragraph (e)(5) of this section.
(2) Procedures shall be established to ensure that keno personnel are aware of multi-race tickets still in process at the end of a shift.
(p) Manual keno. For gaming operations that conduct manual keno games, alternate procedures that provide at least the level of control described by the standards in this section shall be developed and implemented.
§ 542.11 What are the minimum internal control standards for pari-mutuel wagering?
(a) Exemptions. (1) The requirements of this section shall not apply to gaming operations who house pari-mutuel wagering operations conducted entirely by a state licensed simulcast service provider pursuant to an approved tribal-state compact if:
(i) The simulcast service provider utilizes its own employees for all aspects of the pari-mutuel wagering operation;
(ii) The gaming operation posts, in a location visible to the public, that the simulcast service provider and its employees are wholly responsible for the conduct of pari-mutuel wagering offered at that location;
(iii) The gaming operation receives a predetermined fee from the simulcast service provider; and
(iv) In addition, the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with standards that ensure that the gaming operation receives, from the racetrack, its contractually guaranteed percentage of the handle.
(2) Gaming operations that contract directly with a state regulated racetrack as a simulcast service provider, but whose on-site pari-mutuel operations are conducted wholly or in part by tribal gaming operation employees, shall not be required to comply with paragraphs (h)(5) thru (h)(9) of this section.
(i) If any standard contained within this section conflicts with state law, a tribal-state compact, or a contract, then the gaming operation shall document the basis for noncompliance and shall maintain such documentation for inspection by the Tribal gaming regulatory authority and the Commission.
(ii) In addition, the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with standards that ensure that the gaming operation receives, from the racetrack, its contractually guaranteed percentage of the handle.
(b) Computer applications. For any computer applications utilized, alternate documentation and/or procedures that provide at least the level of control described by the standards in this section, as approved by the Tribal gaming regulatory authority, will be acceptable.
(c) Betting ticket and equipment standards. (1) All pari-mutuel wagers shall be transacted through the pari-mutuel satellite system. In case of computer failure between the pari-mutuel book and the hub, no tickets shall be manually written.
(2) Whenever a betting station is opened for wagering or turned over to a new writer/cashier, the writer/cashier shall sign on and the computer shall document gaming operation name (or identification number), station number, the writer/cashier identifier, and the date and time.
(3) A betting ticket shall consist of at least two parts:
(i) An original, which shall be transacted and issued through a printer and given to the customer; and
(ii) A copy that shall be recorded concurrently with the generation of the original ticket either on paper or other storage media (e.g., tape or diskette).
(4) Upon accepting a wager, the betting ticket that is created shall contain the following:
(i) A unique transaction identifier;
(ii) Gaming operation name (or identification number) and station number;
(iii) Race track, race number, horse identification or event identification, as applicable;
(iv) Type of bet(s), each bet amount, total number of bets, and total take; and
(v) Date and time.
(5) All tickets shall be considered final at post time.
(6) If a gaming operation voids a betting ticket written prior to post time, it shall be immediately entered into the system.
(7) Future wagers shall be accepted and processed in the same manner as regular wagers.
(d) Payout standards. (1) Prior to making payment on a ticket, the writer/cashier shall input the ticket for verification and payment authorization.
(2) The computer shall be incapable of authorizing payment on a ticket that has been previously paid, a voided ticket, a losing ticket, or an unissued ticket.
(e) Checkout standards. (1) Whenever the betting station is closed or the writer/cashier is replaced, the writer/cashier shall sign off and the computer shall document the gaming operation name (or identification number), station number, the writer/cashier identifier, the date and time, and cash balance.
(2) For each writer/cashier station a summary report shall be completed at the conclusion of each shift including:
(i) Computation of cash turned in for the shift; and
(ii) Signature of two employees who have verified the cash turned in for the shift. Unverified transfers of cash and/or cash equivalents are prohibited.
(f) Employee wagering. Pari-mutuel employees shall be prohibited from wagering on race events while on duty, including during break periods.
(g) Computer reports standards. (1) Adequate documentation of all pertinent pari-mutuel information shall be generated by the computer system.
(2) This documentation shall be restricted to authorized personnel.
(3) The documentation shall be created for each day’s operation and shall include, but is not limited to:
(i) Unique transaction identifier;
(ii) Date/time of transaction;
(iii) Type of wager;
(iv) Animal identification or event identification;
(v) Amount of wagers (by ticket, writer/SAM, track/event, and total);
(vi) Amount of payouts (by ticket, writer/SAM, track/event, and total);
(vii) Tickets refunded (by ticket, writer, track/event, and total);
(viii) Unpaid winners/vouchers (“outs”) (by ticket/voucher, track/event, and total);
(ix) Voucher sales/payments (by ticket, writer/SAM, and track/event);
(x) Voids (by ticket, writer, and total);
(xi) Future wagers (by ticket, date of event, total by day, and total at the time of revenue recognition);
(xii) Results (winners and payout data);
(xiii) Breakage data (by race and track/event);
(xiv) Commission data (by race and track/event); and
(xv) Purged data (by ticket and total).
(4) The system shall generate the following reports:
(i) A reconciliation report that summarizes totals by track/event, including write, the day’s winning ticket total, total commission and breakage due the gaming operation, and net funds transferred to or from the gaming operation’s bank account;
(ii) An exception report that contains a listing of all system functions and overrides not involved in the actual writing or cashing of tickets, including sign-on/off, voids, and manually input paid tickets; and
(iii) A purged ticket report that contains a listing of the unique transaction identifier(s), description, ticket cost and value, and date purged.
(h) Accounting and auditing functions. A gaming operation shall perform the following accounting and auditing functions:
(1) The parimutuel audit shall be conducted by personnel independent of the parimutuel operation.
(2) Documentation shall be maintained evidencing the performance of all parimutuel accounting and auditing procedures.
(3) An accounting employee shall review handle, commission, and breakage for each day’s play and recalculate the net amount due to or from the systems operator on a weekly basis.
(4) The accounting employee shall verify actual cash/cash equivalents turned in to the system’s summary report for each cashier’s drawer (Beginning balance, (+) fills (draws), (+) net write (sold less voids), (−) payouts (net of IRS withholding), (−) cashbacks (paids), (=) cash turn-in).
(5) An accounting employee shall produce a gross revenue recap report to calculate gross revenue for each day’s play and for a month-to-date basis, including the following totals:
(i) Commission;
(ii) Positive breakage;
(iii) Negative breakage;
(iv) Track/event fees;
(v) Track/event fee rebates; and
(vi) Purged tickets.
(6) All winning tickets and vouchers shall be physically removed from the SAM’s for each day’s play.
(7) In the event a SAM does not balance for a day’s play, the auditor shall perform the following procedures:
(i) Foot the winning tickets and vouchers deposited and trace to the totals of SAM activity produced by the system;
(ii) Foot the listing of cashed vouchers and trace to the totals produced by the system;
(iii) Review all exceptions for propriety of transactions and unusual occurrences;
(iv) Review all voids for propriety;
(v) Verify the results as produced by the system to the results provided by an independent source;
(vi) Regrade 1% of paid (cashed) tickets to ensure accuracy and propriety; and
(vii) When applicable, reconcile the totals of future tickets written to the totals produced by the system for both earned and unearned take, and review the reports to ascertain that future wagers are properly included on the day of the event.
(8) At least annually, the auditor shall foot the wagers for one day and trace to the total produced by the system.
(9) At least one day per quarter, the auditor shall recalculate and verify the change in the unpaid winners to the total purged tickets.
§ 542.12 What are the minimum internal control standards for table games?
(a) Computer applications. For any computer applications utilized, alternate documentation and/or procedures that provide at least the level of control described by the standards in this section, as approved by the Tribal gaming regulatory authority, will be acceptable.
(b) Standards for drop and count. The procedures for the collection of the table game drop and the count thereof shall comply with § 542.21, § 542.31, or § 542.41 (as applicable).
(c) Fill and credit standards. (1) Fill slips and credit slips shall be in at least triplicate form, and in a continuous, prenumbered series. Such slips shall be concurrently numbered in a form utilizing the alphabet and only in one series at a time. The alphabet need not be used if the numerical series is not repeated during the business year.
(2) Unissued and issued fill/credit slips shall be safeguarded and adequate procedures shall be employed in their distribution, use, and control. Personnel from the cashier or pit departments shall have no access to the secured (control) copies of the fill/credit slips.
(3) When a fill/credit slip is voided, the cashier shall clearly mark “void” across the face of the original and first copy, the cashier and one other person independent of the transactions shall sign both the original and first copy, and shall submit them to the accounting department for retention and accountability.
(4) Fill transactions shall be authorized by pit supervisory personnel before the issuance of fill slips and transfer of chips, tokens, or cash equivalents. The fill request shall be communicated to the cage where the fill slip is prepared.
(5) At least three parts of each fill slip shall be utilized as follows:
(i) One part shall be transported to the pit with the fill and, after the appropriate signatures are obtained, deposited in the table game drop box;
(ii) One part shall be retained in the cage for reconciliation of the cashier bank; and
(iii) For computer systems, one part shall be retained in a secure manner to insure that only authorized persons may gain access to it. For manual systems, one part shall be retained in a secure manner in a continuous unbroken form.
(6) For Tier C gaming operations, the part of the fill slip that is placed in the table game drop box shall be of a different color for fills than for credits, unless the type of transaction is clearly distinguishable in another manner (the checking of a box on the form shall not be a clearly distinguishable indicator).
(7) The table number, shift, and amount of fill by denomination and in total shall be noted on all copies of the fill slip. The correct date and time shall be indicated on at least two copies.
(8) All fills shall be carried from the cashier’s cage by a person who is independent of the cage or pit.
(9) The fill slip shall be signed by at least the following persons (as an indication that each has counted the amount of the fill and the amount agrees with the fill slip):
(i) Cashier who prepared the fill slip and issued the chips, tokens, or cash equivalent;
(ii) Runner who carried the chips, tokens, or cash equivalents from the cage to the pit;
(iii) Dealer or boxperson who received the chips, tokens, or cash equivalents at the gaming table; and
(iv) Pit supervisory personnel who supervised the fill transaction.
(10) Fills shall be broken down and verified by the dealer or boxperson in public view before the dealer or boxperson places the fill in the table tray.
(11) A copy of the fill slip shall then be deposited into the drop box on the table by the dealer, where it shall appear in the soft count room with the cash receipts for the shift.
(12) Table credit transactions shall be authorized by a pit supervisor before the issuance of credit slips and transfer of chips, tokens, or other cash equivalent. The credit request shall be communicated to the cage where the credit slip is prepared.
(13) At least three parts of each credit slip shall be utilized as follows:
(i) Two parts of the credit slip shall be transported by the runner to the pit. After signatures of the runner, dealer, and pit supervisor are obtained, one copy shall be deposited in the table game drop box and the original shall accompany transport of the chips, tokens, markers, or cash equivalents from the pit to the cage for verification and signature of the cashier.
(ii) For computer systems, one part shall be retained in a secure manner to insure that only authorized persons may gain access to it. For manual systems, one part shall be retained in a secure manner in a continuous unbroken form.
(14) The table number, shift, and the amount of credit by denomination and in total shall be noted on all copies of the credit slip. The correct date and time shall be indicated on at least two copies.
(15) Chips, tokens, and/or cash equivalents shall be removed from the table tray by the dealer or boxperson and shall be broken down and verified by the dealer or boxperson in public view prior to placing them in racks for transfer to the cage.
(16) All chips, tokens, and cash equivalents removed from the tables and markers removed from the pit shall be carried to the cashier’s cage by a person who is independent of the cage or pit.
(17) The credit slip shall be signed by at least the following persons (as an indication that each has counted or, in the case of markers, reviewed the items transferred):
(i) Cashier who received the items transferred from the pit and prepared the credit slip;
(ii) Runner who carried the items transferred from the pit to the cage;
(iii) Dealer who had custody of the items prior to transfer to the cage; and
(iv) Pit supervisory personnel who supervised the credit transaction.
(18) The credit slip shall be inserted in the drop box by the dealer.
(19) Chips, tokens, or other cash equivalents shall be deposited on or removed from gaming tables only when accompanied by the appropriate fill/credit or marker transfer forms.
(20) Cross fills (the transfer of chips between table games) and even cash exchanges are prohibited in the pit.
(d) Table inventory forms. (1) At the close of each shift, for those table banks that were opened during that shift:
(i) The table’s chip, token, coin, and marker inventory shall be counted and recorded on a table inventory form; or
(ii) If the table banks are maintained on an imprest basis, a final fill or credit shall be made to bring the bank back to par.
(2) If final fills are not made, beginning and ending inventories shall be recorded on the master game sheet for shift win calculation purposes.
(3) The accuracy of inventory forms prepared at shift end shall be verified by the outgoing pit supervisor and the dealer. Alternatively, if the dealer is not available, such verification may be provided by another pit supervisor or another supervisor from another gaming department. Verifications shall be evidenced by signature on the inventory form.
(4) If inventory forms are placed in the drop box, such action shall be performed by a person other than a pit supervisor.
(e) Table games computer generated documentation standards. (1) The computer system shall be capable of generating adequate documentation of all information recorded on the source documents and transaction detail (e.g., fill/credit slips, markers, etc.).
(2) This documentation shall be restricted to authorized personnel.
(3) The documentation shall include, at a minimum:
(i) System exception information (e.g., appropriate system parameter information, corrections, voids, etc.); and
(ii) Personnel access listing, which includes, at a minimum:
(A) Employee name or employee identification number (if applicable); and
(B) Listing of functions employees can perform or equivalent means of identifying the same.
(f) Standards for playing cards and dice. (1) Playing cards and dice shall be maintained in a secure location to prevent unauthorized access and to reduce the possibility of tampering.
(2) Used cards and dice shall be maintained in a secure location until marked, scored, or destroyed, in a manner as approved by the Tribal gaming regulatory authority, to prevent unauthorized access and reduce the possibility of tampering.
(3) The Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with a reasonable time period, which shall not exceed seven (7) days, within which to mark, cancel, or destroy cards and dice from play.
(i) This standard shall not apply where playing cards or dice are retained for an investigation.
(ii) [Reserved]
(4) A card control log shall be maintained that documents when cards and dice are received on site, distributed to and returned from tables and removed from play by the gaming operation.
(g) Plastic cards. Notwithstanding paragraph (f) of this section, if a gaming operation uses plastic cards (not plastic-coated cards), the cards may be used for up to three (3) months if the plastic cards are routinely inspected, and washed or cleaned in a manner and time frame approved by the Tribal gaming regulatory authority.
(h) Standards for supervision. Pit supervisory personnel (with authority equal to or greater than those being supervised) shall provide supervision of all table games.
(i) Analysis of table game performance standards. (1) Records shall be maintained by day and shift indicating any single-deck blackjack games that were dealt for an entire shift.
(2) Records reflecting hold percentage by table and type of game shall be maintained by shift, by day, cumulative month-to-date, and cumulative year-to-date.
(3) This information shall be presented to and reviewed by management independent of the pit department on at least a monthly basis.
(4) The management in paragraph (i)(3) of this section shall investigate any unusual fluctuations in hold percentage with pit supervisory personnel.
(5) The results of such investigations shall be documented, maintained for inspection, and provided to the Tribal gaming regulatory authority upon request.
(j) Accounting/auditing standards. (1) The accounting and auditing procedures shall be performed by personnel who are independent of the transactions being audited/accounted for.
(2) If a table game has the capability to determine drop (e.g., bill-in/coin-drop meters, bill acceptor, computerized record, etc.) the dollar amount of the drop shall be reconciled to the actual drop by shift.
(3) Accounting/auditing employees shall review exception reports for all computerized table games systems at least monthly for propriety of transactions and unusual occurrences.
(4) All noted improper transactions or unusual occurrences shall be investigated with the results documented.
(5) Evidence of table games auditing procedures and any follow-up performed shall be documented, maintained for inspection, and provided to the Tribal gaming regulatory authority upon request.
(6) A daily recap shall be prepared for the day and month-to-date, which shall include the following information:
(i) Drop;
(ii) Win; and
(iii) Gross revenue.
(k) Marker credit play. (1) If a gaming operation allows marker credit play (exclusive of rim credit and call bets), the following standards shall apply:
(i) A marker system shall allow for credit to be both issued and repaid in the pit.
(ii) Prior to the issuance of gaming credit to a player, the employee extending the credit shall contact the cashier or other independent source to determine if the player’s credit limit has been properly established and there is sufficient remaining credit available for the advance.
(iii) Proper authorization of credit extension in excess of the previously established limit shall be documented.
(iv) The amount of credit extended shall be communicated to the cage or another independent source and the amount documented within a reasonable time subsequent to each issuance.
(v) The marker form shall be prepared in at least triplicate form (triplicate form being defined as three parts performing the functions delineated in the standard in paragraph (k)(1)(vi) of this section), with a preprinted or concurrently printed marker number, and utilized in numerical sequence. (This requirement shall not preclude the distribution of batches of markers to various pits.)
(vi) At least three parts of each separately numbered marker form shall be utilized as follows:
(A) Original shall be maintained in the pit until settled or transferred to the cage;
(B) Payment slip shall be maintained in the pit until the marker is settled or transferred to the cage. If paid in the pit, the slip shall be inserted in the table game drop box. If not paid in the pit, the slip shall be transferred to the cage with the original;
(C) Issue slip shall be inserted into the appropriate table game drop box when credit is extended or when the player has signed the original.
(vii) When marker documentation (e.g., issue slip and payment slip) is inserted in the drop box, such action shall be performed by the dealer or boxperson at the table.
(viii) A record shall be maintained that details the following (e.g., master credit record retained at the pit podium):
(A) The signature or initials of the person(s) approving the extension of credit (unless such information is contained elsewhere for each issuance);
(B) The legible name of the person receiving the credit;
(C) The date and shift of granting the credit;
(D) The table on which the credit was extended;
(E) The amount of credit issued;
(F) The marker number;
(G) The amount of credit remaining after each issuance or the total credit available for all issuances;
(H) The amount of payment received and nature of settlement (e.g., credit slip number, cash, chips, etc.); and
(I) The signature or initials of the person receiving payment/settlement.
(ix) The forms required in paragraphs (k)(1)(v), (vi), and (viii) of this section shall be safeguarded, and adequate procedures shall be employed to control the distribution, use, and access to these forms.
(x) All credit extensions shall be initially evidenced by lammer buttons, which shall be displayed on the table in public view and placed there by supervisory personnel.
(xi) Marker preparation shall be initiated and other records updated within approximately one hand of play following the initial issuance of credit to the player.
(xii) Lammer buttons shall be removed only by the dealer or boxperson employed at the table upon completion of a marker transaction.
(xiii) The original marker shall contain at least the following information:
(A) Marker number;
(B) Player’s name and signature;
(C) Date; and
(D) Amount of credit issued.
(xiv) The issue slip or stub shall include the same marker number as the original, the table number, date and time of issuance, and amount of credit issued. The issue slip or stub shall also include the signature of the person extending the credit, and the signature or initials of the dealer or boxperson at the applicable table, unless this information is included on another document verifying the issued marker.
(xv) The payment slip shall include the same marker number as the original. When the marker is paid in full in the pit, it shall also include the table number where paid, date and time of payment, nature of settlement (cash, chips, etc.), and amount of payment. The payment slip shall also include the signature of pit supervisory personnel acknowledging payment, and the signature or initials of the dealer or boxperson receiving payment, unless this information is included on another document verifying the payment of the marker.
(xvi) When partial payments are made in the pit, a new marker shall be completed reflecting the remaining balance and the marker number of the marker originally issued.
(xvii) When partial payments are made in the pit, the payment slip of the marker that was originally issued shall be properly cross-referenced to the new marker number, completed with all information required by paragraph (k)(1)(xv) of this section, and inserted into the drop box.
(xviii) The cashier’s cage or another independent source shall be notified when payments (full or partial) are made in the pit so that cage records can be updated for such transactions. Notification shall be made no later than when the customer’s play is completed or at shift end, whichever is earlier.
(xix) All portions of markers, both issued and unissued, shall be safeguarded and procedures shall be employed to control the distribution, use and access to the forms.
(xx) An investigation shall be performed to determine the cause and responsibility for loss whenever marker forms, or any part thereof, are missing. These investigations shall be documented, maintained for inspection, and provided to the Tribal gaming regulatory authority upon request.
(xxi) When markers are transferred to the cage, marker transfer forms or marker credit slips (or similar documentation) shall be utilized and such documents shall include, at a minimum, the date, time, shift, marker number(s), table number(s), amount of each marker, the total amount transferred, signature of pit supervisory personnel releasing instruments from the pit, and the signature of cashier verifying receipt of instruments at the cage.
(xxii) All markers shall be transferred to the cage within twenty-four (24) hours of issuance.
(xxiii) Markers shall be transported to the cashier’s cage by a person who is independent of the marker issuance and payment functions (pit clerks may perform this function).
(2) [Reserved]
(l) Name credit instruments accepted in the pit. (1) For the purposes of this paragraph, name credit instruments means personal checks, payroll checks, counter checks, hold checks, traveler’s checks, or other similar instruments that are accepted in the pit as a form of credit issuance to a player with an approved credit limit.
(2) The following standards shall apply if name credit instruments are accepted in the pit:
(i) A name credit system shall allow for the issuance of credit without using markers;
(ii) Prior to accepting a name credit instrument, the employee extending the credit shall contact the cashier or another independent source to determine if the player’s credit limit has been properly established and the remaining credit available is sufficient for the advance;
(iii) All name credit instruments shall be transferred to the cashier’s cage (utilizing a two-part order for credit) immediately following the acceptance of the instrument and issuance of chips (if name credit instruments are transported accompanied by a credit slip, an order for credit is not required);
(iv) The order for credit (if applicable) and the credit slip shall include the customer’s name, amount of the credit instrument, the date, time, shift, table number, signature of pit supervisory personnel releasing instrument from pit, and the signature of the cashier verifying receipt of instrument at the cage;
(v) The procedures for transacting table credits at standards in paragraphs (c)(12) through (19) of this section shall be strictly adhered to; and
(vi) The acceptance of payments in the pit for name credit instruments shall be prohibited.
(m) Call bets. (1) The following standards shall apply if call bets are accepted in the pit:
(i) A call bet shall be evidenced by the placement of a lammer button, chips, or other identifiable designation in an amount equal to that of the wager in a specific location on the table;
(ii) The placement of the lammer button, chips, or other identifiable designation shall be performed by supervisory/boxperson personnel. The placement may be performed by a dealer only if the supervisor physically observes and gives specific authorization;
(iii) The call bet shall be settled at the end of each hand of play by the preparation of a marker, repayment of the credit extended, or the payoff of the winning wager. Call bets extending beyond one hand of play shall be prohibited; and
(iv) The removal of the lammer button, chips, or other identifiable designation shall be performed by the dealer/ boxperson upon completion of the call bet transaction.
(2) [Reserved]
(n) Rim credit. (1) The following standards shall apply if rim credit is extended in the pit:
(i) Rim credit shall be evidenced by the issuance of chips to be placed in a neutral zone on the table and then extended to the customer for the customer to wager, or to the dealer to wager for the customer, and by the placement of a lammer button or other identifiable designation in an amount equal to that of the chips extended; and
(ii) Rim credit shall be recorded on player cards, or similarly used documents, which shall be:
(A) Prenumbered or concurrently numbered and accounted for by a department independent of the pit;
(B) For all extensions and subsequent repayments, evidenced by the initials or signatures of a supervisor and the dealer attesting to the validity of each credit extension and repayment;
(C) An indication of the settlement method (e.g., serial number of marker issued, chips, cash);
(D) Settled no later than when the customer leaves the table at which the card is prepared;
(E) Transferred to the accounting department on a daily basis; and
(F) Reconciled with other forms utilized to control the issuance of pit credit (e.g., master credit records, table cards).
(2) [Reserved]
(o) Foreign currency. (l) The following standards shall apply if foreign currency is accepted in the pit:
(i) Foreign currency transactions shall be authorized by a pit supervisor/ boxperson who completes a foreign currency exchange form before the exchange for chips or tokens;
(ii) Foreign currency exchange forms include the country of origin, total face value, amount of chips/token extended (i.e., conversion amount), signature of supervisor/boxperson, and the dealer completing the transaction;
(iii) Foreign currency exchange forms and the foreign currency shall be inserted in the drop box by the dealer; and
(iv) Alternate procedures specific to the use of foreign valued gaming chips shall be developed by the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority.
(2) [Reserved]
§ 542.13 What are the minimum internal control standards for gaming machines?
(a) Standards for gaming machines. (1) For this section only, credit or customer credit means a unit of value equivalent to cash or cash equivalents deposited, wagered, won, lost, or redeemed by a customer.
(2) Coins shall include tokens.
(3) For all computerized gaming machine systems, a personnel access listing shall be maintained, which includes at a minimum:
(i) Employee name or employee identification number (or equivalent); and
(ii) Listing of functions employee can perform or equivalent means of identifying same.
(b) Computer applications. For any computer applications utilized, alternate documentation and/or procedures that provide at least the level of control described by the standards in this section, as approved by the Tribal gaming regulatory authority, will be acceptable.
(c) Standards for drop and count. The procedures for the collection of the gaming machine drop and the count thereof shall comply with § 542.21, § 542.31, or § 542.41 (as applicable).
(d) Jackpot payouts, gaming machines fills, short pays and accumulated credit payouts standards. (1) For jackpot payouts and gaming machine fills, documentation shall include the following information:
(i) Date and time;
(ii) Machine number;
(iii) Dollar amount of cash payout or gaming machine fill (both alpha and numeric) or description of personal property awarded, including fair market value. Alpha is optional if another unalterable method is used for evidencing the amount of the payout;
(iv) Game outcome (including reel symbols, card values, suits, etc.) for jackpot payouts. Game outcome is not required if a computerized jackpot/fill system is used;
(v) Preprinted or concurrently printed sequential number; and
(vi) Signatures of at least two employees verifying and witnessing the payout or gaming machine fill (except as otherwise provided in paragraphs (d)(1)(vi)(A), (B), and (C) of this section).
(A) Jackpot payouts over a predetermined amount shall require the signature and verification of a supervisory or management employee independent of the gaming machine department (in addition to the two signatures required in paragraph (d)(1)(vi) of this section). Alternatively, if an on-line accounting system is utilized, only two signatures are required: one employee and one supervisory or management employee independent of the gaming machine department. This predetermined amount shall be authorized by management (as approved by the Tribal gaming regulatory authority), documented, and maintained.
(B) With regard to jackpot payouts and hopper fills, the signature of one employee is sufficient if an on-line accounting system is utilized and the jackpot or fill is less than $1,200.
(C) On graveyard shifts (eight-hour maximum) payouts/fills less than $100 can be made without the payout/fill being witnessed by a second person.
(2) For short pays of $10.00 or more, and payouts required for accumulated credits, the payout form shall include the following information:
(i) Date and time;
(ii) Machine number;
(iii) Dollar amount of payout (both alpha and numeric); and
(iv) The signature of at least one (1) employee verifying and witnessing the payout.
(A) Where the payout amount is $50 or more, signatures of at least two (2) employees verifying and witnessing the payout. Alternatively, the signature of one (1) employee is sufficient if an on-line accounting system is utilized and the payout amount is less than $3,000.
(B) [Reserved]
(3) Computerized jackpot/fill systems shall be restricted so as to prevent unauthorized access and fraudulent payouts by one person as required by § 542.16(a).
(4) Payout forms shall be controlled and routed in a manner that precludes any one person from producing a fraudulent payout by forging signatures or by altering the amount paid out subsequent to the payout and misappropriating the funds.
(e) Promotional payouts or awards. (1) If a gaming operation offers promotional payouts or awards that are not reflected on the gaming machine pay table, then the payout form/documentation shall include:
(i) Date and time;
(ii) Machine number and denomination;
(iii) Dollar amount of payout or description of personal property (e.g., jacket, toaster, car, etc.), including fair market value;
(iv) Type of promotion (e.g., double jackpots, four-of-a-kind bonus, etc.); and
(v) Signature of at least one employee authorizing and completing the transaction.
(2) [Reserved]
(f) Gaming machine department funds standards. (1) The gaming machine booths and change banks that are active during the shift shall be counted down and reconciled each shift by two employees utilizing appropriate accountability documentation. Unverified transfers of cash and/or cash equivalents are prohibited.
(2) The wrapping of loose gaming machine booth and cage cashier coin shall be performed at a time or location that does not interfere with the hard count/wrap process or the accountability of that process.
(3) A record shall be maintained evidencing the transfers of wrapped and unwrapped coins and retained for seven (7) days.
(g) EPROM control standards. (1) At least annually, procedures shall be performed to insure the integrity of a sample of gaming machine game program EPROMs, or other equivalent game software media, by personnel independent of the gaming machine department or the machines being tested.
(2) The Tribal gaming regulatory authority, or the gaming operation subject to the approval of the Tribal gaming regulatory authority, shall develop and implement procedures for the following:
(i) Removal of EPROMs, or other equivalent game software media, from devices, the verification of the existence of errors as applicable, and the correction via duplication from the master game program EPROM, or other equivalent game software media;
(ii) Copying one gaming device program to another approved program;
(iii) Verification of duplicated EPROMs before being offered for play;
(iv) Receipt and destruction of EPROMs, or other equivalent game software media; and
(v) Securing the EPROM, or other equivalent game software media, duplicator, and master game EPROMs, or other equivalent game software media, from unrestricted access.
(3) The master game program number, par percentage, and the pay table shall be verified to the par sheet when initially received from the manufacturer.
(4) Gaming machines with potential jackpots in excess of $100,000 shall have the game software circuit boards locked or physically sealed. The lock or seal shall necessitate the presence of a person independent of the gaming machine department to access the device game program EPROM, or other equivalent game software media. If a seal is used to secure the board to the frame of the gaming device, it shall be pre-numbered.
(5) Records that document the procedures in paragraph (g)(2)(i) of this section shall include the following information:
(i) Date;
(ii) Machine number (source and destination);
(iii) Manufacturer;
(iv) Program number;
(v) Personnel involved;
(vi) Reason for duplication;
(vii) Disposition of any permanently removed EPROM, or other equivalent game software media;
(viii) Seal numbers, if applicable; and
(ix) Approved testing lab approval numbers, if available.
(6) EPROMS, or other equivalent game software media, returned to gaming devices shall be labeled with the program number. Supporting documentation shall include the date, program number, information identical to that shown on the manufacturer’s label, and initials of the person replacing the EPROM, or other equivalent game software media.
(h) Standards for evaluating theoretical and actual hold percentages.
(1) Accurate and current theoretical hold worksheets shall be maintained for each gaming machine.
(2) For multi-game/multi-denominational machines, an employee or department independent of the gaming machine department shall:
(i) Weekly, record the total coin-in meter;
(ii) Quarterly, record the coin-in meters for each paytable contained in the machine; and
(iii) On an annual basis, adjust the theoretical hold percentage in the gaming machine statistical report to a weighted average based upon the ratio of coin-in for each game paytable.
(3) For those gaming operations that are unable to perform the weighted average calculation as required by paragraph (h)(2) of this section, the following procedures shall apply:
(i) On at least an annual basis, calculate the actual hold percentage for each gaming machine;
(ii) On at least an annual basis, adjust the theoretical hold percentage in the gaming machine statistical report for each gaming machine to the previously calculated actual hold percentage; and
(iii) The adjusted theoretical hold percentage shall be within the spread between the minimum and maximum theoretical payback percentages.
(4) The adjusted theoretical hold percentage for multi-game/multi-denominational machines may be combined for machines with exactly the same game mix throughout the year.
(5) The theoretical hold percentages used in the gaming machine analysis reports should be within the performance standards set by the manufacturer.
(6) Records shall be maintained for each machine indicating the dates and type of changes made and the recalculation of theoretical hold as a result of the changes.
(7) Records shall be maintained for each machine that indicate the date the machine was placed into service, the date the machine was removed from operation, the date the machine was placed back into operation, and any changes in machine numbers and designations.
(8) All of the gaming machines shall contain functioning meters that shall record coin-in or credit-in, or on-line gaming machine monitoring system that captures similar data.
(9) All gaming machines with bill acceptors shall contain functioning billing meters that record the dollar amounts or number of bills accepted by denomination.
(10) Gaming machine in-meter readings shall be recorded at least weekly (monthly for Tier A and Tier B gaming operations) immediately prior to or subsequent to a gaming machine drop. On-line gaming machine monitoring systems can satisfy this requirement. However, the time between readings may extend beyond one week in order for a reading to coincide with the end of an accounting period only if such extension is for no longer than six (6) days.
(11) The employee who records the in-meter reading shall either be independent of the hard count team or shall be assigned on a rotating basis, unless the in-meter readings are randomly verified quarterly for all gaming machines and bill acceptors by a person other than the regular in-meter reader.
(12) Upon receipt of the meter reading summary, the accounting department shall review all meter readings for reasonableness using pre-established parameters.
(13) Prior to final preparation of statistical reports, meter readings that do not appear reasonable shall be reviewed with gaming machine department employees or other appropriate designees, and exceptions documented, so that meters can be repaired or clerical errors in the recording of meter readings can be corrected.
(14) A report shall be produced at least monthly showing month-to-date, year-to-date (previous twelve (12) months data preferred), and if practicable, life-to-date actual hold percentage computations for individual machines and a comparison to each machine’s theoretical hold percentage previously discussed.
(15) Each change to a gaming machine’s theoretical hold percentage, including progressive percentage contributions, shall result in that machine being treated as a new machine in the statistical reports (i.e., not commingling various hold percentages), except for adjustments made in accordance with paragraph (h)(2) of this section.
(16) If promotional payouts or awards are included on the gaming machine statistical reports, it shall be in a manner that prevents distorting the actual hold percentages of the affected machines.
(17) The statistical reports shall be reviewed by both gaming machine department management and management employees independent of the gaming machine department on at least a monthly basis.
(18) For those machines that have experienced at least 100,000 wagering transactions, large variances (three percent (3%) recommended) between theoretical hold and actual hold shall be investigated and resolved by a department independent of the gaming machine department with the findings documented and provided to the Tribal gaming regulatory authority upon request in a timely manner.
(19) Maintenance of the on-line gaming machine monitoring system data files shall be performed by a department independent of the gaming machine department. Alternatively, maintenance may be performed by gaming machine supervisory employees if sufficient documentation is generated and it is randomly verified on a monthly basis by employees independent of the gaming machine department.
(20) Updates to the on-line gaming machine monitoring system to reflect additions, deletions, or movements of gaming machines shall be made at least weekly prior to in-meter readings and the weigh process.
(i) Gaming machine hopper contents standards. (1) When machines are temporarily removed from the floor, gaming machine drop and hopper contents shall be protected to preclude the misappropriation of stored funds.
(2) When machines are permanently removed from the floor, the gaming machine drop and hopper contents shall be counted and recorded by at least two employees with appropriate documentation being routed to the accounting department for proper recording and accounting for initial hopper loads.
(j) Player tracking system. (1) The following standards apply if a player tracking system is utilized:
(i) The player tracking system shall be secured so as to prevent unauthorized access (e.g., changing passwords at least quarterly and physical access to computer hardware, etc.).
(ii) The addition of points to members’ accounts other than through actual gaming machine play shall be sufficiently documented (including substantiation of reasons for increases) and shall be authorized by a department independent of the player tracking and gaming machines. Alternatively, addition of points to members’ accounts may be authorized by gaming machine supervisory employees if sufficient documentation is generated and it is randomly verified by employees independent of the gaming machine department on a quarterly basis.
(iii) Booth employees who redeem points for members shall be allowed to receive lost players club cards, provided that they are immediately deposited into a secured container for retrieval by independent personnel.
(iv) Changes to the player tracking system parameters, such as point structures and employee access, shall be performed by supervisory employees independent of the gaming machine department. Alternatively, changes to player tracking system parameters may be performed by gaming machine supervisory employees if sufficient documentation is generated and it is randomly verified by supervisory employees independent of the gaming machine department on a monthly basis.
(v) All other changes to the player tracking system shall be appropriately documented.
(2) [Reserved]
(k) In-house progressive gaming machine standards. (1) A meter that shows the amount of the progressive jackpot shall be conspicuously displayed at or near the machines to which the jackpot applies.
(2) At least once each day, each gaming operation shall record the amount shown on each progressive jackpot meter at the gaming operation except for those jackpots that can be paid directly from the machine’s hopper;
(3) Explanations for meter reading decreases shall be maintained with the progressive meter reading sheets, and where the payment of a jackpot is the explanation for a decrease, the gaming operation shall record the jackpot payout number on the sheet or have the number reasonably available; and
(4) Each gaming operation shall record the base amount of each progressive jackpot the gaming operation offers.
(5) The Tribal gaming regulatory authority shall approve procedures specific to the transfer of progressive amounts in excess of the base amount to other gaming machines. Such procedures may also include other methods of distribution that accrue to the benefit of the gaming public via an award or prize.
(l) Wide area progressive gaming machine standards. (1) A meter that shows the amount of the progressive jackpot shall be conspicuously displayed at or near the machines to which the jackpot applies.
(2) As applicable to participating gaming operations, the wide area progressive gaming machine system shall be adequately restricted to prevent unauthorized access (e.g., changing passwords at least quarterly, restrict access to EPROMs or other equivalent game software media, and restrict physical access to computer hardware, etc.).
(3) The Tribal gaming regulatory authority shall approve procedures for the wide area progressive system that:
(i) Reconcile meters and jackpot payouts;
(ii) Collect/drop gaming machine funds;
(iii) Verify jackpot, payment, and billing to gaming operations on pro-rata basis;
(iv) System maintenance;
(v) System accuracy; and
(vi) System security.
(4) Reports, where applicable, adequately documenting the procedures required in paragraph (l)(3) of this section shall be generated and retained.
(m) Accounting/auditing standards. (1) Gaming machine accounting/auditing procedures shall be performed by employees who are independent of the transactions being reviewed.
(2) For on-line gaming machine monitoring systems, procedures shall be performed at least monthly to verify that the system is transmitting and receiving data from the gaming machines properly and to verify the continuing accuracy of the coin-in meter readings as recorded in the gaming machine statistical report.
(3) For weigh scale and currency interface systems, for at least one drop period per month accounting/auditing employees shall make such comparisons as necessary to the system generated count as recorded in the gaming machine statistical report. Discrepancies shall be resolved prior to generation/distribution of gaming machine reports.
(4) For each drop period, accounting/auditing personnel shall compare the coin-to-drop meter reading to the actual drop amount. Discrepancies should be resolved prior to generation/distribution of on-line gaming machine monitoring system statistical reports.
(5) Follow-up shall be performed for any one machine having an unresolved variance between actual coin drop and coin-to-drop meter reading in excess of three percent (3%) and over $25.00. The follow-up performed and results of the investigation shall be documented, maintained for inspection, and provided to the Tribal gaming regulatory authority upon request.
(6) For each drop period, accounting/auditing employees shall compare the bill-in meter reading to the total bill acceptor drop amount for the period. Discrepancies shall be resolved before the generation/distribution of gaming machine statistical reports.
(7) Follow-up shall be performed for any one machine having an unresolved variance between actual currency drop and bill-in meter reading in excess of an amount that is both more than $25 and at least three percent (3%) of the actual currency drop. The follow-up performed and results of the investigation shall be documented, maintained for inspection, and provided to the Tribal gaming regulatory authority upon request.
(8) At least annually, accounting/auditing personnel shall randomly verify that EPROM or other equivalent game software media changes are properly reflected in the gaming machine analysis reports.
(9) Accounting/auditing employees shall review exception reports for all computerized gaming machine systems on a daily basis for propriety of transactions and unusual occurrences.
(10) All gaming machine auditing procedures and any follow-up performed shall be documented, maintained for inspection, and provided to the Tribal gaming regulatory authority upon request.
(n) Cash-out tickets. For gaming machines that utilize cash-out tickets, the following standards apply. This standard is not applicable to Tiers A and B. Tier A and B gaming operations shall develop adequate standards governing the security over the issuance of the cash-out paper to the gaming machines and the redemption of cash-out slips.
(1) In addition to the applicable auditing and accounting standards in paragraph (m) of this section, on a quarterly basis, the gaming operation shall foot all jackpot cash-out tickets equal to or greater than $1,200 and trace totals to those produced by the host validation computer system.
(2) The customer may request a cash-out ticket from the gaming machine that reflects all remaining credits. The cash-out ticket shall be printed at the gaming machine by an internal document printer. The cash-out ticket shall be valid for a time period specified by the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority. Cash-out tickets may be redeemed for payment or inserted in another gaming machine and wagered, if applicable, during the specified time period.
(3) The customer shall redeem the cash-out ticket at a change booth or cashiers’ cage. Alternatively, if a gaming operation utilizes a remote computer validation system, the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall develop alternate standards for the maximum amount that can be redeemed, which shall not exceed $2,999.99 per cash-out transaction.
(4) Upon presentation of the cash-out ticket(s) for redemption, the following shall occur:
(i) Scan the bar code via an optical reader or its equivalent; or
(ii) Input the cash-out ticket validation number into the computer.
(5) The information contained in paragraph (n)(4) of this section shall be communicated to the host computer. The host computer shall verify the authenticity of the cash-out ticket and communicate directly to the redeemer of the cash-out ticket.
(6) If valid, the cashier (redeemer of the cash-out ticket) pays the customer the appropriate amount and the cash-out ticket is electronically noted “paid” in the system. The “paid” cash-out ticket shall remain in the cashiers” bank for reconciliation purposes. The host validation computer system shall electronically reconcile the cashier’s banks for the paid cashed-out tickets.
(7) If invalid, the host computer shall notify the cashier (redeemer of the cash-out ticket). The cashier (redeemer of the cash-out ticket) shall refuse payment to the customer and notify a supervisor of the invalid condition. The supervisor shall resolve the dispute.
(8) If the host validation computer system temporarily goes down, cashiers may redeem cash-out tickets at a change booth or cashier’s cage after recording the following:
(i) Serial number of the cash-out ticket;
(ii) Date and time;
(iii) Dollar amount;
(iv) Issuing gaming machine number;
(v) Marking ticket “paid”; and
(vi) Ticket shall remain in cashier’s bank for reconciliation purposes.
(9) Cash-out tickets shall be validated as expeditiously as possible when the host validation computer system is restored.
(10) The Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with procedures to control cash-out ticket paper, which shall include procedures that:
(i) Mitigate the risk of counterfeiting of cash-out ticket paper;
(ii) Adequately control the inventory of the cash-out ticket paper; and
(iii) Provide for the destruction of all unused cash-out ticket paper.
(iv) Alternatively, if the gaming operation utilizes a computer validation system, this standard shall not apply.
(11) If the host validation computer system is down for more than four (4) hours, the gaming operation shall promptly notify the Tribal gaming regulatory authority or its designated representative.
(12) These gaming machine systems shall comply with all other standards (as applicable) in this part including:
(i) Standards for bill acceptor drop and count;
(ii) Standards for coin drop and count; and
(iii) Standards concerning EPROMS or other equivalent game software media.
(o) Account access cards. For gaming machines that utilize account access cards to activate play of the machine, the following standards shall apply:
(1) Equipment. (i) A central computer, with supporting hardware and software, to coordinate network activities, provide system interface, and store and manage a player/account database;
(ii) A network of contiguous player terminals with touch-screen or button-controlled video monitors connected to an electronic selection device and the central computer via a communications network;
(iii) One or more electronic selection devices, utilizing random number generators, each of which selects any combination or combinations of numbers, colors, and/or symbols for a network of player terminals.
(2) Player terminals standards. (i) The player terminals are connected to a game server;
(ii) The game server shall generate and transmit to the bank of player terminals a set of random numbers, colors, and/or symbols at regular intervals. The subsequent game results are determined at the player terminal and the resulting information is transmitted to the account server;
(iii) The game server shall be housed in a game server room or a secure locked cabinet.
(3) Customer account maintenance standards. (i) A central computer acting as an account server shall provide customer account maintenance and the deposit/withdrawal function of those account balances;
(ii) Customers may access their accounts on the computer system by means of an account access card at the player terminal. Each player terminal may be equipped with a card reader and personal identification number (PIN) pad or touch screen array for this purpose;
(iii) All communications between the player terminal, or bank of player terminals, and the account server shall be encrypted for security reasons.
(4) Customer account generation standards. (i) A computer file for each customer shall be prepared by a clerk, with no incompatible functions, prior to the customer being issued an account access card to be utilized for machine play. The customer may select his/her PIN to be used in conjunction with the account access card.
(ii) For each customer file, an employee shall:
(A) Record the customer’s name and current address;
(B) The date the account was opened; and
(C) At the time the initial deposit is made, account opened, or credit extended, the identity of the customer shall be verified by examination of a valid driver’s license or other reliable identity credential.
(iii) The clerk shall sign-on with a unique password to a terminal equipped with peripherals required to establish a customer account. Passwords are issued and can only be changed by information technology personnel at the discretion of the department director.
(iv) After entering a specified number of incorrect PIN entries at the cage or player terminal, the customer shall be directed to proceed to a clerk to obtain a new PIN. If a customer forgets, misplaces or requests a change to their PIN, the customer shall proceed to a clerk for assistance.
(5) Deposit of credits standards. (i) The cashier shall sign-on with a unique password to a cashier terminal equipped with peripherals required to complete the credit transactions. Passwords are issued and can only be changed by information technology personnel at the discretion of the department director.
(ii) The customer shall present cash, chips, coin or coupons along with their account access card to a cashier to deposit credits.
(iii) The cashier shall complete the transaction by utilizing a card scanner that the cashier shall slide the customer’s account access card through.
(iv) The cashier shall accept the funds from the customer and enter the appropriate amount on the cashier terminal.
(v) A multi-part deposit slip shall be generated by the point of sale receipt printer. The cashier shall direct the customer to sign the deposit slip receipt. One copy of the deposit slip shall be given to the customer. The other copy of the deposit slip shall be secured in the cashier’s cash drawer.
(vi) The cashier shall verify the customer’s balance before completing the transaction. The cashier shall secure the funds in their cash drawer and return the account access card to the customer.
(vii) Alternatively, if a kiosk is utilized to accept a deposit of credits, the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with procedures that safeguard the integrity of the kiosk system.
(6) Prize standards. (i) Winners at the gaming machines may receive cash, prizes redeemable for cash or merchandise.
(ii) If merchandise prizes are to be awarded, the specific type of prize or prizes that may be won shall be disclosed to the player before the game begins.
(iii) The redemption period of account access cards, as approved by the Tribal gaming regulatory authority, shall be conspicuously posted in the gaming operation.
(7) Credit withdrawal. The customer shall present their account access card to a cashier to withdraw their credits. The cashier shall perform the following:
(i) Scan the account access card;
(ii) Request the customer to enter their PIN, if the PIN was selected by the customer;
(iii) The cashier shall ascertain the amount the customer wishes to withdraw and enter the amount into the computer;
(iv) A multi-part withdrawal slip shall be generated by the point of sale receipt printer. The cashier shall direct the customer to sign the withdrawal slip;
(v) The cashier shall verify that the account access card and the customer match by:
(A) Comparing the customer to image on the computer screen;
(B) Comparing the customer to image on customer’s picture ID; or
(C) Comparing the customer signature on the withdrawal slip to signature on the computer screen.
(vi) The cashier shall verify the customer’s balance before completing the transaction. The cashier shall pay the customer the appropriate amount, issue the customer the original withdrawal slip and return the account access card to the customer;
(vii) The copy of the withdrawal slip shall be placed in the cash drawer. All account transactions shall be accurately tracked by the account server computer system. The copy of the withdrawal slip shall be forwarded to the accounting department at the end of the gaming day; and
(viii) In the event the imaging function is temporarily disabled, customers shall be required to provide positive ID for cash withdrawal transactions at the cashier stations.
(p) Smart cards. All smart cards (i.e., cards that possess the means to electronically store and retrieve data) that maintain the only source of account data are prohibited.
§ 542.14 What are the minimum internal control standards for the cage?
(a) Computer applications. For any computer applications utilized, alternate documentation and/or procedures that provide at least the level of control described by the standards in this section, as approved by the Tribal gaming regulatory authority, will be acceptable.
(b) Personal checks, cashier’s checks, payroll checks, and counter checks. (1) If personal checks, cashier’s checks, payroll checks, or counter checks are cashed at the cage, the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with appropriate controls for purposes of security and integrity.
(2) The Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with procedures for the acceptance of personal checks, collecting and recording checks returned to the gaming operation after deposit, re-deposit, and write-off authorization.
(3) When counter checks are issued, the following shall be included on the check:
(i) The customer’s name and signature;
(ii) The dollar amount of the counter check (both alpha and numeric);
(iii) Customer’s bank name and bank account number;
(iv) Date of issuance; and
(v) Signature or initials of the person approving the counter check transaction.
(4) When traveler’s checks or other guaranteed drafts such as cashier’s checks are presented, the cashier shall comply with the examination and documentation procedures as required by the issuer.
(c) Customer deposited funds. If a gaming operation permits a customer to deposit funds with the gaming operation at the cage, the following standards shall apply.
(1) The receipt or withdrawal of a customer deposit shall be evidenced by at least a two-part document with one copy going to the customer and one copy remaining in the cage file.
(2) The multi-part receipt shall contain the following information:
(i) Same receipt number on all copies;
(ii) Customer’s name and signature;
(iii) Date of receipt and withdrawal;
(iv) Dollar amount of deposit/withdrawal; and
(v) Nature of deposit (cash, check, chips); however,
(vi) Provided all of the information in paragraph (c)(2)(i) through (v) is available, the only required information for all copies of the receipt is the receipt number.
(3) The Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with procedures that:
(i) Maintain a detailed record by customer name and date of all funds on deposit;
(ii) Maintain a current balance of all customer cash deposits that are in the cage/vault inventory or accountability; and
(iii) Reconcile this current balance with the deposits and withdrawals at least daily.
(4) The gaming operation, as approved by the Tribal gaming regulatory authority, shall describe the sequence of the required signatures attesting to the accuracy of the information contained on the customer deposit or withdrawal form ensuring that the form is signed by the cashier.
(5) All customer deposits and withdrawal transactions at the cage shall be recorded on a cage accountability form on a per-shift basis.
(6) Only cash, cash equivalents, chips, and tokens shall be accepted from customers for the purpose of a customer deposit.
(7) The Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with procedures that verify the customer’s identity, including photo identification.
(8) A file for customers shall be prepared prior to acceptance of a deposit.
(d) Cage and vault accountability standards. (1) All transactions that flow through the cage shall be summarized on a cage accountability form on a per shift basis and shall be supported by documentation.
(2) The cage and vault (including coin room) inventories shall be counted by the oncoming and outgoing cashiers. These employees shall make individual counts for comparison for accuracy and maintenance of individual accountability. Such counts shall be recorded at the end of each shift during which activity took place. All discrepancies shall be noted and investigated. Unverified transfers of cash and/or cash equivalents are prohibited.
(3) The Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with a minimum bankroll formula to ensure the gaming operation maintains cash or cash equivalents (on hand and in the bank, if readily accessible) in an amount sufficient to satisfy obligations to the gaming operation’s customers as they are incurred. A suggested bankroll formula will be provided by the Commission upon request.
(e) Chip and token standards. The Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with procedures for the receipt, inventory, storage, and destruction of gaming chips and tokens.
(f) Coupon standards. Any program for the exchange of coupons for chips, tokens, and/or another coupon program shall be approved by the Tribal gaming regulatory authority prior to implementation. If approved, the gaming operation shall establish and comply with procedures that account for and control such programs.
(g) Accounting/auditing standards. (1) The cage accountability shall be reconciled to the general ledger at least monthly.
(2) A trial balance of gaming operation accounts receivable, including the name of the customer and current balance, shall be prepared at least monthly for active, inactive, settled or written-off accounts.
(3) The trial balance of gaming operation accounts receivable shall be reconciled to the general ledger each month. The reconciliation and any follow-up performed shall be documented, maintained for inspection, and provided to the Tribal gaming regulatory authority upon request.
(4) On a monthly basis an evaluation of the collection percentage of credit issued to identify unusual trends shall be performed.
(5) All cage and credit accounting procedures and any follow-up performed shall be documented, maintained for inspection, and provided to the Tribal gaming regulatory authority upon request.
(h) Extraneous items. The Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with procedures to address the transporting of extraneous items, such as coats, purses, and/or boxes, into and out of the cage, coin room, count room, and/or vault.
§ 542.15 What are the minimum internal control standards for credit?
(a) Computer applications. For any computer applications utilized, alternate documentation and/or procedures that provide at least the level of control described by the standards in this section, as approved by the Tribal gaming regulatory authority, will be acceptable.
(b) Credit standards. The following standards shall apply if the gaming operation authorizes and extends credit to customers:
(1) At least the following information shall be recorded for customers that have credit limits or are issued credit (excluding personal checks, payroll checks, cashier’s checks, and traveler’s checks):
(i) Customer’s name, current address, and signature;
(ii) Identification verifications;
(iii) Authorized credit limit;
(iv) Documentation of authorization by a person designated by management to approve credit limits; and
(v) Credit issuances and payments.
(2) Prior to extending credit, the customer’s gaming operation credit record and/or other documentation shall be examined to determine the following:
(i) Properly authorized credit limit;
(ii) Whether remaining credit is sufficient to cover the credit issuance; and
(iii) Identity of the customer (except for known customers).
(3) Credit extensions over a specified dollar amount shall be approved by personnel designated by management.
(4) Proper approval of credit extensions over ten percent (10%) of the previously established limit shall be documented.
(5) The job functions of credit approval (i.e., establishing the customer’s credit worthiness) and credit extension (i.e., advancing customer’s credit) shall be segregated for credit extensions to a single customer of $10,000 or more per day (applies whether the credit is extended in the pit or the cage).
(6) If cage credit is extended to a single customer in an amount exceeding $2,500, appropriate gaming personnel shall be notified on a timely basis of the customers playing on cage credit, the applicable amount of credit issued, and the available balance.
(7) Cage marker forms shall be at least two parts (the original marker and a payment slip), prenumbered by the printer or concurrently numbered by the computerized system, and utilized in numerical sequence.
(8) The completed original cage marker shall contain at least the following information:
(i) Marker number;
(ii) Player’s name and signature; and
(iii) Amount of credit issued (both alpha and numeric).
(9) The completed payment slip shall include the same marker number as the original, date and time of payment, amount of payment, nature of settlement (cash, chips, etc.), and signature of cashier receiving the payment.
(c) Payment standards. (1) All payments received on outstanding credit instruments shall be recorded in ink or other permanent form of recordation in the gaming operation’s records.
(2) When partial payments are made on credit instruments, they shall be evidenced by a multi-part receipt (or another equivalent document) that contains:
(i) The same preprinted number on all copies;
(ii) Customer’s name;
(iii) Date of payment;
(iv) Dollar amount of payment (or remaining balance if a new marker is issued), and nature of settlement (cash, chips, etc.);
(v) Signature of employee receiving payment; and
(vi) Number of credit instrument on which partial payment is being made.
(3) Unless account balances are routinely confirmed on a random basis by the accounting or internal audit departments, or statements are mailed by a person independent of the credit transactions and collections thereon, and the department receiving payments cannot access cash, then the following standards shall apply:
(i) The routing procedures for payments by mail require that they be received by a department independent of credit instrument custody and collection;
(ii) Such receipts by mail shall be documented on a listing indicating the customer’s name, amount of payment, nature of payment (if other than a check), and date payment received; and
(iii) The total amount of the listing of mail receipts shall be reconciled with the total mail receipts recorded on the appropriate accountability form by the accounting department on a random basis (for at least three (3) days per month).
(d) Access to credit documentation. (1) Access to credit documentation shall be restricted as follows:
(i) The credit information shall be restricted to those positions that require access and are so authorized by management;
(ii) Outstanding credit instruments shall be restricted to persons authorized by management; and
(iii) Written-off credit instruments shall be further restricted to persons specified by management.
(2) [Reserved]
(e) Maintenance of credit documentation. (1) All extensions of cage credit, pit credit transferred to the cage, and subsequent payments shall be documented on a credit instrument control form.
(2) Records of all correspondence, transfers to and from outside agencies, and other documents related to issued credit instruments shall be maintained.
(f) Write-off and settlement standards. (1) Written-off or settled credit instruments shall be authorized in writing.
(2) Such authorizations shall be made by at least two management officials who are from departments independent of the credit transaction.
(g) Collection agency standards. (1) If credit instruments are transferred to collection agencies or other collection representatives, a copy of the credit instrument and a receipt from the collection representative shall be obtained and maintained until the original credit instrument is returned or payment is received.
(2) A person independent of credit transactions and collections shall periodically review the documents in paragraph (g)(1) of this section.
(h) Accounting/auditing standards. (1) A person independent of the cage, credit, and collection functions shall perform all of the following at least three (3) times per year:
(i) Ascertain compliance with credit limits and other established credit issuance procedures;
(ii) Randomly reconcile outstanding balances of both active and inactive accounts on the accounts receivable listing to individual credit records and physical instruments;
(iii) Examine credit records to determine that appropriate collection efforts are being made and payments are being properly recorded; and
(iv) For a minimum of five (5) days per month, partial payment receipts shall be subsequently reconciled to the total payments recorded by the cage for the day and shall be numerically accounted for.
(2) [Reserved]
§ 542.16 [Reserved]
§ 542.17 What are the minimum internal control standards for complimentary services or items?
(a) Each Tribal gaming regulatory authority or gaming operation shall establish and the gaming operation shall comply with procedures for the authorization, issuance, and tracking of complimentary services and items, including cash and non-cash gifts. Such procedures must be approved by the Tribal gaming regulatory authority and shall include, but shall not be limited to, the procedures by which the gaming operation delegates to its employees the authority to approve the issuance of complimentary services and items, and the procedures by which conditions or limits, if any, which may apply to such authority are established and modified (including limits based on relationships between the authorizer and recipient), and shall further include effective provisions for audit purposes.
(b) At least monthly, accounting, information technology, or audit personnel that cannot grant or receive complimentary privileges shall prepare reports that include the following information for all complimentary items and services equal to or exceeding $100 or an amount established by the Tribal gaming regulatory authority, which shall not be greater than $100:
(1) Name of customer who received the complimentary service or item;
(2) Name(s) of authorized issuer of the complimentary service or item;
(3) The actual cash value of the complimentary service or item;
(4) The type of complimentary service or item (i.e., food, beverage, etc.); and
(5) Date the complimentary service or item was issued.
(c) The internal audit or accounting departments shall review the reports required in paragraph (b) of this section at least monthly. These reports shall be made available to the Tribe, Tribal gaming regulatory authority, audit committee, other entity designated by the Tribe, and the Commission upon request.
§ 542.18 How does a gaming operation apply for a variance from the standards of the part?
(a) Tribal gaming regulatory authority approval. (1) A Tribal gaming regulatory authority may approve a variance for a gaming operation if it has determined that the variance will achieve a level of control sufficient to accomplish the purpose of the standard it is to replace.
(2) For each enumerated standard for which the Tribal gaming regulatory authority approves a variance, it shall submit to the Chairman of the NIGC, within thirty (30) days, a detailed report, which shall include the following:
(i) A detailed description of the variance;
(ii) An explanation of how the variance achieves a level of control sufficient to accomplish the purpose of the standard it is to replace; and
(iii) Evidence that the Tribal gaming regulatory authority has approved the variance.
(3) In the event that the Tribal gaming regulatory authority or the Tribe chooses to submit a variance request directly to the Chairman, it may do so without the approval requirement set forth in paragraph (a)(2)(iii) of this section and such request shall be deemed as having been approved by the Tribal gaming regulatory authority.
(b) Review by the Chairman. (1) Following receipt of the variance approval, the Chairman or his or her designee shall have sixty (60) days to concur with or object to the approval of the variance.
(2) Any objection raised by the Chairman shall be in the form of a written explanation based upon the following criteria:
(i) There is no valid explanation of why the gaming operation should have received a variance approval from the Tribal gaming regulatory authority on the enumerated standard; or
(ii) The variance as approved by the Tribal gaming regulatory authority does not provide a level of control sufficient to accomplish the purpose of the standard it is to replace.
(3) If the Chairman fails to object in writing within sixty (60) days after the date of receipt of a complete submission, the variance shall be considered concurred with by the Chairman.
(4) The 60-day deadline may be extended, provided such extension is mutually agreed upon by the Tribal gaming regulatory authority and the Chairman.
(c) Curing Chairman’s objections. (1) Following an objection by the Chairman to the issuance of a variance, the Tribal gaming regulatory authority shall have the opportunity to cure any objections noted by the Chairman.
(2) A Tribal gaming regulatory authority may cure the objections raised by the Chairman by:
(i) Rescinding its initial approval of the variance; or
(ii) Rescinding its initial approval, revising the variance, approving it, and re-submitting it to the Chairman.
(3) Upon any re-submission of a variance approval, the Chairman shall have thirty (30) days to concur with or object to the re-submitted variance.
(4) If the Chairman fails to object in writing within thirty (30) days after the date of receipt of the re-submitted variance, the re-submitted variance shall be considered concurred with by the Chairman.
(5) The thirty (30) day deadline may be extended, provided such extension is mutually agreed upon by the Tribal gaming regulatory authority and the Chairman.
(d) Appeals. (1) Upon receipt of objections to a re-submission of a variance, the Tribal gaming regulatory authority shall be entitled to an appeal to the full Commission in accordance with the following process:
(i) Within thirty (30) days of receiving an objection to a re-submission, the Tribal gaming regulatory authority shall file its notice of appeal.
(ii) Failure to file an appeal within the time provided by this section shall result in a waiver of the opportunity for an appeal.
(iii) An appeal under this section shall specify the reasons why the Tribal gaming regulatory authority believes the Chairman’s objections should be reviewed, and shall include supporting documentation, if any.
(iv) The Tribal gaming regulatory authority shall be provided with any comments offered by the Chairman to the Commission on the substance of the appeal by the Tribal gaming regulatory authority and shall be offered the opportunity to respond to any such comments.
(v) Within thirty (30) days after receipt of the appeal, the Commission shall render a decision based upon the criteria contained within paragraph (b)(2) of this section unless the Tribal gaming regulatory authority elects to wave the thirty (30) day requirement and to provide the Commission additional time, not to exceed an additional thirty (30) days, to render a decision.
(vi) In the absence of a decision within the time provided, the Tribal gaming regulatory authority’s resubmission shall be considered concurred with by the Commission and become effective.
(2) The Tribal gaming regulatory authority may appeal the Chairman’s objection to the approval of a variance to the full Commission without resubmitting the variance by filling a notice of appeal with the full Commission within thirty (30) days of the Chairman’s objection and complying with the procedures described in paragraph (d)(1) of this section.
(e) Effective date of variance. The gaming operation shall comply with standards that achieve a level of control sufficient to accomplish the purpose of the standard it is to replace until such time as the Commission objects to the Tribal gaming regulatory authority’s approval of a variance as provided in paragraph (b) of this section. Concurrence in a variance by the Chairman or Commission is discretionary and variances will not be granted routinely. The gaming operation shall comply with standards at least as stringent as those set forth in this part until such time as the Chairman or Commission concurs with the Tribal gaming regulatory authority’s approval of a variance.
§ 542.19 What are the minimum internal control standards for accounting?
(a) Each gaming operation shall prepare accurate, complete, legible, and permanent records of all transactions pertaining to revenue and gaming activities.
(b) Each gaming operation shall prepare general accounting records according to Generally Accepted Accounting Principles on a double-entry system of accounting, maintaining detailed, supporting, subsidiary records, including, but not limited to:
(1) Detailed records identifying revenues, expenses, assets, liabilities, and equity for each gaming operation;
(2) Detailed records of all markers, IOU’s, returned checks, hold checks, or other similar credit instruments;
(3) Individual and statistical game records to reflect statistical drop, statistical win, and the percentage of statistical win to statistical drop by each table game, and to reflect statistical drop, statistical win, and the percentage of statistical win to statistical drop for each type of table game, by shift, by day, cumulative month-to-date and year-to-date, and individual and statistical game records reflecting similar information for all other games;
(4) Gaming machine analysis reports which, by each machine, compare actual hold percentages to theoretical hold percentages;
(5) The records required by this part and by the Tribal internal control standards;
(6) Journal entries prepared by the gaming operation and by its independent accountants; and
(7) Any other records specifically required to be maintained.
(c) Each gaming operation shall establish administrative and accounting procedures for the purpose of determining effective control over a gaming operation’s fiscal affairs. The procedures shall be designed to reasonably ensure that:
(1) Assets are safeguarded;
(2) Financial records are accurate and reliable;
(3) Transactions are performed only in accordance with management’s general and specific authorization;
(4) Transactions are recorded adequately to permit proper reporting of gaming revenue and of fees and taxes, and to maintain accountability of assets;
(5) Recorded accountability for assets is compared with actual assets at reasonable intervals, and appropriate action is taken with respect to any discrepancies; and
(6) Functions, duties, and responsibilities are appropriately segregated in accordance with sound business practices.
(d) Gross gaming revenue computations. (1) For table games, gross revenue equals the closing table bankroll, plus credit slips for cash, chips, tokens or personal/payroll checks returned to the cage, plus drop, less opening table bankroll and fills to the table, and money transfers issued from the game through the use of a cashless wagering system.
(2) For gaming machines, gross revenue equals drop, less fills, jackpot payouts and personal property awarded to patrons as gambling winnings. Additionally, the initial hopper load is not a fill and does not affect gross revenue. The difference between the initial hopper load and the total amount that is in the hopper at the end of the gaming operation’s fiscal year should be adjusted accordingly as an addition to or subtraction from the drop for the year.
(3) For each counter game, gross revenue equals:
(i) The money accepted by the gaming operation on events or games that occur during the month or will occur in subsequent months, less money paid out during the month to patrons on winning wagers (“cash basis”); or
(ii) The money accepted by the gaming operation on events or games that occur during the month, plus money, not previously included in gross revenue, that was accepted by the gaming operation in previous months on events or games occurring in the month, less money paid out during the month to patrons as winning wagers (“modified accrual basis”).
(4) For each card game and any other game in which the gaming operation is not a party to a wager, gross revenue equals all money received by the operation as compensation for conducting the game.
(i) A gaming operation shall not include either shill win or loss in gross revenue computations.
(ii) In computing gross revenue for gaming machines, keno and bingo, the actual cost to the gaming operation of any personal property distributed as losses to patrons may be deducted from winnings (other than costs of travel, lodging, services, food, and beverages), if the gaming operation maintains detailed documents supporting the deduction.
(e) Each gaming operation shall establish internal control systems sufficient to ensure that currency (other than tips or gratuities) received from a patron in the gaming area is promptly placed in a locked box in the table, or, in the case of a cashier, in the appropriate place in the cashier’s cage, or on those games which do not have a locked drop box, or on card game tables, in an appropriate place on the table, in the cash register or in another approved repository.
(f) If the gaming operation provides periodic payments to satisfy a payout resulting from a wager, the initial installment payment, when paid, and the actual cost of a payment plan, which is funded by the gaming operation, may be deducted from winnings. The gaming operation is required to obtain the approval of all payment plans from the TGRA. For any funding method which merely guarantees the gaming operation’s performance, and under which the gaming operation makes payments out of cash flow (e.g. irrevocable letters of credits, surety bonds, or other similar methods), the gaming operation may only deduct such payments when paid to the patron.
(g) For payouts by wide-area progressive gaming machine systems, a gaming operation may deduct from winnings only its pro rata share of a wide-area gaming machine system payout.
(h) Cash-out tickets issued at a gaming machine or gaming device shall be deducted from gross revenue as jackpot payouts in the month the tickets are issued by the gaming machine or gaming device. Tickets deducted from gross revenue that are not redeemed within a period, not to exceed 180 days of issuance, shall be included in gross revenue. An unredeemed ticket previously included in gross revenue may be deducted from gross revenue in the month redeemed.
(i) A gaming operation may not deduct from gross revenues the unpaid balance of a credit instrument extended for purposes other than gaming.
(j) A gaming operation may deduct from gross revenue the unpaid balance of a credit instrument if the gaming operation documents, or otherwise keeps detailed records of, compliance with the following requirements. Such records confirming compliance shall be made available to the TGRA or the Commission upon request:
(1) The gaming operation can document that the credit extended was for gaming purposes;
(2) The gaming operation has established procedures and relevant criteria to evaluate a patron’s credit reputation or financial resources and to then determine that there is a reasonable basis for extending credit in the amount or sum placed at the patron’s disposal;
(3) In the case of personal checks, the gaming operation has established procedures to examine documentation, which would normally be acceptable as a type of identification when cashing checks, and has recorded the patron’s bank check guarantee card number or credit card number, or has satisfied paragraph (j)(2) of this section, as management may deem appropriate for the check-cashing authorization granted;
(4) In the case of third-party checks for which cash, chips, or tokens have been issued to the patron, or which were accepted in payment of another credit instrument, the gaming operation has established procedures to examine documentation, normally accepted as a means of identification when cashing checks, and has, for the check’s maker or drawer, satisfied paragraph (j)(2) of this section, as management may deem appropriate for the check-cashing authorization granted;
(5) In the case of guaranteed drafts, procedures should be established to ensure compliance with the issuance and acceptance procedures prescribed by the issuer;
(6) The gaming operation has established procedures to ensure that the credit extended is appropriately documented, not least of which would be the patron’s identification and signature attesting to the authenticity of the individual credit transactions. The authorizing signature shall be obtained at the time credit is extended.
(7) The gaming operation has established procedures to effectively document its attempt to collect the full amount of the debt. Such documentation would include, but not be limited to, letters sent to the patron, logs of personal or telephone conversations, proof of presentation of the credit instrument to the patron’s bank for collection, settlement agreements, or other documents which demonstrate that the gaming operation has made a good faith attempt to collect the full amount of the debt. Such records documenting collection efforts shall be made available to the TGRA or the commission upon request.
(k) Maintenance and preservation of books, records and documents. (1) All original books, records and documents pertaining to the conduct of wagering activities shall be retained by a gaming operation in accordance with the following schedule. A record that summarizes gaming transactions is sufficient, provided that all documents containing an original signature(s) attesting to the accuracy of a gaming related transaction are independently preserved. Original books, records or documents shall not include copies of originals, except for copies that contain original comments or notations on parts of multi-part forms. The following original books, records and documents shall be retained by a gaming operation for a minimum of five (5) years:
(i) Casino cage documents;
(ii) Documentation supporting the calculation of table game win;
(iii) Documentation supporting the calculation of gaming machine win;
(iv) Documentation supporting the calculation of revenue received from the games of keno, pari-mutuel, bingo, pull-tabs, card games, and all other gaming activities offered by the gaming operation;
(v) Table games statistical analysis reports;
(vi) Gaming machine statistical analysis reports;
(vii) Bingo, pull-tab, keno and pari-mutuel wagering statistical reports;
(viii) Internal audit documentation and reports;
(ix) Documentation supporting the write-off of gaming credit instruments and named credit instruments;
(x) All other books, records and documents pertaining to the conduct of wagering activities that contain original signature(s) attesting to the accuracy of the gaming related transaction.
(2) Unless otherwise specified in this part, all other books, records, and documents shall be retained until such time as the accounting records have been audited by the gaming operation’s independent certified public accountants.
(3) The above definition shall apply without regards to the medium by which the book, record or document is generated or maintained (paper, computer-generated, magnetic media, etc.).
§ 542.20 What is a Tier A gaming operation?
A Tier A gaming operation is one with annual gross gaming revenues of more than $1 million but not more than $5 million.
§ 542.21 What are the minimum internal control standards for drop and count for Tier A gaming operations?
(a) Computer applications. For any computer applications utilized, alternate documentation and/or procedures that provide at least the level of control described by the standards in this section, as approved by the Tribal gaming regulatory authority, will be acceptable.
(b) Table game drop standards. (1) The setting out of empty table game drop boxes and the drop shall be a continuous process.
(2) At the end of each shift:
(i) All locked table game drop boxes shall be removed from the tables by a person independent of the pit shift being dropped;
(ii) A separate drop box shall be placed on each table opened at any time during each shift or a gaming operation may utilize a single drop box with separate openings and compartments for each shift; and
(iii) Upon removal from the tables, table game drop boxes shall be transported directly to the count room or other equivalently secure area with comparable controls and locked in a secure manner until the count takes place.
(3) If drop boxes are not placed on all tables, then the pit department shall document which tables were open during the shift.
(4) The transporting of table game drop boxes shall be performed by a minimum of two persons, at least one of whom is independent of the pit shift being dropped.
(5) All table game drop boxes shall be posted with a number corresponding to a permanent number on the gaming table and marked to indicate game, table number, and shift.
(c) Soft count room personnel. (1) The table game soft count and the gaming machine bill acceptor count shall be performed by a minimum of two employees.
(2) Count room personnel shall not be allowed to exit or enter the count room during the count except for emergencies or scheduled breaks. At no time during the count, shall there be fewer than two employees in the count room until the drop proceeds have been accepted into cage/vault accountability.
(3) Count team members shall be rotated on a routine basis such that the count team is not consistently the same two persons more than four (4) days per week. This standard shall not apply to gaming operations that utilize a count team of more than two persons.
(4) The count team shall be independent of transactions being reviewed and counted. The count team shall be independent of the cage/vault departments, however, a dealer or a cage cashier may be used if this person is not allowed to perform the recording function. An accounting representative may be used if there is an independent audit of all soft count documentation.
(d) Table game soft count standards. (1) The table game soft count shall be performed in a soft count room or other equivalently secure area with comparable controls.
(2) Access to the count room during the count shall be restricted to members of the drop and count teams, with the exception of authorized observers, supervisors for resolution of problems, and authorized maintenance personnel.
(3) If counts from various revenue centers occur simultaneously in the count room, procedures shall be in effect that prevent the commingling of funds from different revenue centers.
(4) The table game drop boxes shall be individually emptied and counted in such a manner to prevent the commingling of funds between boxes until the count of the box has been recorded.
(i) The count of each box shall be recorded in ink or other permanent form of recordation.
(ii) A second count shall be performed by an employee on the count team who did not perform the initial count.
(iii) Corrections to information originally recorded by the count team on soft count documentation shall be made by drawing a single line through the error, writing the correct figure above the original figure, and then obtaining the initials of at least two count team members who verified the change, unless the count team only has two (2) members in which case the initials of only one (1) verifying member is required.
(5) If cash counters are utilized and the count room table is used only to empty boxes and sort/stack contents, a count team member shall be able to observe the loading and unloading of all cash at the cash counter, including rejected cash.
(6) Table game drop boxes, when empty, shall be shown to another member of the count team, or to another person who is observing the count, or to surveillance.
(7) Orders for fill/credit (if applicable) shall be matched to the fill/credit slips. Fills and credits shall be traced to or recorded on the count sheet.
(8) Pit marker issue and payment slips (if applicable) removed from the table game drop boxes shall either be:
(i) Traced to or recorded on the count sheet by the count team; or
(ii) Totaled by shift and traced to the totals documented by the computerized system. Accounting personnel shall verify the issue/payment slip for each table is accurate.
(9) Foreign currency exchange forms (if applicable) removed from the table game drop boxes shall be reviewed for the proper daily exchange rate and the conversion amount shall be recomputed by the count team. Alternatively, this may be performed by accounting/auditing employees.
(10) The opening/closing table and marker inventory forms (if applicable) shall either be:
(i) Examined and traced to or recorded on the count sheet; or
(ii) If a computerized system is used, accounting personnel can trace the opening/closing table and marker inventory forms to the count sheet. Discrepancies shall be investigated with the findings documented and maintained for inspection.
(11) The count sheet shall be reconciled to the total drop by a count team member who shall not function as the sole recorder.
(12) All members of the count team shall sign the count document or a summary report to attest to their participation in the count.
(13) All drop proceeds and cash equivalents that were counted shall be turned over to the cage or vault cashier (who shall be independent of the count team) or to an authorized person/employee independent of the revenue generation and the count process for verification. Such person shall certify by signature as to the accuracy of the drop proceeds delivered and received.
(14) The count sheet, with all supporting documents, shall be delivered to the accounting department by a count team member or a person independent of the cashiers department. Alternatively, it may be adequately secured (e.g., locked container to which only accounting personnel can gain access) until retrieved by the accounting department.
(15) Access to stored, full table game drop boxes shall be restricted to authorized members of the drop and count teams.
(e) Gaming machine bill acceptor drop standards. (1) A minimum of two employees shall be involved in the removal of the gaming machine drop, at least one of whom is independent of the gaming machine department.
(2) All bill acceptor canisters shall be removed only at the time previously designated by the gaming operation and reported to the Tribal gaming regulatory authority, except for emergency drops.
(3) The bill acceptor canisters shall be removed by a person independent of the gaming machine department then transported directly to the count room or other equivalently secure area with comparable controls and locked in a secure manner until the count takes place.
(i) Security shall be provided over the bill acceptor canisters removed from the gaming machines and awaiting transport to the count room.
(ii) The transporting of bill acceptor canisters shall be performed by a minimum of two persons, at least one of whom is independent of the gaming machine department.
(4) All bill acceptor canisters shall be posted with a number corresponding to a permanent number on the gaming machine.
(f) Gaming machine bill acceptor count standards. (1) The gaming machine bill acceptor count shall be performed in a soft count room or other equivalently secure area with comparable controls.
(2) Access to the count room during the count shall be restricted to members of the drop and count teams, with the exception of authorized observers, supervisors for resolution of problems, and authorized maintenance personnel.
(3) If counts from various revenue centers occur simultaneously in the count room, procedures shall be in effect that prevent the commingling of funds from different revenue centers.
(4) The bill acceptor canisters shall be individually emptied and counted in such a manner to prevent the commingling of funds between canisters until the count of the canister has been recorded.
(i) The count of each canister shall be recorded in ink or other permanent form of recordation.
(ii) Corrections to information originally recorded by the count team on soft count documentation shall be made by drawing a single line through the error, writing the correct figure above the original figure, and then obtaining the initials of at least two count team members who verified the change.
(5) If cash counters are utilized and the count room table is used only to empty canisters and sort/stack contents, a count team member shall be able to observe the loading and unloading of all cash at the cash counter, including rejected cash.
(6) Canisters, when empty, shall be shown to another member of the count team, or to another person who is observing the count, or to surveillance.
(7) The count sheet shall be reconciled to the total drop by a count team member who shall not function as the sole recorder.
(8) All members of the count team shall sign the count document or a summary report to attest to their participation in the count.
(9) All drop proceeds and cash equivalents that were counted shall be turned over to the cage or vault cashier (who shall be independent of the count team) or to an authorized person/employee independent of the revenue generation and the count process for verification. Such person shall certify by signature as to the accuracy of the drop proceeds delivered and received.
(10) The count sheet, with all supporting documents, shall be delivered to the accounting department by a count team member or a person independent of the cashiers department. Alternatively, it may be adequately secured (e.g., locked container to which only accounting personnel can gain access) until retrieved by the accounting department.
(11) Access to stored bill acceptor canisters, full or empty, shall be restricted to:
(i) Authorized members of the drop and count teams; and
(ii) Authorized personnel in an emergency for resolution of a problem.
(g) Gaming machine coin drop standards. (1) A minimum of two employees shall be involved in the removal of the gaming machine drop, at least one of whom is independent of the gaming machine department.
(2) All drop buckets shall be removed only at the time previously designated by the gaming operation and reported to the Tribal gaming regulatory authority, except for emergency drops.
(3) Security shall be provided over the buckets removed from the gaming machine drop cabinets and awaiting transport to the count room.
(4) As each machine is opened, the contents shall be tagged with its respective machine number if the bucket is not permanently marked with the machine number. The contents shall be transported directly to the area designated for the counting of such drop proceeds. If more than one trip is required to remove the contents of the machines, the filled carts of coins shall be securely locked in the room designed for counting or in another equivalently secure area with comparable controls. There shall be a locked covering on any carts in which the drop route includes passage out of doors.
(i) Alternatively, a smart bucket system that electronically identifies and tracks the gaming machine number, and facilitates the proper recognition of gaming revenue, shall satisfy the requirements of this paragraph.
(ii) [Reserved]
(5) Each drop bucket in use shall be:
(i) Housed in a locked compartment separate from any other compartment of the gaming machine and keyed differently than other gaming machine compartments; and
(ii) Identifiable to the gaming machine from which it is removed. If the gaming machine is identified with a removable tag that is placed in the bucket, the tag shall be placed on top of the bucket when it is collected.
(6) Each gaming machine shall have drop buckets into which coins or tokens that are retained by the gaming machine are collected. Drop bucket contents shall not be used to make change or pay hand-paid payouts.
(7) The collection procedures may include procedures for dropping gaming machines that have trays instead of drop buckets.
(h) Hard count room personnel. (1) The weigh/count shall be performed by a minimum of two employees.
(2) At no time during the weigh/count shall there be fewer than two employees in the count room until the drop proceeds have been accepted into cage/vault accountability.
(i) If the gaming machine count is conducted with a continuous mechanical count meter that is not reset during the count and is verified in writing by at least two employees at the start and end of each denomination count, then one employee may perform the wrap.
(ii) [Reserved]
(3) Count team members shall be rotated on a routine basis such that the count team is not consistently the same two persons more than four (4) days per week. This standard shall not apply to gaming operations that utilize a count team of more than two persons.
(4) The count team shall be independent of transactions being reviewed and counted. The count team shall be independent of the cage/vault departments, unless they are non-supervisory gaming machine employees and perform the laborer function only (A non-supervisory gaming machine employee is defined as a person below the level of gaming machine shift supervisor). A cage cashier may be used if this person is not allowed to perform the recording function. An accounting representative may be used if there is an independent audit of all count documentation.
(i) Gaming machine coin count and wrap standards. (1) Coins shall include tokens.
(2) The gaming machine coin count and wrap shall be performed in a count room or other equivalently secure area with comparable controls.
(i) Alternatively, an on-the-floor drop system utilizing a mobile scale shall satisfy the requirements of this paragraph, subject to the following conditions:
(A) The gaming operation shall utilize and maintain an effective on-line gaming machine monitoring system, as described in § 542.13(m)(3);
(B) Components of the on-the-floor drop system shall include, but not be limited to, a weigh scale, a laptop computer through which weigh/count applications are operated, a security camera available for the mobile scale system, and a VCR to be housed within the video compartment of the mobile scale. The system may include a mule cart used for mobile weigh scale system locomotion.
(C) The gaming operation must obtain the security camera available with the system, and this camera must be added in such a way as to eliminate tampering.
(D) Prior to the drop, the drop/count team shall ensure the scale batteries are charged;
(E) Prior to the drop, a videotape shall be inserted into the VCR used to record the drop in conjunction with the security camera system and the VCR shall be activated;
(F) The weigh scale test shall be performed prior to removing the unit from the hard count room for the start of the weigh/drop/count;
(G) Surveillance shall be notified when the weigh/drop/count begins and shall be capable of monitoring the entire process;
(H) An observer independent of the weigh/drop/count teams (independent observer) shall remain by the weigh scale at all times and shall observe the entire weigh/drop/count process;
(I) Physical custody of the key(s) needed to access the laptop and video compartment shall require the involvement of two persons, one of whom is independent of the drop and count team;
(J) The mule key (if applicable), the laptop and video compartment keys, and the remote control for the VCR shall be maintained by a department independent of the gaming machine department. The appropriate personnel shall sign out these keys;
(K) A person independent of the weigh/drop/count teams shall be required to accompany these keys while they are checked out, and observe each time the laptop compartment is opened;
(L) The laptop access panel shall not be opened outside the hard count room, except in instances when the laptop must be rebooted as a result of a crash, lock up, or other situation requiring immediate corrective action;
(M) User access to the system shall be limited to those employees required to have full or limited access to complete the weigh/drop/count; and
(N) When the weigh/drop/count is completed, the independent observer shall access the laptop compartment, end the recording session, eject the videotape, and deliver the videotape to surveillance.
(ii) [Reserved]
(3) Access to the count room during the count shall be restricted to members of the drop and count teams, with the exception of authorized observers, supervisors for resolution of problems, and authorized maintenance personnel.
(4) If counts from various revenue centers occur simultaneously in the count room, procedures shall be in effect that prevent the commingling of funds from different revenue centers.
(5) The following functions shall be performed in the counting of the gaming machine drop:
(i) Recorder function, which involves the recording of the gaming machine count; and
(ii) Count team supervisor function, which involves the control of the gaming machine weigh and wrap process. The supervisor shall not perform the initial recording of the weigh/count unless a weigh scale with a printer is used.
(6) The gaming machine drop shall be counted, wrapped, and reconciled in such a manner to prevent the commingling of gaming machine drop coin with coin (for each denomination) from the next gaming machine drop until the count of the gaming machine drop has been recorded. If the coins are not wrapped immediately after being weighed or counted, they shall be secured and not commingled with other coins.
(i) The amount of the gaming machine drop from each machine shall be recorded in ink or other permanent form of recordation on a gaming machine count document by the recorder or mechanically printed by the weigh scale.
(ii) Corrections to information originally recorded by the count team on gaming machine count documentation shall be made by drawing a single line through the error, writing the correct figure above the original figure, and then obtaining the initials of at least two count team members who verified the change.
(A) If a weigh scale interface is used, corrections to gaming machine count data shall be made using either of the following:
(1) Drawing a single line through the error on the gaming machine document, writing the correct figure above the original figure, and then obtaining the initials of at least two count team employees. If this procedure is used, an employee independent of the gaming machine department and count team shall enter the correct figure into the computer system prior to the generation of related gaming machine reports; or
(2) During the count process, correct the error in the computer system and enter the passwords of at least two count team employees. If this procedure is used, an exception report shall be generated by the computer system identifying the gaming machine number, the error, the correction, and the count team employees attesting to the correction.
(B) [Reserved]
(7) If applicable, the weight shall be converted to dollar amounts prior to the reconciliation of the weigh to the wrap.
(8) If a coin meter is used, a count team member shall convert the coin count for each denomination into dollars and shall enter the results on a summary sheet.
(9) The recorder and at least one other count team member shall sign the weigh tape and the gaming machine count document attesting to the accuracy of the weigh/count.
(10) All members of the count team shall sign the count document or a summary report to attest to their participation in the count.
(11) All drop proceeds and cash equivalents that were counted shall be turned over to the cage or vault cashier (who shall be independent of the count team) or to an authorized person/employee independent of the revenue generation and the count process for verification. Such person shall certify by signature as to the accuracy of the drop proceeds delivered and received.
(12) All gaming machine count and wrap documentation, including any applicable computer storage media, shall be delivered to the accounting department by a count team member or a person independent of the cashier’s department. Alternatively, it may be adequately secured (e.g., locked container to which only accounting personnel can gain access) until retrieved by the accounting department.
(13) If the coins are transported off the property, a second (alternative) count procedure shall be performed before the coins leave the property. Any variances shall be documented.
(14) Variances. Large (by denomination, either $1,000 or 2% of the drop, whichever is less) or unusual (e.g., zero for weigh/count or patterned for all counts) variances between the weigh/count and wrap shall be investigated by management personnel independent of the gaming machine department, count team, and the cage/vault functions on a timely basis. The results of such investigation shall be documented, maintained for inspection, and provided to the Tribal gaming regulatory authority upon request.
(j) Security of the coin room inventory during the gaming machine coin count and wrap. (1) If the count room serves as a coin room and coin room inventory is not secured so as to preclude access by the count team, then the following standards shall apply:
(i) At the commencement of the gaming machine count the following requirements shall be met:
(A) The coin room inventory shall be counted by at least two employees, one of whom is a member of the count team and the other is independent of the weigh/count and wrap procedures;
(B) The count in paragraph (j)(1)(i)(A) of this section shall be recorded on an appropriate inventory form;
(ii) Upon completion of the wrap of the gaming machine drop:
(A) At least two members of the count team (wrap team), independently from each other, shall count the ending coin room inventory;
(B) The counts in paragraph (j)(1)(ii)(A) of this section shall be recorded on a summary report(s) that evidences the calculation of the final wrap by subtracting the beginning inventory from the sum of the ending inventory and transfers in and out of the coin room;
(C) The same count team members shall compare the calculated wrap to the weigh/count, recording the comparison and noting any variances on the summary report;
(D) A member of the cage/vault department shall count the ending coin room inventory by denomination and shall reconcile it to the beginning inventory, wrap, transfers, and weigh/count; and
(E) At the conclusion of the reconciliation, at least two count/wrap team members and the verifying employee shall sign the summary report(s) attesting to its accuracy.
(iii) The functions described in paragraph (j)(1)(ii)(A) and (C) of this section may be performed by only one count team member. That count team member must then sign the summary report, along with the verifying employee, as required under paragraph (j)(1)(ii)(E).
(2) If the count room is segregated from the coin room, or if the coin room is used as a count room and the coin room inventory is secured to preclude access by the count team, all of the following requirements shall be completed, at the conclusion of the count:
(i) At least two members of the count/wrap team shall count the final wrapped gaming machine drop independently from each other;
(ii) The counts shall be recorded on a summary report;
(iii) The same count team members (or the accounting department) shall compare the final wrap to the weigh/count, recording the comparison, and noting any variances on the summary report;
(iv) A member of the cage/vault department shall count the wrapped gaming machine drop by denomination and reconcile it to the weigh/count;
(v) At the conclusion of the reconciliation, at least two count team members and the cage/vault employee shall sign the summary report attesting to its accuracy; and
(vi) The wrapped coins (exclusive of proper transfers) shall be transported to the cage, vault or coin vault after the reconciliation of the weigh/count to the wrap.
(k) Transfers during the gaming machine coin count and wrap. (1) Transfers may be permitted during the count and wrap only if permitted under the internal control standards approved by the Tribal gaming regulatory authority.
(2) Each transfer shall be recorded on a separate multi-part form with a preprinted or concurrently-printed form number (used solely for gaming machine count transfers) that shall be subsequently reconciled by the accounting department to ensure the accuracy of the reconciled gaming machine drop.
(3) Each transfer must be counted and signed for by at least two members of the count team and by a person independent of the count team who is responsible for authorizing the transfer.
(l) Gaming machine drop key control standards. (1) Gaming machine coin drop cabinet keys, including duplicates, shall be maintained by a department independent of the gaming machine department.
(2) The physical custody of the keys needed to access gaming machine coin drop cabinets, including duplicates, shall require the involvement of two persons, one of whom is independent of the gaming machine department.
(3) Two employees (separate from key custodian) shall be required to accompany such keys while checked out and observe each time gaming machine drop cabinets are accessed.
(m) Table game drop box key control standards. (1) Tier A gaming operations shall be exempt from compliance with this paragraph if the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, establishes and the gaming operation complies with procedures that maintain adequate key control and restricts access to the keys.
(2) Procedures shall be developed and implemented to insure that unauthorized access to empty table game drop boxes shall not occur from the time the boxes leave the storage racks until they are placed on the tables.
(3) The involvement of at least two persons independent of the cage department shall be required to access stored empty table game drop boxes.
(4) The release keys shall be separately keyed from the contents keys.
(5) At least two count team members are required to be present at the time count room and other count keys are issued for the count.
(6) All duplicate keys shall be maintained in a manner that provides the same degree of control as is required for the original keys. Records shall be maintained for each key duplicated that indicate the number of keys made and destroyed.
(7) Logs shall be maintained by the custodian of sensitive keys to document authorization of personnel accessing keys.
(n) Table game drop box release keys. (1) Tier A gaming operations shall be exempt from compliance with this paragraph if the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, establishes and the gaming operation complies with procedures that maintain adequate key control and restricts access to the keys.
(2) The table game drop box release keys shall be maintained by a department independent of the pit department.
(3) Only the person(s) authorized to remove table game drop boxes from the tables shall be allowed access to the table game drop box release keys; however, the count team members may have access to the release keys during the soft count in order to reset the table game drop boxes.
(4) Persons authorized to remove the table game drop boxes shall be precluded from having simultaneous access to the table game drop box contents keys and release keys.
(5) For situations requiring access to a table game drop box at a time other than the scheduled drop, the date, time, and signature of employee signing out/in the release key must be documented.
(o) Bill acceptor canister release keys. (1) Tier A gaming operations shall be exempt from compliance with this paragraph if the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, establishes and the gaming operation complies with procedures that maintain adequate key control and restricts access to the keys.
(2) The bill acceptor canister release keys shall be maintained by a department independent of the gaming machine department.
(3) Only the person(s) authorized to remove bill acceptor canisters from the gaming machines shall be allowed access to the release keys.
(4) Persons authorized to remove the bill acceptor canisters shall be precluded from having simultaneous access to the bill acceptor canister contents keys and release keys.
(5) For situations requiring access to a bill acceptor canister at a time other than the scheduled drop, the date, time, and signature of employee signing out/in the release key must be documented.
(p) Table game drop box storage rack keys. (1) Tier A gaming operations shall be exempt from compliance with this paragraph if the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, establishes and the gaming operation complies with procedures that maintain adequate key control and restricts access to the keys.
(2) Persons authorized to obtain table game drop box storage rack keys shall be precluded from having simultaneous access to table game drop box contents keys, with the exception of the count team.
(q) Bill acceptor canister storage rack keys. (1) Tier A gaming operations shall be exempt from compliance with this paragraph if the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, establishes and the gaming operation complies with procedures that maintain adequate key control and restricts access to the keys.
(2) Persons authorized to obtain bill acceptor canister storage rack keys shall be precluded from having simultaneous access to bill acceptor canister contents keys, with the exception of the count team.
(r) Table game drop box contents keys. (1) Tier A gaming operations shall be exempt from compliance with this paragraph if the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, establishes and the gaming operation complies with procedures that maintain adequate key control and restricts access to the keys.
(2) The physical custody of the keys needed for accessing stored, full table game drop box contents shall require the involvement of persons from at least two separate departments, with the exception of the count team.
(3) Access to the table game drop box contents key at other than scheduled count times shall require the involvement of at least two persons from separate departments, including management. The reason for access shall be documented with the signatures of all participants and observers.
(4) Only count team members shall be allowed access to table game drop box contents keys during the count process.
(s) Bill acceptor canister contents keys. (1) Tier A gaming operations shall be exempt from compliance with this paragraph if the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, establishes and the gaming operation complies with procedures that maintain adequate key control and restricts access to the keys.
(2) The physical custody of the keys needed for accessing stored, full bill acceptor canister contents shall require involvement of persons from two separate departments, with the exception of the count team.
(3) Access to the bill acceptor canister contents key at other than scheduled count times shall require the involvement of at least two persons from separate departments, one of whom must be a supervisor. The reason for access shall be documented with the signatures of all participants and observers.
(4) Only the count team members shall be allowed access to bill acceptor canister contents keys during the count process.
(t) Gaming machine computerized key security systems. (1) Computerized key security systems which restrict access to the gaming machine drop and count keys through the use of passwords, keys or other means, other than a key custodian, must provide the same degree of control as indicated in the aforementioned key control standards; refer to paragraphs (l), (o), (q) and (s) of this section. Note: This standard does not apply to the system administrator. The system administrator is defined in paragraph (t)(2)(i) of this section.
(2) For computerized key security systems, the following additional gaming machine key control procedures apply:
(i) Management personnel independent of the gaming machine department assign and control user access to keys in the computerized key security system (i.e., system administrator) to ensure that gaming machine drop and count keys are restricted to authorized employees.
(ii) In the event of an emergency or the key box is inoperable, access to the emergency manual key(s) (a.k.a. override key), used to access the box containing the gaming machine drop and count keys, requires the physical involvement of at least three persons from separate departments, including management. The date, time, and reason for access, must be documented with the signatures of all participating employees signing out/in the emergency manual key(s).
(iii) The custody of the keys issued pursuant to paragraph (t)(2)(ii) of this section requires the presence of two persons from separate departments from the time of their issuance until the time of their return.
(iv) Routine physical maintenance that requires accessing the emergency manual key(s) (override key) and does not involve the accessing of the gaming machine drop and count keys, only requires the presence of two persons from separate departments. The date, time and reason for access must be documented with the signatures of all participating employees signing out/in the emergency manual key(s).
(3) For computerized key security systems controlling access to gaming machine drop and count keys, accounting/audit personnel, independent of the system administrator, will perform the following procedures:
(i) Daily, review the report generated by the computerized key security system indicating the transactions performed by the individual(s) that adds, deletes, and changes user’s access within the system (i.e., system administrator). Determine whether the transactions completed by the system administrator provide an adequate control over the access to the gaming machine drop and count keys. Also, determine whether any gaming machine drop and count key(s) removed or returned to the key cabinet by the system administrator was properly authorized.
(ii) For at least one day each month, review the report generated by the computerized key security system indicating all transactions performed to determine whether any unusual gaming machine drop and count key removals or key returns occurred.
(iii) At least quarterly, review a sample of users that are assigned access to the gaming machine drop and count keys to determine that their access to the assigned keys is adequate relative to their job position.
(iv) All noted improper transactions or unusual occurrences are investigated with the results documented.
(4) Quarterly, an inventory of all count room, drop box release, storage rack and contents keys is performed, and reconciled to records of keys made, issued, and destroyed. Investigations are performed for all keys unaccounted for, with the investigation being documented.
(u) Table games computerized key security systems. (1) Computerized key security systems which restrict access to the table game drop and count keys through the use of passwords, keys or other means, other than a key custodian, must provide the same degree of control as indicated in the aforementioned key control standards; refer to paragraphs (m), (n), (p) and (r) of this section. Note: This standard does not apply to the system administrator. The system administrator is defined in paragraph (u)(2)(ii) of this section.
(2) For computerized key security systems, the following additional table game key control procedures apply:
(i) Management personnel independent of the table game department assign and control user access to keys in the computerized key security system (i.e., system administrator) to ensure that table game drop and count keys are restricted to authorized employees.
(ii) In the event of an emergency or the key box is inoperable, access to the emergency manual key(s) (a.k.a. override key), used to access the box containing the table game drop and count keys, requires the physical involvement of at least three persons from separate departments, including management. The date, time, and reason for access, must be documented with the signatures of all participating employees signing out/in the emergency manual key(s).
(iii) The custody of the keys issued pursuant to paragraph (u)(2)(ii) of this section requires the presence of two persons from separate departments from the time of their issuance until the time of their return.
(iv) Routine physical maintenance that requires accessing the emergency manual key(s) (override key) and does not involve the accessing of the table games drop and count keys, only requires the presence of two persons from separate departments. The date, time and reason for access must be documented with the signatures of all participating employees signing out/in the emergency manual key(s).
(3) For computerized key security systems controlling access to table games drop and count keys, accounting/audit personnel, independent of the system administrator, will perform the following procedures:
(i) Daily, review the report generated by the computerized key security system indicating the transactions performed by the individual(s) that adds, deletes, and changes user’s access within the system (i.e., system administrator). Determine whether the transactions completed by the system administrator provide an adequate control over the access to the table games drop and count keys. Also, determine whether any table games drop and count key(s) removed or returned to the key cabinet by the system administrator was properly authorized.
(ii) For at least one day each month, review the report generated by the computerized key security system indicating all transactions performed to determine whether any unusual table games drop and count key removals or key returns occurred.
(iii) At least quarterly, review a sample of users that are assigned access to the table games drop and count keys to determine that their access to the assigned keys is adequate relative to their job position.
(iv) All noted improper transactions or unusual occurrences are investigated with the results documented.
(4) Quarterly, an inventory of all count room, table game drop box release, storage rack and contents keys is performed, and reconciled to records of keys made, issued, and destroyed. Investigations are performed for all keys unaccounted for, with the investigations being documented.
(v) Emergency drop procedures. Emergency drop procedures shall be developed by the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority.
(w) Equipment standards for gaming machine count. (1) A weigh scale calibration module shall be secured so as to prevent unauthorized access (e.g., prenumbered seal, lock and key, etc.).
(2) A person independent of the cage, vault, gaming machine, and count team functions shall be required to be present whenever the calibration module is accessed. Such access shall be documented and maintained.
(3) If a weigh scale interface is used, it shall be adequately restricted so as to prevent unauthorized access (passwords, keys, etc.).
(4) If the weigh scale has a zero adjustment mechanism, it shall be physically limited to minor adjustments (e.g., weight of a bucket) or physically situated such that any unnecessary adjustments to it during the weigh process would be observed by other count team members.
(5) The weigh scale and weigh scale interface (if applicable) shall be tested by a person or persons independent of the cage, vault, and gaming machine departments and count team at least quarterly. At least annually, this test shall be performed by internal audit in accordance with the internal audit standards. The result of these tests shall be documented and signed by the person or persons performing the test.
(6) Prior to the gaming machine count, at least two employees shall verify the accuracy of the weigh scale with varying weights or with varying amounts of previously counted coin for each denomination to ensure the scale is properly calibrated (varying weights/coin from drop to drop is acceptable).
(7) If a mechanical coin counter is used (instead of a weigh scale), the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply, with procedures that are equivalent to those described in paragraphs (u)(4), (u)(5), and (u)(6) of this section.
(8) If a coin meter count machine is used, the count team member shall record the machine number denomination and number of coins in ink on a source document, unless the meter machine automatically records such information.
(i) A count team member shall test the coin meter count machine prior to the actual count to ascertain if the metering device is functioning properly with a predetermined number of coins for each denomination.
(ii) [Reserved]
§ 542.22 What are the minimum internal control standards for internal audit for Tier A gaming operations?
(a) Internal audit personnel. (1) For Tier A gaming operations, a separate internal audit department must be maintained. Alternatively, designating personnel (who are independent with respect to the departments/procedures being examined) to perform internal audit work satisfies the requirements of this paragraph.
(2) The internal audit personnel shall report directly to the Tribe, Tribal gaming regulatory authority, audit committee, or other entity designated by the Tribe in accordance with the definition of internal audit in § 542.2.
(b) Audits. (1) Internal audit personnel shall perform audits of all major gaming areas of the gaming operation. The following shall be reviewed at least annually:
(i) Bingo, including but not limited to, bingo card control, payout procedures, and cash reconciliation process;
(ii) Pull tabs, including but not limited to, statistical records, winner verification, perpetual inventory, and accountability of sales versus inventory;
(iii) Card games, including but not limited to, card games operation, cash exchange procedures, shill transactions, and count procedures;
(iv) Keno, including but not limited to, game write and payout procedures, sensitive key location and control, and a review of keno auditing procedures;
(v) Pari-mutual wagering, including write and payout procedures, and pari-mutual auditing procedures;
(vi) Table games, including but not limited to, fill and credit procedures, pit credit play procedures, rim credit procedures, soft drop/count procedures and the subsequent transfer of funds, unannounced testing of count room currency counters and/or currency interface, location and control over sensitive keys, the tracing of source documents to summarized documentation and accounting records, and reconciliation to restricted copies;
(vii) Gaming machines, including but not limited to, jackpot payout and gaming machine fill procedures, gaming machine drop/count and bill acceptor drop/count and subsequent transfer of funds, unannounced testing of weigh scale and weigh scale interface, unannounced testing of count room currency counters and/or currency interface, gaming machine drop cabinet access, tracing of source documents to summarized documentation and accounting records, reconciliation to restricted copies, location and control over sensitive keys, compliance with EPROM duplication procedures, and compliance with MICS procedures for gaming machines that accept currency or coin(s) and issue cash-out tickets or gaming machines that do not accept currency or coin(s) and do not return currency or coin(s);
(viii) Cage and credit procedures including all cage, credit, and collection procedures, and the reconciliation of trial balances to physical instruments on a sample basis. Cage accountability shall be reconciled to the general ledger;
(ix) Information technology functions, including review for compliance with information technology standards;
(x) Complimentary service or item, including but not limited to, procedures whereby complimentary service items are issued, authorized, and redeemed; and
(xi) Any other internal audits as required by the Tribe, Tribal gaming regulatory authority, audit committee, or other entity designated by the Tribe.
(2) In addition to the observation and examinations performed under paragraph (b)(1) of this section, follow-up observations and examinations shall be performed to verify that corrective action has been taken regarding all instances of noncompliance cited by internal audit, the independent accountant, and/or the Commission. The verification shall be performed within six (6) months following the date of notification.
(3) Whenever possible, internal audit observations shall be performed on an unannounced basis (i.e., without the employees being forewarned that their activities will be observed). Additionally, if the independent accountant also performs the internal audit function, the accountant shall perform separate observations of the table games/gaming machine drops and counts to satisfy the internal audit observation requirements and independent accountant tests of controls as required by the American Institute of Certified Public Accountants guide.
(c) Documentation. (1) Documentation (e.g., checklists, programs, reports, etc.) shall be prepared to evidence all internal audit work performed as it relates to the requirements in this section, including all instances of noncompliance.
(2) The internal audit department shall operate with audit programs, which, at a minimum, address the MICS. Additionally, the department shall properly document the work performed, the conclusions reached, and the resolution of all exceptions. Institute of Internal Auditors standards are recommended but not required.
(d) Reports. (1) Reports documenting audits performed shall be maintained and made available to the Commission upon request.
(2) Such audit reports shall include the following information:
(i) Audit objectives;
(ii) Audit procedures and scope;
(iii) Findings and conclusions;
(iv) Recommendations, if applicable; and
(v) Management’s response.
(e) Material exceptions. All material exceptions resulting from internal audit work shall be investigated and resolved with the results of such being documented and retained for five years.
(f) Role of management. (1) Internal audit findings shall be reported to management.
(2) Management shall be required to respond to internal audit findings stating corrective measures to be taken to avoid recurrence of the audit exception.
(3) Such management responses shall be included in the internal audit report that will be delivered to management, the Tribe, Tribal gaming regulatory authority, audit committee, or other entity designated by the Tribe.
(g) Internal Audit Guidelines. In connection with the internal audit testing pursuant to paragraph (b)(1) of this section, the Commission shall develop recommended Internal Audit Guidelines, which shall be available upon request.
§ 542.23 What are the minimum internal control standards for surveillance for Tier A gaming operations?
(a) Tier A gaming operations must, at a minimum, maintain and operate an unstaffed surveillance system in a secured location whereby the areas under surveillance are continually recorded.
(b) The entrance to the secured location shall be located so that it is not readily accessible by either gaming operation employees who work primarily on the casino floor, or the general public.
(c) Access to the secured location shall be limited to surveillance personnel, designated employees, and other persons authorized in accordance with the surveillance department policy. Such policy shall be approved by the Tribal gaming regulatory authority.
(d) The surveillance system shall include date and time generators that possess the capability to display the date and time of recorded events on video and/or digital recordings. The displayed date and time shall not significantly obstruct the recorded view.
(e) The surveillance department shall strive to ensure staff is trained in the use of the equipment, knowledge of the games, and house rules.
(f) Each camera required by the standards in this section shall be installed in a manner that will prevent it from being readily obstructed, tampered with, or disabled by customers or employees.
(g) Each camera required by the standards in this section shall possess the capability of having its picture recorded. The surveillance system shall include sufficient numbers of recorders to simultaneously record multiple gaming and count room activities, and record the views of all dedicated cameras and motion activated dedicated cameras.
(h) Reasonable effort shall be made to repair each malfunction of surveillance system equipment required by the standards in this section within seventy-two (72) hours after the malfunction is discovered. The Tribal gaming regulatory authority shall be notified of any camera(s) that has malfunctioned for more than twenty-four (24) hours.
(1) In the event of a dedicated camera malfunction, the gaming operation and/or the surveillance department shall, upon identification of the malfunction, provide alternative camera coverage or other security measures, such as additional supervisory or security personnel, to protect the subject activity.
(2) [Reserved]
(i) Bingo. The surveillance system shall record the bingo ball drawing device, the game board, and the activities of the employees responsible for drawing, calling, and entering the balls drawn or numbers selected.
(j) Card games. The surveillance system shall record the general activities in each card room and be capable of identifying the employees performing the different functions.
(k) Keno. The surveillance system shall record the keno ball-drawing device, the general activities in each keno game area, and be capable of identifying the employees performing the different functions.
(l) Table games—(1) Operations with four (4) or more table games. Except as otherwise provided in paragraphs (l)(3), (l)(4), and (l)(5) of this section, the surveillance system of gaming operations operating four (4) or more table games shall provide at a minimum one (1) pan-tilt-zoom camera per two (2) tables and surveillance must be capable of taping:
(i) With sufficient clarity to identify customers and dealers; and
(ii) With sufficient coverage and clarity to simultaneously view the table bank and determine the configuration of wagers, card values, and game outcome.
(iii) One (1) dedicated camera per table and one (1) pan-tilt-zoom camera per four (4) tables may be an acceptable alternative procedure to satisfy the requirements of this paragraph.
(2) Operations with three (3) or fewer table games. The surveillance system of gaming operations operating three (3) or fewer table games shall:
(i) Comply with the requirements of paragraph (l)(1) of this section; or
(ii) Have one (1) overhead camera at each table.
(3) Craps. All craps tables shall have two (2) dedicated cross view cameras covering both ends of the table.
(4) Roulette. All roulette areas shall have one (1) overhead dedicated camera covering the roulette wheel and shall also have one (1) dedicated camera covering the play of the table.
(5) Big wheel. All big wheel games shall have one (1) dedicated camera viewing the wheel.
(m) Progressive table games. (1) Progressive table games with a progressive jackpot of $25,000 or more shall be recorded by dedicated cameras that provide coverage of:
(i) The table surface, sufficient that the card values and card suits can be clearly identified;
(ii) An overall view of the entire table with sufficient clarity to identify customers and dealer; and
(iii) A view of the progressive meter jackpot amount. If several tables are linked to the same progressive jackpot meter, only one meter need be recorded.
(2) [Reserved]
(n) Gaming machines. (1) Except as otherwise provided in paragraphs (n)(2) and (n)(3) of this section, gaming machines offering a payout of more than $250,000 shall be recorded by a dedicated camera(s) to provide coverage of:
(i) All customers and employees at the gaming machine; and
(ii) The face of the gaming machine, with sufficient clarity to identify the payout line(s) of the gaming machine.
(2) In-house progressive machine. In-house progressive gaming machines offering a base payout amount (jackpot reset amount) of more than $100,000 shall be recorded by a dedicated camera(s) to provide coverage of:
(i) All customers and employees at the gaming machine; and
(ii) The face of the gaming machine, with sufficient clarity to identify the payout line(s) of the gaming machine.
(3) Wide-area progressive machine. Wide-area progressive gaming machines offering a base payout amount of $1 million or more and monitored by an independent vendor utilizing an on-line progressive computer system shall be recorded by a dedicated camera(s) to provide coverage of:
(i) All customers and employees at the gaming machine; and
(ii) The face of the gaming machine, with sufficient clarity to identify the payout line(s) of the gaming machine.
(4) Notwithstanding paragraph (n)(1) of this section, if the gaming machine is a multi-game machine, the Tribal gaming regulatory authority, or the gaming operation subject to the approval of the Tribal gaming regulatory authority, may develop and implement alternative procedures to verify payouts.
(o) Currency and coin. The surveillance system shall record a general overview of all areas where currency or coin may be stored or counted.
(p) Video recording and/or digital record retention. (1) All video recordings and/or digital records of coverage provided by the dedicated cameras or motion-activated dedicated cameras required by the standards in this section shall be retained for a minimum of seven (7) days.
(2) Recordings involving suspected or confirmed gaming crimes, unlawful activity, or detentions by security personnel, must be retained for a minimum of thirty (30) days.
(3) Duly authenticated copies of video recordings and/or digital records shall be provided to the Commission upon request.
(q) Video library log. A video library log, or comparable alternative procedure approved by the Tribal gaming regulatory authority, shall be maintained to demonstrate compliance with the storage, identification, and retention standards required in this section.
(r) Malfunction and repair log. (1) Surveillance personnel shall maintain a log or alternative procedure approved by the Tribal gaming regulatory authority that documents each malfunction and repair of the surveillance system as defined in this section.
(2) The log shall state the time, date, and nature of each malfunction, the efforts expended to repair the malfunction, and the date of each effort, the reasons for any delays in repairing the malfunction, the date the malfunction is repaired, and where applicable, any alternative security measures that were taken.
§ 542.30 What is a Tier B gaming operation?
A Tier B gaming operation is one with gross gaming revenues of more than $5 million but not more than $15 million.
§ 542.31 What are the minimum internal control standards for drop and count for Tier B gaming operations?
(a) Computer applications. For any computer applications utilized, alternate documentation and/or procedures that provide at least the level of control described by the standards in this section, as approved by the Tribal gaming regulatory authority, will be acceptable.
(b) Table game drop standards. (1) The setting out of empty table game drop boxes and the drop shall be a continuous process.
(2) At the end of each shift:
(i) All locked table game drop boxes shall be removed from the tables by a person independent of the pit shift being dropped;
(ii) A separate drop box shall be placed on each table opened at any time during each shift or a gaming operation may utilize a single drop box with separate openings and compartments for each shift; and
(iii) Upon removal from the tables, table game drop boxes shall be transported directly to the count room or other equivalently secure area with comparable controls and locked in a secure manner until the count takes place.
(3) If drop boxes are not placed on all tables, then the pit department shall document which tables were open during the shift.
(4) The transporting of table game drop boxes shall be performed by a minimum of two persons, at least one of whom is independent of the pit shift being dropped.
(5) All table game drop boxes shall be posted with a number corresponding to a permanent number on the gaming table and marked to indicate game, table number, and shift.
(6) Surveillance shall be notified when the drop is to begin so that surveillance may monitor the activities.
(c) Soft count room personnel. (1) The table game soft count and the gaming machine bill acceptor count shall be performed by a minimum of two employees.
(i) The count shall be viewed live, or on video recording and/or digital record, within seven (7) days by an employee independent of the count.
(ii) [Reserved]
(2) Count room personnel shall not be allowed to exit or enter the count room during the count except for emergencies or scheduled breaks. At no time during the count, shall there be fewer than two employees in the count room until the drop proceeds have been accepted into cage/vault accountability. Surveillance shall be notified whenever count room personnel exit or enter the count room during the count.
(3) Count team members shall be rotated on a routine basis such that the count team is not consistently the same two persons more than four (4) days per week. This standard shall not apply to gaming operations that utilize a count team of more than two persons.
(4) The count team shall be independent of transactions being reviewed and counted. The count team shall be independent of the cage/vault departments, however, a dealer or a cage cashier may be used if this person is not allowed to perform the recording function. An accounting representative may be used if there is an independent audit of all soft count documentation.
(d) Table game soft count standards. (1) The table game soft count shall be performed in a soft count room or other equivalently secure area with comparable controls.
(2) Access to the count room during the count shall be restricted to members of the drop and count teams, with the exception of authorized observers, supervisors for resolution of problems, and authorized maintenance personnel.
(3) If counts from various revenue centers occur simultaneously in the count room, procedures shall be in effect that prevent the commingling of funds from different revenue centers.
(4) The table game drop boxes shall be individually emptied and counted in such a manner to prevent the commingling of funds between boxes until the count of the box has been recorded.
(i) The count of each box shall be recorded in ink or other permanent form of recordation.
(ii) A second count shall be performed by an employee on the count team who did not perform the initial count.
(iii) Corrections to information originally recorded by the count team on soft count documentation shall be made by drawing a single line through the error, writing the correct figure above the original figure, and then obtaining the initials of at least two count team members who verified the change, unless the count team only has two (2) members in which case the initials of only one (1) verifying count team member is required.
(5) If currency counters are utilized and the count room table is used only to empty boxes and sort/stack contents, a count team member shall be able to observe the loading and unloading of all currency at the currency counter, including rejected currency.
(6) Table game drop boxes, when empty, shall be shown to another member of the count team, or to another person who is observing the count, or to surveillance, provided the count is monitored in its entirety by a person independent of the count.
(7) Orders for fill/credit (if applicable) shall be matched to the fill/credit slips. Fills and credits shall be traced to or recorded on the count sheet.
(8) Pit marker issue and payment slips (if applicable) removed from the table game drop boxes shall either be:
(i) Traced to or recorded on the count sheet by the count team; or
(ii) Totaled by shift and traced to the totals documented by the computerized system. Accounting personnel shall verify the issue/payment slip for each table is accurate.
(9) Foreign currency exchange forms (if applicable) removed from the table game drop boxes shall be reviewed for the proper daily exchange rate and the conversion amount shall be recomputed by the count team. Alternatively, this may be performed by accounting/auditing employees.
(10) The opening/closing table and marker inventory forms (if applicable) shall either be:
(i) Examined and traced to or recorded on the count sheet; or
(ii) If a computerized system is used, accounting personnel can trace the opening/closing table and marker inventory forms to the count sheet. Discrepancies shall be investigated with the findings documented and maintained for inspection.
(11) The count sheet shall be reconciled to the total drop by a count team member who shall not function as the sole recorder.
(12) All members of the count team shall sign the count document or a summary report to attest to their participation in the count.
(13) All drop proceeds and cash equivalents that were counted shall be turned over to the cage or vault cashier (who shall be independent of the count team) or to an authorized person/employee independent of the revenue generation and the count process for verification. Such person shall certify by signature as to the accuracy of the drop proceeds delivered and received.
(14) The count sheet, with all supporting documents, shall be delivered to the accounting department by a count team member or a person independent of the cashiers department. Alternatively, it may be adequately secured (e.g., locked container to which only accounting personnel can gain access) until retrieved by the accounting department.
(15) Access to stored, full table game drop boxes shall be restricted to authorized members of the drop and count teams.
(e) Gaming machine bill acceptor drop standards. (1) A minimum of two employees shall be involved in the removal of the gaming machine drop, at least one of who is independent of the gaming machine department.
(2) All bill acceptor canisters shall be removed only at the time previously designated by the gaming operation and reported to the Tribal gaming regulatory authority, except for emergency drops.
(3) Surveillance shall be notified when the drop is to begin so that surveillance may monitor the activities.
(4) The bill acceptor canisters shall be removed by a person independent of the gaming machine department then transported directly to the count room or other equivalently secure area with comparable controls and locked in a secure manner until the count takes place.
(i) Security shall be provided over the bill acceptor canisters removed from the gaming machines and awaiting transport to the count room.
(ii) The transporting of bill acceptor canisters shall be performed by a minimum of two persons, at least one of who is independent of the gaming machine department.
(5) All bill acceptor canisters shall be posted with a number corresponding to a permanent number on the gaming machine.
(f) Gaming machine bill acceptor count standards. (1) The gaming machine bill acceptor count shall be performed in a soft count room or other equivalently secure area with comparable controls.
(2) Access to the count room during the count shall be restricted to members of the drop and count teams, with the exception of authorized observers, supervisors for resolution of problems, and authorized maintenance personnel.
(3) If counts from various revenue centers occur simultaneously in the count room, procedures shall be in effect that prevent the commingling of funds from different revenue centers.
(4) The bill acceptor canisters shall be individually emptied and counted in such a manner to prevent the commingling of funds between canisters until the count of the canister has been recorded.
(i) The count of each canister shall be recorded in ink or other permanent form of recordation.
(ii) Corrections to information originally recorded by the count team on soft count documentation shall be made by drawing a single line through the error, writing the correct figure above the original figure, and then obtaining the initials of at least two count team members who verified the change.
(5) If currency counters are utilized and the count room table is used only to empty canisters and sort/stack contents, a count team member shall be able to observe the loading and unloading of all currency at the currency counter, including rejected currency.
(6) Canisters, when empty, shall be shown to another member of the count team, to another person who is observing the count, or to surveillance, provided that the count is monitored in its entirety by a person independent of the count.
(7) The count sheet shall be reconciled to the total drop by a count team member who shall not function as the sole recorder.
(8) All members of the count team shall sign the count document or a summary report to attest to their participation in the count.
(9) All drop proceeds and cash equivalents that were counted shall be turned over to the cage or vault cashier (who shall be independent of the count team) or to an authorized person/employee independent of the revenue generation and the count process for verification. Such person shall certify by signature as to the accuracy of the drop proceeds delivered and received.
(10) The count sheet, with all supporting documents, shall be delivered to the accounting department by a count team member or a person independent of the cashiers department. Alternatively, it may be adequately secured (e.g., locked container to which only accounting personnel can gain access) until retrieved by the accounting department.
(11) Access to stored bill acceptor canisters, full or empty, shall be restricted to:
(i) Authorized members of the drop and count teams; and
(ii) Authorized personnel in an emergency for the resolution of a problem.
(g) Gaming machine coin drop standards. (1) A minimum of two employees shall be involved in the removal of the gaming machine drop, at least one of who is independent of the gaming machine department.
(2) All drop buckets shall be removed only at the time previously designated by the gaming operation and reported to the Tribal gaming regulatory authority, except for emergency drops.
(3) Surveillance shall be notified when the drop is to begin in order that surveillance may monitor the activities.
(4) Security shall be provided over the buckets removed from the gaming machine drop cabinets and awaiting transport to the count room.
(5) As each machine is opened, the contents shall be tagged with its respective machine number if the bucket is not permanently marked with the machine number. The contents shall be transported directly to the area designated for the counting of such drop proceeds. If more than one trip is required to remove the contents of the machines, the filled carts of coins shall be securely locked in the room designed for counting or in another equivalently secure area with comparable controls. There shall be a locked covering on any carts in which the drop route includes passage out of doors.
(i) Alternatively, a smart bucket system that electronically identifies and tracks the gaming machine number, and facilitates the proper recognition of gaming revenue, shall satisfy the requirements of this paragraph.
(ii) [Reserved]
(6) Each drop bucket in use shall be:
(i) Housed in a locked compartment separate from any other compartment of the gaming machine and keyed differently than other gaming machine compartments; and
(ii) Identifiable to the gaming machine from which it is removed. If the gaming machine is identified with a removable tag that is placed in the bucket, the tag shall be placed on top of the bucket when it is collected.
(7) Each gaming machine shall have drop buckets into which coins or tokens that are retained by the gaming machine are collected. Drop bucket contents shall not be used to make change or pay hand-paid payouts.
(8) The collection procedures may include procedures for dropping gaming machines that have trays instead of drop buckets.
(h) Hard count room personnel. (1) The weigh/count shall be performed by a minimum of two employees.
(i) The count shall be viewed either live, or on video recording and/or digital record within seven (7) days by an employee independent of the count.
(ii) [Reserved]
(2) At no time during the weigh/count shall there be fewer than two employees in the count room until the drop proceeds have been accepted into cage/vault accountability. Surveillance shall be notified whenever count room personnel exit or enter the count room during the count.
(i) If the gaming machine count is conducted with a continuous mechanical count meter that is not reset during the count and is verified in writing by at least two employees at the start and end of each denomination count, then one employee may perform the wrap.
(ii) [Reserved]
(3) Count team members shall be rotated on a routine basis such that the count team is not consistently the same two persons more than four (4) days per week. This standard shall not apply to gaming operations that utilize a count team of more than two persons.
(4) The count team shall be independent of transactions being reviewed and counted. The count team shall be independent of the cage/vault departments, unless they are non-supervisory gaming machine employees and perform the laborer function only (A non-supervisory gaming machine employee is defined as a person below the level of gaming machine shift supervisor). A cage cashier may be used if this person is not allowed to perform the recording function. An accounting representative may be used if there is an independent audit of all count documentation.
(i) Gaming machine coin count and wrap standards. (1) Coins shall include tokens.
(2) The gaming machine coin count and wrap shall be performed in a count room or other equivalently secure area with comparable controls.
(i) Alternatively, an on-the-floor drop system utilizing a mobile scale shall satisfy the requirements of this paragraph, subject to the following conditions:
(A) The gaming operation shall utilize and maintain an effective on-line gaming machine monitoring system, as described in § 542.13(m)(3);
(B) Components of the on-the-floor drop system shall include, but not be limited to, a weigh scale, a laptop computer through which weigh/count applications are operated, a security camera available for the mobile scale system, and a VCR to be housed within the video compartment of the mobile scale. The system may include a mule cart used for mobile weigh scale system locomotion.
(C) The gaming operation must obtain the security camera available with the system, and this camera must be added in such a way as to eliminate tampering.
(D) Prior to the drop, the drop/count team shall ensure the scale batteries are charged;
(E) Prior to the drop, a videotape shall be inserted into the VCR used to record the drop in conjunction with the security camera system and the VCR shall be activated;
(F) The weigh scale test shall be performed prior to removing the unit from the hard count room for the start of the weigh/drop/count;
(G) Surveillance shall be notified when the weigh/drop/count begins and shall be capable of monitoring the entire process;
(H) An observer independent of the weigh/drop/count teams (independent observer) shall remain by the weigh scale at all times and shall observe the entire weigh/drop/count process;
(I) Physical custody of the key(s) needed to access the laptop and video compartment shall require the involvement of two persons, one of whom is independent of the drop and count team;
(J) The mule key (if applicable), the laptop and video compartment keys, and the remote control for the VCR shall be maintained by a department independent of the gaming machine department. The appropriate personnel shall sign out these keys;
(K) A person independent of the weigh/drop/count teams shall be required to accompany these keys while they are checked out, and observe each time the laptop compartment is opened;
(L) The laptop access panel shall not be opened outside the hard count room, except in instances when the laptop must be rebooted as a result of a crash, lock up, or other situation requiring immediate corrective action;
(M) User access to the system shall be limited to those employees required to have full or limited access to complete the weigh/drop/count; and
(N) When the weigh/drop/count is completed, the independent observer shall access the laptop compartment, end the recording session, eject the videotape, and deliver the videotape to surveillance.
(ii) [Reserved]
(3) Access to the count room during the count shall be restricted to members of the drop and count teams, with the exception of authorized observers, supervisors for resolution of problems, and authorized maintenance personnel.
(4) If counts from various revenue centers occur simultaneously in the count room, procedures shall be in effect that prevent the commingling of funds from different revenue centers.
(5) The following functions shall be performed in the counting of the gaming machine drop:
(i) Recorder function, which involves the recording of the gaming machine count; and
(ii) Count team supervisor function, which involves the control of the gaming machine weigh and wrap process. The supervisor shall not perform the initial recording of the weigh/count unless a weigh scale with a printer is used.
(6) The gaming machine drop shall be counted, wrapped, and reconciled in such a manner to prevent the commingling of gaming machine drop coin with coin (for each denomination) from the next gaming machine drop until the count of the gaming machine drop has been recorded. If the coins are not wrapped immediately after being weighed or counted, they shall be secured and not commingled with other coin.
(i) The amount of the gaming machine drop from each machine shall be recorded in ink or other permanent form of recordation on a gaming machine count document by the recorder or mechanically printed by the weigh scale.
(ii) Corrections to information originally recorded by the count team on gaming machine count documentation shall be made by drawing a single line through the error, writing the correct figure above the original figure, and then obtaining the initials of at least two count team members who verified the change.
(A) If a weigh scale interface is used, corrections to gaming machine count data shall be made using either of the following:
(1) Drawing a single line through the error on the gaming machine document, writing the correct figure above the original figure, and then obtaining the initials of at least two count team employees. If this procedure is used, an employee independent of the gaming machine department and count team shall enter the correct figure into the computer system prior to the generation of related gaming machine reports; or
(2) During the count process, correct the error in the computer system and enter the passwords of at least two count team employees. If this procedure is used, an exception report shall be generated by the computer system identifying the gaming machine number, the error, the correction, and the count team employees attesting to the correction.
(B) [Reserved]
(7) If applicable, the weight shall be converted to dollar amounts before the reconciliation of the weigh to the wrap.
(8) If a coin meter is used, a count team member shall convert the coin count for each denomination into dollars and shall enter the results on a summary sheet.
(9) The recorder and at least one other count team member shall sign the weigh tape and the gaming machine count document attesting to the accuracy of the weigh/count.
(10) All members of the count team shall sign the count document or a summary report to attest to their participation in the count.
(11) All drop proceeds and cash equivalents that were counted shall be turned over to the cage or vault cashier (who shall be independent of the count team) or to an authorized person/employee independent of the revenue generation and the count process for verification. Such person shall certify by signature as to the accuracy of the drop proceeds delivered and received.
(12) All gaming machine count and wrap documentation, including any applicable computer storage media, shall be delivered to the accounting department by a count team member or a person independent of the cashier’s department. Alternatively, it may be adequately secured (e.g., locked container to which only accounting personnel can gain access) until retrieved by the accounting department.
(13) If the coins are transported off the property, a second (alternative) count procedure shall be performed before the coins leave the property. Any variances shall be documented.
(14) Variances. Large (by denomination, either $1,000 or 2% of the drop, whichever is less) or unusual (e.g., zero for weigh/count or patterned for all counts) variances between the weigh/count and wrap shall be investigated by management personnel independent of the gaming machine department, count team, and the cage/vault functions on a timely basis. The results of such investigation shall be documented, maintained for inspection, and provided to the Tribal gaming regulatory authority upon request.
(j) Security of the coin room inventory during the gaming machine coin count and wrap. (1) If the count room serves as a coin room and coin room inventory is not secured so as to preclude access by the count team, then the following standards shall apply:
(i) At the commencement of the gaming machine count the following requirements shall be met:
(A) The coin room inventory shall be counted by at least two employees, one of whom is a member of the count team and the other is independent of the weigh/count and wrap procedures;
(B) The count in paragraph (j)(1)(i)(A) of this section shall be recorded on an appropriate inventory form;
(ii) Upon completion of the wrap of the gaming machine drop:
(A) At least two members of the count team (wrap team), independently from each other, shall count the ending coin room inventory;
(B) The counts in paragraph (j)(1)(ii)(A) of this section shall be recorded on a summary report(s) that evidences the calculation of the final wrap by subtracting the beginning inventory from the sum of the ending inventory and transfers in and out of the coin room;
(C) The same count team members shall compare the calculated wrap to the weigh/count, recording the comparison and noting any variances on the summary report;
(D) A member of the cage/vault department shall count the ending coin room inventory by denomination and shall reconcile it to the beginning inventory, wrap, transfers and weigh/count; and
(E) At the conclusion of the reconciliation, at least two count/wrap team members and the verifying employee shall sign the summary report(s) attesting to its accuracy.
(iii) The functions described in paragraph (j)(1)(ii)(A) and (C) of this section may be performed by only one count team member. That count team member must then sign the summary report, along with the verifying employee, as required under paragraph (j)(1)(ii)(E).
(2) If the count room is segregated from the coin room, or if the coin room is used as a count room and the coin room inventory is secured to preclude access by the count team, all of the following requirements shall be completed, at the conclusion of the count:
(i) At least two members of the count/wrap team shall count the final wrapped gaming machine drop independently from each other;
(ii) The counts shall be recorded on a summary report;
(iii) The same count team members (or the accounting department) shall compare the final wrap to the weigh/count, recording the comparison, and noting any variances on the summary report;
(iv) A member of the cage/vault department shall count the wrapped gaming machine drop by denomination and reconcile it to the weigh/count;
(v) At the conclusion of the reconciliation, at least two count team members and the cage/vault employee shall sign the summary report attesting to its accuracy; and
(vi) The wrapped coins (exclusive of proper transfers) shall be transported to the cage, vault or coin vault after the reconciliation of the weigh/count to the wrap.
(k) Transfers during the gaming machine coin count and wrap. (1) Transfers may be permitted during the count and wrap only if permitted under the internal control standards approved by the Tribal gaming regulatory authority.
(2) Each transfer shall be recorded on a separate multi-part form with a preprinted or concurrently-printed form number (used solely for gaming machine count transfers) that shall be subsequently reconciled by the accounting department to ensure the accuracy of the reconciled gaming machine drop.
(3) Each transfer must be counted and signed for by at least two members of the count team and by a person independent of the count team who is responsible for authorizing the transfer.
(l) Gaming machine drop key control standards. (1) Gaming machine coin drop cabinet keys, including duplicates, shall be maintained by a department independent of the gaming machine department.
(2) The physical custody of the keys needed to access gaming machine coin drop cabinets, including duplicates, shall require the involvement of two persons, one of whom is independent of the gaming machine department.
(3) Two employees (separate from key custodian) shall be required to accompany such keys while checked out and observe each time gaming machine drop cabinets are accessed, unless surveillance is notified each time keys are checked out and surveillance observes the person throughout the period the keys are checked out.
(m) Table game drop box key control standards. (1) Procedures shall be developed and implemented to insure that unauthorized access to empty table game drop boxes shall not occur from the time the boxes leave the storage racks until they are placed on the tables.
(2) The involvement of at least two persons independent of the cage department shall be required to access stored empty table game drop boxes.
(3) The release keys shall be separately keyed from the contents keys.
(4) At least two count team members are required to be present at the time count room and other count keys are issued for the count.
(5) All duplicate keys shall be maintained in a manner that provides the same degree of control as is required for the original keys. Records shall be maintained for each key duplicated that indicate the number of keys made and destroyed.
(6) Logs shall be maintained by the custodian of sensitive keys to document authorization of personnel accessing keys.
(n) Table game drop box release keys. (1) The table game drop box release keys shall be maintained by a department independent of the pit department.
(2) Only the person(s) authorized to remove table game drop boxes from the tables shall be allowed access to the table game drop box release keys; however, the count team members may have access to the release keys during the soft count in order to reset the table game drop boxes.
(3) Persons authorized to remove the table game drop boxes shall be precluded from having simultaneous access to the table game drop box contents keys and release keys.
(4) For situations requiring access to a table game drop box at a time other than the scheduled drop, the date, time, and signature of employee signing out/in the release key must be documented.
(o) Bill acceptor canister release keys. (1) The bill acceptor canister release keys shall be maintained by a department independent of the gaming machine department.
(2) Only the person(s) authorized to remove bill acceptor canisters from the gaming machines shall be allowed access to the release keys.
(3) Persons authorized to remove the bill acceptor canisters shall be precluded from having simultaneous access to the bill acceptor canister contents keys and release keys.
(4) For situations requiring access to a bill acceptor canister at a time other than the scheduled drop, the date, time, and signature of employee signing out/in the release key must be documented.
(p) Table game drop box storage rack keys. Persons authorized to obtain table game drop box storage rack keys shall be precluded from having simultaneous access to table game drop box contents keys with the exception of the count team.
(q) Bill acceptor canister storage rack keys. Persons authorized to obtain bill acceptor canister storage rack keys shall be precluded from having simultaneous access to bill acceptor canister contents keys with the exception of the count team.
(r) Table game drop box contents keys. (1) The physical custody of the keys needed for accessing stored, full table game drop box contents shall require the involvement of persons from at least two separate departments, with the exception of the count team.
(2) Access to the table game drop box contents key at other than scheduled count times shall require the involvement of at least two persons from separate departments, including management. The reason for access shall be documented with the signatures of all participants and observers.
(3) Only count team members shall be allowed access to table game drop box contents keys during the count process.
(s) Bill acceptor canister contents keys. (1) The physical custody of the keys needed for accessing stored, full bill acceptor canister contents shall require involvement of persons from two separate departments, with the exception of the count team.
(2) Access to the bill acceptor canister contents key at other than scheduled count times shall require the involvement of at least two persons from separate departments, one of whom must be a supervisor. The reason for access shall be documented with the signatures of all participants and observers.
(3) Only the count team members shall be allowed access to bill acceptor canister contents keys during the count process.
(t) Gaming machine computerized key security systems. (1) Computerized key security systems which restrict access to the gaming machine drop and count keys through the use of passwords, keys or other means, other than a key custodian, must provide the same degree of control as indicated in the aforementioned key control standards; refer to paragraphs (l), (o), (q) and (s) of this section. Note: This standard does not apply to the system administrator. The system administrator is defined in paragraph (t)(2)(i) of this section.
(2) For computerized key security systems, the following additional gaming machine key control procedures apply:
(i) Management personnel independent of the gaming machine department assign and control user access to keys in the computerized key security system (i.e., system administrator) to ensure that gaming machine drop and count keys are restricted to authorized employees.
(ii) In the event of an emergency or the key box is inoperable, access to the emergency manual key(s) (a.k.a. override key), used to access the box containing the gaming machine drop and count keys, requires the physical involvement of at least three persons from separate departments, including management. The date, time, and reason for access, must be documented with the signatures of all participating employees signing out/in the emergency manual key(s).
(iii) The custody of the keys issued pursuant to paragraph (t)(2)(ii) of this section, requires the presence of two persons from separate departments from the time of their issuance until the time of their return.
(iv) Routine physical maintenance that requires accessing the emergency manual key(s) (override key) and does not involve the accessing of the gaming machine drop and count keys, only requires the presence of two persons from separate departments. The date, time and reason for access must be documented with the signatures of all participating employees signing out/in the emergency manual key(s).
(3) For computerized key security systems controlling access to gaming machine drop and count keys, accounting/audit personnel, independent of the system administrator, will perform the following procedures:
(i) Daily, review the report generated by the computerized key security system indicating the transactions performed by the individual(s) that adds, deletes, and changes user’s access within the system (i.e., system administrator). Determine whether the transactions completed by the system administrator provide an adequate control over the access to the gaming machine drop and count keys. Also, determine whether any gaming machine drop and count key(s) removed or returned to the key cabinet by the system administrator was properly authorized.
(ii) For at least one day each month, review the report generated by the computerized key security system indicating all transactions performed to determine whether any unusual gaming machine drop and count key removals or key returns occurred.
(iii) At least quarterly, review a sample of users that are assigned access to the gaming machine drop and count keys to determine that their access to the assigned keys is adequate relative to their job position.
(iv) All noted improper transactions or unusual occurrences are investigated with the results documented.
(4) Quarterly, an inventory of all count room, drop box release, storage rack and contents keys is performed, and reconciled to records of keys made, issued, and destroyed. Investigations are performed for all keys unaccounted for, with the investigation being documented.
(u) Table games computerized key security systems. (1) Computerized key security systems which restrict access to the table game drop and count keys through the use of passwords, keys or other means, other than a key custodian, must provide the same degree of control as indicated in the aforementioned key control standards, refer to paragraphs (m), (n), (p) and (r) of this section. Note: This standard does not apply to the system administrator. The system administrator is defined in paragraph (u)(2)(ii) of this section.
(2) For computerized key security systems, the following additional table game key control procedures apply:
(i) Management personnel independent of the table game department assign and control user access to keys in the computerized key security system (i.e., system administrator) to ensure that table game drop and count keys are restricted to authorized employees.
(ii) In the event of an emergency or the key box is inoperable, access to the emergency manual key(s) (a.k.a. override key), used to access the box containing the table game drop and count keys, requires the physical involvement of at least three persons from separate departments, including management. The date, time, and reason for access, must be documented with the signatures of all participating employees signing out/in the emergency manual key(s).
(iii) The custody of the keys issued pursuant to paragraph (u)(2)(ii) of this section, requires the presence of two persons from separate departments from the time of their issuance until the time of their return.
(iv) Routine physical maintenance that requires accessing the emergency manual key(s) (override key) and does not involve the accessing of the table games drop and count keys, only requires the presence of two persons from separate departments. The date, time and reason for access must be documented with the signatures of all participating employees signing out/in the emergency manual key(s).
(3) For computerized key security systems controlling access to table games drop and count keys, accounting/audit personnel, independent of the system administrator, will perform the following procedures:
(i) Daily, review the report generated by the computerized key security system indicating the transactions performed by the individual(s) that adds, deletes, and changes user’s access within the system (i.e., system administrator). Determine whether the transactions completed by the system administrator provide an adequate control over the access to the table games drop and count keys. Also, determine whether any table games drop and count key(s) removed or returned to the key cabinet by the system administrator was properly authorized.
(ii) For at least one day each month, review the report generated by the computerized key security system indicating all transactions performed to determine whether any unusual table games drop and count key removals or key returns occurred.
(iii) At least quarterly, review a sample of users that are assigned access to the table games drop and count keys to determine that their access to the assigned keys is adequate relative to their job position.
(iv) All noted improper transactions or unusual occurrences are investigated with the results documented.
(4) Quarterly, an inventory of all count room, table game drop box release, storage rack and contents keys is performed, and reconciled to records of keys made, issued, and destroyed. Investigations are performed for all keys unaccounted for, with the investigations being documented.
(v) Emergency drop procedures. Emergency drop procedures shall be developed by the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority.
(w) Equipment standards for gaming machine count. (1) A weigh scale calibration module shall be secured so as to prevent unauthorized access (e.g., prenumbered seal, lock and key, etc.).
(2) A person independent of the cage, vault, gaming machine, and count team functions shall be required to be present whenever the calibration module is accessed. Such access shall be documented and maintained.
(3) If a weigh scale interface is used, it shall be adequately restricted so as to prevent unauthorized access (passwords, keys, etc.).
(4) If the weigh scale has a zero adjustment mechanism, it shall be physically limited to minor adjustments (e.g., weight of a bucket) or physically situated such that any unnecessary adjustments to it during the weigh process would be observed by other count team members.
(5) The weigh scale and weigh scale interface (if applicable) shall be tested by a person or persons independent of the cage, vault, and gaming machine departments and count team at least quarterly. At least annually, this test shall be performed by internal audit in accordance with the internal audit standards. The result of these tests shall be documented and signed by the person or persons performing the test.
(6) Prior to the gaming machine count, at least two employees shall verify the accuracy of the weigh scale with varying weights or with varying amounts of previously counted coin for each denomination to ensure the scale is properly calibrated (varying weights/coin from drop to drop is acceptable).
(7) If a mechanical coin counter is used (instead of a weigh scale), the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with procedures that are equivalent to those described in paragraphs (u)(4), (u)(5), and (u)(6) of this section.
(8) If a coin meter count machine is used, the count team member shall record the machine number denomination and number of coins in ink on a source document, unless the meter machine automatically records such information.
(i) A count team member shall test the coin meter count machine before the actual count to ascertain if the metering device is functioning properly with a predetermined number of coins for each denomination.
(ii) [Reserved]
§ 542.32 What are the minimum internal control standards for internal audit for Tier B gaming operations?
(a) Internal audit personnel. (1) For Tier B gaming operations, a separate internal audit department must be maintained. Alternatively, designating personnel (who are independent with respect to the departments/procedures being examined) to perform internal audit work satisfies the requirements of this paragraph.
(2) The internal audit personnel shall report directly to the Tribe, Tribal gaming regulatory authority, audit committee, or other entity designated by the Tribe in accordance with the definition of internal audit in § 542.2.
(b) Audits. (1) Internal audit personnel shall perform audits of all major gaming areas of the gaming operation. The following shall be reviewed at least annually:
(i) Bingo, including but not limited to, bingo card control, payout procedures, and cash reconciliation process;
(ii) Pull tabs, including but not limited to, statistical records, winner verification, perpetual inventory, and accountability of sales versus inventory;
(iii) Card games, including but not limited to, card games operation, cash exchange procedures, shill transactions, and count procedures;
(iv) Keno, including but not limited to, game write and payout procedures, sensitive key location and control, and a review of keno auditing procedures;
(v) Pari-mutual wagering, including write and payout procedures, and pari-mutual auditing procedures;
(vi) Table games, including but not limited to, fill and credit procedures, pit credit play procedures, rim credit procedures, soft drop/count procedures and the subsequent transfer of funds, unannounced testing of count room currency counters and/or currency interface, location and control over sensitive keys, the tracing of source documents to summarized documentation and accounting records, and reconciliation to restricted copies;
(vii) Gaming machines, including but not limited to, jackpot payout and gaming machine fill procedures, gaming machine drop/count and bill acceptor drop/count and subsequent transfer of funds, unannounced testing of weigh scale and weigh scale interface, unannounced testing of count room currency counters and/or currency interface, gaming machine drop cabinet access, tracing of source documents to summarized documentation and accounting records, reconciliation to restricted copies, location and control over sensitive keys, compliance with EPROM duplication procedures, and compliance with MICS procedures for gaming machines that accept currency or coin(s) and issue cash-out tickets or gaming machines that do not accept currency or coin(s) and do not return currency or coin(s);
(viii) Cage and credit procedures including all cage, credit, and collection procedures, and the reconciliation of trial balances to physical instruments on a sample basis. Cage accountability shall be reconciled to the general ledger;
(ix) Information technology functions, including review for compliance with information technology standards;
(x) Complimentary service or item, including but not limited to, procedures whereby complimentary service items are issued, authorized, and redeemed; and
(xi) Any other internal audits as required by the Tribe, Tribal gaming regulatory authority, audit committee, or other entity designated by the Tribe.
(2) In addition to the observation and examinations performed under paragraph (b)(1) of this section, follow-up observations and examinations shall be performed to verify that corrective action has been taken regarding all instances of noncompliance cited by internal audit, the independent accountant, and/or the Commission. The verification shall be performed within six (6) months following the date of notification.
(3) Whenever possible, internal audit observations shall be performed on an unannounced basis (i.e., without the employees being forewarned that their activities will be observed). Additionally, if the independent accountant also performs the internal audit function, the accountant shall perform separate observations of the table games/gaming machine drops and counts to satisfy the internal audit observation requirements and independent accountant tests of controls as required by the American Institute of Certified Public Accountants guide.
(c) Documentation. (1) Documentation (e.g., checklists, programs, reports, etc.) shall be prepared to evidence all internal audit work performed as it relates to the requirements in this section, including all instances of noncompliance.
(2) The internal audit department shall operate with audit programs, which, at a minimum, address the MICS. Additionally, the department shall properly document the work performed, the conclusions reached, and the resolution of all exceptions. Institute of Internal Auditors standards are recommended but not required.
(d) Reports. (1) Reports documenting audits performed shall be maintained and made available to the Commission upon request.
(2) Such audit reports shall include the following information:
(i) Audit objectives;
(ii) Audit procedures and scope;
(iii) Findings and conclusions;
(iv) Recommendations, if applicable; and
(v) Management’s response.
(e) Material exceptions. All material exceptions resulting from internal audit work shall be investigated and resolved with the results of such being documented and retained for five years.
(f) Role of management. (1) Internal audit findings shall be reported to management.
(2) Management shall be required to respond to internal audit findings stating corrective measures to be taken to avoid recurrence of the audit exception.
(3) Such management responses shall be included in the internal audit report that will be delivered to management, the Tribe, Tribal gaming regulatory authority, audit committee, or other entity designated by the Tribe.
(g) Internal Audit Guidelines. In connection with the internal audit testing pursuant to paragraph (b)(1) of this section, the Commission shall develop recommended Internal Audit Guidelines, which shall be available upon request.
§ 542.33 What are the minimum internal control standards for surveillance for Tier B gaming operations?
(a) The surveillance system shall be maintained and operated from a staffed surveillance room and shall provide surveillance over gaming areas.
(b) The entrance to the surveillance room shall be located so that it is not readily accessible by either gaming operation employees who work primarily on the casino floor, or the general public.
(c) Access to the surveillance room shall be limited to surveillance personnel, designated employees, and other persons authorized in accordance with the surveillance department policy. Such policy shall be approved by the Tribal gaming regulatory authority. The surveillance department shall maintain a sign-in log of other authorized persons entering the surveillance room.
(d) Surveillance room equipment shall have total override capability over all other satellite surveillance equipment located outside the surveillance room.
(e) The surveillance system shall include date and time generators that possess the capability to display the date and time of recorded events on video and/or digital recordings. The displayed date and time shall not significantly obstruct the recorded view.
(f) The surveillance department shall strive to ensure staff is trained in the use of the equipment, knowledge of the games, and house rules.
(g) Each camera required by the standards in this section shall be installed in a manner that will prevent it from being readily obstructed, tampered with, or disabled by customers or employees.
(h) Each camera required by the standards in this section shall possess the capability of having its picture displayed on a monitor and recorded. The surveillance system shall include sufficient numbers of monitors and recorders to simultaneously display and record multiple gaming and count room activities, and record the views of all dedicated cameras and motion activated dedicated cameras.
(i) Reasonable effort shall be made to repair each malfunction of surveillance system equipment required by the standards in this section within seventy-two (72) hours after the malfunction is discovered. The Tribal gaming regulatory authority shall be notified of any camera(s) that has malfunctioned for more than twenty-four (24) hours.
(1) In the event of a dedicated camera malfunction, the gaming operation and/or surveillance department shall immediately provide alternative camera coverage or other security measures, such as additional supervisory or security personnel, to protect the subject activity.
(2) [Reserved]
(j) Bingo. (1) The surveillance system shall possess the capability to monitor the bingo ball drawing device or random number generator, which shall be recorded during the course of the draw by a dedicated camera with sufficient clarity to identify the balls drawn or numbers selected.
(2) The surveillance system shall monitor and record the game board and the activities of the employees responsible for drawing, calling, and entering the balls drawn or numbers selected.
(k) Card games. The surveillance system shall monitor and record general activities in each card room with sufficient clarity to identify the employees performing the different functions.
(l) Progressive card games. (1) Progressive card games with a progressive jackpot of $25,000 or more shall be monitored and recorded by dedicated cameras that provide coverage of:
(i) The table surface, sufficient that the card values and card suits can be clearly identified;
(ii) An overall view of the entire table with sufficient clarity to identify customers and dealer; and
(iii) A view of the posted jackpot amount.
(2) [Reserved]
(m) Keno. (1) The surveillance system shall possess the capability to monitor the keno ball-drawing device or random number generator, which shall be recorded during the course of the draw by a dedicated camera with sufficient clarity to identify the balls drawn or numbers selected.
(2) The surveillance system shall monitor and record general activities in each keno game area with sufficient clarity to identify the employees performing the different functions.
(n) Pari-mutuel. The surveillance system shall monitor and record general activities in the pari-mutuel area, to include the ticket writer and cashier areas, with sufficient clarity to identify the employees performing the different functions.
(o) Table games—(1) Operations with four (4) or more table games. Except as otherwise provided in paragraphs (o)(3), (o)(4), and (o)(5) of this section, the surveillance system of gaming operations operating four (4) or more table games shall provide at a minimum one (1) pan-tilt-zoom camera per two (2) tables and surveillance must be capable of taping:
(i) With sufficient clarity to identify customers and dealers; and
(ii) With sufficient coverage and clarity to simultaneously view the table bank and determine the configuration of wagers, card values, and game outcome.
(iii) One (1) dedicated camera per table and one (1) pan-tilt-zoom camera per four (4) tables may be an acceptable alternative procedure to satisfy the requirements of this paragraph.
(2) Operations with three (3) or fewer table games. The surveillance system of gaming operations operating three (3) or fewer table games shall:
(i) Comply with the requirements of paragraph (o)(1) of this section; or
(ii) Have one (1) overhead camera at each table.
(3) Craps. All craps tables shall have two (2) dedicated cross view cameras covering both ends of the table.
(4) Roulette. All roulette areas shall have one (1) overhead dedicated camera covering the roulette wheel and shall also have one (1) dedicated camera covering the play of the table.
(5) Big wheel. All big wheel games shall have one (1) dedicated camera viewing the wheel.
(p) Progressive table games. (1) Progressive table games with a progressive jackpot of $25,000 or more shall be monitored and recorded by dedicated cameras that provide coverage of:
(i) The table surface, sufficient that the card values and card suits can be clearly identified;
(ii) An overall view of the entire table with sufficient clarity to identify customers and dealer; and
(iii) A view of the progressive meter jackpot amount. If several tables are linked to the same progressive jackpot meter, only one meter need be recorded.
(2) [Reserved]
(q) Gaming machines. (1) Except as otherwise provided in paragraphs (q)(2) and (q)(3) of this section, gaming machines offering a payout of more than $250,000 shall be monitored and recorded by a dedicated camera(s) to provide coverage of:
(i) All customers and employees at the gaming machine, and
(ii) The face of the gaming machine, with sufficient clarity to identify the payout line(s) of the gaming machine.
(2) In-house progressive machine. In-house progressive gaming machines offering a base payout amount (jackpot reset amount) of more than $100,000 shall be monitored and recorded by a dedicated camera(s) to provide coverage of:
(i) All customers and employees at the gaming machine; and
(ii) The face of the gaming machine, with sufficient clarity to identify the payout line(s) of the gaming machine.
(3) Wide-area progressive machine. Wide-area progressive gaming machines offering a base payout amount of $1 million or more and monitored by an independent vendor utilizing an on-line progressive computer system shall be recorded by a dedicated camera(s) to provide coverage of:
(i) All customers and employees at the gaming machine; and
(ii) The face of the gaming machine, with sufficient clarity to identify the payout line(s) of the gaming machine.
(4) Notwithstanding paragraph (q)(1) of this section, if the gaming machine is a multi-game machine, the Tribal gaming regulatory authority, or the gaming operation subject to the approval of the Tribal gaming regulatory authority, may develop and implement alternative procedures to verify payouts.
(r) Cage and vault. (1) The surveillance system shall monitor and record a general overview of activities occurring in each cage and vault area with sufficient clarity to identify employees within the cage and customers and employees at the counter areas.
(2) Each cashier station shall be equipped with one (1) dedicated overhead camera covering the transaction area.
(3) The surveillance system shall provide an overview of cash transactions. This overview should include the customer, the employee, and the surrounding area.
(s) Fills and credits. (1) The cage or vault area in which fills and credits are transacted shall be monitored and recorded by a dedicated camera or motion activated dedicated camera that provides coverage with sufficient clarity to identify the chip values and the amounts on the fill and credit slips.
(2) Controls provided by a computerized fill and credit system may be deemed an adequate alternative to viewing the fill and credit slips.
(t) Currency and coin. (1) The surveillance system shall monitor and record with sufficient clarity all areas where currency or coin may be stored or counted.
(2) The surveillance system shall provide for:
(i) Coverage of scales shall be sufficiently clear to view any attempted manipulation of the recorded data.
(ii) Monitoring and recording of the table game drop box storage rack or area by either a dedicated camera or a motion-detector activated camera.
(iii) Monitoring and recording of all areas where coin may be stored or counted, including the hard count room, all doors to the hard count room, all scales and wrapping machines, and all areas where uncounted coin may be stored during the drop and count process.
(iv) Monitoring and recording of soft count room, including all doors to the room, all table game drop boxes, safes, and counting surfaces, and all count team personnel. The counting surface area must be continuously monitored and recorded by a dedicated camera during the soft count.
(v) Monitoring and recording of all areas where currency is sorted, stacked, counted, verified, or stored during the soft count process.
(u) Change booths. The surveillance system shall monitor and record a general overview of the activities occurring in each gaming machine change booth.
(v) Video recording and/or digital record retention. (1) All video recordings and/or digital records of coverage provided by the dedicated cameras or motion-activated dedicated cameras required by the standards in this section shall be retained for a minimum of seven (7) days.
(2) Recordings involving suspected or confirmed gaming crimes, unlawful activity, or detentions by security personnel, must be retained for a minimum of thirty (30) days.
(3) Duly authenticated copies of video recordings and/or digital records shall be provided to the Commission upon request.
(w) Video library log. A video library log, or comparable alternative procedure approved by the Tribal gaming regulatory authority, shall be maintained to demonstrate compliance with the storage, identification, and retention standards required in this section.
(x) Malfunction and repair log. (1) Surveillance personnel shall maintain a log or alternative procedure approved by the Tribal gaming regulatory authority that documents each malfunction and repair of the surveillance system as defined in this section.
(2) The log shall state the time, date, and nature of each malfunction, the efforts expended to repair the malfunction, and the date of each effort, the reasons for any delays in repairing the malfunction, the date the malfunction is repaired, and where applicable, any alternative security measures that were taken.
(y) Surveillance log. (1) Surveillance personnel shall maintain a log of all surveillance activities.
(2) Such log shall be maintained by surveillance room personnel and shall be stored securely within the surveillance department.
(3) At a minimum, the following information shall be recorded in a surveillance log:
(i) Date;
(ii) Time commenced and terminated;
(iii) Activity observed or performed; and
(iv) The name or license credential number of each person who initiates, performs, or supervises the surveillance.
(4) Surveillance personnel shall also record a summary of the results of the surveillance of any suspicious activity. This summary may be maintained in a separate log.
§ 542.40 What is a Tier C gaming operation?
A Tier C gaming operation is one with annual gross gaming revenues of more than $15 million.
§ 542.41 What are the minimum internal control standards for drop and count for Tier C gaming operations?
(a) Computer applications. For any computer applications utilized, alternate documentation and/or procedures that provide at least the level of control described by the standards in this section, as approved by the Tribal gaming regulatory authority, will be acceptable.
(b) Table game drop standards. (1) The setting out of empty table game drop boxes and the drop shall be a continuous process.
(2) At the end of each shift:
(i) All locked table game drop boxes shall be removed from the tables by a person independent of the pit shift being dropped;
(ii) A separate drop box shall be placed on each table opened at any time during each shift or a gaming operation may utilize a single drop box with separate openings and compartments for each shift; and
(iii) Upon removal from the tables, table game drop boxes shall be transported directly to the count room or other equivalently secure area with comparable controls and locked in a secure manner until the count takes place.
(3) If drop boxes are not placed on all tables, then the pit department shall document which tables were open during the shift.
(4) The transporting of table game drop boxes shall be performed by a minimum of two persons, at least one of whom is independent of the pit shift being dropped.
(5) All table game drop boxes shall be posted with a number corresponding to a permanent number on the gaming table and marked to indicate game, table number, and shift.
(6) Surveillance shall be notified when the drop is to begin so that surveillance may monitor the activities.
(c) Soft count room personnel. (1) The table game soft count and the gaming machine bill acceptor count shall be performed by a minimum of three employees.
(2) Count room personnel shall not be allowed to exit or enter the count room during the count except for emergencies or scheduled breaks. At no time during the count, shall there be fewer than three employees in the count room until the drop proceeds have been accepted into cage/vault accountability. Surveillance shall be notified whenever count room personnel exit or enter the count room during the count.
(3) Count team members shall be rotated on a routine basis such that the count team is not consistently the same three persons more than four (4) days per week. This standard shall not apply to gaming operations that utilize a count team of more than three persons.
(4) The count team shall be independent of transactions being reviewed and counted. The count team shall be independent of the cage/vault departments, however, an accounting representative may be used if there is an independent audit of all soft count documentation.
(d) Table game soft count standards. (1) The table game soft count shall be performed in a soft count room or other equivalently secure area with comparable controls.
(2) Access to the count room during the count shall be restricted to members of the drop and count teams, with the exception of authorized observers, supervisors for resolution of problems, and authorized maintenance personnel.
(3) If counts from various revenue centers occur simultaneously in the count room, procedures shall be in effect that prevent the commingling of funds from different revenue centers.
(4) The table game drop boxes shall be individually emptied and counted in such a manner to prevent the commingling of funds between boxes until the count of the box has been recorded.
(i) The count of each box shall be recorded in ink or other permanent form of recordation.
(ii) A second count shall be performed by an employee on the count team who did not perform the initial count.
(iii) Corrections to information originally recorded by the count team on soft count documentation shall be made by drawing a single line through the error, writing the correct figure above the original figure, and then obtaining the initials of at least two count team members who verified the change.
(5) If currency counters are utilized and the count room table is used only to empty boxes and sort/stack contents, a count team member shall be able to observe the loading and unloading of all currency at the currency counter, including rejected currency.
(6) Table game drop boxes, when empty, shall be shown to another member of the count team, or to another person who is observing the count, or to surveillance, provided the count is monitored in its entirety by a person independent of the count.
(7) Orders for fill/credit (if applicable) shall be matched to the fill/credit slips. Fills and credits shall be traced to or recorded on the count sheet.
(8) Pit marker issue and payment slips (if applicable) removed from the table game drop boxes shall either be:
(i) Traced to or recorded on the count sheet by the count team; or
(ii) Totaled by shift and traced to the totals documented by the computerized system. Accounting personnel shall verify the issue/payment slip for each table is accurate.
(9) Foreign currency exchange forms (if applicable) removed from the table game drop boxes shall be reviewed for the proper daily exchange rate and the conversion amount shall be recomputed by the count team. Alternatively, this may be performed by accounting/auditing employees.
(10) The opening/closing table and marker inventory forms (if applicable) shall either be:
(i) Examined and traced to or recorded on the count sheet; or
(ii) If a computerized system is used, accounting personnel can trace the opening/closing table and marker inventory forms to the count sheet. Discrepancies shall be investigated with the findings documented and maintained for inspection.
(11) The count sheet shall be reconciled to the total drop by a count team member who shall not function as the sole recorder.
(12) All members of the count team shall sign the count document or a summary report to attest to their participation in the count.
(13) All drop proceeds and cash equivalents that were counted shall be turned over to the cage or vault cashier (who shall be independent of the count team) or to an authorized person/employee independent of the revenue generation and the count process for verification. Such person shall certify by signature as to the accuracy of the drop proceeds delivered and received.
(14) The count sheet, with all supporting documents, shall be delivered to the accounting department by a count team member or a person independent of the cashiers department. Alternatively, it may be adequately secured (e.g., locked container to which only accounting personnel can gain access) until retrieved by the accounting department.
(15) Access to stored, full table game drop boxes shall be restricted to authorized members of the drop and count teams.
(e) Gaming machine bill acceptor drop standards. (1) A minimum of three employees shall be involved in the removal of the gaming machine drop, at least one of who is independent of the gaming machine department.
(2) All bill acceptor canisters shall be removed only at the time previously designated by the gaming operation and reported to the Tribal gaming regulatory authority, except for emergency drops.
(3) Surveillance shall be notified when the drop is to begin so that surveillance may monitor the activities.
(4) The bill acceptor canisters shall be removed by a person independent of the gaming machine department then transported directly to the count room or other equivalently secure area with comparable controls and locked in a secure manner until the count takes place.
(i) Security shall be provided over the bill acceptor canisters removed from the gaming machines and awaiting transport to the count room.
(ii) The transporting of bill acceptor canisters shall be performed by a minimum of two persons, at least one of who is independent of the gaming machine department.
(5) All bill acceptor canisters shall be posted with a number corresponding to a permanent number on the gaming machine.
(f) Gaming machine bill acceptor count standards. (1) The gaming machine bill acceptor count shall be performed in a soft count room or other equivalently secure area with comparable controls.
(2) Access to the count room during the count shall be restricted to members of the drop and count teams, with the exception of authorized observers, supervisors for resolution of problems, and authorized maintenance personnel.
(3) If counts from various revenue centers occur simultaneously in the count room, procedures shall be in effect that prevent the commingling of funds from different revenue centers.
(4) The bill acceptor canisters shall be individually emptied and counted in such a manner to prevent the commingling of funds between canisters until the count of the canister has been recorded.
(i) The count of each canister shall be recorded in ink or other permanent form of recordation.
(ii) Corrections to information originally recorded by the count team on soft count documentation shall be made by drawing a single line through the error, writing the correct figure above the original figure, and then obtaining the initials of at least two count team members who verified the change.
(5) If currency counters are utilized and the count room table is used only to empty canisters and sort/stack contents, a count team member shall be able to observe the loading and unloading of all currency at the currency counter, including rejected currency.
(6) Canisters, when empty, shall be shown to another member of the count team, or to another person who is observing the count, or to surveillance, provided that the count is monitored in its entirety by a person independent of the count.
(7) The count sheet shall be reconciled to the total drop by a count team member who shall not function as the sole recorder.
(8) All members of the count team shall sign the count document or a summary report to attest to their participation in the count.
(9) All drop proceeds and cash equivalents that were counted shall be turned over to the cage or vault cashier (who shall be independent of the count team) or to an authorized person/employee independent of the revenue generation and the count process for verification. Such person shall certify by signature as to the accuracy of the drop proceeds delivered and received.
(10) The count sheet, with all supporting documents, shall be delivered to the accounting department by a count team member or a person independent of the cashiers department. Alternatively, it may be adequately secured (e.g., locked container to which only accounting personnel can gain access) until retrieved by the accounting department.
(11) Access to stored bill acceptor canisters, full or empty, shall be restricted to:
(i) Authorized members of the drop and count teams; and
(ii) Authorized personnel in an emergency for the resolution of a problem.
(g) Gaming machine coin drop standards. (1) A minimum of three employees shall be involved in the removal of the gaming machine drop, at least one of who is independent of the gaming machine department.
(2) All drop buckets shall be removed only at the time previously designated by the gaming operation and reported to the Tribal gaming regulatory authority, except for emergency drops.
(3) Surveillance shall be notified when the drop is to begin in order that surveillance may monitor the activities.
(4) Security shall be provided over the buckets removed from the gaming machine drop cabinets and awaiting transport to the count room.
(5) As each machine is opened, the contents shall be tagged with its respective machine number if the bucket is not permanently marked with the machine number. The contents shall be transported directly to the area designated for the counting of such drop proceeds. If more than one trip is required to remove the contents of the machines, the filled carts of coins shall be securely locked in the room designed for counting or in another equivalently secure area with comparable controls. There shall be a locked covering on any carts in which the drop route includes passage out of doors.
(i) Alternatively, a smart bucket system that electronically identifies and tracks the gaming machine number, and facilitates the proper recognition of gaming revenue, shall satisfy the requirements of this paragraph.
(ii) [Reserved]
(6) Each drop bucket in use shall be:
(i) Housed in a locked compartment separate from any other compartment of the gaming machine and keyed differently than other gaming machine compartments; and
(ii) Identifiable to the gaming machine from which it is removed. If the gaming machine is identified with a removable tag that is placed in the bucket, the tag shall be placed on top of the bucket when it is collected.
(7) Each gaming machine shall have drop buckets into which coins or tokens that are retained by the gaming machine are collected. Drop bucket contents shall not be used to make change or pay hand-paid payouts.
(8) The collection procedures may include procedures for dropping gaming machines that have trays instead of drop buckets.
(h) Hard count room personnel. (1) The weigh/count shall be performed by a minimum of three employees.
(2) At no time during the weigh/count shall there be fewer than three employees in the count room until the drop proceeds have been accepted into cage/vault accountability. Surveillance shall be notified whenever count room personnel exit or enter the count room during the count.
(i) If the gaming machine count is conducted with a continuous mechanical count meter that is not reset during the count and is verified in writing by at least three employees at the start and end of each denomination count, then one employee may perform the wrap.
(ii) [Reserved]
(3) Count team members shall be rotated on a routine basis such that the count team is not consistently the same three persons more than four (4) days per week. This standard shall not apply to gaming operations that utilize a count team of more than three persons.
(4) The count team shall be independent of transactions being reviewed and counted. The count team shall be independent of the cage/vault departments, unless they are non-supervisory gaming machine employees and perform the laborer function only (A non-supervisory gaming machine employee is defined as a person below the level of gaming machine shift supervisor). A cage cashier may be used if this person is not allowed to perform the recording function. An accounting representative may be used if there is an independent audit of all count documentation.
(i) Gaming machine coin count and wrap standards. (1) Coins shall include tokens.
(2) The gaming machine coin count and wrap shall be performed in a count room or other equivalently secure area with comparable controls.
(i) Alternatively, an on-the-floor drop system utilizing a mobile scale shall satisfy the requirements of this paragraph, subject to the following conditions:
(A) The gaming operation shall utilize and maintain an effective on-line gaming machine monitoring system, as described in § 542.13(m)(3);
(B) Components of the on-the-floor drop system shall include, but not be limited to, a weigh scale, a laptop computer through which weigh/count applications are operated, a security camera available for the mobile scale system, and a VCR to be housed within the video compartment of the mobile scale. The system may include a mule cart used for mobile weigh scale system locomotion.
(C) The gaming operation must obtain the security camera available with the system, and this camera must be added in such a way as to eliminate tampering.
(D) Prior to the drop, the drop/count team shall ensure the scale batteries are charged;
(E) Prior to the drop, a videotape shall be inserted into the VCR used to record the drop in conjunction with the security camera system and the VCR shall be activated;
(F) The weigh scale test shall be performed prior to removing the unit from the hard count room for the start of the weigh/drop/count;
(G) Surveillance shall be notified when the weigh/drop/count begins and shall be capable of monitoring the entire process;
(H) An observer independent of the weigh/drop/count teams (independent observer) shall remain by the weigh scale at all times and shall observe the entire weigh/drop/count process;
(I) Physical custody of the key(s) needed to access the laptop and video compartment shall require the involvement of two persons, one of whom is independent of the drop and count team;
(J) The mule key (if applicable), the laptop and video compartment keys, and the remote control for the VCR shall be maintained by a department independent of the gaming machine department. The appropriate personnel shall sign out these keys;
(K) A person independent of the weigh/drop/count teams shall be required to accompany these keys while they are checked out, and observe each time the laptop compartment is opened;
(L) The laptop access panel shall not be opened outside the hard count room, except in instances when the laptop must be rebooted as a result of a crash, lock up, or other situation requiring immediate corrective action;
(M) User access to the system shall be limited to those employees required to have full or limited access to complete the weigh/drop/count; and
(N) When the weigh/drop/count is completed, the independent observer shall access the laptop compartment, end the recording session, eject the videotape, and deliver the videotape to surveillance.
(ii) [Reserved]
(3) Access to the count room during the count shall be restricted to members of the drop and count teams, with the exception of authorized observers, supervisors for resolution of problems, and authorized maintenance personnel.
(4) If counts from various revenue centers occur simultaneously in the count room, procedures shall be in effect that prevent the commingling of funds from different revenue centers.
(5) The following functions shall be performed in the counting of the gaming machine drop:
(i) Recorder function, which involves the recording of the gaming machine count; and
(ii) Count team supervisor function, which involves the control of the gaming machine weigh and wrap process. The supervisor shall not perform the initial recording of the weigh/count unless a weigh scale with a printer is used.
(6) The gaming machine drop shall be counted, wrapped, and reconciled in such a manner to prevent the commingling of gaming machine drop coin with coin (for each denomination) from the next gaming machine drop until the count of the gaming machine drop has been recorded. If the coins are not wrapped immediately after being weighed or counted, they shall be secured and not commingled with other coin.
(i) The amount of the gaming machine drop from each machine shall be recorded in ink or other permanent form of recordation on a gaming machine count document by the recorder or mechanically printed by the weigh scale.
(ii) Corrections to information originally recorded by the count team on gaming machine count documentation shall be made by drawing a single line through the error, writing the correct figure above the original figure, and then obtaining the initials of at least two count team members who verified the change.
(A) If a weigh scale interface is used, corrections to gaming machine count data shall be made using either of the following:
(1) Drawing a single line through the error on the gaming machine document, writing the correct figure above the original figure, and then obtaining the initials of at least two count team employees. If this procedure is used, an employee independent of the gaming machine department and count team shall enter the correct figure into the computer system prior to the generation of related gaming machine reports; or
(2) During the count process, correct the error in the computer system and enter the passwords of at least two count team employees. If this procedure is used, an exception report shall be generated by the computer system identifying the gaming machine number, the error, the correction, and the count team employees attesting to the correction.
(B) [Reserved]
(7) If applicable, the weight shall be converted to dollar amounts before the reconciliation of the weigh to the wrap.
(8) If a coin meter is used, a count team member shall convert the coin count for each denomination into dollars and shall enter the results on a summary sheet.
(9) The recorder and at least one other count team member shall sign the weigh tape and the gaming machine count document attesting to the accuracy of the weigh/count.
(10) All members of the count team shall sign the count document or a summary report to attest to their participation in the count.
(11) All drop proceeds and cash equivalents that were counted shall be turned over to the cage or vault cashier (who shall be independent of the count team) or to an authorized person/employee independent of the revenue generation and the count process for verification. Such person shall certify by signature as to the accuracy of the drop proceeds delivered and received.
(12) All gaming machine count and wrap documentation, including any applicable computer storage media, shall be delivered to the accounting department by a count team member or a person independent of the cashier’s department. Alternatively, it may be adequately secured (e.g., locked container to which only accounting personnel can gain access) until retrieved by the accounting department.
(13) If the coins are transported off the property, a second (alternative) count procedure shall be performed before the coins leave the property. Any variances shall be documented.
(14) Variances. Large (by denomination, either $1,000 or 2% of the drop, whichever is less) or unusual (e.g., zero for weigh/count or patterned for all counts) variances between the weigh/count and wrap shall be investigated by management personnel independent of the gaming machine department, count team, and the cage/vault functions on a timely basis. The results of such investigation shall be documented, maintained for inspection, and provided to the Tribal gaming regulatory authority upon request.
(j) Security of the count room inventory during the gaming machine coin count and wrap. (1) If the count room serves as a coin room and coin room inventory is not secured so as to preclude access by the count team, then the following standards shall apply:
(i) At the commencement of the gaming machine count the following requirements shall be met:
(A) The coin room inventory shall be counted by at least two employees, one of whom is a member of the count team and the other is independent of the weigh/count and wrap procedures;
(B) The count in paragraph (j)(1)(i)(A) of this section shall be recorded on an appropriate inventory form;
(ii) Upon completion of the wrap of the gaming machine drop:
(A) At least two members of the count team (wrap team), independently from each other, shall count the ending coin room inventory;
(B) The counts in paragraph (j)(1)(ii)(A) of this section shall be recorded on a summary report(s) that evidences the calculation of the final wrap by subtracting the beginning inventory from the sum of the ending inventory and transfers in and out of the coin room;
(C) The same count team members shall compare the calculated wrap to the weigh/count, recording the comparison and noting any variances on the summary report;
(D) A member of the cage/vault department shall count the ending coin room inventory by denomination and shall reconcile it to the beginning inventory, wrap, transfers, and weigh/count; and
(E) At the conclusion of the reconciliation, at least two count/wrap team members and the verifying employee shall sign the summary report(s) attesting to its accuracy.
(2) If the count room is segregated from the coin room, or if the coin room is used as a count room and the coin room inventory is secured to preclude access by the count team, all of the following requirements shall be completed, at the conclusion of the count:
(i) At least two members of the count/wrap team shall count the final wrapped gaming machine drop independently from each other;
(ii) The counts shall be recorded on a summary report;
(iii) The same count team members (or the accounting department) shall compare the final wrap to the weigh/count, recording the comparison and noting any variances on the summary report;
(iv) A member of the cage/vault department shall count the wrapped gaming machine drop by denomination and reconcile it to the weigh/count;
(v) At the conclusion of the reconciliation, at least two count team members and the cage/vault employee shall sign the summary report attesting to its accuracy; and
(vi) The wrapped coins (exclusive of proper transfers) shall be transported to the cage, vault or coin vault after the reconciliation of the weigh/count to the wrap.
(k) Transfers during the gaming machine coin count and wrap. (1) Transfers may be permitted during the count and wrap only if permitted under the internal control standards approved by the Tribal gaming regulatory authority.
(2) Each transfer shall be recorded on a separate multi-part form with a preprinted or concurrently-printed form number (used solely for gaming machine count transfers) that shall be subsequently reconciled by the accounting department to ensure the accuracy of the reconciled gaming machine drop.
(3) Each transfer must be counted and signed for by at least two members of the count team and by a person independent of the count team who is responsible for authorizing the transfer.
(l) Gaming machine drop key control standards. (1) Gaming machine coin drop cabinet keys, including duplicates, shall be maintained by a department independent of the gaming machine department.
(2) The physical custody of the keys needed to access gaming machine coin drop cabinets, including duplicates, shall require the involvement of two persons, one of whom is independent of the gaming machine department.
(3) Two employees (separate from key custodian) shall be required to accompany such keys while checked out and observe each time gaming machine drop cabinets are accessed, unless surveillance is notified each time keys are checked out and surveillance observes the person throughout the period the keys are checked out.
(m) Table game drop box key control standards. (1) Procedures shall be developed and implemented to insure that unauthorized access to empty table game drop boxes shall not occur from the time the boxes leave the storage racks until they are placed on the tables.
(2) The involvement of at least two persons independent of the cage department shall be required to access stored empty table game drop boxes.
(3) The release keys shall be separately keyed from the contents keys.
(4) At least three (two for table game drop box keys in operations with three tables or fewer) count team members are required to be present at the time count room and other count keys are issued for the count.
(5) All duplicate keys shall be maintained in a manner that provides the same degree of control as is required for the original keys. Records shall be maintained for each key duplicated that indicate the number of keys made and destroyed.
(6) Logs shall be maintained by the custodian of sensitive keys to document authorization of personnel accessing keys.
(n) Table game drop box release keys. (1) The table game drop box release keys shall be maintained by a department independent of the pit department.
(2) Only the person(s) authorized to remove table game drop boxes from the tables shall be allowed access to the table game drop box release keys; however, the count team members may have access to the release keys during the soft count in order to reset the table game drop boxes.
(3) Persons authorized to remove the table game drop boxes shall be precluded from having simultaneous access to the table game drop box contents keys and release keys.
(4) For situations requiring access to a table game drop box at a time other than the scheduled drop, the date, time, and signature of employee signing out/in the release key must be documented.
(o) Bill acceptor canister release keys. (1) The bill acceptor canister release keys shall be maintained by a department independent of the gaming machine department.
(2) Only the person(s) authorized to remove bill acceptor canisters from the gaming machines shall be allowed access to the release keys.
(3) Persons authorized to remove the bill acceptor canisters shall be precluded from having simultaneous access to the bill acceptor canister contents keys and release keys.
(4) For situations requiring access to a bill acceptor canister at a time other than the scheduled drop, the date, time, and signature of employee signing out/in the release key must be documented.
(p) Table game drop box storage rack keys. (1) A person independent of the pit department shall be required to accompany the table game drop box storage rack keys and observe each time table game drop boxes are removed from or placed in storage racks.
(2) Persons authorized to obtain table game drop box storage rack keys shall be precluded from having simultaneous access to table game drop box contents keys with the exception of the count team.
(q) Bill acceptor canister storage rack keys. (1) A person independent of the gaming machine department shall be required to accompany the bill acceptor canister storage rack keys and observe each time canisters are removed from or placed in storage racks.
(2) Persons authorized to obtain bill acceptor canister storage rack keys shall be precluded from having simultaneous access to bill acceptor canister contents keys with the exception of the count team.
(r) Table game drop box contents keys. (1) The physical custody of the keys needed for accessing stored, full table game drop box contents shall require the involvement of persons from at least two separate departments, with the exception of the count team.
(2) Access to the table game drop box contents key at other than scheduled count times shall require the involvement of at least three persons from separate departments, including management. The reason for access shall be documented with the signatures of all participants and observers.
(3) Only count team members shall be allowed access to table game drop box content keys during the count process.
(s) Bill acceptor canister contents keys. (1) The physical custody of the keys needed for accessing stored, full bill acceptor canister contents shall require involvement of persons from two separate departments, with the exception of the count team.
(2) Access to the bill acceptor canister contents key at other than scheduled count times shall require the involvement of at least three persons from separate departments, one of whom must be a supervisor. The reason for access shall be documented with the signatures of all participants and observers.
(3) Only the count team members shall be allowed access to bill acceptor canister contents keys during the count process.
(t) Gaming machine computerized key security systems. (1) Computerized key security systems which restrict access to the gaming machine drop and count keys through the use of passwords, keys or other means, other than a key custodian, must provide the same degree of control as indicated in the aforementioned key control standards; refer to paragraphs (l), (o), (q) and (s) of this section. Note: This standard does not apply to the system administrator. The system administrator is defined in paragraph (t)(2)(i) of this section.
(2) For computerized key security systems, the following additional gaming machine key control procedures apply:
(i) Management personnel independent of the gaming machine department assign and control user access to keys in the computerized key security system (i.e., system administrator) to ensure that gaming machine drop and count keys are restricted to authorized employees.
(ii) In the event of an emergency or the key box is inoperable, access to the emergency manual key(s) (a.k.a. override key), used to access the box containing the gaming machine drop and count keys, requires the physical involvement of at least three persons from separate departments, including management. The date, time, and reason for access, must be documented with the signatures of all participating employees signing out/in the emergency manual key(s).
(iii) The custody of the keys issued pursuant to paragraph (t)(2)(ii) of this section requires the presence of two persons from separate departments from the time of their issuance until the time of their return.
(iv) Routine physical maintenance that requires accessing the emergency manual key(s) (override key) and does not involve the accessing of the gaming machine drop and count keys, only requires the presence of two persons from separate departments. The date, time and reason for access must be documented with the signatures of all participating employees signing out/in the emergency manual key(s).
(3) For computerized key security systems controlling access to gaming machine drop and count keys, accounting/audit personnel, independent of the system administrator, will perform the following procedures:
(i) Daily, review the report generated by the computerized key security system indicating the transactions performed by the individual(s) that adds, deletes, and changes user’s access within the system (i.e., system administrator). Determine whether the transactions completed by the system administrator provide an adequate control over the access to the gaming machine drop and count keys. Also, determine whether any gaming machine drop and count key(s) removed or returned to the key cabinet by the system administrator was properly authorized.
(ii) For at least one day each month, review the report generated by the computerized key security system indicating all transactions performed to determine whether any unusual gaming machine drop and count key removals or key returns occurred.
(iii) At least quarterly, review a sample of users that are assigned access to the gaming machine drop and count keys to determine that their access to the assigned keys is adequate relative to their job position.
(iv) All noted improper transactions or unusual occurrences are investigated with the results documented.
(4) Quarterly, an inventory of all count room, drop box release, storage rack and contents keys is performed, and reconciled to records of keys made, issued, and destroyed. Investigations are performed for all keys unaccounted for, with the investigation being documented.
(u) Table games computerized key security systems. (1) Computerized key security systems which restrict access to the table game drop and count keys through the use of passwords, keys or other means, other than a key custodian, must provide the same degree of control as indicated in the aforementioned key control standards; refer to paragraphs (m), (n), (p) and (r) of this section. Note: This standard does not apply to the system administrator. The system administrator is defined in paragraph (u)(2)(ii) of this section.
(2) For computerized key security systems, the following additional table game key control procedures apply:
(i) Management personnel independent of the table game department assign and control user access to keys in the computerized key security system (i.e., system administrator) to ensure that table game drop and count keys are restricted to authorized employees.
(ii) In the event of an emergency or the key box is inoperable, access to the emergency manual key(s) (a.k.a. override key), used to access the box containing the table game drop and count keys, requires the physical involvement of at least three persons from separate departments, including management. The date, time, and reason for access, must be documented with the signatures of all participating employees signing out/in the emergency manual key(s).
(iii) The custody of the keys issued pursuant to paragraph (u)(2)(ii) of this section requires the presence of two persons from separate departments from the time of their issuance until the time of their return.
(iv) Routine physical maintenance that requires accessing the emergency manual key(s) override key) and does not involve the accessing of the table games drop and count keys, only requires the presence of two persons from separate departments. The date, time and reason for access must be documented with the signatures of all participating employees signing out/in the emergency manual key(s).
(3) For computerized key security systems controlling access to table games drop and count keys, accounting/audit personnel, independent of the system administrator, will perform the following procedures:
(i) Daily, review the report generated by the computerized key security system indicating the transactions performed by the individual(s) that adds, deletes, and changes user’s access within the system (i.e., system administrator). Determine whether the transactions completed by the system administrator provide an adequate control over the access to the table games drop and count keys. Also, determine whether any table games drop and count key(s) removed or returned to the key cabinet by the system administrator was properly authorized.
(ii) For at least one day each month, review the report generated by the computerized key security system indicating all transactions performed to determine whether any unusual table games drop and count key removals or key returns occurred.
(iii) At least quarterly, review a sample of users that are assigned access to the table games drop and count keys to determine that their access to the assigned keys is adequate relative to their job position.
(iv) All noted improper transactions or unusual occurrences are investigated with the results documented.
(4) Quarterly, an inventory of all count room, table game drop box release, storage rack and contents keys is performed, and reconciled to records of keys made, issued, and destroyed. Investigations are performed for all keys unaccounted for, with the investigations being documented.
(v) Emergency drop procedures. Emergency drop procedures shall be developed by the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority.
(w) Equipment standards for gaming machine count. (1) A weigh scale calibration module shall be secured so as to prevent unauthorized access (e.g., prenumbered seal, lock and key, etc.).
(2) A person independent of the cage, vault, gaming machine, and count team functions shall be required to be present whenever the calibration module is accessed. Such access shall be documented and maintained.
(3) If a weigh scale interface is used, it shall be adequately restricted so as to prevent unauthorized access (passwords, keys, etc.).
(4) If the weigh scale has a zero adjustment mechanism, it shall be physically limited to minor adjustments (e.g., weight of a bucket) or physically situated such that any unnecessary adjustments to it during the weigh process would be observed by other count team members.
(5) The weigh scale and weigh scale interface (if applicable) shall be tested by a person or persons independent of the cage, vault, and gaming machine departments and count team at least quarterly. At least annually, this test shall be performed by internal audit in accordance with the internal audit standards. The result of these tests shall be documented and signed by the person or persons performing the test.
(6) Prior to the gaming machine count, at least two employees shall verify the accuracy of the weigh scale with varying weights or with varying amounts of previously counted coin for each denomination to ensure the scale is properly calibrated (varying weights/coin from drop to drop is acceptable).
(7) If a mechanical coin counter is used (instead of a weigh scale), the Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with procedures that are equivalent to those described in paragraphs (u)(4), (u)(5), and (u)(6) of this section.
(8) If a coin meter count machine is used, the count team member shall record the machine number denomination and number of coins in ink on a source document, unless the meter machine automatically records such information.
(i) A count team member shall test the coin meter count machine before the actual count to ascertain if the metering device is functioning properly with a predetermined number of coins for each denomination.
(ii) [Reserved]
§ 542.42 What are the minimum internal control standards for internal audit for Tier C gaming operations?
(a) Internal audit personnel. (1) For Tier C gaming operations, a separate internal audit department shall be maintained whose primary function is performing internal audit work and that is independent with respect to the departments subject to audit.
(2) The internal audit personnel shall report directly to the Tribe, Tribal gaming regulatory authority, audit committee, or other entity designated by the Tribe in accordance with the definition of internal audit in § 542.2.
(b) Audits. (1) Internal audit personnel shall perform audits of all major gaming areas of the gaming operation. The following shall be reviewed at least annually:
(i) Bingo, including but not limited to, bingo card control, payout procedures, and cash reconciliation process;
(ii) Pull tabs, including but not limited to, statistical records, winner verification, perpetual inventory, and accountability of sales versus inventory;
(iii) Card games, including but not limited to, card games operation, cash exchange procedures, shill transactions, and count procedures;
(iv) Keno, including but not limited to, game write and payout procedures, sensitive key location and control, and a review of keno auditing procedures;
(v) Pari-mutual wagering, including write and payout procedures, and pari-mutual auditing procedures;
(vi) Table games, including but not limited to, fill and credit procedures, pit credit play procedures, rim credit procedures, soft drop/count procedures and the subsequent transfer of funds, unannounced testing of count room currency counters and/or currency interface, location and control over sensitive keys, the tracing of source documents to summarized documentation and accounting records, and reconciliation to restricted copies;
(vii) Gaming machines, including but not limited to, jackpot payout and gaming machine fill procedures, gaming machine drop/count and bill acceptor drop/count and subsequent transfer of funds, unannounced testing of weigh scale and weigh scale interface, unannounced testing of count room currency counters and/or currency interface, gaming machine drop cabinet access, tracing of source documents to summarized documentation and accounting records, reconciliation to restricted copies, location and control over sensitive keys, compliance with EPROM duplication procedures, and compliance with MICS procedures for gaming machines that accept currency or coin(s) and issue cash-out tickets or gaming machines that do not accept currency or coin(s) and do not return currency or coin(s);
(viii) Cage and credit procedures including all cage, credit, and collection procedures, and the reconciliation of trial balances to physical instruments on a sample basis. Cage accountability shall be reconciled to the general ledger;
(ix) Information technology functions, including review for compliance with information technology standards;
(x) Complimentary service or item, including but not limited to, procedures whereby complimentary service items are issued, authorized, and redeemed; and
(xi) Any other internal audits as required by the Tribe, Tribal gaming regulatory authority, audit committee, or other entity designated by the Tribe.
(2) In addition to the observation and examinations performed under paragraph (b)(1) of this section, follow-up observations and examinations shall be performed to verify that corrective action has been taken regarding all instances of noncompliance cited by internal audit, the independent accountant, and/or the Commission. The verification shall be performed within six (6) months following the date of notification.
(3) Whenever possible, internal audit observations shall be performed on an unannounced basis (i.e., without the employees being forewarned that their activities will be observed). Additionally, if the independent accountant also performs the internal audit function, the accountant shall perform separate observations of the table games/gaming machine drops and counts to satisfy the internal audit observation requirements and independent accountant tests of controls as required by the American Institute of Certified Public Accountants guide.
(c) Documentation. (1) Documentation (e.g., checklists, programs, reports, etc.) shall be prepared to evidence all internal audit work performed as it relates to the requirements in this section, including all instances of noncompliance.
(2) The internal audit department shall operate with audit programs, which, at a minimum, address the MICS. Additionally, the department shall properly document the work performed, the conclusions reached, and the resolution of all exceptions. Institute of Internal Auditors standards are recommended but not required.
(d) Reports. (1) Reports documenting audits performed shall be maintained and made available to the Commission upon request.
(2) Such audit reports shall include the following information:
(i) Audit objectives;
(ii) Audit procedures and scope;
(iii) Findings and conclusions;
(iv) Recommendations, if applicable; and
(v) Management’s response.
(e) Material exceptions. All material exceptions resulting from internal audit work shall be investigated and resolved with the results of such being documented and retained for five years.
(f) Role of management. (1) Internal audit findings shall be reported to management.
(2) Management shall be required to respond to internal audit findings stating corrective measures to be taken to avoid recurrence of the audit exception.
(3) Such management responses shall be included in the internal audit report that will be delivered to management, the Tribe, Tribal gaming regulatory authority, audit committee, or other entity designated by the Tribe.
(g) Internal Audit Guidelines. In connection with the internal audit testing pursuant to paragraph (b)(1) of this section, the Commission shall develop recommended Internal Audit Guidelines, which shall be available upon request.
§ 542.43 What are the minimum internal control standards for surveillance for a Tier C gaming operation?
(a) The surveillance system shall be maintained and operated from a staffed surveillance room and shall provide surveillance over gaming areas.
(b) The entrance to the surveillance room shall be located so that it is not readily accessible by either gaming operation employees who work primarily on the casino floor, or the general public.
(c) Access to the surveillance room shall be limited to surveillance personnel, designated employees, and other persons authorized in accordance with the surveillance department policy. Such policy shall be approved by the Tribal gaming regulatory authority. The surveillance department shall maintain a sign-in log of other authorized persons entering the surveillance room.
(d) Surveillance room equipment shall have total override capability over all other satellite surveillance equipment located outside the surveillance room.
(e) In the event of power loss to the surveillance system, an auxiliary or backup power source shall be available and capable of providing immediate restoration of power to all elements of the surveillance system that enable surveillance personnel to observe the table games remaining open for play and all areas covered by dedicated cameras. Auxiliary or backup power sources such as a UPS System, backup generator, or an alternate utility supplier, satisfy this requirement.
(f) The surveillance system shall include date and time generators that possess the capability to display the date and time of recorded events on video and/or digital recordings. The displayed date and time shall not significantly obstruct the recorded view.
(g) The surveillance department shall strive to ensure staff is trained in the use of the equipment, knowledge of the games, and house rules.
(h) Each camera required by the standards in this section shall be installed in a manner that will prevent it from being readily obstructed, tampered with, or disabled by customers or employees.
(i) Each camera required by the standards in this section shall possess the capability of having its picture displayed on a monitor and recorded. The surveillance system shall include sufficient numbers of monitors and recorders to simultaneously display and record multiple gaming and count room activities, and record the views of all dedicated cameras and motion activated dedicated cameras.
(j) Reasonable effort shall be made to repair each malfunction of surveillance system equipment required by the standards in this section within seventy-two (72) hours after the malfunction is discovered. The Tribal gaming regulatory authority shall be notified of any camera(s) that has malfunctioned for more than twenty-four (24) hours.
(1) In the event of a dedicated camera malfunction, the gaming operation and/or the surveillance department shall immediately provide alternative camera coverage or other security measures, such as additional supervisory or security personnel, to protect the subject activity.
(2) [Reserved]
(k) Bingo. (1) The surveillance system shall possess the capability to monitor the bingo ball drawing device or random number generator, which shall be recorded during the course of the draw by a dedicated camera with sufficient clarity to identify the balls drawn or numbers selected.
(2) The surveillance system shall monitor and record the game board and the activities of the employees responsible for drawing, calling, and entering the balls drawn or numbers selected.
(l) Card games. The surveillance system shall monitor and record general activities in each card room with sufficient clarity to identify the employees performing the different functions.
(m) Progressive card games. (1) Progressive card games with a progressive jackpot of $25,000 or more shall be monitored and recorded by dedicated cameras that provide coverage of:
(i) The table surface, sufficient that the card values and card suits can be clearly identified;
(ii) An overall view of the entire table with sufficient clarity to identify customers and dealer; and
(iii) A view of the posted jackpot amount.
(2) [Reserved]
(n) Keno. (1) The surveillance system shall possess the capability to monitor the keno ball-drawing device or random number generator, which shall be recorded during the course of the draw by a dedicated camera with sufficient clarity to identify the balls drawn or numbers selected.
(2) The surveillance system shall monitor and record general activities in each keno game area with sufficient clarity to identify the employees performing the different functions.
(o) Pari-mutuel. The surveillance system shall monitor and record general activities in the pari-mutuel area, to include the ticket writer and cashier areas, with sufficient clarity to identify the employees performing the different functions.
(p) Table games—(1) Operations with four (4) or more table games. Except as otherwise provided in paragraphs (p)(3), (p)(4), and (p)(5) of this section, the surveillance system of gaming operations operating four (4) or more table games shall provide at a minimum one (1) pan-tilt-zoom camera per two (2) tables and surveillance must be capable of taping:
(i) With sufficient clarity to identify customers and dealers; and
(ii) With sufficient coverage and clarity to simultaneously view the table bank and determine the configuration of wagers, card values, and game outcome.
(iii) One (1) dedicated camera per table and one (1) pan-tilt-zoom camera per four (4) tables may be an acceptable alternative procedure to satisfy the requirements of this paragraph.
(2) Operations with three (3) or fewer table games. The surveillance system of gaming operations operating three (3) or fewer table games shall:
(i) Comply with the requirements of paragraph (p)(1) of this section; or
(ii) Have one (1) overhead camera at each table.
(3) Craps. All craps tables shall have two (2) dedicated cross view cameras covering both ends of the table.
(4) Roulette. All roulette areas shall have one (1) overhead dedicated camera covering the roulette wheel and shall also have one (1) dedicated camera covering the play of the table.
(5) Big wheel. All big wheel games shall have one (1) dedicated camera viewing the wheel.
(q) Progressive table games. (1) Progressive table games with a progressive jackpot of $25,000 or more shall be monitored and recorded by dedicated cameras that provide coverage of:
(i) The table surface, sufficient that the card values and card suits can be clearly identified;
(ii) An overall view of the entire table with sufficient clarity to identify customers and dealer; and
(iii) A view of the progressive meter jackpot amount. If several tables are linked to the same progressive jackpot meter, only one meter need be recorded.
(2) [Reserved]
(r) Gaming machines. (1) Except as otherwise provided in paragraphs (r)(2) and (r)(3) of this section, gaming machines offering a payout of more than $250,000 shall be monitored and recorded by a dedicated camera(s) to provide coverage of:
(i) All customers and employees at the gaming machine, and
(ii) The face of the gaming machine, with sufficient clarity to identify the payout line(s) of the gaming machine.
(2) In-house progressive machine. In-house progressive gaming machines offering a base payout amount (jackpot reset amount) of more than $100,000 shall be monitored and recorded by a dedicated camera(s) to provide coverage of:
(i) All customers and employees at the gaming machine; and
(ii) The face of the gaming machine, with sufficient clarity to identify the payout line(s) of the gaming machine.
(3) Wide-area progressive machine. Wide-area progressive gaming machines offering a base payout amount of $1 million or more and monitored by an independent vendor utilizing an on-line progressive computer system shall be recorded by a dedicated camera(s) to provide coverage of:
(i) All customers and employees at the gaming machine; and
(ii) The face of the gaming machine, with sufficient clarity to identify the payout line(s) of the gaming machine.
(4) Notwithstanding paragraph (r)(1) of this section, if the gaming machine is a multi-game machine, the Tribal gaming regulatory authority, or the gaming operation subject to the approval of the Tribal gaming regulatory authority, may develop and implement alternative procedures to verify payouts.
(s) Cage and vault. (1) The surveillance system shall monitor and record a general overview of activities occurring in each cage and vault area with sufficient clarity to identify employees within the cage and customers and employees at the counter areas.
(2) Each cashier station shall be equipped with one (1) dedicated overhead camera covering the transaction area.
(3) The surveillance system shall provide an overview of cash transactions. This overview should include the customer, the employee, and the surrounding area.
(t) Fills and credits. (1) The cage or vault area in which fills and credits are transacted shall be monitored and recorded by a dedicated camera or motion activated dedicated camera that provides coverage with sufficient clarity to identify the chip values and the amounts on the fill and credit slips.
(2) Controls provided by a computerized fill and credit system maybe deemed an adequate alternative to viewing the fill and credit slips.
(u) Currency and coin. (1) The surveillance system shall monitor and record with sufficient clarity all areas where currency or coin may be stored or counted.
(2) Audio capability of the soft count room shall also be maintained.
(3) The surveillance system shall provide for:
(i) Coverage of scales shall be sufficiently clear to view any attempted manipulation of the recorded data.
(ii) Monitoring and recording of the table game drop box storage rack or area by either a dedicated camera or a motion-detector activated camera.
(iii) Monitoring and recording of all areas where coin may be stored or counted, including the hard count room, all doors to the hard count room, all scales and wrapping machines, and all areas where uncounted coin may be stored during the drop and count process.
(iv) Monitoring and recording of soft count room, including all doors to the room, all table game drop boxes, safes, and counting surfaces, and all count team personnel. The counting surface area must be continuously monitored and recorded by a dedicated camera during the soft count.
(v) Monitoring and recording of all areas where currency is sorted, stacked, counted, verified, or stored during the soft count process.
(v) Change booths. The surveillance system shall monitor and record a general overview of the activities occurring in each gaming machine change booth.
(w) Video recording and/or digital record retention. (1) All video recordings and/or digital records of coverage provided by the dedicated cameras or motion-activated dedicated cameras required by the standards in this section shall be retained for a minimum of seven (7) days.
(2) Recordings involving suspected or confirmed gaming crimes, unlawful activity, or detentions by security personnel, must be retained for a minimum of thirty (30) days.
(3) Duly authenticated copies of video recordings and/or digital records shall be provided to the Commission upon request.
(x) Video library log. A video library log, or comparable alternative procedure approved by the Tribal gaming regulatory authority, shall be maintained to demonstrate compliance with the storage, identification, and retention standards required in this section.
(y) Malfunction and repair log. (1) Surveillance personnel shall maintain a log or alternative procedure approved by the Tribal gaming regulatory authority that documents each malfunction and repair of the surveillance system as defined in this section.
(2) The log shall state the time, date, and nature of each malfunction, the efforts expended to repair the malfunction, and the date of each effort, the reasons for any delays in repairing the malfunction, the date the malfunction is repaired, and where applicable, any alternative security measures that were taken.
(z) Surveillance log. (1) Surveillance personnel shall maintain a log of all surveillance activities.
(2) Such log shall be maintained by surveillance room personnel and shall be stored securely within the surveillance department.
(3) At a minimum, the following information shall be recorded in a surveillance log:
(i) Date;
(ii) Time commenced and terminated;
(iii) Activity observed or performed; and
(iv) The name or license credential number of each person who initiates, performs, or supervises the surveillance.
(4) Surveillance personnel shall also record a summary of the results of the surveillance of any suspicious activity. This summary may be maintained in a separate log.
PART 543—MINIMUM INTERNAL CONTROL STANDARDS FOR CLASS II GAMING
§ 543.1 What does this part cover?
This part establishes the minimum internal control standards for the conduct of Class II games on Indian lands as defined in 25 U.S.C. 2701 et seq.
§ 543.2 What are the definitions for this part?
The definitions in this section apply to all sections of this part unless otherwise noted.
Accountability. All financial instruments, receivables, and patron deposits constituting the total amount for which the bankroll custodian is responsible at a given time.
Agent. A person authorized by the gaming operation, as approved by the TGRA, to make decisions or perform assigned tasks or actions on behalf of the gaming operation.
Automated payout. Payment issued by a machine.
Cage. A secure work area within the gaming operation for cashiers, which may include a storage area for the gaming operation bankroll.
Cash equivalents. Documents, financial instruments other than cash, or anything else of representative value to which the gaming operation has assigned a monetary value. A cash equivalent includes, but is not limited to, tokens, chips, coupons, vouchers, payout slips and tickets, and other items to which a gaming operation has assigned an exchange value.
Cashless system. A system that performs cashless transactions and maintains records of those cashless transactions.
Cashless transaction. A movement of funds electronically from one component to another, such as to or from a patron deposit account.
Chair. The Chair of the National Indian Gaming Commission.
Class II gaming. Class II gaming has the same meaning as defined in 25 U.S.C. 2703(7)(A).
Class II gaming system. All components, whether or not technologic aids in electronic, computer, mechanical, or other technologic form, that function together to aid the play of one or more Class II games, including accounting functions mandated by these regulations or part 547 of this chapter.
Commission. The National Indian Gaming Commission, established by the Indian Gaming Regulatory Act, 25 U.S.C. 2701 et seq.
Complimentary services and items. Services and items provided to a patron at the discretion of an agent on behalf of the gaming operation or by a third party on behalf of the gaming operation. Services and items may include, but are not limited to, travel, lodging, food, beverages, or entertainment expenses.
Count. The act of counting and recording the drop and/or other funds. Also, the total funds counted for a particular game, player interface, shift, or other period.
Count room. A secured room where the count is performed in which the cash and cash equivalents are counted.
Coupon. A financial instrument of fixed wagering value, that can only be used to acquire non-cashable credits through interaction with a voucher system. This does not include instruments such as printed advertising material that cannot be validated directly by a voucher system.
Currency cassette. A compartment that contains a specified denomination of currency. Currency cassettes are inserted into kiosks, allowing them to dispense currency.
Dedicated camera. A video camera that continuously records a specific activity.
Drop box. A locked container in which cash or cash equivalents are placed at the time of a transaction, typically used in card games.
Drop proceeds. The total amount of financial instruments removed from drop boxes and financial instrument storage components.
Exception report. A listing of occurrences, transactions or items that fall outside a predetermined range of acceptability.
Financial instrument. Any tangible item of value tendered in Class II game play, including, but not limited to bills, coins, vouchers, and coupons.
Financial instrument storage component. Any component that stores financial instruments, such as a drop box, but typically used in connection with player interfaces.
Gaming promotion. Any promotional activity or award that requires game play as a condition of eligibility.
Generally Accepted Accounting Principles (GAAP). A widely accepted set of rules, conventions, standards, and procedures for reporting financial information, as established by the Financial Accounting Standards Board (FASB), including, but not limited to, the standards for casino accounting published by the American Institute of Certified Public Accountants (AICPA).
Generally Accepted Auditing Standards (GAAS). A widely accepted set of standards that provide a measure of audit quality and the objectives to be achieved in an audit, as established by the Auditing Standards Board of the American Institute of Certified Public Accountants (AICPA).
Governmental Accounting Standards Board (GASB). Generally accepted accounting principles used by state and local governments.
Independent. The separation of functions to ensure that the agent or process monitoring, reviewing, or authorizing the controlled activity, function, or transaction is separate from the agents or process performing the controlled activity, function, or transaction.
Kiosk. A device capable of redeeming vouchers and/or wagering credits or initiating electronic transfers of money to or from a patron deposit account.
Lines of credit. The privilege granted by a gaming operation to a patron to:
(1) Defer payment of debt; or
(2) Incur debt and defer its payment under specific terms and conditions.
Manual payout. Any non-automated payout.
Marker. A document, signed by the patron, promising to repay credit issued by the gaming operation.
MICS. Minimum internal control standards in this part.
Network communication equipment. A device or collection of devices that controls data communication in a system including, but not limited to, cables, switches, hubs, routers, wireless access points, landline telephones and cellular telephones.
Patron. A person who is a customer or guest of the gaming operation and may interact with a Class II game. Also may be referred to as a “player.”
Patron deposit account. An account maintained on behalf of a patron, for the deposit and withdrawal of funds for the primary purpose of interacting with a gaming activity.
Player interface. Any component(s) of a Class II gaming system, including an electronic or technologic aid (not limited to terminals, player stations, handhelds, fixed units, etc.), that directly enables player interaction in a Class II game.
Prize payout. Payment to a player associated with a winning or qualifying event.
Promotional progressive pots and/or pools. Funds contributed to a game by and for the benefit of players that are distributed to players based on a predetermined event.
Shift. A time period, unless otherwise approved by the tribal gaming regulatory authority, not to exceed 24 hours.
Shill. An agent financed by the gaming operation and acting as a player.
Smart card. A card with embedded integrated circuits that possesses the means to electronically store or retrieve account data.
Sufficient clarity. The capacity of a surveillance system to record images at a minimum of 20 frames per second or equivalent recording speed and at a resolution sufficient to clearly identify the intended activity, person, object, or location.
Surveillance operation room(s). The secured area(s) where surveillance takes place and/or where active surveillance equipment is located.
Surveillance system. A system of video cameras, monitors, recorders, video printers, switches, selectors, and other equipment used for surveillance.
SICS (System of Internal Control Standards). An overall operational framework for a gaming operation that incorporates principles of independence and segregation of function, and is comprised of written policies, procedures, and standard practices based on overarching regulatory standards specifically designed to create a system of checks and balances to safeguard the integrity of a gaming operation and protect its assets from unauthorized access, misappropriation, forgery, theft, or fraud.
Tier A. Gaming operations with annual gross gaming revenues of more than $3 million but not more than $8 million.
Tier B. Gaming operations with annual gross gaming revenues of more than $8 million but not more than $15 million.
Tier C. Gaming operations with annual gross gaming revenues of more than $15 million.
TGRA. Tribal gaming regulatory authority, which is the entity authorized by tribal law to regulate gaming conducted pursuant to the Indian Gaming Regulatory Act.
TICS. Tribal Internal Control Standards established by the TGRA that are at least as stringent as the standards set forth in this part.
Vault. A secure area where cash and cash equivalents are stored.
Voucher. A financial instrument of fixed wagering value, usually paper, that can be used only to acquire an equivalent value of cashable credits or cash through interaction with a voucher system.
Voucher system. A system that securely maintains records of vouchers and coupons; validates payment of vouchers; records successful or failed payments of vouchers and coupons; and controls the purging of expired vouchers and coupons.
§ 543.3 How do tribal governments comply with this part?
(a) Minimum standards. These are minimum standards and a TGRA may establish and implement additional controls that do not conflict with those set out in this part.
(b) TICS. TGRAs must ensure that TICS are established and implemented that provide a level of control that equals or exceeds the applicable standards set forth in this part.
(1) Evaluation of existing TICS. Each TGRA must, in accordance with the tribal gaming ordinance, determine whether and to what extent their TICS require revision to ensure compliance with this part.
(2) Compliance date. All changes necessary to ensure compliance with this part must be promulgated within twelve months of the effective date of this part and implemented at the commencement of the next fiscal year. At the discretion of the TGRA, gaming operations may have an additional six months to come into compliance with the TICS.
(c) SICS. Each gaming operation must develop a SICS, as approved by the TGRA, to implement the TICS.
(1) Existing gaming operations. All gaming operations that are operating on or before the effective date of this part, must comply with this part within the time requirements established in paragraph (b) of this section. In the interim, such operations must continue to comply with existing TICS.
(2) New gaming operations. All gaming operations that commence operations after the effective date of this part must comply with this part before commencement of operations.
(d) Variances. Where referenced throughout this part, the gaming operation must set a reasonable threshold, approved by the TGRA, for when a variance must be reviewed to determine the cause, and the results of the review must be documented and maintained.
(e) Computer applications. For any computer applications utilized, alternate documentation and/or procedures that provide at least the level of control established by the standards of this part, as approved in writing by the TGRA, will be acceptable.
(f) Determination of tier. (1) The determination of tier level will be made based upon the annual gross gaming revenues indicated within the gaming operation’s audited financial statements.
(2) Gaming operations moving from one tier to another will have nine months from the date of the independent certified public accountant’s audit report to achieve compliance with the requirements of the new tier. The TGRA may extend the deadline by an additional six months if written notice is provided to the Commission no later than two weeks before the expiration of the nine month period.
(g) Submission to Commission. Tribal regulations promulgated pursuant to this part are not required to be submitted to the Commission pursuant to § 522.3(b) of this chapter.
(h) Enforcement of Commission MICS. (1) Each TGRA is required to establish and implement TICS pursuant to paragraph (b) of this section. Each gaming operation is then required, pursuant to paragraph (c) of this section, to develop a SICS that implements the TICS. Failure to comply with this subsection may subject the tribal operator of the gaming operation, or the management contractor, to penalties under 25 U.S.C. 2713.
(2) Enforcement action by the Commission will not be initiated under this part without first informing the tribe and TGRA of deficiencies in the TICS or absence of SICS for its gaming operation and allowing a reasonable period of time to address such deficiencies. Such prior notice and opportunity for corrective action are not required where the threat to the integrity of the gaming operation is immediate and severe.
§ 543.4 Does this part apply to small and charitable gaming operations?
(a) Small gaming operations. This part does not apply to small gaming operations provided that:
(1) The TGRA permits the operation to be exempt from this part;
(2) The annual gross gaming revenue of the operation does not exceed $3 million; and
(3) The TGRA develops, and the operation complies with, alternate procedures that:
(i) Protect the integrity of games offered;
(ii) Safeguard the assets used in connection with the operation; and
(iii) Create, prepare and maintain records in accordance with Generally Accepted Accounting Principles.
(b) Charitable gaming operations. This part does not apply to charitable gaming operations provided that:
(1) All proceeds are for the benefit of a charitable organization;
(2) The TGRA permits the charitable organization to be exempt from this part;
(3) The charitable gaming operation is operated wholly by the charitable organization’s agents;
(4) The annual gross gaming revenue of the charitable operation does not exceed $3 million; and
(5) The TGRA develops, and the charitable gaming operation complies with, alternate procedures that:
(i) Protect the integrity of the games offered;
(ii) Safeguard the assets used in connection with the gaming operation; and
(iii) Create, prepare and maintain records in accordance with Generally Accepted Accounting Principles.
(c) Independent operators. Nothing in this section exempts gaming operations conducted by independent operators for the benefit of a charitable organization.
§ 543.5 How does a gaming operation apply to use an alternate minimum standard from those set forth in this part?
(a) TGRA approval. (1) A TGRA may approve an alternate standard from those required by this part if it has determined that the alternate standard will achieve a level of security and integrity sufficient to accomplish the purpose of the standard it is to replace. A gaming operation may implement an alternate standard upon TGRA approval subject to the Chair’s decision pursuant to paragraph (b) of this section.
(2) For each enumerated standard for which the TGRA approves an alternate standard, it must submit to the Chair within 30 days a detailed report, which must include the following:
(i) An explanation of how the alternate standard achieves a level of security and integrity sufficient to accomplish the purpose of the standard it is to replace; and
(ii) The alternate standard as approved and the record on which it is based.
(3) In the event that the TGRA or the tribal government chooses to submit an alternate standard request directly to the Chair for joint government to government review, the TGRA or tribal government may do so without the approval requirement set forth in paragraph (a)(1) of this section.
(b) Chair review. (1) The Chair may approve or object to an alternate standard approved by a TGRA.
(2) If the Chair approves the alternate standard, the Tribe may continue to use it as authorized by the TGRA.
(3) If the Chair objects, the operation may no longer use the alternate standard and must follow the relevant MICS set forth in this part.
(4) Any objection by the Chair must be in writing and provide reasons that the alternate standard, as approved by the TGRA, does not provide a level of security or integrity sufficient to accomplish the purpose of the standard it is to replace.
(5) If the Chair fails to approve or object in writing within 60 days after the date of receipt of a complete submission, the alternate standard is considered approved by the Chair. The Chair may, upon notification to the TGRA, extend this deadline an additional 60 days.
(c) Appeal of Chair decision. A TGRA may appeal the Chair’s decision pursuant to 25 CFR chapter III, subchapter H.
§ 543.6-543.7 [Reserved]
§ 543.8 What are the minimum internal control standards for bingo?
(a) Supervision. Supervision must be provided as needed for bingo operations by an agent(s) with authority equal to or greater than those being supervised.
(b) Bingo cards. (1) Physical bingo card inventory controls must address the placement of orders, receipt, storage, issuance, removal, and cancellation of bingo card inventory to ensure that:
(i) The bingo card inventory can be accounted for at all times; and
(ii) Bingo cards have not been marked, altered, or otherwise manipulated.
(2) Receipt from supplier. (i) When bingo card inventory is initially received from the supplier, it must be inspected (without breaking the factory seals, if any), counted, inventoried, and secured by an authorized agent.
(ii) Bingo card inventory records must include the date received, quantities received, and the name of the individual conducting the inspection.
(3) Storage. (i) Bingo cards must be maintained in a secure location, accessible only to authorized agents, and with surveillance coverage adequate to identify persons accessing the storage area.
(ii) For Tier A operations, bingo card inventory may be stored in a cabinet, closet, or other similar area; however, such area must be secured and separate from the working inventory.
(4) Issuance and returns of inventory. (i) Controls must be established for the issuance and return of bingo card inventory. Records signed by the issuer and recipient must be created under the following events:
(A) Issuance of inventory from storage to a staging area;
(B) Issuance of inventory from a staging area to the cage or sellers;
(C) Return of inventory from a staging area to storage; and
(D) Return of inventory from cage or seller to staging area or storage.
(ii) [Reserved]
(5) Cancellation and removal. (i) Bingo cards removed from inventory that are deemed out of sequence, flawed, or misprinted and not returned to the supplier must be cancelled to ensure that they are not utilized in the play of a bingo game. Bingo cards that are removed from inventory and returned to the supplier or cancelled must be logged as removed from inventory.
(ii) Bingo cards associated with an investigation must be retained intact outside of the established removal and cancellation policy.
(6) Logs. (i) The inventory of bingo cards must be tracked and logged from receipt until use or permanent removal from inventory.
(ii) The bingo card inventory record(s) must include:
(A) Date;
(B) Shift or session;
(C) Time;
(D) Location;
(E) Inventory received, issued, removed, and returned;
(F) Signature of agent performing transaction;
(G) Signature of agent performing the reconciliation;
(H) Any variance;
(I) Beginning and ending inventory; and
(J) Description of inventory transaction being performed.
(c) Bingo card sales. (1) Agents who sell bingo cards must not be the sole verifier of bingo cards for prize payouts.
(2) Manual bingo card sales: In order to adequately record, track, and reconcile sales of bingo cards, the following information must be documented:
(i) Date;
(ii) Shift or session;
(iii) Number of bingo cards issued, sold, and returned;
(iv) Dollar amount of bingo card sales;
(v) Signature, initials, or identification number of the agent preparing the record; and
(vi) Signature, initials, or identification number of an independent agent who verified the bingo cards returned to inventory and dollar amount of bingo card sales.
(3) Bingo card sale voids must be processed in accordance with the rules of the game and established controls that must include the following:
(i) Patron refunds;
(ii) Adjustments to bingo card sales to reflect voids;
(iii) Adjustment to bingo card inventory;
(iv) Documentation of the reason for the void; and
(v) Authorization for all voids.
(4) Class II gaming system bingo card sales. In order to adequately record, track and reconcile sales of bingo cards, the following information must be documented from the server (this is not required if the system does not track the information, but system limitation(s) must be noted):
(i) Date;
(ii) Time;
(iii) Number of bingo cards sold;
(iv) Dollar amount of bingo card sales; and
(v) Amount in, amount out and other associated meter information.
(d) Draw. (1) Controls must be established and procedures implemented to ensure that all eligible objects used in the conduct of the bingo game are available to be drawn and have not been damaged or altered. Verification of physical objects must be performed by two agents before the start of the first bingo game/session. At least one of the verifying agents must be a supervisory agent or independent of the bingo games department.
(2) Where the selection is made through an electronic aid, certification in accordance with 25 CFR 547.14 is acceptable for verifying the randomness of the draw and satisfies the requirements of paragraph (d)(1) of this section.
(3) Controls must be established and procedures implemented to provide a method of recall of the draw, which includes the order and identity of the objects drawn, for dispute resolution purposes.
(4) Verification and display of draw. Controls must be established and procedures implemented to ensure that:
(i) The identity of each object drawn is accurately recorded and transmitted to the participants. The procedures must identify the method used to ensure the identity of each object drawn.
(ii) For all games offering a prize payout of $1,200 or more, as the objects are drawn, the identity of the objects are immediately recorded and maintained for a minimum of 24 hours.
(e) Prize payout. (1) Controls must be established and procedures implemented for cash or cash equivalents that address the following:
(i) Identification of the agent authorized (by position) to make a payout;
(ii) Predetermined payout authorization levels (by position); and
(iii) Documentation procedures ensuring separate control of the cash accountability functions.
(2) Verification of validity. (i) Controls must be established and procedures implemented to verify that the following is valid for the game in play prior to payment of a winning prize:
(A) Winning card(s);
(B) Objects drawn; and
(C) The previously designated arrangement of numbers or designations on such cards, as described in 25 U.S.C. 2703(7)(A).
(ii) At least two agents must verify that the card, objects drawn, and previously designated arrangement were valid for the game in play.
(iii) Where an automated verification method is available, verification by such method is acceptable.
(3) Validation. (i) For manual payouts, at least two agents must determine the validity of the claim prior to the payment of a prize. The system may serve as one of the validators.
(ii) For automated payouts, the system may serve as the sole validator of the claim.
(4) Verification. (i) For manual payouts, at least two agents must verify that the winning pattern has been achieved on the winning card prior to the payment of a prize. The system may serve as one of the verifiers.
(ii) For automated payouts, the system may serve as the sole verifier that the pattern has been achieved on the winning card.
(5) Authorization and signatures. (i) At least two agents must authorize, sign, and witness all manual prize payouts above $1,200, or a lower threshold as authorized by management and approved by the TGRA.
(ii) Manual prize payouts above the following threshold (or a lower threshold, as authorized by management and approved by TGRA) must require one of the two signatures and verifications to be a supervisory or management employee independent of the operation of Class II Gaming System bingo:
(A) $5,000 for a Tier A facility;
(B) $10,000 at a Tier B facility;
(C) $20,000 for a Tier C facility; or
(D) $50,000 for a Tier C facility with over $100,000,000 in gross gaming revenues.
(iii) The predetermined thresholds, whether set at the MICS level or lower, must be authorized by management, approved by the TGRA, documented, and maintained.
(iv) A Class II gaming system may substitute for one authorization/signature verifying, validating or authorizing a winning card, but may not substitute for a supervisory or management authorization/signature.
(6) Payout records, including manual payout records, must include the following information:
(i) Date and time;
(ii) Amount of the payout (alpha & numeric for player interface payouts); and
(iii) Bingo card identifier or player interface identifier.
(iv) Manual payout records must also include the following:
(A) Game name or number;
(B) Description of pattern covered, such as cover-all or four corners;
(C) Signature of all, but not less than two, agents involved in the transaction;
(D) For override transactions, verification by a supervisory or management agent independent of the transaction; and
(E) Any other information necessary to substantiate the payout.
(f) Cash and cash equivalent controls. (1) Cash or cash equivalents exchanged between two persons must be counted independently by at least two agents and reconciled to the recorded amounts at the end of each shift or session. Unexplained variances must be documented and maintained. Unverified transfers of cash or cash equivalents are prohibited.
(2) Procedures must be implemented to control cash or cash equivalents based on the amount of the transaction. These procedures must include documentation by shift, session, or other relevant time period of the following:
(i) Inventory, including any increases or decreases;
(ii) Transfers;
(iii) Exchanges, including acknowledging signatures or initials; and
(iv) Resulting variances.
(3) Any change to control of accountability, exchange, or transfer requires that the cash or cash equivalents be counted and recorded independently by at least two agents and reconciled to the recorded amount.
(g) Technologic aids to the play of bingo. Controls must be established and procedures implemented to safeguard the integrity of technologic aids to the play of bingo during installations, operations, modifications, removal and retirements. Such procedures must include the following:
(1) Shipping and receiving.
(i) A communication procedure must be established between the supplier, the gaming operation, and the TGRA to properly control the shipping and receiving of all software and hardware components. Such procedures must include:
(A) Notification of pending shipments must be provided to the TGRA by the gaming operation;
(B) Certification in accordance with 25 CFR part 547;
(C) Notification from the supplier to the TGRA, or the gaming operation as approved by the TGRA, of the shipping date and expected date of delivery. The shipping notification must include:
(1) Name and address of the supplier;
(2) Description of shipment;
(3) For player interfaces: a serial number;
(4) For software: software version and description of software;
(5) Method of shipment; and
(6) Expected date of delivery.
(ii) Procedures must be implemented for the exchange of Class II gaming system components for maintenance and replacement.
(iii) Class II gaming system components must be shipped in a secure manner to deter unauthorized access.
(iv) The TGRA, or its designee, must receive all Class II gaming system components and game play software packages, and verify the contents against the shipping notification.
(2) Access credential control methods. (i) Controls must be established to restrict access to the Class II gaming system components, as set forth in § 543.20, Information and Technology.
(ii) [Reserved]
(3) Recordkeeping and audit processes. (i) The gaming operation must maintain the following records, as applicable, related to installed game servers and player interfaces:
(A) Date placed into service;
(B) Date made available for play;
(C) Supplier;
(D) Software version;
(E) Serial number;
(F) Game title;
(G) Asset and/or location number;
(H) Seal number; and
(I) Initial meter reading.
(ii) Procedures must be implemented for auditing such records in accordance with § 543.23, Audit and Accounting.
(4) System software signature verification. (i) Procedures must be implemented for system software verifications. These procedures must include comparing signatures generated by the verification programs required by 25 CFR 547.8, to the signatures provided in the independent test laboratory letter for that software version.
(ii) An agent independent of the bingo operation must perform system software signature verification(s) to verify that only approved software is installed.
(iii) Procedures must be implemented for investigating and resolving any software verification variances.
(iv) Internal audits must be conducted as set forth in § 543.23, Audit and Accounting. Such audits must be documented.
(5) Installation testing. (i) Testing must be completed during the installation process to verify that the player interface has been properly installed. This must include testing of the following, as applicable:
(A) Communication with the Class II gaming system;
(B) Communication with the accounting system;
(C) Communication with the player tracking system;
(D) Currency and vouchers to bill acceptor;
(E) Voucher printing;
(F) Meter incrementation;
(G) Pay table, for verification;
(H) Player interface denomination, for verification;
(I) All buttons, to ensure that all are operational and programmed appropriately;
(J) System components, to ensure that they are safely installed at location; and
(K) Locks, to ensure that they are secure and functioning.
(ii) [Reserved]
(6) Display of rules and necessary disclaimers. The TGRA or the operation must verify that all game rules and disclaimers are displayed at all times or made readily available to the player upon request, as required by 25 CFR part 547;
(7) TGRA approval of all technologic aids before they are offered for play.
(8) All Class II gaming equipment must comply with 25 CFR part 547, Minimum Technical Standards for Gaming Equipment Used With the Play of Class II Games; and
(9) Dispute resolution.
(h) Operations—(1) Malfunctions. Procedures must be implemented to investigate, document and resolve malfunctions. Such procedures must address the following:
(i) Determination of the event causing the malfunction;
(ii) Review of relevant records, game recall, reports, logs, surveillance records;
(iii) Repair or replacement of the Class II gaming component;
(iv) Verification of the integrity of the Class II gaming component before restoring it to operation; and
(2) Removal, retirement and/or destruction. Procedures must be implemented to retire or remove any or all associated components of a Class II gaming system from operation. Procedures must include the following:
(i) For player interfaces and components that accept cash or cash equivalents:
(A) Coordinate with the drop team to perform a final drop;
(B) Collect final accounting information such as meter readings, drop and payouts;
(C) Remove and/or secure any or all associated equipment such as locks, card reader, or ticket printer from the retired or removed component; and
(D) Document removal, retirement, and/or destruction.
(ii) For removal of software components:
(A) Purge and/or return the software to the license holder; and
(B) Document the removal.
(iii) For other related equipment such as blowers, cards, interface cards:
(A) Remove and/or secure equipment; and
(B) Document the removal or securing of equipment.
(iv) For all components:
(A) Verify that unique identifiers, and descriptions of removed/retired components are recorded as part of the retirement documentation; and
(B) Coordinate with the accounting department to properly retire the component in the system records.
(v) Where the TGRA authorizes destruction of any Class II gaming system components, procedures must be developed to destroy such components. Such procedures must include the following:
(A) Methods of destruction;
(B) Witness or surveillance of destruction;
(C) Documentation of all components destroyed; and
(D) Signatures of agent(s) destroying components attesting to destruction.
(i) Vouchers. (1) Controls must be established and procedures implemented to:
(i) Verify the authenticity of each voucher redeemed.
(ii) If the voucher is valid, verify that the patron is paid the appropriate amount.
(iii) Document the payment of a claim on a voucher that is not physically available or a voucher that cannot be validated such as a mutilated, expired, lost, or stolen voucher.
(iv) Retain payment documentation for reconciliation purposes.
(v) For manual payment of a voucher of $500 or more, require a supervisory employee to verify the validity of the voucher prior to payment.
(2) Vouchers paid during a period while the voucher system is temporarily out of operation must be marked “paid” by the cashier.
(3) Vouchers redeemed while the voucher system was temporarily out of operation must be validated as expeditious