[Title 25 CFR III]
[Code of Federal Regulations (annual edition) - April 1, 2004 Edition]
[Title 25 - INDIANS]
[Chapter III - NATIONAL INDIAN GAMING COMMISSION, DEPARTMENT OF THE]
[From the U.S. Government Printing Office]


25INDIANS12004-04-012004-04-01falseNATIONAL INDIAN GAMING COMMISSION, DEPARTMENT OF THEIIICHAPTER IIIINDIANS
   CHAPTER III--NATIONAL INDIAN GAMING COMMISSION, DEPARTMENT OF THE 
                                INTERIOR




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                    SUBCHAPTER A--GENERAL PROVISIONS
Part                                                                Page
501             Purpose and scope of this chapter...........         751
502             Definitions of this chapter.................         751
503             Commission information collection 
                    requirements under the Paperwork 
                    Reduction Act: OMB control numbers and 
                    expiration dates........................         754
504-512         [Reserved]
513             Debt Collection.............................         755
514             Fees........................................         762
515             Privacy Act procedures......................         765
516             Testimony of commissioners and employees and 
                    former commissioners and former 
                    employees respecting official duties; 
                    response to subpoena....................         768
517             Freedom of Information Act procedures.......         770
518             Self regulation of class II gaming..........         776
519             Service.....................................         782
    SUBCHAPTER B--APPROVAL OF CLASS II AND CLASS III ORDINANCES AND 
                               RESOLUTIONS
520-521         [Reserved]
522             Submission of gaming ordinance or resolution         784
523             Review and approval of existing ordinances 
                    or resolutions..........................         786
524             Appeals.....................................         787
525-529         [Reserved]

              SUBCHAPTER C--MANAGEMENT CONTRACT PROVISIONS
530             [Reserved]
531             Content of management contracts.............         789
532             [Reserved]
533             Approval of management contracts............         790
534             [Reserved]
535             Post-approval procedures....................         793
536             [Reserved]

[[Page 750]]

537             Background investigations for persons or 
                    entities with a financial interest in, 
                    or having management responsibility for, 
                    a management contract...................         794
538             [Reserved]

539             Appeals.....................................         797
                      SUBCHAPTER D--HUMAN SERVICES
540-541         [Reserved]
542             Minimum internal control standards..........         798
543-549         [Reserved]

  SUBCHAPTER E--GAMING LICENSES AND BACKGROUND INVESTIGATIONS FOR KEY 
               EMPLOYEES AND PRIMARY MANAGEMENT OFFICIALS
550-555         [Reserved]
556             Background investigations for primary 
                    management officials and key employees..         877
557             [Reserved]
558             Gaming licenses for key employees and 
                    primary management officials............         897
559             [Reserved]

                         SUBCHAPTER F [RESERVED]
560-569         [Reserved]

           SUBCHAPTER G--COMPLIANCE AND ENFORCEMENT PROVISIONS
570             [Reserved]
571             Monitoring and investigations...............         881
572             [Reserved]
573             Enforcement.................................         883
574             [Reserved]
575             Civil fines.................................         885
576             [Reserved]
577             Appeals before the Commission...............         886
578-579         [Reserved]

                         SUBCHAPTER H [RESERVED]
580-589         [Reserved]

                         SUBCHAPTER I [RESERVED]
590-599         [Reserved]

[[Page 751]]



                     SUBCHAPTER A_GENERAL PROVISIONS





PART 501_PURPOSE AND SCOPE OF THIS CHAPTER--Table of Contents




Sec.
501.1 Purpose.
501.2 Scope.

    Authority: 25 U.S.C. 2706, 2710.

    Source: 58 FR 5810, Jan. 22, 1993, unless otherwise noted.



Sec. 501.1  Purpose.

    This chapter implements the Indian Gaming Regulatory Act (Pub. L. 
100-497, 102 Stat. 2467).



Sec. 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--Table of Contents




Sec.
502.1 Chairman.
502.2 Class I gaming.
502.3 Class II gaming.
502.4 Class III gaming.
502.5 Collateral agreement.
502.6 Commission.
502.7 Electronic, computer or other technologic aid.
502.8 Electronic or electromechanical facsimile.
502.9 Other games similar to bingo.
502.10 Gaming operation.
502.11 House banking game.
502.12 Indian lands.
502.13 Indian tribe.
502.14 Key employee.
502.15 Management contract.
502.16 Net revenues.
502.17 Person having a direct or indirect financial interest in a 
          management contract.
502.18 Person having management responsibility for a management 
          contract.
502.19 Primary management official.
502.20 Secretary.
502.21 Tribal-State compact.

    Authority: 25 U.S.C. 2701 et seq.

    Source: 57 FR 12392, Apr. 9, 1992, unless otherwise noted.



Sec. 502.1  Chairman.

    Chairman means the Chairman of the National Indian Gaming Commission 
or his or her designee.



Sec. 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.



Sec. 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;

[[Page 752]]

    (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.



Sec. 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.



Sec. 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).



Sec. 502.6  Commission.

    Commission means the National Indian Gaming Commission.



Sec. 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.

[67 FR 41172, June 17, 2002]



Sec. 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

[[Page 753]]

participation by allowing multiple players to play with or against each 
other rather than with or against a machine.

[67 FR 41172, June 17, 2002]



Sec. 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 USC 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.

[67 FR 41172, June 17, 2002]



Sec. 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.



Sec. 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.



Sec. 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.



Sec. 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.



Sec. 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.



Sec. 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.



Sec. 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, excluding management 
fees.



Sec. 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;

[[Page 754]]

    (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 10% of the issued and 
outstanding stock alone or in combination with another stockholder who 
is a spouse, parent, child or sibling; or
    (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.



Sec. 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.



Sec. 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.



Sec. 502.20  Secretary.

    Secretary means the Secretary of the Interior.



Sec. 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).



PART 503_COMMISSION INFORMATION COLLECTION REQUIREMENTS UNDER THE 

PAPERWORK REDUCTION ACT: OMB CONTROL NUMBERS AND EXPIRATION DATES
--Table of Contents




Sec.
503.1 Purpose of this part.
503.2 Display of control numbers and expiration dates.

    Authority: 44 U.S.C. 3501 et seq.

    Source: 58 FR 16495, Mar. 29, 1993, unless otherwise noted.



Sec. 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.



Sec. 503.2  Display of control numbers and expiration dates.

------------------------------------------------------------------------
                                             Currently
                                           assigned OMB     Expiration
 Part or section number of title 25 CFR       control          date
                                              numbers
------------------------------------------------------------------------
Sec.  514.1 (submission of fee reports)       3141-0007         6/30/94
Sec.  515.3 (request for access to            3141-0002        10/31/95
 records)...............................
Sec.  515.5 (request for amendment to         3141-0002        10/31/95
 records)...............................
Sec.  515.7 (appeals)..................       3141-0002        10/31/95
Part 519 (designation of agent for             3141-0003        10/31/95
 service)...............................
Sec.  522.2 (submission and approval of       3141-0003        10/31/95
 new ordinances)........................
Sec.  522.3 (amendment)................       3141-0003        10/31/95
Sec.  522.12 (revocation of class III         3141-0003        10/31/95
 gaming)................................
Sec.  523.2 (submission and approval of       3141-0003        10/31/95
 existing ordinances)...................
Sec.  523.4 (amendment)................       3141-0003        10/31/95
Part 524 (appeals)......................       3141-0003        10/31/95
Sec.  533.3 (approval of management           3141-0004        10/31/95
 contracts).............................
Sec.  533.5 (modifications)............       3141-0004        10/31/95
Sec.  535.1 (post-approval procedures).       3141-0004        10/31/95

[[Page 755]]

 
Part 537 (background investigations)....       3141-0004        10/31/95
Part 539 (appeals)......................       3141-0004        10/31/95
Sec.  556.4 (background investigations        3141-0003        10/31/95
 for class II gaming)...................
Sec.  556.5 (background investigations)       3141-0003        10/31/95
Part 558 (gaming licenses)..............       3141-0003        10/31/95
Sec.  571.7 (maintenance of records)...       3141-0001         7/31/95
Sec.  571.12 (audits)..................       3141-0001         7/31/95
Sec.  571.13 (audits)..................       3141-0001         7/31/95
Sec.  571.14 (audit reconciliation)....       3141-0001         7/31/95
Sec.  575.5 (information to Chairman)..       3141-0001         7/31/95
Sec.  575.6 (penalty reduction)........       3141-0001         7/31/95
Sec.  577.3 (notice of appeal).........       3141-0001         7/31/95
Sec.  577.8 (confidentiality)..........       3141-0001         7/31/95
Sec.  577.12 (intervention)............       3141-0001         7/31/95
Sec.  577.14 (objections)..............       3141-0001         7/31/95
------------------------------------------------------------------------

                        PARTS 504	512 [RESERVED]



PART 513_DEBT COLLECTION--Table of Contents




                      Subpart A_General Provisions

Sec.
513.1 What definitions apply to the regulations in this part?
513.2 What is the Commission's authority to issue these regulations?
513.3 What happens to delinquent debts owed to the Commission?
513.4 What notice will the Commission give to a debtor of the 
          Commission's intent to collect debts?
513.5 What is the Commission's policy on interest, penalty charges, and 
          administrative costs?
513.6 What are the requirements for offset review?
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?

             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?
513.21 What notice will a debtor be given of the Commission's intent to 
          collect a debt through administrative and tax refund offset?

                         Subpart C_Salary Offset

513.30 When may the Commission use salary offset to collect debts?
513.31 What notice will the Commission, as the creditor agency, give a 
          debtor that salary offset will occur?
513.32 What are the hearing procedures when the Commission is the 
          creditor agency?
513.33 Will the Commission issue a certification when the Commission is 
          the creditor agency?
513.34 What opportunity is there for a voluntary repayment agreement 
          when the Commission is the creditor agency?
513.35 What special review is available when the Commission is the 
          creditor agency?
513.36 Under what conditions will the Commission refund amounts 
          collected by salary offset?
513.37 What will the Commission do as the paying agency?

                Subpart D_Administrative Wage Garnishment

513.40 How will the Commission handle debt collection through 
          administrative wage garnishment?

    Authority: 31 U.S.C. 3711, 3716-3718, 3720A, 3720D; 5 U.S.C. 5514; 
25 U.S.C. 2713(a)(1).

    Source: 66 FR 58057, Nov. 20, 2001, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 513.2  What is the Commission's authority to issue these regulations?

    (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.



Sec. 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.

[[Page 757]]

    (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.



Sec. 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 Sec. 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 part 577 may not re-
litigate matters that were the subject of the final order.



Sec. 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

[[Page 758]]

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.



Sec. 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.



Sec. 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



Sec. 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.



Sec. 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



Sec. 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.

[[Page 759]]

    (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.



Sec. 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 Sec. 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;

[[Page 760]]

    (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.



Sec. 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 part 577 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 Sec. 
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.



Sec. 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.



Sec. 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.

[[Page 761]]



Sec. 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.



Sec. 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.



Sec. 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

[[Page 762]]

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



Sec. 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--Table of Contents




    Authority: 25 U.S.C. 2706, 2708, 2710, 2717, 2717a.



Sec. 514.1  Annual fees.

    (a) Each gaming operation under the jurisdiction of the Commission 
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.
    (1) The Commission shall adopt preliminary rates for each calendar 
year during the first quarter of that year (or as soon thereafter as 
possible), and, if considered necessary, shall modify those rates during 
the second and third quarters of the calendar year.
    (2) The Commission shall adopt final rates of fees for each calendar 
year during the fourth quarter of that year.
    (3) The Commission shall publish the rates of fees in a notice in 
the Federal Register.
    (4) The rates of fees imposed shall be--
    (i) No more than 2.5 percent of the first $1,500,000 (1st tier), and
    (ii) No more than 5 percent of amounts in excess of the first 
$1,500,000 (2nd tier) of the assessable gross revenues from each gaming 
operation subject to the jurisdiction of the Commission.
    (5) If a tribe has a certificate of self-regulation, the rate of 
fees imposed shall be no more than .25 percent of assessable gross 
revenues from self-regulated class II gaming operations.
    (6) If a tribe is determined to be self-regulated pursuant to the 
provisions of 25 U.S.C. 2717(a)(2)(C), no fees shall be imposed.
    (b) For purposes of computing fees, assessable gross revenues for 
each gaming operation are the annual total amount of money wagered on 
class II and III games, admission fees (including table or card fees), 
less any amounts paid out as prizes or paid for prizes awarded, and less 
an allowance for amortization of capital expenditures for structures.
    (1) Unless otherwise provided by the regulations, generally accepted 
accounting principles shall be used.
    (2) The allowance for amortization of capital expenditures for 
structures shall not exceed 5% of the cost of structures in use 
throughout the year and 2\1/2\% of the cost of structures in use during 
only a part of the year.
    (3) Example:

Gross gaming revenues:
  Money wagered.................................  .........   $1,000,000
  Admission fees................................      5,000
                                                 ------------
                                                  .........    1,005,000

[[Page 763]]

 
Less:
  Prizes paid in cash...........................   $500,000
  Cost of other prizes awarded..................     10,000      510,000
                                                 ------------
    Gross gaming profit.........................  .........      495,000
  Less allowance for amortization of............
    capital expenditures for structures:........
  Capital expenditures for structures made in--
    Prior years.................................    750,000
    Current year................................     50,000
                                                 -----------
                                                    800,000
                                                 -----------
  Maximum allowance:
    $750,000x.05 =..............................     37,500
    50,000x.025=................................      1,250       38,750
                                                 ------------
Assessable gross revenues.......................  .........     $456,250
                                                            ------------
 
 

    (4) All class II and III revenues from gaming operations are to be 
included.
    (c) Each gaming operation subject to the jurisdiction of the 
Commission and not exempt from paying fees pursuant to the self-
regulation provisions shall file with the Commission quarterly a 
statement showing its assessable gross revenues for the previous 
calendar year.
    (1) These quarterly statements shall show the amounts derived from 
each type of game, the amounts deducted for prizes, and the amounts 
deducted for the amortization of structures;
    (2) These quarterly statements shall be filed no later than--March 
31, June 30, September 30, and December 31, of each calendar year the 
gaming operation is subject to the jurisdiction of the Commission, 
beginning in September 1991. For calendar year 1998, the quarterly 
statement for the first quarter shall be filed no later than April 13, 
1998. Any changes or adjustments to the previous year's assessable gross 
revenue amounts from one quarter to the next shall be explained.
    (3) The quarterly statements shall identify an individual or 
individuals to be contacted should the Commission need to communicate 
further with the gaming operation. The telephone numbers of the 
individual(s) shall be included.
    (4) The quarterly statements shall be transmitted to the Commission 
to arrive no later than the due date.
    (5) Each gaming operation shall determine the amount of fees to be 
paid and remit them with the statement required in paragraph (c) of this 
section. The fees payable shall be computed using--
    (i) The most recent rates of fees adopted by the Commission pursuant 
to paragraph (a)(1) or (a)(2) of this section,
    (ii) The assessable gross revenues for the previous calendar year as 
reported pursuant to this paragraph, and
    (iii) The amounts paid and credits received during previous 
quarters.
    (6) Each quarterly statement shall include the computation of the 
fees payable, showing all amounts used in the calculations. The required 
calculations are as follows:
    (i) Multiply the previous calendar year's 1st tier assessable gross 
revenues by the rate for those revenues adopted by the Commission.
    (ii) Multiply the previous calendar year's 2nd tier assessable gross 
revenues by the rate for those revenues adopted by the Commission.
    (iii) Add (total) the results (products) obtained in paragraphs 
(c)(6) (i) and (ii) of this section.
    (iv) Multiply the total obtained in paragraph (c)(6)(iii) of this 
section by the fraction representing the quarter for which the 
computation is being made: 1st quarter--\1/4\; 2nd quarter--\1/2\ (\2/
4\); 3rd quarter--\3/4\; and 4th quarter--1 (\4/4\). For the purpose of 
making these computations in 1991 only, the third calendar quarter is 
the first quarter and the fourth calendar quarter is the second quarter. 
There will be no third or fourth quarter in 1991.
    (v) Subtract the amounts already remitted by the operation for the 
current year and credits, if any, which are due for any previous year's 
overpayment from the amount determined in paragraph (c)(6)(iv) of this 
section.
    (vi) The amount computed in paragraph (c)(6)(v) of this section is 
the amount to be remitted.
    (7) Examples of fee computations follow:
    (i) Example 1: Where a filing is made for the first quarter of the 
calendar

[[Page 764]]

year, the previous year's assessable gross revenues are $2,000,000, the 
fee rates adopted by the Commission are 2% on the first $1,500,000 and 
4% on the remainder, and a credit of $2,000 is due from the previous 
year, the amounts to be used and the computations to be made are as 
follows:

1st tier revenues--$1,500,000x2%=.............................   $30,000
2nd tier revenues-- 500,000x4%=...............................    20,000
                                                               ---------
  Annual fees.................................................    50,000
Multiply for fraction of year--\1/4\ or.......................       .25
                                                               ---------
  Fees for first quarter......................................    12,500
Deduct credit due.............................................     2,000
                                                               ---------
  Amount to be remitted.......................................   $10,500
                                                               ---------
 

    (ii) Example 2: Where a filing is being made for the third quarter, 
the previous year's assessable gross revenues are $5,000,000, the fee 
rates adopted by the Commission are 1% on the first $1,500,000 and 1.5% 
on the remainder, and $35,000 has already been remitted, the amounts to 
be used and the computations to be made are as follows:

1st tier revenues--$1,500,000x1%=.............................   $15,000
2nd tier revenues--3,500,000x1.5%=............................    52,500
  Annual fees.................................................    67,500
Multiply for fraction of year--\3/4\ or.......................       .75
                                                               ---------
  Fees for first three quarters...............................    50,625
Deduct amounts already remitted...............................       \1\
                                                                  35.000
                                                               ---------
  Amount to be remitted.......................................   $15,625
                                                               ---------
 
\1\ This amount may be other than $33,750 ($67,500x.50) because the
  assessable gross revenues may have been adjusted, the fee rate may
  have changed, a credit for the previous year's overpayment may have
  been received, or a clerical error may have been discovered.

    (iii) Example 3: Where a filing is being made for the third quarter 
of 1991, the previous year's assessable gross revenues are $5,000,000, 
the fee rates adopted by the Commission are 1% on the first $1,500,000 
and 1% on the remainder, and nothing has already been remitted, the 
amounts to be used and the computations to be made are as follows:

1st tier revenues--$1,500,000x1%=.............................   $15,000
2nd tier revenues--3,500,000x1%=..............................    35,000
                                                               ---------
      Annual fees.............................................    50,000
Multiply for fraction of year--1/4 or.........................       .25
                                                               ---------
      Fees for first quarter..................................    12,500
Deduct amounts already remitted...............................       -0-
                                                               ---------
      Amount to be remitted...................................   $12,500
 

    (8) Quarterly statements, remittances and communications about fees 
shall be transmitted to the Commission at the following address: Office 
of Finance, National Indian Gaming Commission, 1441 L Street, N.W., 
Suite 9100, Washington, DC 20005. Checks should be made payable to the 
National Indian Gaming Commission (do not remit cash).
    (9) The Commission may assess a penalty for failure to file timely a 
quarterly statement.
    (10) 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 (31 U.S.C. 3717).
    (d) 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 at the end of the quarter following 
the quarter during which the Commission makes such determination.
    (1) The Commission will notify each gaming operation as to the 
amount of overpayment, if any, and therefore the amount of credit to be 
taken against the next quarterly payment otherwise due.
    (2) The notification required in paragraph (d)(1) of this section 
shall be made in writing addressed to the gaming operation.
    (e) Failure to pay fees, any applicable penalties, and interest 
related thereto may be grounds for:
    (1) Closure, or
    (2) Disapproving or revoking the approval of the Chairman of any 
license, ordinance, or resolution required under this Act for the 
operation of gaming.
    (f) To the extent that revenue derived from fees imposed under the 
schedule established under this paragraph are not expended or committed 
at the close of any fiscal year, such funds shall remain available until 
expended (Pub. L. 101-121; 103 Stat. 718; 25 U.S.C. 2717a) to defray the 
costs of operations of the Commission.

[56 FR 40709, Aug. 15, 1991; 56 FR 57373, Nov. 8, 1991, as amended at 63 
FR 12316, Mar. 12, 1998; 69 FR 2505, Jan. 16, 2004]

[[Page 765]]



PART 515_PRIVACY ACT PROCEDURES--Table of Contents




Sec.
515.1 Purpose and scope.
515.2 Definitions.
515.3 Identification of individuals making requests.
515.4 Procedures for requests and disclosures.
515.5 Request for amendment to record.
515.6 Review of request for amendment of record by the Records Manager.
515.7 Appeal to the Commission of initial adverse agency determination 
          on access or amendment to records.
515.8 Disclosure of record to a person other than the individual to whom 
          it pertains.
515.9 Fees.
515.10 Penalties.
515.11 General exemptions. [Reserved]
515.12 Specific exemptions.

    Authority: 5 U.S.C. 552a.

    Source: 58 FR 5815, Jan. 22, 1993, unless otherwise noted.



Sec. 515.1  Purpose and scope.

    (a) The purpose of this part is to inform the public of records 
maintained by the Commission about identifiable individuals and to 
inform those individuals how they may gain access to and amend records 
concerning themselves.
    (b) This part carries out the requirements of the Privacy Act of 
1974 (Pub. L. 93-579) codified at 5 U.S.C. 552a.
    (c) The regulation applies only to records disclosed or requested 
under the Privacy Act of 1974, and not to requests for information made 
pursuant to 5 U.S.C. 552, the Freedom of Information Act.



Sec. 515.2  Definitions.

    As defined in the Privacy Act of 1974 and for the purposes of this 
part, unless otherwise required by the context, the following terms 
shall have these meanings:
    (a) Individual means a citizen of the United States or an alien 
lawfully admitted for permanent residence.
    (b) Maintain means maintain, 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 the 
identifying number, symbol, or other identifier assigned to the 
individual, such as social security number, finger or voice print, or a 
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, with respect to the disclosure of a record, 
the use of such record for a purpose that is compatible with the purpose 
for which it was collected.



Sec. 515.3  Identification of individuals making requests.

    (a) Any individual may request that the Commission inform him or her 
whether a particular record system named by the individual contains a 
record pertaining to him or her and the contents of such record. Such 
requests shall conform to the requirements of Sec. 515.4 of this part. 
The request may be made in person or in writing at the NIGC, suite 250, 
1850 M Street, NW., Washington, DC 20036-5803 during the hours of 9 a.m. 
to 12 noon and 2 p.m. to 5 p.m. Monday through Friday.
    (b)(1) Requests made in writing shall include a statement, signed by 
the individual and either notarized or witnessed by two persons 
(including witnesses' addresses). If the individual appears before a 
notary, the individual shall submit adequate proof of identity in the 
form of a driver's license, birth certificate, passport, or other 
identification acceptable to the notary. If the statement is witnessed, 
it shall include a statement above the witnesses' signatures that they 
personally know the individual or that the individual has submitted 
proof of his or her identity to their satisfaction. In any case in 
which, because of the extreme sensitivity of the record sought to be 
seen or copied, the Commission determines that the identification is not 
adequate, it may request the individual to submit additional proof of 
identity.
    (2) If the request is made in person, the requester shall submit 
proof of

[[Page 766]]

identity similar to that described in paragraph (b)(1) of this section, 
and that is acceptable to the Commission. The individual may have a 
person of his or her own choosing accompany him or her when the record 
is disclosed.
    (c) Requests made by an agent, parent, or guardian shall be in 
accordance with the procedures described in paragraph (b) of this 
section.



Sec. 515.4  Procedures for requests and disclosures.

    (a) Requests for a determination under Sec. 515.3(a) of this part 
shall be acknowledged by the Commission within ten (10) days (excluding 
Saturdays, Sundays and Federal holidays) after the date on which the 
Commission receives the request. If the Commission is unable to locate 
the information requested, it shall so notify the individual within ten 
(10) days (excluding Saturdays, Sundays and Federal holidays) after 
receipt of the request, Such acknowledgement may request additional 
information to assist the Commission in locating the record, or it may 
advise the individual that no record exists about that individual.
    (b)(1) Upon submission of proof of identity as required by Sec. 
515.3(b)(1) or (2) of this part, the Commission shall respond within ten 
(10) days (excluding Saturdays, Sundays and Federal holidays). The 
Commission shall decide whether to make a record available to the record 
subject and shall immediately convey its determination to the requester. 
If the individual asks to see the record, the Commission may make the 
record available at the location where the record is maintained.
    (2) The Commission shall furnish each record requested by an 
individual under this section in a form intelligible to that individual.
    (3) If the Commission denies access to a record to an individual, 
that person shall be advised of the reason for the denial and of the 
appeal procedures provided in Sec. 515.7 of this part.
    (4) Upon request, an individual shall be provided access to the 
accounting of disclosures from his or her record under the same 
procedures as provided above and in Sec. 515.3 of this part.



Sec. 515.5  Request for amendment to record.

    (a) Any individual who has reviewed a record pertaining to him or 
her that was furnished under this part, may request that the Commission 
amend all or any part of that record.
    (b) Each individual requesting an amendment shall send the request 
to the Records Manager.
    (c) Each request for an amendment of a record shall contain the 
following information:
    (1) The name of the individual requesting the amendment;
    (2) The name of the system of records in which the record sought to 
be amended is maintained;
    (3) The location of the system of records from which the individual 
record was obtained;
    (4) A copy of the record sought to be amended or a sufficiently 
detailed description of that record:
    (5) A statement of the material in the record that the individual 
desires to amend;
    (6) A statement of the basis for the requested amendment, including 
any material that the individual can furnish to substantiate the reasons 
for the amendment sought.



Sec. 515.6  Review of request for amendment of record by the Records Manager.

    (a) The Records Manager shall, not later than ten (10) days 
(excluding Saturdays, Sundays and Federal holidays) after the receipt of 
a request for an amendment of a record under Sec. 515.5 of this part, 
acknowledge receipt of the request and inform the individual whether 
more information is required before the amendment can be considered.
    (b) If more information is not required, within ten (10) days after 
receipt of the request (excluding Saturdays, Sundays and Federal 
holidays), the Records Manager shall either make the requested amendment 
or notify the individual of the Commission's refusal to do so, including 
in the notification the reasons for the refusal, and the appeal 
procedures provided in Sec. 515.7 of this part.
    (c) The Records Manager shall make each requested amendment to a 
record

[[Page 767]]

if such amendment will tend to negate inaccurate, irrelevant, untimely, 
or incomplete material in the record.
    (d) The Records Manager shall inform prior recipients of any 
amendment or notation of dispute of such individual's record. The 
individual may request a list of prior recipients if there exists an 
accounting of the disclosures.



Sec. 515.7  Appeal to the Commission of initial adverse agency 
determination on access or amendment to records.

    (a) Any individual whose request for access or an amendment has been 
denied in whole or in part, may appeal the decision to the Commission no 
later than one hundred eighty (180) days after the adverse decision is 
rendered.
    (b) The appeal shall be in writing and shall contain all of the 
following information:
    (1) The name of the individual making the appeal;
    (2) Identification of the record sought to be amended;
    (3) The record system in which such record is contained;
    (4) A short statement describing the amendment sought; and
    (5) The name and location of the agency official who initially 
denied the amendment.
    (c) Not later than thirty (30) days (excluding Saturdays, Sundays 
and Federal holidays) after the date on which the Commission receives 
the appeal, the Commission shall complete its review of the appeal and 
make a final decision thereon. For good cause shown, however, the 
Commission may extend such thirty (30) day period. If the Commission 
extends the period, the individual requesting the review shall be 
promptly notified of the extension and the anticipated date of a 
decision.
    (d) After review of an appeal, the Commission shall send a written 
notice to the requester containing the following information:
    (1) The decision and, if the denial is upheld, the reasons for the 
decision;
    (2) The right of the requester to file with the Commission a concise 
statement setting forth the reasons for his or her disagreement with the 
Commission's denial of access or amendment. The Commission shall make 
this statement available to any person to whom the record is later 
disclosed, together with a brief statement, if appropriate, of the 
Commission's reasons for denying requested access or amendment. The 
Commission shall also send a copy of the statement to prior recipients 
of the individual's record; and
    (3) The right of the requester to institute a civil action in a 
Federal district court for judicial review of the decision.



Sec. 515.8  Disclosure of record to a person other than the individual 
to whom it pertains.

    (a) 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, and notarized or witnessed as provided in Sec. 515.3 of 
this part.
    (b) The parent of any minor individual or the legal guardian of any 
individual who has been declared by a court of competent jurisdiction to 
be incompetent, due to physical or mental incapacity or age, may act on 
behalf of that individual in any matter covered by this section. A 
parent or guardian who desires to act on behalf of such an individual 
shall present suitable evidence of parentage or guardianship, by birth 
certificate, certified copy of court order, or similar documents, and 
proof of the individual's identity in a form that complies with Sec. 
515.3(b) of this part.
    (c) 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.



Sec. 515.9  Fees.

    The Commission shall not charge an individual for the costs of 
making a search for a record or the costs of reviewing the record. When 
the Commission makes a copy of a record as a necessary part of reviewing 
the record, the Commission shall not charge the individual for the cost 
of making that copy. Otherwise, the Commission may

[[Page 768]]

charge a fee sufficient to cover the cost of duplication.



Sec. 515.10  Penalties.

    Any person who makes a false statement in connection with any 
request for a record, or an amendment thereto, under this part, is 
subject to the penalties prescribed in 18 U.S.C. 494 and 495.



Sec. 515.11  General exemptions. [Reserved]



Sec. 515.12  Specific exemptions.

    (a) The following system of records is exempt from 5 U.S.C. 
552a(c)(3), (d), (e)(1) and (f):

                Indian Gaming Individuals Records System

    (b) The exemptions under paragraph (a) of this section apply only to 
the extent that information in this system 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, 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
--Table of Contents




Sec.
516.1 What is the purpose of this part and to whom does it apply?
516.2 When may a person to whom this part applies give testimony, make a 
          statement or submit to interview?
516.3 When may a person to whom this part applies produce records?
516.4 How are records certified or authenticated?


[[Page 769]]


    Authority: 5 U.S.C. 301; 25 U.S.C. 2706; 25 U.S.C. 2716(a); 18 
U.S.C. 1905.

    Source: 64 FR 54542, Oct. 7, 1999, unless otherwise noted.



Sec. 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.



Sec. 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.



Sec. 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.



Sec. 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

[[Page 770]]

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 National Indian Gaming 
Commission, 1441 L Street NW., Suite 9100, Washington, DC 20005, 
Attention: Freedom of Information Act Officer.



PART 517_FREEDOM OF INFORMATION ACT PROCEDURES--Table of Contents




Sec.
517.1 Purpose and scope.
517.2 Definitions.
517.3 Requests for records.
517.4 Disclosure of requested records.
517.5 Confidential commercial information.
517.6 Response to requests for records.
517.7 Appeals.
517.8 Fees.

    Authority: 5 U.S.C. 552.

    Source: 58 FR 44448, Aug. 23, 1993, unless otherwise noted.



Sec. 517.1  Purpose and scope.

    This part contains the regulations of the National Indian Gaming 
Commission implementing the Freedom of Information Act (FOIA). These 
regulations provide procedures by which members of the public 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.



Sec. 517.2  Definitions.

    (a) Commercial-use requester means requesters seeking information 
for a use or purpose that furthers the commercial, trade, or profit 
interests of the requester or the person on whose behalf the request is 
made. In determining whether a requester properly belongs in this 
category, the Commission shall determine the use to which a requester 
will put the documents requested. Where the Commission has reasonable 
cause to doubt the use to which a requester will put the records sought, 
or where that use is not clear from the request itself, the Commission 
shall seek additional clarification before assigning the request to a 
specific category.
    (b) Confidential commercial information means records provided to 
the government by a submitter that arguably contain material exempt from 
disclosure under Exemption 4 of the FOIA, because disclosure could 
reasonably be expected to cause substantial competitive harm.
    (c) Direct costs means those expenditures by the Commission actually 
incurred in searching for and duplicating records to respond to a FOIA 
request. Direct costs include the salary of the employee or employees 
performing the work (the basic rate of pay for the employee plus a 
percentage of that rate to cover benefits) and the cost of operating 
duplicating machinery. Direct costs do not include overhead expenses, 
such as the cost of and heating or lighting of the facility in which the 
records are stored.
    (d) Duplication refers to the process of making a copy of a document 
necessary to fulfill a FOIA request. Such copies can take the form of, 
among other things, paper copy, microform, audio-visual materials, or 
machine-readable documentation. The copies provided shall be in a form 
that is reasonably usable by requesters.
    (e) Educational institution refers to a preschool, a public or 
private elementary school, an institution of undergraduate higher 
education, an institution of graduate higher education, an institution 
of professional education, and an institution of vocational education, 
which operates a program of 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 
Sec. 517.2(a), commercial-use requester, 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.
    (h) Representative of the news media refers to any person actively 
gathering news for an entity that is organized and operated to publish 
or broadcast news to the public. The term ``news''

[[Page 771]]

means information that is about current events or that would be of 
current interest to the public.
    (i) 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.
    (j) Review refers to the process of examining a record, in response 
to a FOIA request, to determine whether any portion of that record may 
be withheld under one or more of the FOIA Exemptions. It also includes 
processing of any record for disclosure, for example, redacting 
information that is exempt from disclosure under the FOIA. Review does 
not include time spent resolving general legal or policy issues 
regarding the use of FOIA Exemptions.
    (k) 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. The Commission shall 
ensure that searches are conducted in the most efficient and least 
expensive manner reasonably possible.
    (l) 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.
    (m) Working day means a federal workday that does not include 
Saturdays, Sundays or federal holidays.



Sec. 517.3  Requests for records.

    (a) Form of requests. Requests for records made pursuant to the FOIA 
may be in writing, specifically invoke the Act, and be addressed to the 
FOIA Officer, Suite 250, 1850 M St., NW., Washington, DC 20036-5803. 
Requests may also be made in person at the same address, where records 
will be available for inspection on the premises. Requests for records 
shall describe the records requested with enough specificity to enable 
Commission employees to locate the information requested with a 
reasonable amount of effort. Requests shall also include a statement of 
the maximum amount of fees the requester is willing to pay to obtain the 
requested information, or if a waiver or reduction of fees seems 
appropriate, the reasons for such waiver or reduction.
    (b) 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 of.



Sec. 517.4  Disclosure of requested records.

    (a) The FOIA Officer shall make requested records available to the 
public to the greatest extent possible in keeping with the FOIA, except 
that the following records are exempt from the disclosure requirements:
    (1) Records specifically authorized under criteria established by an 
Executive order to be kept secret in the interest of national defense or 
foreign policy and which are, in fact, properly classified pursuant to 
such Executive order;
    (2) Records related solely to the internal personnel rules and 
practices of the Commission;
    (3) Records specifically exempted from disclosure by statute (other 
than 5 U.S.C. Sec. 552(b)) provided that such statute requires that the 
matters be withheld from the public in such a manner as to leave no 
discretion on the issue or that the statute establishes particular 
criteria for withholding information or refers to particular types of 
matters to be withheld;
    (4) Records containing trade secrets and commercial or financial 
information obtained from a person and privileged or confidential;
    (5) Interagency or intra-agency memorandums or letters which would 
not be available by law to a party other than an agency in litigation 
with the Commission;

[[Page 772]]

    (6) Personnel and medical files and similar files the disclosure of 
which would constitute a clearly unwarranted invasion of personal 
privacy;
    (7) Records or information compiled for law enforcement purposes, 
but only to the extent that the production of such law enforcement 
records or information:
    (i) Could reasonably be expected to interfere with enforcement 
proceedings;
    (ii) Would deprive a person of a right to a fair trial or an 
impartial adjudication;
    (iii) Could reasonably be expected to constitute an unwarranted 
invasion of personal privacy;
    (iv) Could reasonably be expected to disclose the identity of a 
confidential source, including a State, local or foreign agency or 
authority or any private institution which furnished information on a 
confidential basis, and in the case of a recorded or information 
compiled by criminal law enforcement authority in the course of a 
criminal investigation or by an agency conducting a lawful national 
security intelligence investigation, information furnished by a 
confidential source;
    (v) Would disclose techniques and procedures for law enforcement 
investigations or prosecutions, or would disclose guidelines for law 
enforcement investigations or prosecutions if such disclosure could 
reasonably be expected to risk circumvention of the law; or
    (vi) Could reasonably be expected to endanger the life or physical 
safety of any individual.
    (8) Records contained in or related to examination, operating, or 
condition reports prepared by, or on behalf of, or for the use of an 
agency responsible for the regulation or supervision of financial 
institutions;
    (9) Geological or geophysical information and data, including maps, 
concerning wells.
    (b) If a requested record contains exempted material along with 
nonexempted material, all reasonable segregable nonexempt material shall 
be disclosed.
    (c) The FOIA Officer may disclose requested information falling 
within the exemptions of paragraphs (a)(1)-(a)(3), (a)(5), (a)(6), 
(a)(8) and (a)(9) of this section, if to do so would further the 
purposes and policies of the FOIA and the IGRA. The FOIA Officer shall 
not disclose requested information falling within the exemptions of 
paragraphs (a)(4) and (a)(7) of this section.



Sec. 517.5  Confidential commercial information.

    (a) Notice to submitters. The Commission 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 
Commission shall also notify the requester that notice and an 
opportunity to object has been given to the submitter.
    (b) When 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 because disclosure could 
reasonably be expected to cause substantial competitive harm. 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) Opportunity to object to disclosure. The Commission shall afford 
a submitter a reasonable period of time to provide the Commission with a 
detailed written statement of any objection to disclosure. The statement 
shall specify all grounds for withholding any

[[Page 773]]

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 submitters claim of 
confidentiality shall be supported by a statement or certification by an 
officer or authorized representative of the submitter. Information 
provided by a submitter pursuant to this paragraph may itself be subject 
to disclosure under the FOIA.
    (d) 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 specified disclosure date. The FOIA Officer shall 
also notify the requester that the requested records will be made 
available.
    (e) Notice of lawsuit. When a requester brings suit seeking to 
compel disclosure of confidential commercial information, the FOIA 
Officer shall promptly notify the submitter of this action.
    (f) 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;
    (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.



Sec. 517.6  Response to requests for records.

    (a) Initial determinations. (1) The FOIA Officer shall make an 
initial determination regarding access to the requested information and 
shall so notify the requester within ten (10) working days after receipt 
of the request. This 10-day period may be extended ten (10) additional 
working days 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 (a)(1) of this 
section, he or she shall notify the requester of the reasons for the 
delay and include an estimate of when a determination will be made.
    (3) If no initial determination has been made at the end of the 10-
day period provided in paragraph (a)(1) of this

[[Page 774]]

section, including any extension, the requester may appeal the action to 
the FOIA Appeals Officer.
    (4) If the FOIA Officer determines that another agency is 
responsible for responding to a request or part thereof, the FOIA 
Officer shall refer such request to the appropriate agency. The FOIA 
Officer shall inform the requester of the referral and of the name and 
address of the agency or agencies to which the request has been 
referred.
    (b) Granting of requests. When the FOIA Officer determines that the 
requested records shall be made available, he or she shall:
    (1) Provide copies of the requested records; or
    (2) Notify the requester of his or her decision, including a brief 
statement of when and how the records will be provided. Requested 
records shall then be promptly made available.
    (c) Denial of requests. When the FOIA Officer determines that access 
to requested records should be denied, he or she shall notify the 
requester of the denial, the grounds for withholding the records, and 
the procedures for appeal of the denial.



Sec. 517.7  Appeals.

    (a) Right of appeal. A requester may appeal to the FOIA Appeals 
Officer any adverse determination.
    (b) Notice of appeal.
    (1) Time for appeal. An appeal must be received no later than thirty 
(30) working days after notification of denial of access or after the 
time limit for response by the FOIA Officer has expired.
    (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 the initial denial. To expedite the appellate 
process and give the requester an opportunity to present his or her 
arguments, the notice should contain a brief statement of the reasons 
why the requester believes the initial denial to have been in error. The 
appeal shall be addressed to the Freedom of Information Act Appeals 
Officer, National Indian Gaming Commission, 1850 M St., NW., suite 250, 
Washington, DC 20036.
    (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 denial of access to the 
requested records, the FOIA Appeals Officer shall notify the requester 
of the determination and the right of the requester to obtain judicial 
review in the appropriate federal district court.



Sec. 517.8  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) of this 
section or where a waiver or reduction of fees is granted under 
paragraph (c) of this section. Requesters shall pay fees 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) Copies. The Commission shall charge $0.10 per page for copies of 
documents up to 8\1/2\x14. For copies prepared by 
computer, the Commission will charge actual costs of production of the 
computer printouts, including operator time. For other methods of 
reproduction, the Commission shall charge the actual costs of producing 
the documents.
    (2) Searches. (i) Manual searches. Whenever feasible, the Commission 
will charge at the salary rate (basic pay plus a 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 Commission 
shall charge $12.50 per hour for clerical time and $30.00 per hour for 
professional time. Charges for

[[Page 775]]

search time less than a full hour will be in increments of quarter 
hours.
    (ii) Computer searches. The Commission 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. The Commission is not required to alter or 
develop programming to conduct searches.
    (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 Commission 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 paragraphs (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, representatives of the news media, 
and all other requesters. These terms are defined in Sec. 517.2. 
Specific levels of fees are prescribed below 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 institution 
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 above categories fees which recover the 
full reasonable direct costs incurred for searching for and reproducing 
records if that total cost exceeds $15.00, except that the first

[[Page 776]]

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 will 
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) Charges for unsuccessful searches. Ordinarily, no charge will be 
assessed when requested records are not found or when the 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.
    (f) Charges for interest. The FOIA Officer may assess interest 
charges on an unpaid bill, accrued under previous FOIA request(s), 
starting on the 31st day following the day on which the bill was sent to 
the requester. 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 and the implementing procedures to recover any indebtedness owed to 
the Commission.
    (g) Aggregating requests. A 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 Commission reasonably believes that a requester is attempting to 
divide a request into a series of requests to evade an assessment of 
fees, the Commission 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 the total fee will exceed $250. When payment is 
required in advance of the processing of a request, the time limits 
prescribed in Sec. 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 requesting party 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--Table of Contents




Sec.
518.1 What does this part cover?
518.2 Who may petition for a certificate of self-regulation?
518.3 What must a tribe submit to the Commission as part of its 
          petition?
518.4 What criteria must a tribe meet to receive a certificate of self-
          regulation?
518.5 What process will the Commission use to review petitions?
518.6 When will a certificate of self-regulation become effective?
518.7 If a tribe holds a certificate of self-regulation, is it required 
          to report information to the Commission to maintain its self-
          regulatory status?
518.8 Does a tribe that holds a certificate of self-regulation have a 
          continuous duty to advise the Commission of any information?
518.9 Are any of the investigative or enforcement powers of the 
          Commission limited by the issuance of a certificate of self-
          regulation?
518.10 Under what circumstances may the Commission remove a certificate 
          of self-regulation?
518.11 May a tribe request a hearing on the Commission's proposal to 
          remove its certificate?
518.12 May a tribe request reconsideration by the Commission of a denial 
          of a petition or a removal of a certificate of self-
          regulation?

    Authority: 25 U.S.C. 2706(b)(10), 2710(c)(3)-(6).

    Source: 63 FR 41969, Aug. 6, 1998, unless otherwise noted.

[[Page 777]]



Sec. 518.1  What does this part cover?

    This part sets forth requirements for obtaining, and procedures 
governing, the Commission's issuance of certificates 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 will apply to all class II gaming operations operated by the 
tribe that holds the certificate.



Sec. 518.2  Who may petition for a certificate of self-regulation?

    A tribe may submit to the Commission a petition for self-regulation 
of class II gaming if, for the three (3) year period immediately 
preceding the date of its petition:
    (a) The tribe has continuously conducted the gaming activity for 
which it seeks self-regulation;
    (b) All gaming that the tribe has engaged in, or 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 Chairman 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 years immediately preceding the date of the petition, 
maintained all records required to support the petition for self-
regulation.



Sec. 518.3  What must a tribe submit to the Commission as part of 
its petition?

    (a) A petition for a certificate of self-regulation under this part 
shall contain:
    (1) Two copies on 8-1/2x11 paper of a petition 
for self-regulation approved by the governing body of the tribe and 
certified as authentic by an authorized tribal official, which includes:
    (i) A brief history of each gaming operation(s), including the 
opening dates and periods of voluntary or involuntary closure;
    (ii) An organizational chart of the independent tribal regulatory 
body;
    (iii) A description of the process by which all employee and 
regulator positions at the independent tribal regulatory body are 
filled, including qualifying and disqualifying criteria;
    (iv) A description of the process by which the independent tribal 
regulatory body is funded and the funding level for the three years 
immediately preceding the date of the petition;
    (v) A list of the current regulators and employees of the 
independent tribal regulatory body, their titles, the dates they began 
employment, and, if serving limited terms, the expiration date of such 
terms;
    (vi) A list of the current gaming operation division heads; and
    (vii) A report, with supporting documentation, including a sworn 
statement signed by an authorized tribal official, which explains how 
tribal net gaming revenues were used in accordance with the requirements 
of 25 U.S.C. 2710(b)(2)(B);
    (2) A descriptive list of the documents maintained by the tribe, 
together with an assurance that the listed documents or records are 
available for the Commission's review for use in determining whether the 
tribe meets the eligibility criteria of Sec. 518.2 and the approval 
criteria of Sec. 518.4, which shall include but is not limited to:
    (i) The tribe's constitution or other governing documents;
    (ii) If applicable, the tribe's revenue allocation plan pursuant to 
25 U.S.C. 2710(b)(3);
    (iii) A description of the accounting system(s) at both the gaming 
operation and the tribe that account for the flow of the gaming revenues 
from receipt to their ultimate use, consistent with IGRA;
    (iv) Manual(s) of the internal control systems of the gaming 
operation(s);
    (v) A description of the record keeping system for all allegations 
of criminal or dishonest activity for the three (3)-year period 
immediately preceding the date of the petition, and measures taken to 
resolve the allegations;

[[Page 778]]

    (vi) A description of the record keeping system 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, including 
dispositions thereof;
    (vii) A description of the personnel record keeping system of all 
current employees of the gaming operation(s);
    (viii) The dates of issuance, and criteria for the issuance of 
tribal gaming licenses issued for each place, facility or location at 
which gaming is conducted; and
    (ix) The tribe's current set of gaming regulations; and
    (3) A copy of the public notice required under 25 CFR 518.5(d) and a 
certification, signed by a tribal official, that it has been posted. 
Upon publication of the notice in a local newspaper, the tribe shall 
forward an affidavit of publication to the Commission.



Sec. 518.4  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 the tribe has, for the three years immediately 
preceding the petition:
    (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) Adopted and is implementing adequate systems for:
    (i) Accounting of all revenues from the activity;
    (ii) Investigation, licensing and monitoring of all employees of the 
gaming activity; and
    (iii) Investigation, enforcement and prosecution of violations of 
its gaming ordinance and regulations;
    (3) Conducted the operation on a fiscally and economically sound 
basis; and
    (4) The gaming activity has been conducted in compliance with the 
IGRA, NIGC regulations in this chapter, and the tribe's gaming ordinance 
and gaming regulations.
    (b) Indicators that a tribe has met the criteria set forth in 
paragraph (a) of this section may include, but are not limited to:
    (1) Adoption and implementation of minimum internal control 
standards which are at least as stringent as those promulgated by the 
Commission, or until such standards are promulgated by the Commission, 
minimum internal control standards at least as stringent as those 
required by the State of Nevada or the State of New Jersey;
    (2) Evidence that suitability determinations are made with respect 
to tribal gaming regulators which are at least as stringent as those 
required for key employees and primary management officials of the 
gaming operation(s);
    (3) Evidence of an established independent regulatory body within 
the tribal government which:
    (i) Monitors gaming activities to ensure compliance with federal and 
tribal laws and regulations;
    (ii) Promulgates tribal gaming regulations pursuant to tribal law;
    (iii) Ensures that there is an adequate system for accounting of all 
revenues from the activity and monitors such system for continued 
effectiveness;
    (iv) Performs routine operational or other audits of the gaming 
operation(s);
    (v) Routinely receives and reviews accounting information from the 
gaming operation(s);
    (vi) Has access to and may inspect, examine, photocopy and audit all 
papers, books, and records of the gaming operation(s);
    (vii) Provides ongoing information to the tribe on the status of the 
tribe's gaming operation(s);
    (viii) Monitors compliance with minimum internal control standards 
for the gaming operation;
    (ix) Adopts and implements an adequate system for investigation, 
licensing, and monitoring of all employees of the gaming activity;
    (x) Maintains records on licensees and on persons denied licenses 
including persons otherwise prohibited from

[[Page 779]]

engaging in gaming activities within the tribe's jurisdiction;
    (xi) Inspects and examines all premises where gaming is conducted;
    (xii) 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;
    (xiii) Establishes or approves, and requires the posting of, rules 
of games;
    (xiv) Inspects games, tables, equipment, cards, and chips or tokens 
used in the gaming operation(s);
    (xv) Establishes standards for technological aids and tests such for 
compliance with standards;
    (xvi) Establishes or approves video surveillance standards;
    (xvii) Adopts and implements an adequate system for the 
investigation of possible violations of the tribal gaming ordinance and 
regulations and takes appropriate enforcement actions;
    (xviii) Determines that there are adequate dispute resolution 
procedures for gaming operation employees and customers, and ensures 
that such system is adequately implemented; and
    (xix) Takes testimony and conducts hearings on regulatory matters, 
including matters related to the revocation of primary management 
officials and key employee licenses;
    (4) Documentation of a sufficient source of permanent and stable 
funding for the independent tribal regulatory body which is allocated 
and appropriated by the tribal governing body;
    (5) Adoption of a conflict of interest policy for the regulators/
regulatory body and their staff;
    (6) Evidence that the operation is financially stable;
    (7) Adoption and implementation of a system for adequate prosecution 
of violations of the tribal gaming ordinance and regulations, which may 
include the existence of a tribal court system authorized to hear and 
decide gaming related cases;
    (8) Evidence that the operation is being conducted in a safe manner, 
which may include, but not be limited to:
    (i) The availability of medical, fire, and emergency services;
    (ii) The existence of an evacuation plan; and
    (iii) Proof of compliance with applicable building, health, and 
safety codes; and
    (9) Evidence that reports are produced or received by the tribe, the 
tribal regulatory body, or the gaming operation based on an evaluation 
of the internal controls of the gaming operation during the three (3) 
year period immediately preceding the date of the petition.
    (c) The burden of establishing self-regulation is upon the tribe 
filing the petition.
    (d) During the review of the petition, the Commission shall have 
complete access to all areas of and all papers, books, and records of 
the tribal regulatory body, the gaming operation, and any other entity 
involved in the regulation or oversight of the gaming operation. The 
Commission shall be allowed to inspect and photocopy any relevant 
materials. The tribe shall take no action to prohibit the Commission 
from soliciting information from any current or former employees of the 
tribe, the tribal regulatory body, or the gaming operation. Failure to 
adhere to this paragraph may be grounds for denial of a petition for 
self-regulation.



Sec. 518.5  What process will the Commission use to review petitions?

    (a) The Chairman shall appoint one Commissioner to administer the 
Office of Self Regulation. The Office of Self Regulation shall undertake 
an initial review of the petition to determine whether the tribe meets 
all of the eligibility criteria of Sec. 518.2. If the tribe fails to 
meet any of the eligibility criteria, the Office of Self Regulation 
shall deny the petition and so notify the tribe. If the tribe meets all 
of the eligibility criteria, the Office of Self Regulation shall review 
the petition and accompanying documents for completeness. If the Office 
of Self Regulation finds the petition incomplete, it shall immediately 
notify the tribe by letter, certified mail, return receipt requested, of 
any obvious deficiencies or significant omissions apparent in the 
petition and provide the tribe with an opportunity to submit additional 
information and/or clarification.

[[Page 780]]

    (b) The Office of Self Regulation shall notify a tribe, by letter, 
when it considers a petition to be complete.
    (c) Upon receipt of a complete petition, the Office of Self 
Regulation shall conduct a review and investigation to determine whether 
the tribe meets the approval criteria under Sec. 518.4. During the 
course of this review, the Office of Self Regulation may request from 
the tribe any additional material it deems necessary to assess whether 
the tribe has met the requirements for self-regulation. The tribe shall 
provide all information requested by the Office of Self Regulation in a 
timely manner. The Office of Self Regulation may consider any evidence 
which may be submitted by interested or informed parties. The Office of 
Self Regulation shall make all such information on which it relies in 
making its determination available to the Tribe and shall afford the 
Tribe an opportunity to respond.
    (d) The tribe shall post a notice, contemporaneous with the filing 
of the petition, advising the public that it has petitioned the 
Commission for a certificate of self regulation. Such notice shall be 
posted in conspicuous places in the gaming operation and the tribal 
government offices. Such notice shall remain posted until the Commission 
either issues a certificate or declines to do so. The tribe shall also 
publish such notice, once a week for four weeks, in a local newspaper 
with a broad based circulation. Both notices shall state that one of the 
criteria for the issuance of a certificate is that the tribe has a 
reputation for safe, fair, and honest operation of the gaming activity, 
and shall solicit comments in this regard. The notices shall instruct 
commentors to submit their comments directly to the Office of Self 
Regulation, shall provide the mailing address of the Commission and 
shall request that commentors include their name, address and day time 
telephone number.
    (e) After making an initial determination on the petition, the 
Office of Self Regulation shall issue a report of its findings to the 
tribe.
    (1) If the Office of Self Regulation determines that the tribe has 
satisfied the criteria for a certificate of self regulation, it shall so 
indicate in its report and shall issue a certificate in accordance with 
25 CFR 518.6.
    (2) If the Office of Self Regulation's initial determination is that 
a tribe has not met the criteria for a certificate of self regulation, 
it shall so advise the tribe in its report and the tribe shall have 60 
days from the date of service of the report to submit to the Office of 
Self Regulation a written response to the report. This response may 
include additional materials which:
    (i) The tribe deems necessary to adequately respond to the findings; 
and
    (ii) The tribe believes supports its petition.
    (f) At the time of the submission of its response the tribe may 
request a hearing before the Office of Self Regulation. This request 
shall specify the issues to be addressed by the tribe at such hearing, 
and any proposed oral or written testimony the tribe wishes to present. 
The Office of Self Regulation may limit testimony.
    (g) The Office of Self Regulation shall notify the tribe, within 10 
days of receipt of such request, of the date and place of the hearing. 
The Office of Self Regulation shall also set forth the schedule for the 
conduct of the hearing, including the specification of all issues to be 
addressed at the hearing, the identification of any witnesses, the time 
allotted for testimony and oral argument, and the order of the 
presentation.
    (h) Following review of the tribe's response and the conduct of the 
hearing, the Office of Self Regulation shall issue a decision on the 
petition. The decision shall set forth with particularity the findings 
with respect to the tribe's compliance with standards for self-
regulation set forth in this part. If the Office of Self Regulation 
determines that a certificate will issue, it will do so in accordance 
with 25 CFR 518.6.
    (i) The decision to deny a petition shall be appealable to the full 
Commission. Such appeal shall be received by the Commission within 
thirty (30) days of service of the decision and shall include a 
supplemental statement that states with particularity the relief desired 
and the grounds therefor. The full Commission shall decide the appeal

[[Page 781]]

based only on a review of the record before it. The decision on appeal 
shall require a majority vote of the Commissioners.
    (j) The decision of the Commission to approve or deny a petition 
shall be a final agency action. A denial shall be appealable under 25 
U.S.C. 2714, subject to the provisions of Sec. 518.12. The Commission 
decision shall be effective when the time for the filing of a request 
for reconsideration pursuant to Sec. 518.12 has expired and no request 
has been filed.



Sec. 518.6  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. Complete petitions are due no later than June 
30. No petitions will be considered for the following January 1 
effective date that have not been received by June 30 of the previous 
year. Petitions will be reviewed and investigated in chronological order 
based on the date of receipt of a complete petition. The Commission will 
announce its determinations on December 1 for all those reviews and 
investigations it completes.



Sec. 518.7  If a tribe holds a certificate of self-regulation, is it 

required to report information to the Commission to maintain its 
self-regulatory status?

    Yes. Each tribe that holds a certificate of self-regulation shall be 
required to submit a self-regulation report annually to the Commission 
in order to maintain its self-regulatory status. Such report shall set 
forth information to establish that the tribe has continuously met the 
eligibility requirements of Sec. 518.2 and the approval requirements of 
Sec. 518.4 and shall include a report, with supporting documentation, 
including a sworn statement signed by an authorized tribal official, 
which explains how tribal net gaming revenues were used in accordance 
with the requirements of 25 U.S.C. 2710(b)(2)(B)''. The annual report 
shall be filed with the Commission on April 15th of each year following 
the first year of self-regulation. Failure to file such report shall be 
grounds for the removal of a certificate under Sec. 518.8.



Sec. 518.8  Does a tribe that holds a certificate of self-regulation 
have a continuing duty to advise the Commission of any information?

    Yes. A tribe that holds a certificate of self-regulation has a 
continuing duty to advise immediately the Commission of any 
circumstances that may reasonably cause the Commission to review the 
tribe's certificate of self-regulation. Failure to do so is grounds for 
removal of a certificate of self-regulation. Such circumstances may 
include, but are not limited to: a change in management contractor; 
financial instability; or any other factors that are material to the 
decision to grant a certificate of self regulation.



Sec. 518.9  Are any of the investigative or enforcement powers of the 
Commission limited by the issuance of a certificate of self-regulation?

    No. Subject to the provisions of 25 U.S.C. 2710(c)(5)(A) the 
Commission retains its investigative and enforcement powers over all 
class II gaming tribes notwithstanding the issuance of a certificate of 
self-regulation. The Commission shall retain its powers to investigate 
and bring enforcement actions for violations of the Indian Gaming 
Regulatory Act, accompanying regulations, and violations of tribal 
gaming ordinances.



Sec. 518.10  Under what circumstances may the Commission remove a 
certificate of self-regulation?

    The Commission may, after an opportunity for a hearing, remove a 
certificate of self-regulation by a majority vote of its members if it 
determines that the tribe no longer meets the eligiblity criteria of 
Sec. 518.2, the approval criteria of Sec. 518.4, the requirements of 
Sec. 518.7 or the requirements of Sec. 518.8. The Commission shall 
provide the tribe with prompt notice of the Commission's intent to 
remove a certificate of self-regulation under this Part. Such notice 
shall state the reasons for the Commission's action and shall advise the 
tribe of its right to a hearing under Sec. 518. 11. The decision to 
remove a certificate is appealable to

[[Page 782]]

Federal District Court pursuant to 25 U.S.C. 2714.



Sec. 518.11  May a tribe request a hearing on the Commission's proposal 
to remove its certificate?

    Yes. A tribe may request a hearing regarding the Commission's 
proposal to remove a certificate of self regulation under Sec. 518.10. 
Such a request shall be filed with the Commission within thirty (30) 
days after the tribe receives notice of the Commission's action. Failure 
to request a hearing within the time provided by this section shall 
constitute a waiver of the right to a hearing.



Sec. 518.12  May a tribe request reconsideration by the Commission of a 
denial of a petition or a removal of a certificate of self-regulation?

    Yes. A tribe may file a request for reconsideration of a denial of a 
petition or a removal of a certificate of self-regulation within 30 days 
of receipt of the denial or removal. Such request shall set forth the 
basis for the request, specifically identifying those Commission 
findings which the tribe believes to be erroneous. The Commission shall 
issue a final decision within 30 days of receipt of the request. If the 
Commission fails to issue a decision within 30 days, the request shall 
be considered to be disapproved.



PART 519_SERVICE--Table of Contents




Sec.
519.1 Designation of an agent by a tribe.
519.2 Designation of an agent by a management contractor or a tribal 
          operator.
519.3 Methods of service.
519.4 Copy of any official determination, order, or notice of violation.

    Authority: 25 U.S.C. 2706(b)(10).

    Source: 58 FR 5810, Jan. 22, 1993, unless otherwise noted.



Sec. 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.



Sec. 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.



Sec. 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.



Sec. 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

[[Page 783]]

agent under Sec. 519.1, and to the relevant tribal gaming authority. 
The Commission shall transmit such copy as expeditiously as possible. 
Service under Sec. 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.

[[Page 784]]



     SUBCHAPTER B_APPROVAL OF CLASS II AND CLASS III ORDINANCES AND 
                               RESOLUTIONS



                        PARTS 520	521 [RESERVED]



PART 522_SUBMISSION OF GAMING ORDINANCE OR RESOLUTION--Table of Contents




Sec.
522.1 Scope of this part.
522.2 Submission requirements.
522.3 Amendment.
522.4 Approval requirements for class II ordinances.
522.5 Disapproval of a class II ordinance.
522.6 Approval requirements for class III ordinances.
522.7 Disapproval of a class III ordinance.
522.8 Publication of class III ordinance and approval.
522.9 Substitute approval.
522.10 Individually owned class II and class III gaming operations other 
          than those operating on September 1, 1986.
522.11 Individually owned class II gaming operations operating on 
          September 1, 1986.
522.12 Revocation of class III gaming.

    Authority: 25 U.S.C. 2706, 2710, 2712

    Source: 58 FR 5810, Jan. 22, 1993, unless otherwise noted.



Sec. 522.1  Scope of this part.

    This part applies to any gaming ordinance or resolution adopted by a 
tribe after February 22, 1993. Part 523 of this chapter applies to all 
existing gaming ordinances or resolutions.

[58 FR 5810, Jan. 22, 1993, as amended at 58 FR 16494, Mar. 29, 1993]



Sec. 522.2  Submission requirements.

    A tribe shall submit to the Chairman all of the following 
information with a request for approval of a class II or class III 
ordinance or resolution:
    (a) One copy on 8\1/2\x11 paper of an 
ordinance or resolution certified as authentic by an authorized tribal 
official and that meets the approval requirements in Sec. 522.4(b) or 
522.6 of this part;
    (b) A description of 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 Sec. 556.2 of this chapter;
    (c) A description of procedures to issue tribal licenses to primary 
management officials and key employees;
    (d) Copies of all tribal gaming regulations;
    (e) When an ordinance or resolution concerns class III gaming, a 
copy of the tribal-state compact or procedures as prescribed by the 
Secretary;
    (f) A description of procedures for resolving disputes between the 
gaming public and the tribe or the management contractor;
    (g) Designation of an agent for service under Sec. 519.1 of this 
chapter; and
    (h) Identification of a law enforcement agency that will take 
fingerprints and a description of procedures for conducting a criminal 
history check by a law enforcement agency. Such a criminal history check 
shall include a check of criminal history records information maintained 
by the Federal Bureau of Investigation.

[58 FR 5810, Jan. 22, 1993, as amended at 58 FR 16494, Mar. 29, 1993]



Sec. 522.3  Amendment.

    (a) Within 15 days after adoption, a tribe shall submit for the 
Chairman's approval any amendment to an ordinance or resolution.
    (b) A tribe shall submit for the Chairman's approval any amendment 
to the submissions made under Sec. Sec. 522.2(b) through (h) of this 
part within 15 days after adoption of such amendment.



Sec. 522.4  Approval requirements for class II ordinances.

    No later than 90 days after the submission to the Chairman under 
Sec. 522.2 of this part, the Chairman shall approve the class II 
ordinance or resolution if the Chairman finds that--
    (a) A tribe meets the submission requirements contained in Sec. 
522.2 of this part; and
    (b) The class II ordinance or resolution provides that--

[[Page 785]]

    (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 Sec. 522.10 or Sec. 
522.11 of this part;
    (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.



Sec. 522.5  Disapproval of a class II ordinance.

    No later than 90 days after a tribe submits an ordinance for 
approval under Sec. 522.2 of this part, the Chairman may disapprove an 
ordinance if he or she determines that a tribe failed to comply with the 
requirements of Sec. 522.2 or Sec. 522.4(b) of this part. The Chairman 
shall notify a tribe of its right to appeal under part 524 of this 
chapter. A disapproval shall be effective immediately unless appealed 
under part 524 of this chapter.



Sec. 522.6  Approval requirements for class III ordinances.

    No later than 90 days after the submission to the Chairman under 
Sec. 522.2 of this part, the Chairman shall approve the class III 
ordinance or resolution if--
    (a) A tribe follows the submission requirements contained in Sec. 
522.2 of this part;
    (b) The ordinance or resolution meets the requirements contained in 
Sec. 522.4(b) (2), (3), (4), (5), (6), and (7) of this part; 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 Sec. 522.10 of this part.



Sec. 522.7  Disapproval of a class III ordinance.

    (a) Notwithstanding compliance with the requirements of Sec. 522.6 
of this part and no later than 90 days after a submission under Sec. 
522.2 of this part, the Chairman shall disapprove an ordinance or 
resolution and notify a tribe of its right of appeal under part 524 of 
this chapter if the Chairman determines that--
    (1) A tribal governing body did not adopt the ordinance or 
resolution in compliance with the governing documents of a 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) A disapproval shall be effective immediately unless appealed 
under part 524 of this chapter.

[[Page 786]]



Sec. 522.8  Publication of class III ordinance and approval.

    The Chairman shall publish a class III tribal gaming ordinance or 
resolution in the Federal Register along with the Chairman's approval 
thereof.



Sec. 522.9  Substitute approval.

    If the Chairman fails to approve or disapprove an ordinance or 
resolution submitted under Sec. 522.2 of this part within 90 days after 
the date of submission to the Chairman, a tribal ordinance or resolution 
shall be considered to have been approved by the Chairman but only to 
the extent that such ordinance or resolution is consistent with the 
provisions of the Act and this chapter.



Sec. 522.10  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 Sec. 522.11 of 
this part), a tribal ordinance shall require:
    (a) That the gaming operation be licensed and regulated under an 
ordinance or resolution approved by the Chairman;
    (b) That income to the tribe from an individually owned gaming 
operation be used only for the purposes listed in Sec. 522.4(b)(2) of 
this part;
    (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 Sec. 
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.



Sec. 522.11  Individually owned class II gaming operations operating 
on September 1, 1986.

    For licensing of individually owned gaming operations operating on 
September 1, 1986, under Sec. 502.3(e) of this chapter, a tribal 
ordinance shall contain the same requirements as those in Sec. 
522.10(a)-(d) of this part.



Sec. 522.12  Revocation of class III gaming.

    A governing body of a tribe, in its sole discretion and without the 
approval of the Chairman, may adopt an ordinance or resolution revoking 
any prior ordinance or resolution that authorizes class III gaming.
    (a) A tribe shall submit to the Chairman on 8\1/
2\x11 paper 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 
Federal Register and the revocation provided by such ordinance or 
resolution shall take effect on the date of such publication.
    (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 Federal Register under paragraph (b) of this section 
may, during a one-year period beginning on the date of publication, 
continue to operate such operation in conformance with a tribal-state 
compact.
    (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.



PART 523_REVIEW AND APPROVAL OF EXISTING ORDINANCES OR RESOLUTIONS
--Table of Contents




Sec.
523.1 Scope of this part.
523.2 Submission requirements.
523.3 Review of an ordinance or resolution.
523.4 Review of an amendment.

    Authority: 25 U.S.C. 2706, 2710, 2712.

    Source: 58 FR 5812, Jan. 22, 1993, unless otherwise noted.

[[Page 787]]



Sec. 523.1  Scope of this part.

    This part applies to a class II or a class III gaming ordinance or 
resolution enacted by a tribe prior to February 22, 1993, and that has 
not been submitted to the Chairman.

[58 FR 5810, Jan. 22, 1993, as amended at 58 FR 16494, Mar. 29, 1993]



Sec. 523.2  Submission requirements.

    (a) Within 60 days after a request by the Chairman, a tribe shall:
    (1) Submit for review and approval all items required under Sec. 
522.2 of this chapter; and
    (2) For each gaming operation submit the financial statements for 
the previous fiscal year and the most recent audit report and management 
letter.
    (b) If a tribe fails to submit all items under Sec. 522.2 of this 
chapter within 60 days, the Chairman shall deem the ordinance or 
resolution disapproved and shall notify the tribe of its right to appeal 
under part 524.



Sec. 523.3  Review of an ordinance or resolution.

    Within 90 days after receipt of a submission under Sec. 523.2 of 
this part, the Chairman shall subject the ordinance or resolution to the 
standards in part 522 of this chapter.
    (a) For class II and class III gaming, if the Chairman determines 
that an ordinance or resolution submitted under this part meets the 
approval and submission requirements of part 522 of this chapter and the 
Chairman finds the annual financial statements are included in the 
submission, the Chairman shall approve the ordinance or resolution.
    (b) If an ordinance or resolution fails to meet the requirements for 
review under part 522 of this chapter or if a tribe fails to submit the 
annual financial statement, the Chairman shall notify a tribe in writing 
of the specific areas of noncompliance.
    (c) The Chairman shall allow a tribe 120 days from receipt of such 
notice to bring the ordinance or resolution into compliance with the 
requirements of part 522 of this chapter or to submit an annual 
financial statement, or both.
    (d) At the end of the 120-day period provided under paragraph (c) of 
this section, or earlier if the tribe notifies the Chairman that it 
intends not to comply, the Chairman shall disapprove any ordinance or 
resolution if a tribe fails to amend according to the notification made 
under paragraph (b) of this section.



Sec. 523.4  Review of an amendment.

    Within 90 days after receipt of an amendment, the Chairman shall 
subject the amendment to the standards in part 522 of this chapter.
    (a) If the Chairman determines that an amendment meets the approval 
and submission requirements of part 522 of this chapter, the Chairman 
will approve the amendment.
    (b) If an amendment fails to meet the requirements for review under 
part 522 of this chapter, the Chairman shall notify the tribe in writing 
of the specific areas of noncompliance.
    (c) If the Chairman fails to disapprove a submission under paragraph 
(a) or (b) of this section within 90 days after the date of submission 
to the Chairman, a tribal amendment shall be considered to have been 
approved by the Chairman but only to the extent that such amendment is 
consistent with the provisions of the Act and this chapter.



PART 524_APPEALS--Table of Contents




Sec.
524.1 Appeals by a tribe.
524.2 Limited participation by an entity other than a tribe.
524.3 Decisions on appeals.

    Authority: 25 U.S.C. 2706, 2710, 2712.

    Source: 58 FR 5812, Jan. 22, 1993, unless otherwise noted.



Sec. 524.1  Appeal by a tribe.

    A tribe may appeal disapproval of a gaming ordinance, resolution or 
amendment under part 522 or 523 of this chapter. An appeal shall be 
filed with the Commission within 30 days after the Chairman serves his 
or her determination under part 519 of this chapter. Such an appeal 
shall state succinctly why the tribe believes the Chairman's 
determination to be erroneous, and shall include supporting 
documentation, if any. Failure to file an appeal within the time 
provided by

[[Page 788]]

this section shall result in a waiver of the opportunity for an appeal.



Sec. 524.2  Limited participation by an entity other than a tribe.

    (a) An entity other than a tribe may request to participate in an 
appeal of a disapproval under part 522 or part 523 of this chapter by 
filing a written submission. Such written submission shall:
    (1) State the property, financial, or other interest of the party in 
the appeal; and
    (2) The reasons why the action of the Chairman in disapproving an 
ordinance, resolution or amendment may be in error or the reasons why 
the Chairman's disapproval should be upheld by the Commission. The 
reasons shall address the approval requirements under Sec. Sec. 522.4, 
522.5, 522.6, 522.7, 523.2 of this chapter.
    (b) The Commission shall forward a copy of a request under paragraph 
(a) of this section to the party of record under Sec. 524.1 of this 
part.
    (c) The Commission shall review a request under this section and 
timely notify the requester of its determination. Such notification 
shall supply the reasons for the determination. The Commission shall 
also notify the party of record on appeal under Sec. 524.1 of its 
determination.
    (d) The Commission shall limit the extent of participation by an 
entity other than a tribe to one written submission as described under 
paragraph (a) of this section, unless the Commission determines further 
participation would substantially contribute to the record.



Sec. 524.3  Decisions on appeals.

    (a) Within 90 days after it receives the appeal, the Commission 
shall render its decision on the appeal.
    (b) The Commission shall notify the party of record under Sec. 
524.1 of this part and any limited participant under Sec. 524.2 of this 
part of its final decision and the reasons supporting it.

                        PARTS 525	529 [RESERVED]

[[Page 789]]



               SUBCHAPTER C_MANAGEMENT CONTRACT PROVISIONS



                           PART 530 [RESERVED]



PART 531_CONTENT OF MANAGEMENT CONTRACTS--Table of Contents




Sec.
531.1 Required provisions.
531.2 Prohibited provisions.

    Authority: 25 U.S.C. 81, 2706(b)(10), 2710(d)(9), 2711.

    Source: 58 FR 5828, Jan. 22, 1993, unless otherwise noted.



Sec. 531.1  Required provisions.

    A management contract previously approved by the Secretary of the 
Interior shall conform to the requirements contained in paragraphs (c), 
(d), (e), (f), (g), (h), (i), and (j) of this section and a management 
contract not previously approved by the Secretary 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 operation's financial statements and reports;
    (7) Paying for the services of the independent auditor engaged 
pursuant to Sec. 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 National Indian Gaming Commission 
(NIGC, or 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 class II gaming operation, the tribe, and the Commission 
to calculate the annual fee under Sec. 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

[[Page 790]]

    (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 
modifying 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.



Sec. 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--Table of Contents




Sec.
533.1 Requirement for review and approval.
533.2 Time for submitting management contracts.
533.3 Submission of management contract for approval.
533.4 Action by the Chairman.
533.5 Notice of noncompliance.
533.6 Approval.
533.7 Void agreements.

    Authority: 25 U.S.C. 81, 2706(b)(10), 2710(d)(9), 2711.

    Source: 58 FR 5829, Jan. 22, 1993, unless otherwise noted.



Sec. 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.
    (c) Contracts approved by the Secretary remain effective until 
approved or disapproved by the Chairman.

[[Page 791]]



Sec. 533.2  Time for submitting management contracts.

    A tribe or a management contractor shall submit a management 
contract to the Chairman for review as follows:
    (a) Contracts approved by the Secretary, within sixty (60) days 
after a request by the Chairman. If a tribe or a management contractor 
fail to submit all items under Sec. 533.3 of this part within 60 days, 
the Chairman may deem the contract disapproved and shall notify the 
parties of their rights to appeal under part 539 of this chapter.
    (b) All other contracts, upon execution.



Sec. 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;
    (2) A representation that the contract as submitted to the Chairman 
is the entirety of the agreement among the parties; and
    (3)(i) If the contract has been approved by the Secretary, terms 
that meet the requirements of Sec. Sec. 531.1(c), (d), (e), (f), (g), 
(h), (i), and (j) and Sec. 531.2 of this chapter; or
    (ii) Terms that meet the requirements of part 531 of this chapter.
    (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 Sec. Sec. 
537.1(a) and 537.1(c)(1) of this chapter, and either:
    (1) The information required under Sec. 537.1(b)(1) of this chapter 
for Class II gaming contracts and Sec. 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 existing contracts, income statements and sources and uses 
of funds statements for the previous three (3) years; or
    (3) 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 Sec. 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 Sec. 531.1(i) of this chapter, for a fee in excess of thirty (30) 
percent, but not exceeding forty (40) percent.



Sec. 533.4  Action by the Chairman.

    (a) The Chairman shall provide notice of noncompliance under Sec. 
533.5 of this part, or shall approve or disapprove a management contract 
applying the standards contained in Sec. 533.6 of this part, within 180 
days of the date on which the Chairman receives a complete submission 
under Sec. 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 provide notice of 
noncompliance or 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 provided notice of 
noncompliance or approved or disapproved the contract under this part.



Sec. 533.5  Notice of noncompliance.

    (a) If a management contract previously approved by the Secretary 
fails

[[Page 792]]

to meet the requirements of this part, the Chairman shall notify the 
tribe and management contractor, in writing, of the specific areas of 
noncompliance.
    (1) The Chairman shall allow the tribe and the management contractor 
120 days from receipt of such notice to modify the contract.
    (2) If the Secretary approved a management contract before October 
17, 1988, the Chairman shall allow the tribe and the management 
contractor 180 days from receipt of such notification to modify the 
contract.
    (b) If a tribe and a management contractor fail to modify a 
management contract within the time provided, the Chairman may:
    (1) Disapprove the management contract, or
    (2) Approve the management contract subject to the required 
modifications if:
    (i) All modifications benefit the tribe;
    (ii) The modifications are required to bring the contract into 
statutory compliance; and
    (iii) The modifications are all agreed to by the management 
contractor.



Sec. 533.6  Approval.

    (a) The Chairman may approve a management contract if it meets the 
standards of part 531 of this chapter and Sec. 533.3 of this part;
    (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 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 this 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.



Sec. 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 Secretary of the Interior or the Chairman 
in accordance with the requirements of this part, are void.

                           PART 534 [RESERVED]

[[Page 793]]



PART 535_POST-APPROVAL PROCEDURES--Table of Contents




Sec.
535.1 Modifications.
535.2 Assignments.
535.3 Post-approval noncompliance.

    Authority: 25 U.S.C. 81, 2706(b)(10), 2710(d)(9), 2711.

    Source: 58 FR 5830, Jan. 22, 1993, unless otherwise noted.



Sec. 535.1  Modifications.

    (a) Subject to the Chairman's approval, a tribe may enter into a 
modification of a management contract for the operation of a class II or 
class III gaming activity.
    (b) A tribe shall submit a modification to the Chairman upon its 
execution.
    (c) A tribe shall include in any request for approval of a 
modification under this part:
    (1) A modification 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 modification;
    (3) Copies of documents evidencing the authority under paragraph 
(c)(2) of this section;
    (4) If the modification 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:
    (i) The information required under Sec. 537.1(b)(1) of this chapter 
for class II gaming contracts or Sec. 537.1(b)(1)(i) of this chapter 
for class III gaming contracts; or
    (ii) The dates on which the information was previously submitted;
    (5) If applicable, a justification, consistent with the provisions 
of Sec. 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 Sec. 531.1(i) of this chapter, for a management fee in excess of 
thirty (30) percent, but not exceeding forty (40) percent.
    (d) For modifications which do not require a background 
investigation under part 537 of this chapter, the Chairman shall have 
thirty (30) days from receipt to approve or disapprove a modification, 
or to notify the parties that an additional thirty (30) days is required 
to reach a decision.
    (1) When a modification requires a background investigation under 
part 537 of this chapter, the Chairman shall approve or disapprove such 
modification as soon as practicable but in no event later than 180 days 
after the Chairman receives it;
    (2) If the Chairman does not approve or disapprove, he shall respond 
in accordance with the service provisions of part 519 of this chapter 
noting that no action has been taken on the proposed modification. The 
request shall therefore be deemed disapproved and the parties shall have 
thirty (30) days to appeal the decision under part 539 of this chapter.
    (e) (1) The Chairman may approve a modification to a management 
contract if the modification meets the submission requirements of 
paragraph (c) of this section.
    (2) The Chairman shall disapprove a modification of a management 
contract for class II gaming if he or she determines that the conditions 
contained in Sec. 533.6(b) of this chapter apply.
    (3) The Chairman may disapprove a modification of a management 
contract for class III gaming if he or she determines that the 
conditions contained in Sec. 533.6(c) of this chapter apply.
    (f) Modifications that have not been approved by the Chairman in 
accordance with the requirements of this part are void.



Sec. 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

[[Page 794]]

standards of, and within the time provided by Sec. Sec. 535.1(d) and 
535.1(e) of this part.



Sec. 535.3  Post-approval noncompliance.

    If the Chairman learns of any action or condition that violates the 
standards contained in parts 531, 533, 535, and 537 of this chapter, the 
Chairman may require modifications of, or may void, a management 
contract 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 577 of this 
chapter. The Chairman will initiate modification proceedings by serving 
the parties, specifying the grounds for modification. 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 his decision on the basis of the 
developed record and notify the parties of his/her 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--Table of Contents




Sec.
537.1 Applications for approval.
537.2 Submission of background information.
537.3 Fees for background investigations.
537.4 Determinations.

    Authority: 25 U.S.C. 81, 2706(b)(10), 2710(d)(9), 2711.

    Source: 58 FR 5831, Jan. 22, 1993, unless otherwise noted.



Sec. 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) The ten (10) persons who have the greatest direct or indirect 
financial interest in a management contract;
    (4) Any entity with a financial interest in a management contract 
(in the case of institutional investors, the Chairman may exercise 
discretion and reduce the scope of the information to be furnished and 
the background investigation to be conducted); and
    (5) Any other person 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

[[Page 795]]

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; and
    (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.
    (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

[[Page 796]]

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).

[58 FR 5831, Jan. 22, 1993, as amended at 58 FR 16494, Mar. 29, 1993]



Sec. 537.2  Submission of background information.

    A management contractor shall submit the background information 
required in Sec. 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.



Sec. 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 bond, letter of credit, 
or deposit with the Commission to cover the cost of the background 
investigations as follows:
    (1) Management contractor (party to the contract)--$10,000
    (2) Each individual and entity with a financial interest in the 
contract--$5,000
    (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 bond, letter of credit, or 
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.

[[Page 797]]

    (d) The bond, letter of credit or deposit will be returned to the 
management contractor when all bills have been paid and the 
investigations have been completed or terminated.



Sec. 537.4  Determinations.

    The Chairman shall determine whether the results of a background 
investigation preclude the Chairman from approving a management contract 
because of the individual disqualifying factors contained in Sec. 
533.6(b)(1) of this chapter. The Chairman shall promptly notify the 
tribe and management contractor if any findings preclude the Chairman 
from approving a management contract or a change in financial interest.

                           PART 538 [RESERVED]



PART 539_APPEALS--Table of Contents




Sec.
539.1 Scope of this part.
539.2 Appeals.

    Authority: 25 U.S.C. 81, 2706(b)(10), 2710(d)(9), 2711.

    Source: 58 FR 5832, Jan. 22, 1993, unless otherwise noted.



Sec. 539.1  Scope of this part.

    This part applies to appeals from the Chairman's decision to approve 
or disapprove a management contract under this subchapter, except that 
appeals from the Chairman's decision to require modification of or to 
void a management contract subsequent to his or her initial approval are 
addressed in part 577 of this chapter.

[58 FR 16494, Mar. 29, 1993]



Sec. 539.2  Appeals.

    A party may appeal the Chairman's disapproval of a management 
contract or modification under parts 533 or 535 of this chapter to the 
Commission. Such an appeal shall be filed with the Commission within 
thirty (30) days after the Chairman serves his or her determination 
pursuant to part 519 of this chapter. Failure to file an appeal within 
the time provided by this section shall result in a waiver of the 
opportunity for an appeal. An appeal under this section shall specify 
the reasons why the person believes the Chairman's determination to be 
erroneous, and shall include supporting documentation, if any. Within 
thirty (30) days after receipt of the appeal, the Commission shall 
render a decision unless the appellant elects to provide the Commission 
additional time, not to exceed an additional thirty (30) days, to render 
a decision. In the absence of a decision within the time provided, the 
Chairman's decision shall constitute the final decision of the 
Commission.

[[Page 798]]



                       SUBCHAPTER D_HUMAN SERVICES



                        PARTS 540	541 [RESERVED]



PART 542_MINIMUM INTERNAL CONTROL STANDARDS--Table of Contents




Sec.
542.1 What does this part cover?
542.2 What are the definitions for this part?
542.3 How do I comply with this part?
542.4 How do these regulations affect minimum internal control standards 
          establish in a Tribal-State compact?
542.5 How do these regulations affect state jurisdiction?
542.6 Does this part apply to small and charitable gaming operations?
542.7 What are the minimum internal control standards for bingo?
542.8 What are the minimum internal control standards for pull tabs?
542.9 What are the minimum internal control standards for card games?
542.10 What are the minimum internal control standards for keno?
542.11 What are the minimum internal control standards for pari-mutuel 
          wagering?
542.12 What are the minimum internal control standards for table games?
542.13 What are the minimum internal control standards for gaming 
          machines?
542.14 What are the minimum internal control standards for the cage?
542.15 What are the minimum internal control standards for credit?
542.16 What are the minimum internal control standards for information 
          technology?
542.17 What are the minimum internal control standards for complimentary 
          services or items?
542.18 How does a gaming operation apply for a variance from the 
          standards of this part?
542.20 What is a Tier A gaming operation?
542.21 What are the minimum internal control standards for drop and 
          count for Tier A gaming operations?
542.22 What are the minimum internal control standards for internal 
          audit for Tier A gaming operations?
542.23 What are the minimum internal control standards for surveillance 
          for Tier A gaming operations?
542.30 What is a Tier B gaming operation?
542.31 What are the minimum internal control standards for drop and 
          count for Tier B gaming operations?
542.32 What are the minimum internal control standards for internal 
          audit for Tier B gaming operations?
542.33 What are the minimum internal control standards for surveillance 
          for Tier B gaming operations?
542.40 What is a Tier C gaming operation?
542.41 What are the minimum internal control standards for drop and 
          count for Tier C gaming operations?
542.42 What are the minimum internal control standards for internal 
          audit for Tier C gaming operations?
542.43 What are the minimum internal control standards for surveillance 
          for a Tier C gaming operation?

    Authority: 25 U.S.C. 2702(c), 2706(b)(10).

    Source:  67 FR 43400, June 27, 2002, unless otherwise noted.



Sec. 542.1  What does this part cover?

    This part establishes the minimum internal control standards for 
gaming operations on Indian land.



Sec. 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.
    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.

[[Page 799]]

    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.

[[Page 800]]

    Counter check means a form provided by the gaming operation for the 
customer to use in lieu of a personal check.
    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.
    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 
which contains a microprocessor with random number generator capability 
which allows a player to play games of chance, some of which may be 
affected by skill, which machine is activated by the insertion of a 
coin, token or cash, or by the use of a credit, and which awards game 
credits, cash, tokens, or replays,

[[Page 801]]

or a written statement of the player's accumulated credits, which 
written statements 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.

[[Page 802]]

    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 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.

[[Page 803]]

    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.
    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.
    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

[[Page 804]]

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.



Sec. 542.3  How do I comply with this part?

    (a) Compliance based upon tier. (1) Tier A gaming operations must 
comply with Sec. Sec. 542.1 through 542.18, and Sec. Sec. 542.20 
through 542.23.
    (2) Tier B gaming operations must comply with Sec. Sec. 542.1 
through 542.18, and Sec. Sec. 542.30 through 542.33.
    (3) Tier C gaming operations must comply with Sec. Sec. 542.1 
through 542.18, and Sec. Sec. 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 procedures to

[[Page 805]]

verify, on a test basis, that the gaming operation is in material 
compliance with the tribal internal control standards or a tribally 
approved variance that has received Commission concurrence. The 
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 a copy of the report 
to the Commission within 120 days of the gaming operation's fiscal year 
end.
    (2) CPA Guidelines. In connection with the CPA testing pursuant to 
paragraph (f)(1) of this section, the Commission shall develop 
recommended CPA Guidelines available 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.



Sec. 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.



Sec. 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.



Sec. 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;

[[Page 806]]

    (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.



Sec. 542.7  What are the minimum internal control standards for bingo?

    (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 functions of seller and payout 
verifier shall be segregated. Employees who sell cards on the floor 
shall not verify payouts with cards in their possession. Floor clerks 
who sell cards on the floor are permitted to announce the serial numbers 
of winning cards.
    (2) All sales of bingo cards shall be documented by recording at 
least the following:
    (i) Date;
    (ii) Shift (if applicable);
    (iii) Session (if applicable);
    (iv) Dollar amount;
    (v) Signature, initials, or identification number of at least one 
seller (if manually documented); and
    (vi) Signature, initials, or identification number of a person 
independent of the seller who has randomly verified the card sales (this 
requirement is not applicable to locations with $1 million or less in 
annual write).
    (3) The total win and write shall be computed and recorded by shift 
(or session, if applicable).
    (4) 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 ensure the 
correct calling of numbers selected in the bingo game.
    (5) Each ball shall be shown to a camera immediately before it is 
called so that it is individually displayed to all customers. For speed 
bingo games not verified by camera equipment, each ball drawn shall be 
verified by a person independent of the bingo caller responsible for 
calling the speed bingo game.
    (6) For all coverall games and other games offering a payout of 
$1,200 or more, as the balls are called the numbers shall be immediately 
recorded by the caller and maintained for a minimum of twenty-four (24) 
hours.
    (7) Controls shall be present to assure that the numbered balls are 
placed back into the selection device prior to calling the next game.
    (8) The authenticity of each payout shall be verified by at least 
two persons. A computerized card verifying system may function as the 
second person verifying the payout if the card with the winning numbers 
is displayed on a reader board.
    (9) Payouts in excess of $1,200 shall require written approval, by 
personnel independent of the transaction, that the bingo card has been 
examined and verified with the bingo card record to ensure that the 
ticket has not been altered.
    (10) Total payout shall be computed and recorded by shift or 
session, if applicable.
    (c) Promotional payouts or awards. (1) If the 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]
    (d) Accountability form. (1) All funds used to operate the bingo 
department

[[Page 807]]

shall be recorded on an accountability form.
    (2) All funds used to operate the bingo department shall be counted 
independently by at least two persons and reconciled to the recorded 
amounts at the end of each shift or session.
    (e) Bingo equipment. (1) Access to controlled bingo equipment (e.g., 
blower, balls in play, and back-up balls) shall be restricted to 
authorized persons.
    (2) The procedures established by the Tribal gaming regulatory 
authority, or the gaming operation as approved by the Tribal gaming 
regulatory authority, shall include standards relating to the inspection 
of new bingo balls put into play as well as for those in use.
    (3) Bingo equipment shall be maintained and checked for accuracy on 
a periodic basis.
    (4) The bingo card inventory shall be controlled so as to assure the 
integrity of the cards being used as follows:
    (i) Purchased paper shall be inventoried and secured by a person or 
persons independent of the bingo sales;
    (ii) The issue of paper to the cashiers shall be documented and 
signed for by the person responsible for inventory control and a 
cashier. The document log shall include the series number of the bingo 
paper;
    (iii) A copy of the bingo paper control log shall be given to the 
bingo ball caller for purposes of determining if the winner purchased 
the paper that was issued for sale that day (electronic verification 
satisfies this standard);
    (iv) At the end of each month, a person or persons independent of 
bingo sales and inventory control shall verify the accuracy of the 
ending balance in the bingo paper control by reconciling the paper on-
hand;
    (v) A monthly comparison for reasonableness shall be made of the 
amount of paper sold from the bingo paper control log to the amount of 
revenue recognized.
    (f) Standards for statistical reports. (1) Records shall be 
maintained, which include win, write (card sales), and a win-to-write 
hold percentage, for:
    (i) Each shift or each session;
    (ii) Each day;
    (iii) Month-to-date; and
    (iv) Year-to-date or fiscal year-to-date.
    (2) A manager independent of the bingo department shall review bingo 
statistical information on at least a monthly basis and investigate any 
large or unusual statistical fluctuations.
    (3) Investigations shall be documented, maintained for inspection, 
and provided to the Tribal gaming regulatory authority upon request.
    (g) Electronic equipment. (1) If the gaming operation utilizes 
electronic equipment in connection with the play of bingo, then the 
following standards shall also apply.
    (i) If the electronic equipment contains a bill acceptor, then Sec. 
542.21(d) and (e), Sec. 542.31(d) and (e), or Sec. 542.41(d) and (e) 
(as applicable) shall apply.
    (ii) If the electronic equipment uses a bar code or microchip 
reader, the reader shall be tested periodically by a person or persons 
independent of the bingo department to determine that it is correctly 
reading the bar code or the microchip.
    (iii) If the electronic equipment returns a voucher or a payment 
slip to the player, then Sec. 542.13(n) (as applicable) shall apply.
    (2) [Reserved]
    (h) Standards for linked electronic games. Management shall ensure 
that all agreements/contracts entered into after June 27, 2002 to 
provide linked electronic games shall contain language requiring the 
vendor to comply with the standards in this section applicable to the 
goods or services the vendor is providing.
    (i) Host requirements/game information (for linked electronic 
games). (1) Providers of any linked electronic game(s) shall maintain 
complete records of game data for a period of one (1) year from the date 
the games are played (or a time frame established by the Tribal gaming 
regulatory authority). This data may be kept in an archived manner, 
provided the information can be produced within twenty-four (24) hours 
upon request. In any event, game data for the preceding seventy-two (72) 
hours shall be immediately accessible.
    (2) Data required to be maintained for each game played includes:
    (i) Date and time game start and game end;
    (ii) Sales information by location;

[[Page 808]]

    (iii) Cash distribution by location;
    (iv) Refund totals by location;
    (v) Cards-in-play count by location;
    (vi) Identification number of winning card(s);
    (vii) Ordered list of bingo balls drawn; and
    (viii) Prize amounts at start and end of game.
    (j) Host requirements/sales information (for linked electronic 
games). (1) Providers of any linked electronic game(s) shall maintain 
complete records of sales data for a period of one (1) year from the 
date the games are played (or a time frame established by the Tribal 
gaming regulatory authority). This data may be kept in an archived 
manner, provided the information can be produced within twenty-four (24) 
hours upon request. In any event, sales data for the preceding ten (10) 
days shall be immediately accessible. Summary information must be 
accessible for at least 120 days.
    (2) Sales information required shall include:
    (i) Daily sales totals by location;
    (ii) Commissions distribution summary by location;
    (iii) Game-by-game sales, prizes, refunds, by location; and
    (iv) Daily network summary, by game by location.
    (k) Remote host requirements (for linked electronic games). (1) 
Linked electronic game providers shall maintain on-line records at the 
remote host site for any game played. These records shall remain on-line 
until the conclusion of the session of which the game is a part. 
Following the conclusion of the session, records may be archived, but in 
any event, must be retrievable in a timely manner for at least seventy-
two (72) hours following the close of the session. Records shall be 
accessible through some archived media for at least ninety (90) days 
from the date of the game.
    (2) Game information required includes date and time of game start 
and game end, sales totals, cash distribution (prizes) totals, and 
refund totals.
    (3) Sales information required includes cash register 
reconciliations, detail and summary records for purchases, prizes, 
refunds, credits, and game/sales balance for each session.
    (l) Standards for player accounts (for proxy play and linked 
electronic games). (1) Prior to participating in any game, players shall 
be issued a unique player account number. The player account number can 
be issued through the following means:
    (i) Through the use of a point-of-sale (cash register device);
    (ii) By assignment through an individual play station; or
    (iii) Through the incorporation of a ``player tracking'' media.
    (2) Printed receipts issued in conjunction with any player account 
should include a time/date stamp.
    (3) All player transactions shall be maintained, chronologically by 
account number, through electronic means on a data storage device. These 
transaction records shall be maintained on-line throughout the active 
game and for at least twenty-four (24) hours before they can be stored 
on an ``off-line'' data storage media.
    (4) The game software shall provide the ability to, upon request, 
produce a printed account history, including all transactions, and a 
printed game summary (total purchases, deposits, wins, debits, for any 
account that has been active in the game during the preceding twenty-
four (24) hours).
    (5) The game software shall provide a ``player account summary'' at 
the end of every game. This summary shall list all accounts for which 
there were any transactions during that game day and include total 
purchases, total deposits, total credits (wins), total debits (cash-
outs) and an ending balance.



Sec. 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

[[Page 809]]

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.
    (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 Sec. 
542.21(d) and (e), Sec. 542.31(d) and (e), or Sec. 542.41(d) and 
(e)(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 Sec. 542.13(n)(as applicable) shall apply.
    (2) [Reserved]



Sec. 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 Sec. 
542.21, Sec. 542.31, or Sec. 542.41 (as applicable).

[[Page 810]]

    (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

[[Page 811]]

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.



Sec. 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

[[Page 812]]

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.
    (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:

[[Page 813]]

    (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

[[Page 814]]

    (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.



Sec. 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

[[Page 815]]

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:

[[Page 816]]

    (i) Computation of cash turned in for the shift; and
    (ii) Signatures of two employees who have verified the cash turned 
in for the shift.
    (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;

[[Page 817]]

    (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.



Sec. 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 Sec. 
542.21, Sec. 542.31, or Sec. 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

[[Page 818]]

    (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.).

[[Page 819]]

    (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 (h)(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:

[[Page 820]]

    (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 (j)(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 (j)(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

[[Page 821]]

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 (j)(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.

[[Page 822]]

    (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]



Sec. 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

[[Page 823]]

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 Sec. 
542.21, Sec. 542.31, or Sec. 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 Sec. 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

[[Page 824]]

down and reconciled each shift utilizing appropriate accountability 
documentation.
    (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 those gaming machines or groups of identical machines 
(excluding multi-game machines) with differences in theoretical payback 
percentage exceeding a 4% spread between the minimum and maximum 
theoretical payback, an employee or department independent from the 
gaming machine department shall perform a weighted average calculation 
to periodically adjust theoretical as follows:
    (i) On a quarterly basis, record the meters that contain the number 
of plays by wager (i.e., one coin, two coins, etc.);
    (ii) On an annual basis, calculate the theoretical hold percentage 
based on the distribution of plays by wager type;
    (iii) On an annual basis, adjust the machine(s) theoretical hold 
percentage in the gaming machine statistical report to reflect this 
revised percentage; and

[[Page 825]]

    (iv) The adjusted theoretical hold percentage shall be within the 
spread between the minimum and maximum theoretical payback percentages.
    (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 aming 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) For multi-game machines with a four percent (4%) or greater 
spread between minimum and maximum theoretical payback percentages, 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 game 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.
    (5) The adjusted theoretical hold percentage for multi-game machines 
may be combined for machines with exactly the same game mix throughout 
the year.
    (6) The theoretical hold percentages used in the gaming machine 
analysis reports should be within the performance standards set by the 
manufacturer.
    (7) 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.
    (8) 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.
    (9) 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.
    (10) All gaming machines with bill acceptors shall contain 
functioning bill-in meters that record the dollar amounts or number of 
bills accepted by denomination.
    (11) 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.
    (12) 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.
    (13) Upon receipt of the meter reading summary, the accounting 
department shall review all meter readings for reasonableness using pre-
established parameters.
    (14) 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.
    (15) 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.

[[Page 826]]

    (16) 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.
    (17) 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.
    (18) 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.
    (19) For those machines in play for more than six (6) months, 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.
    (20) 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.
    (21) 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.

[[Page 827]]

    (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 (1)(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) At least weekly, accounting/auditing employees shall compare the 
bill-in meter reading to the total bill acceptor drop amount for the 
week. 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 $200.00. 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.

[[Page 828]]

    (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

[[Page 829]]

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) 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.
    (iii) After entering a specified number of incorrect PIN entries at 
the cage or player terminal, the customer shall be directed to proceed 
to the Gaming Machine Information Center to obtain a new PIN. If a 
customer forgets, misplaces or requests a change to their PIN, the 
customer shall proceed to the Gaming Machine Information Center.
    (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

[[Page 830]]

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.



Sec. 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

[[Page 831]]

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 of 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.

[[Page 832]]

    (3) The gaming operation cash-on-hand shall include, but is not 
limited to, the following components:
    (i) Currency and coins;
    (ii) House chips, including reserve chips;
    (iii) Personal checks, cashier's checks, counter checks, and 
traveler's checks for deposit;
    (iv) Customer deposits;
    (v) Chips on tables;
    (vi) Hopper loads (coins put into machines when they are placed in 
service); and
    (vii) Fills and credits (these documents shall be treated as assets 
and liabilities, respectively, of the cage during a business day. When 
win or loss is recorded at the end of the business day, they are removed 
from the accountability).
    (4) 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.



Sec. 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;

[[Page 833]]

    (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,

[[Page 834]]

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]



Sec. 542.16  What are the minimum internal control standards for 
information technology?

    (a) General controls for gaming hardware and software. (1) 
Management shall take an active role in making sure that physical and 
logical security measures are implemented, maintained, and adhered to by 
personnel to prevent unauthorized access that could cause errors or 
compromise data or processing integrity.
    (i) Management shall ensure that all new gaming vendor hardware and 
software agreements/contracts contain language requiring the vendor to 
adhere to tribal internal control standards applicable to the goods and 
services the vendor is providing.
    (ii) Physical security measures shall exist over computer, computer 
terminals, and storage media to prevent unauthorized access and loss of 
integrity of data and processing.
    (iii) Access to systems software and application programs shall be 
limited to authorized personnel.
    (iv) Access to computer data shall be limited to authorized 
personnel.
    (v) Access to computer communications facilities, or the computer 
system, and information transmissions shall be limited to authorized 
personnel.
    (vi) Standards in paragraph (a)(1) of this section shall apply to 
each applicable department within the gaming operation.
    (2) The main computers (i.e., hardware, software, and data files) 
for each gaming application (e.g., keno, race and sports, gaming 
machines, etc.) shall be in a secured area with access restricted to 
authorized persons, including vendors.
    (3) Access to computer operations shall be restricted to authorized 
personnel to reduce the risk of loss of integrity of data or processing.
    (4) Incompatible duties shall be adequately segregated and monitored 
to prevent error in general information technology procedures to go 
undetected or fraud to be concealed.
    (5) Non-information technology personnel shall be precluded from 
having unrestricted access to the secured computer areas.
    (6) The computer systems, including application software, shall be 
secured through the use of passwords or other

[[Page 835]]

approved means where applicable. Management personnel or persons 
independent of the department being controlled shall assign and control 
access to system functions.
    (7) Passwords shall be controlled as follows unless otherwise 
addressed in the standards in this section.
    (i) Each user shall have their own individual password;
    (ii) Passwords shall be changed at least quarterly with changes 
documented; and
    (iii) For computer systems that automatically force a password 
change on a quarterly basis, documentation shall be maintained listing 
the systems and the date the user was given access.
    (8) Adequate backup and recovery procedures shall be in place that 
include:
    (i) Frequent backup of data files;
    (ii) Backup of all programs;
    (iii) Secured off-site storage of all backup data files and 
programs, or other adequate protection; and
    (iv) Recovery procedures, which are tested on a sample basis at 
least annually with documentation of results.
    (9) Adequate information technology system documentation shall be 
maintained, including descriptions of hardware and software, operator 
manuals, etc.
    (b) Independence of information technology personnel. (1) The 
information technology personnel shall be independent of the gaming 
areas (e.g., cage, pit, count rooms, etc.). Information technology 
personnel procedures and controls should be documented and 
responsibilities communicated.
    (2) Information technology personnel shall be precluded from 
unauthorized access to:
    (i) Computers and terminals located in gaming areas;
    (ii) Source documents; and
    (iii) Live data files (not test data).
    (3) Information technology personnel shall be restricted from:
    (i) Having unauthorized access to cash or other liquid assets; and
    (ii) Initiating general or subsidiary ledger entries.
    (c) Gaming program changes. (1) Program changes for in-house 
developed systems should be documented as follows:
    (i) Requests for new programs or program changes shall be reviewed 
by the information technology supervisor. Approvals to begin work on the 
program shall be documented;
    (ii) A written plan of implementation for new and modified programs 
shall be maintained, and shall include, at a minimum, the date the 
program is to be placed into service, the nature of the change, a 
description of procedures required in order to bring the new or modified 
program into service (conversion or input of data, installation 
procedures, etc.), and an indication of who is to perform all such 
procedures;
    (iii) Testing of new and modified programs shall be performed and 
documented prior to implementation; and
    (iv) A record of the final program or program changes, including 
evidence of user acceptance, date in service, programmer, and reason for 
changes, shall be documented and maintained.
    (2) [Reserved]
    (d) Security logs. (1) If computer security logs are generated by 
the system, they shall be reviewed by information technology supervisory 
personnel for evidence of:
    (i) Multiple attempts to log-on, or alternatively, the system shall 
deny user access after three attempts to log-on;
    (ii) Unauthorized changes to live data files; and
    (iii) Any other unusual transactions.
    (2) This paragraph shall not apply to personal computers.
    (e) Remote dial-up. (1) If remote dial-up to any associated 
equipment is allowed for software support, the gaming operation shall 
maintain an access log that includes:
    (i) Name of employee authorizing modem access;
    (ii) Name of authorized programmer or manufacturer representative;
    (iii) Reason for modem access;
    (iv) Description of work performed; and
    (v) Date, time, and duration of access.
    (2) [Reserved]
    (f) Document storage. (1) Documents may be scanned or directly 
stored to an unalterable storage medium under the following conditions.

[[Page 836]]

    (i) The storage medium shall contain the exact duplicate of the 
original document.
    (ii) All documents stored on the storage medium shall be maintained 
with a detailed index containing the gaming operation department and 
date. This index shall be available upon request by the Commission.
    (iii) Upon request and adequate notice by the Commission, hardware 
(terminal, printer, etc.) shall be made available in order to perform 
auditing procedures.
    (iv) Controls shall exist to ensure the accurate reproduction of 
records up to and including the printing of stored documents used for 
auditing purposes.
    (v) The storage medium shall be retained for a minimum of five 
years.
    (vi) Original documents must be retained until the books and records 
have been audited by an independent certified public accountant.
    (2) [Reserved]



Sec. 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:
    (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 report required by paragraph (b) of this section shall not 
be required to include complimentary services or items below a 
reasonable amount to be established by the Tribal gaming regulatory 
authority, or the gaming operation as approved by the Tribal gaming 
regulatory authority.
    (d) 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.



Sec. 542.18  How does a gaming operation apply for a variance from 
the standards of this 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 
Commission, 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 Commission, 
it may do so without the approval requirement

[[Page 837]]

set forth in paragraph (a)(2)(iii) of this section.
    (b) Commission concurrence. (1) Following receipt of the variance 
approval, the Commission shall have sixty (60) days to concur with or 
object to the approval of the variance.
    (2) Any objection raised by the Commission 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 Commission 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 Commission.
    (4) The 60-day deadline may be extended, provided such extension is 
mutually agreed upon by the Tribal gaming regulatory authority and the 
Commission.
    (c) Curing Commission objections. (1) Following an objection by the 
Commission to the issuance of a variance, the Tribal gaming regulatory 
authority shall have the opportunity to cure any objections noted by the 
Commission.
    (2) A Tribal gaming regulatory authority may cure the objections 
raised by the Commission by:
    (i) Rescinding its initial approval of the variance; or
    (ii) Amending its initial approval and re-submitting it to the 
Commission.
    (3) Upon any re-submission of a variance approval, the Commission 
shall have thirty (30) days to concur with or object to the re-submitted 
variance.
    (4) If the Commission 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 Commission.
    (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 Commission's objections 
should be reviewed, and shall include supporting documentation, if any.
    (iv) 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 appellant elects to 
provide the Commission additional time, not to exceed an additional 
thirty (30) days, to render a decision.
    (v) In the absence of a decision within the time provided, the 
Tribal gaming regulatory authority's re-submission shall be considered 
concurred with by the Commission and become effective.
    (2) [Reserved]
    (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.



Sec. 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.



Sec. 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

[[Page 838]]

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.

[[Page 839]]

    (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

[[Page 840]]

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) 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 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.
    (12) All bill acceptor canisters shall be posted with a number 
corresponding to a permanent number on the gaming machine.
    (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

[[Page 841]]

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 Sec. 
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;

[[Page 842]]

    (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.

[[Page 843]]

    (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;

[[Page 844]]

    (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.

[[Page 845]]

    (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.

[[Page 846]]

    (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) 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.
    (u) 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]



Sec. 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 Sec. 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:

[[Page 847]]

    (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.

[[Page 848]]

    (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.



Sec. 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

[[Page 849]]

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 more than $1.5 million 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.

[[Page 850]]

    (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.



Sec. 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.



Sec. 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

[[Page 851]]

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.

[[Page 852]]

    (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) 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 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

[[Page 853]]

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.
    (12) All bill acceptor canisters shall be posted with a number 
corresponding to a permanent number on the gaming machine.
    (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

[[Page 854]]

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 Sec. 
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

[[Page 855]]

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

[[Page 856]]

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

[[Page 857]]

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

[[Page 858]]

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) 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.
    (u) 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]



Sec. 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

[[Page 859]]

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 Sec. 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

[[Page 860]]

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.



Sec. 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

[[Page 861]]

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]

[[Page 862]]

    (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 more than $1.5 million and 
monitored by an independent vendor utilizing an on-line progressive 
computer system 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.
    (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

[[Page 863]]

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.



Sec. 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.



Sec. 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.

[[Page 864]]

    (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.

[[Page 865]]

    (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) 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 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

[[Page 866]]

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.
    (12) All bill acceptor canisters shall be posted with a number 
corresponding to a permanent number on the gaming machine.
    (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.

[[Page 867]]

    (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 Sec. 
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,

[[Page 868]]

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

[[Page 869]]

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

[[Page 870]]

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.

[[Page 871]]

    (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) 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.
    (u) 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

[[Page 872]]

the actual count to ascertain if the metering device is functioning 
properly with a predetermined number of coins for each denomination.
    (ii) [Reserved]



Sec. 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 Sec. 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

[[Page 873]]

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.



Sec. 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

[[Page 874]]

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.

[[Page 875]]

    (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 more than $1.5 million and 
monitored by an independent vendor utilizing an on-line progressive 
computer system 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.
    (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.

[[Page 876]]

    (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.

                        PARTS 543	549 [RESERVED]

[[Page 877]]



   SUBCHAPTER E_GAMING LICENSES AND BACKGROUND INVESTIGATIONS FOR KEY 
               EMPLOYEES AND PRIMARY MANAGEMENT OFFICIALS



                        PARTS 550	555 [RESERVED]



PART 556_BACKGROUND INVESTIGATIONS FOR PRIMARY MANAGEMENT OFFICIALS AND 
KEY EMPLOYEES--Table of Contents




Sec.
556.1 Scope of this part.
556.2 Privacy notice.
556.3 Notice regarding false statements.
556.4 Background investigations.
556.5 Report to Commission.

    Authority: 25 U.S.C. 2706, 2710, 2712.

    Source: 58 FR 5813, Jan. 22, 1993, unless otherwise noted.



Sec. 556.1  Scope of this part.

    Unless a tribal-state compact allocates sole jurisdiction to an 
entity other than a tribe with respect to background investigations, the 
requirements of this part apply to all class II and class III gaming.

[58 FR 5810, Jan. 22, 1993, as amended at 58 FR 16494, Mar. 29, 1993]



Sec. 556.2  Privacy notice.

    (a) A tribe shall place the following notice on the application form 
for a key employee or a primary management official before that form is 
filled out by an applicant:

    In compliance with the Privacy Act of 1974, the following 
information is provided: Solicitation of the information on this form is 
authorized by 25 U.S.C. 2701 et seq. The purpose of the requested 
information is to determine the eligibility of individuals to be 
employed in a gaming operation. The information will be used by National 
Indian Gaming Commission members and staff who have need for the 
information in the performance of their official duties. The information 
may be disclosed to appropriate Federal, Tribal, State, local, or 
foreign law enforcement and regulatory agencies when relevant to civil, 
criminal or regulatory investigations or prosecutions or when pursuant 
to a requirement by a tribe or the National Indian Gaming Commission in 
connection with the hiring or firing of an employee, the issuance or 
revocation of a gaming license, or investigations of activities while 
associated with a tribe or a gaming operation. Failure to consent to the 
disclosures indicated in this notice will result in a tribe's being 
unable to hire you in a primary management official or key employee 
position.
    The disclosure of your Social Security Number (SSN) is voluntary. 
However, failure to supply a SSN may result in errors in processing your 
application.

    (b) A tribe shall notify in writing existing key employees and 
primary management officials that they shall either:
    (1) Complete a new application form that contains a Privacy Act 
notice; or
    (2) Sign a statement that contains the Privacy Act notice and 
consent to the routine uses described in that notice.



Sec. 556.3  Notice regarding false statements.

    (a) A tribe shall place the following notice on the application form 
for a key employee or a primary management official before that form is 
filled out by an applicant:

    A false statement on any part of your application may be grounds for 
not hiring you, or for firing you after you begin work. Also, you may be 
punished by fine or imprisonment (U.S. Code, title 18, section 1001)

    (b) A tribe shall notify in writing existing key employees and 
primary management officials that they shall either:
    (1) Complete a new application form that contains a notice regarding 
false statements; or
    (2) Sign a statement that contains the notice regarding false 
statements.



Sec. 556.4  Background investigations.

    A tribe shall perform a background investigation for each primary 
management official and for each key employee of a gaming operation.
    (a) A tribe shall request from each primary management official and 
from each key employee all of the following information:
    (1) Full name, other names used (oral or written), social security 
number(s),

[[Page 878]]

birth date, place of birth, citizenship, gender, all languages (spoken 
or written);
    (2) Currently and for the previous 5 years: business and employment 
positions held, ownership interests in those businesses, business and 
residence addresses, and drivers license numbers;
    (3) The names and current addresses of at least three personal 
references, including one personal reference who was acquainted with the 
applicant during each period of residence listed under paragraph (a)(2) 
of this section;
    (4) Current business and residence telephone numbers;
    (5) A description of any existing and previous business 
relationships with Indian tribes, including ownership interests in those 
businesses;
    (6) A description of any existing and previous business 
relationships with the gaming industry generally, including ownership 
interests in those businesses;
    (7) The name and address of any licensing or regulatory agency with 
which the person has filed an application for a license or permit 
related to gaming, whether or not such license or permit was granted;
    (8) For each felony for which there is an ongoing prosecution or a 
conviction, the charge, the name and address of the court involved, and 
the date and disposition if any;
    (9) For each misdemeanor conviction or ongoing misdemeanor 
prosecution (excluding minor traffic violations) within 10 years of the 
date of the application, the name and address of the court involved and 
the date and disposition;
    (10) 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 (a)(8) or (a)(9) of this section, the criminal 
charge, the name and address of the court involved and the date and 
disposition;
    (11) The name and address of any licensing or regulatory agency with 
which the person has filed an application for an occupational license or 
permit, whether or not such license or permit was granted;
    (12) A photograph;
    (13) Any other information a tribe deems relevant; and
    (14) Fingerprints consistent with procedures adopted by a tribe 
according to Sec. 522.2(h) of this chapter.
    (b) A tribe shall conduct an investigation sufficient to make a 
determination under Sec. 558.2 of this chapter. In conducting a 
background investigation, a tribe or its agents shall promise to keep 
confidential the identity of each person interviewed in the course of 
the investigation.
    (c) If the Commission has received an investigative report 
concerning an individual who another tribe wishes to employ as a key 
employee or primary management official and if the second tribe has 
access to the investigative materials held by the first tribe, the 
second tribe may update the investigation and update the investigative 
report under Sec. 556.5(b) of this part.



Sec. 556.5  Report to Commission.

    (a) When a tribe employs a primary management official or a key 
employee, the tribe shall forward to the Commission a completed 
application containing the information listed under Sec. 556.4(a)(1)-
(13) of this part.
    (b) Before issuing a license to a primary management official or to 
a key employee, a tribe shall forward to the Commission an investigative 
report on each background investigation. An investigative report shall 
include all of the following:
    (1) Steps taken in conducting a background investigation;
    (2) Results obtained;
    (3) Conclusions reached; and
    (4) The bases for those conclusions.
    (c) When a tribe forwards its report to the Commission, it shall 
include a copy of the eligibility determination made under Sec. 558.2 
of this chapter.
    (d) If a tribe does not license an applicant--
    (1) The tribe shall notify the Commission; and
    (2) May forward copies of its eligibility determination under Sec. 
558.2 and investigative report (if any) under Sec. 556.5(b) to the 
Commission for inclusion in the Indian Gaming Individuals Record System.

[[Page 879]]

                           PART 557 [RESERVED]



PART 558_GAMING LICENSES FOR KEY EMPLOYEES AND PRIMARY MANAGEMENT 
OFFICIALS--Table of Contents




Sec.
558.1 Scope of this part.
558.2 Eligibility determination for employment in a gaming operation.
558.3 Procedures for forwarding applications and reports for key 
          employees and primary management officials to the Commission.
558.4 Granting a gaming license.
558.5 License suspension.

    Authority: 25 U.S.C. 2706, 2710, 2712.

    Source: 58 FR 5814, Jan. 22, 1993, unless otherwise noted.



Sec. 558.1  Scope of this part.

    Unless a tribal-state compact allocates responsibility to an entity 
other than a tribe:
    (a) The licensing authority for class II or class III gaming is a 
tribal authority.
    (b) A tribe shall develop licensing procedures for all employees of 
a gaming operation. The procedures and standards of part 556 of this 
chapter and the procedures and standards of this part apply only to 
primary management officials and key employees.
    (c) For primary management officials or key employees, a tribe shall 
retain applications for employment and reports (if any) of background 
investigations for inspection by the Chairman or his or her designee for 
no less than three (3) years from the date of termination of employment.
    (d) A right to a hearing under Sec. 558.5 of this part shall vest 
only upon receipt of a license granted under an ordinance approved by 
the Chairman.

[58 FR 5814, Jan. 22, 1993, as amended at 58 FR 16494, Mar. 29, 1993]



Sec. 558.2  Eligibility determination for employment in a gaming operation.

    An authorized tribal official shall review a person's prior 
activities, criminal record, if any, and reputation, habits and 
associations to make a finding concerning the eligibility of a key 
employee or a primary management official for employment in a gaming 
operation. If the authorized tribal official, in applying the standards 
adopted in a tribal ordinance, determines that employment of the person 
poses a threat to the public interest or to the effective regulation of 
gaming, or creates or enhances the dangers of unsuitable, unfair, or 
illegal practices and methods and activities in the conduct of gaming, a 
management contractor or a tribal gaming operation shall not employ that 
person in a key employee or primary management official position.

[58 FR 5814, Jan. 22, 1993, as amended at 58 FR 16494, Mar. 29, 1993]



Sec. 558.3  Procedures for forwarding applications and reports for key 
employees and primary management officials to the Commission.

    (a) When a key employee or a primary management official begins work 
at a gaming operation, a tribe shall:
    (1) Forward to the Commission a completed application for employment 
that contains the notices and information listed in Sec. Sec. 556.2, 
556.3 and 556.4 of this chapter; and
    (2) Conduct a background investigation under part 556 of this 
chapter to determine the eligibility of the key employee or primary 
management official for continued employment in a gaming operation.
    (b) Upon completion of a background investigation and a 
determination of eligibility for employment in a gaming operation under 
paragraph (a)(2) of this section, a tribe shall forward a report under 
Sec. 556.5(b) of this chapter to the Commission within 60 days after an 
employee begins work or within 60 days of the Chairman's approval of an 
ordinance under part 523. A gaming operation shall not employ a key 
employee or primary management official who does not have a license 
after 90 days.
    (c) During a 30-day period beginning when the Commission receives a 
report submitted under paragraph (b) of this section, the Chairman may 
request additional information from a tribe concerning a key employee or 
a primary management official who is the subject of a report. Such a 
request shall suspend the 30-day period until the Chairman receives the 
additional information.

[[Page 880]]



Sec. 558.4  Granting a gaming license.

    (a) If, within the 30-day period described in Sec. 558.3(c) of this 
part, the Commission notifies a tribe that it has no objection to the 
issuance of a license pursuant to a license application filed by a key 
employee or a primary management official for whom the tribe has 
provided an application and investigative report to the Commission 
pursuant to Sec. 558.3 (a) and (b) of this part, the tribe may go 
forward and issue a license to such applicant.
    (b) If, within the 30-day period described in Sec. 558.3(c) of this 
part, the Commission provides the tribe with a statement itemizing 
objections to the issuance of a license to a key employee or to a 
primary management official for whom the tribe has provided an 
application and investigative report to the Commission pursuant to Sec. 
558.3 (a) and (b) of this part, the tribe shall reconsider the 
application, taking into account the objections itemized by the 
Commission. The tribe shall make the final decision whether to issue a 
license to such applicant.



Sec. 558.5  License suspension.

    (a) If, after the issuance of a gaming license, the Commission 
receives reliable information indicating that a key employee or a 
primary management official is not eligible for employment under Sec. 
558.2 of this part, the Commission shall notify the tribe that issued a 
gaming license.
    (b) Upon receipt of such notification under paragraph (a) of this 
section, a tribe shall suspend such license and shall notify in writing 
the licensee of the suspension and the proposed revocation.
    (c) A tribe shall notify the licensee of a time and a place for a 
hearing on the proposed revocation of a license.
    (d) After a revocation hearing, a tribe shall decide to revoke or to 
reinstate a gaming license. A tribe shall notify the Commission of its 
decision.

                           PART 559 [RESERVED]



                         SUBCHAPTER F [RESERVED]



                        PARTS 560	569 [RESERVED]

[[Page 881]]



           SUBCHAPTER G_COMPLIANCE AND ENFORCEMENT PROVISIONS



                           PART 570 [RESERVED]



PART 571_MONITORING AND INVESTIGATIONS--Table of Contents




                            Subpart A_General

Sec.
571.1 Scope.
571.2 Definitions.
571.3 Confidentiality.

                Subpart B_Inspection of Books and Records

571.5 Entry of premises.
571.6 Access to papers, books, and records.
571.7 Maintenance and preservation of papers and records.

                   Subpart C_Subpoenas and Depositions

571.8 Subpoena of witnesses.
571.9 Subpoena of documents and other items.
571.10 Geographical location.
571.11 Depositions.

                            Subpart D_Audits

571.12 Audit standards.
571.13 Copies of audit reports.
571.14 Relationship of audited financial statements to fee assessment 
          reports.

    Authority: 25 U.S.C. 2706(b), 2710(b)(2)(C), 2715, 2716.

    Source: 58 FR 5842, Jan. 22, 1993, unless otherwise noted.



                            Subpart A_General



Sec. 571.1  Scope.

    This part sets forth general procedures governing Commission 
monitoring and investigations of Indian gaming operations.



Sec. 571.2  Definitions.

    As used in this subchapter, the following terms have the specified 
meanings:
    Commission's authorized representative means any persons who is 
authorized to act on behalf of the Commission for the purpose of 
implementing the Act and this chapter.
    Day means calendar day unless otherwise specified.
    Hearing means that part of a proceeding that involves the submission 
of evidence to the presiding official, either by oral presentation or 
written submission.
    Party means the Chairman, the respondent(s), and any other person 
named or admitted as a party to a proceeding.
    Person means an individual, Indian tribe, corporation, partnership, 
or other organization or entity.
    Presiding official means a person designated by the Commission who 
is qualified to conduct an administrative hearing and authorized to 
administer oaths, and has had no previous role in the prosecution of a 
matter over which he or she will preside.
    Respondent means a person against whom the Commission is seeking 
civil penalties under section 2713 of the Act.
    Violation means a violation of applicable federal or tribal 
statutes, regulations, ordinances, or resolutions.

[58 FR 5842, Jan. 22, 1993; 58 FR 8449, Feb. 12, 1993, as amended at 58 
FR 16494, Mar. 29, 1993]



Sec. 571.3  Confidentiality.

    Unless confidentiality is waived, the Commission shall treat as 
confidential any and all information received under the Act that falls 
within the exemptions of 5 U.S.C. 552(b) (4) and (7); except that when 
such information indicates a violation of Federal, State, or tribal 
statutes, regulations, ordinances, or resolutions, the Commission shall 
provide such information to appropriate law enforcement officials. The 
confidentiality of documents submitted in a multiple-party proceeding 
under part 577 of this chapter is addressed in Sec. 577.8 of this 
chapter.



                Subpart B_Inspection of Books and Records



Sec. 571.5  Entry of premises.

    (a) The Commission's authorized representative may enter the 
premises of an Indian gaming operation to inspect,

[[Page 882]]

examine, photocopy, and audit all papers, books, and records (including 
computer records) concerning:
    (1) Gross revenues of class II gaming conducted on Indian lands; and
    (2) Any other matters necessary to carry out the duties of the 
Commission under the Act and this chapter.
    (b) The Commission's authorized representative shall present 
official identification upon entering a gaming operation for the purpose 
of enforcing the Act.



Sec. 571.6  Access to papers, books, and records.

    (a) Once the Commission's authorized representative presents proper 
identification, a gaming operation shall provide the authorized 
representative with access to all papers, books, and records (including 
computer records) concerning class II gaming or any other matters for 
which the Commission requires such access to carry out its duties under 
the Act.
    (b) If such papers, books, and records are not available at the 
location of the gaming operation, the gaming operation shall make them 
available at a time and place convenient to the Commission's authorized 
representative.
    (c) Upon the request of the Commission's authorized representative, 
the gaming operation shall photocopy, or allow the Commission's 
authorized representative to photocopy, any papers, books, and records 
that are requested by the Commission's authorized representative.



Sec. 571.7  Maintenance and preservation of papers and records.

    (a) A gaming operation shall keep permanent books of account or 
records, including inventory records of gaming supplies, sufficient to 
establish the amount of gross and net income, deductions and expenses, 
receipts and disbursements, and other information required in any 
financial statement, report, or other accounting prepared pursuant to 
the Act or this chapter.
    (b) The Commission may require a gaming operation to submit 
statements, reports, or accountings, or keep specific records, that will 
enable the Commission to determine whether or not such operation:
    (1) Is liable for fees payable to the Commission and in what amount; 
and
    (2) Has properly and completely accounted for all transactions and 
other matters monitored by the Commission.
    (c) Books or records required by this section shall be kept at all 
times available for inspection by the Commission's authorized 
representatives. They shall be retained for no less than five (5) years.
    (d) A gaming operation shall maintain copies of all enforcement 
actions that a tribe or a state has taken against the operation, noting 
the final disposition of each case.



                   Subpart C_Subpoenas and Depositions



Sec. 571.8  Subpoena of witnesses.

    By majority vote the Commission may authorize the Chairman to 
require by subpoena the attendance and testimony of witnesses relating 
to any matter under consideration or investigation by the Commission. 
Witnesses so summoned shall be paid the same fees and mileage that are 
paid to witnesses in the courts of the United States.



Sec. 571.9  Subpoena of documents and other items.

    By majority vote the Commission may authorize the Chairman to 
require by subpoena the production of certain documents and other items 
that are material and relevant to facts in issue in any matter under 
consideration or investigation by the Commission.



Sec. 571.10  Geographical location.

    The attendance of witnesses and the production of books, papers, and 
documents, may be required from any place in the United States at any 
designated place of hearing.



Sec. 571.11  Depositions.

    (a) Any party wishing to depose a witness shall file a request with 
the Commission or, if a presiding official has been designated under 
part 577 of this chapter, to the presiding official. Such a request 
shall not be granted except for good cause shown. A Commissioner or a 
presiding official may order testimony to be taken by deposition in

[[Page 883]]

any proceeding or investigation pending before the Commission at any 
stage of such proceeding or investigation, except that Commission 
personnel may not be questioned by deposition for the purposes of 
discovery, but may be questioned by written interrogatories as 
authorized by the Commission or a presiding official. Commission records 
are not subject to discovery under this chapter. The inspection of 
Commission records is governed by Sec. 571.3 of this part and the 
Freedom of Information Act, 5 U.S.C. 552. Depositions under this section 
may be taken before any person designated by the Commission or a 
presiding official, and who has the power to administer oaths.
    (b) A party or a Commissioner (or a person designated by a 
Commissioner under paragraph (a) of this section) proposing to take a 
deposition under this section shall give reasonable notice to the 
Commission and the parties, if any, of the taking of a deposition. 
Notice shall include the name of the witness and the time and place of 
the deposition.
    (c) Every person deposed under this part shall be notified of his or 
her right to be represented by counsel during the deposition, and shall 
be required to swear or affirm to testify to the whole truth. Testimony 
shall be reduced to writing and subscribed by the deponent. Depositions 
shall be filed promptly with the Commission or, if a presiding official 
has been designated, with the presiding official.
    (d) Witnesses whose depositions are taken as authorized in this 
section, and the persons taking the same, shall be severally entitled to 
the same fees as are paid for like services in the courts of the United 
States.



                            Subpart D_Audits



Sec. 571.12  Audit standards.

    A tribe shall engage an independent certified public accountant to 
provide an annual audit of the financial statements of each gaming 
operation on Indian lands. Such financial statements shall be prepared 
in accordance with generally accepted accounting principles and the 
audit(s) shall be conducted in accordance with generally accepted 
auditing standards. Audit(s) of the gaming operation required under this 
section may be conducted in conjunction with any other independent audit 
of the tribe, provided that the requirements of this chapter are met.



Sec. 571.13  Copies of audit reports.

    A tribe shall submit to the Commission a copy of the report(s) and 
management letter(s) setting forth the results of each annual audit 
within 120 days after the end of each fiscal year of the gaming 
operation.



Sec. 571.14  Relationship of audited financial statements to fee assessment 
reports.

    A tribe shall reconcile its quarterly fee assessment reports, 
submitted under 25 CFR part 514, with its audited financial statements 
and make available such reconciliation upon request by the Commission's 
authorized representative.

                           PART 572 [RESERVED]



PART 573_ENFORCEMENT--Table of Contents




Sec.
573.1 Scope.
573.3 Notice of violation.
573.6 Order of temporary closure.

    Authority: 25 U.S.C. 2705(a)(1), 2706, 2713, 2715.

    Source: 58 FR 5844, Jan. 22, 1993, unless otherwise noted.



Sec. 573.1  Scope.

    This part sets forth general rules governing the Commission's 
enforcement of the Act, this chapter, and tribal ordinances and 
resolutions approved by the Chairman under part 522 or 523 of this 
chapter. Civil fines in connection with notice of violation issued under 
this part are addressed in part 575 of this chapter.



Sec. 573.3  Notice of violation.

    (a) The Chairman may issue a notice of violation to any person for 
violations of any provision of the Act or this chapter, or of any tribal 
ordinance or resolution approved by the Chairman under part 522 or 523 
of this chapter.

[[Page 884]]

    (b) A notice of violation shall contain:
    (1) A citation to the federal or tribal requirement that has been or 
is being violated;
    (2) A description of the circumstances surrounding the violation, 
set forth in common and concise language;
    (3) Measures required to correct the violation;
    (4) A reasonable time for correction, if the respondent cannot take 
measures to correct the violation immediately; and
    (5) Notice of rights of appeal.



Sec. 573.6  Order of temporary closure.

    (a) When an order of temporary closure may issue. Simultaneously 
with or subsequently to the issuance of a notice of violation under 
Sec. 573.3 of this part, the Chairman may issue an order of temporary 
closure of all or part of an Indian gaming operation if one or more of 
the following substantial violations are present:
    (1) The respondent fails to correct violations within:
    (i) The time permitted in a notice of violation; or
    (ii) A reasonable time after a tribe provides notice of a violation.
    (2) A gaming operation fails to pay the annual fee required by 25 
CFR part 514.
    (3) A gaming operation operates for business without a tribal 
ordinance or resolution that the Chairman has approved under part 522 or 
523 of this chapter.
    (4) A gaming operation operates for business without a license from 
a tribe, in violation of part 558 of this chapter.
    (5) A gaming operation operates for business without either 
background investigations having been completed for, or tribal licenses 
granted to, all key employees and primary management officials, as 
provided in Sec. 558.3(b) of this chapter.
    (6) There is clear and convincing evidence that a gaming operation 
defrauds a tribe or a customer.
    (7) A management contractor operates for business without a contract 
that the Chairman has approved under part 533 of this chapter.
    (8) Any person knowingly submits false or misleading information to 
the Commission or a tribe in response to any provision of the Act, this 
chapter, or a tribal ordinance or resolution that the Chairman has 
approved under part 522 or 523 of this chapter.
    (9) A gaming operation refuses to allow an authorized representative 
of the Commission or an authorized tribal official to enter or inspect a 
gaming operation, in violation of Sec. 571.5 or Sec. 571.6 of this 
chapter, or of a tribal ordinance or resolution approved by the Chairman 
under part 522 or 523 of this chapter.
    (10) A tribe fails to suspend a license upon notification by the 
Commission that a primary management official or key employee does not 
meet the standards for employment contained in Sec. 558.2 of this 
chapter, in violation of Sec. 558.5 of this chapter.
    (11) A gaming operation operates class III games in the absence of a 
tribal-state compact that is in effect, in violation of 25 U.S.C. 
2710(d).
    (12) A gaming operation's facility is constructed, maintained, or 
operated in a manner that threatens the environment or the public health 
and safety, in violation of a tribal ordinance or resolution approved by 
the Chairman under part 522 or 523 of this chapter.
    (b) Order effective upon service. The operator of an Indian gaming 
operation shall close the operation upon service of an order of 
temporary closure, unless the order provides otherwise.
    (c) Informal expedited review. Within seven (7) days after service 
of an order of temporary closure, the respondent may request, orally or 
in writing, informal expedited review by the Chairman.
    (1) The Chairman shall complete the expedited review provided for by 
this paragraph within two (2) days after his or her receipt of a timely 
request.
    (2) The Chairman shall, within two (2) days after the expedited 
review provided for by this paragraph:
    (i) Decide whether to continue an order of temporary closure; and
    (ii) Provide the respondent with an explanation of the basis for the 
decision.
    (3) Whether or not a respondent seeks informal expedited review 
under this

[[Page 885]]

paragraph, within thirty (30) days after the Chairman serves an order of 
temporary closure the respondent may appeal the order to the Commission 
under part 577 of this chapter. Otherwise, the order shall remain in 
effect unless rescinded by the Chairman for good cause.

                           PART 574 [RESERVED]



PART 575_CIVIL FINES--Table of Contents




Sec.
575.1 Scope.
575.3 How assessments are made.
575.4 When civil fine will be assessed.
575.5 Procedures for assessment of civil fines.
575.6 Settlement, reduction, or waiver of civil fine.
575.9 Final assessment.

    Authority: 25 U.S.C. 2705(a), 2706, 2713, 2715.

    Source: 58 FR 5844, Jan. 22, 1993, unless otherwise noted.



Sec. 575.1  Scope.

    This part addresses the assessment of civil fines under section 
2713(a) of the Act with respect to notices of violation issued under 
Sec. 573.3 of this chapter.



Sec. 575.3  How assessments are made.

    The Chairman shall review each notice of violation and order of 
temporary closure in accordance with Sec. 575.4 of this part to 
determine whether a civil fine will be assessed, the amount of the fine, 
and, in the case of continuing violations, whether each daily illegal 
act or omission will be deemed a separate violation for purposes of the 
total civil fine assessed.



Sec. 575.4  When civil fine will be assessed.

    The Chairman may assess a civil fine, not to exceed $25,000 per 
violation, against a tribe, management contractor, or individual 
operating Indian gaming for each notice of violation issued under Sec. 
573.3 of this chapter after considering the following factors:
    (a) Economic benefit of noncompliance. The Chairman shall consider 
the extent to which the respondent obtained an economic benefit from the 
noncompliance that gave rise to a notice of violation, as well as the 
likelihood of escaping detection.
    (1) The Chairman may consider the documented benefits derived from 
the noncompliance, or may rely on reasonable assumptions regarding such 
benefits.
    (2) If noncompliance continues for more than one day, the Chairman 
may treat each daily illegal act or omission as a separate violation.
    (b) Seriousness of the violation. The Chairman may adjust the amount 
of a civil fine to reflect the seriousness of the violation. In doing 
so, the Chairman shall consider the extent to which the violation 
threatens the integrity of Indian gaming.
    (c) History of violations. The Chairman may adjust a civil fine by 
an amount that reflects the respondent's history of violations over the 
preceding five (5) years.
    (1) A violation cited by the Chairman shall not be considered unless 
the associated notice of violation is the subject of a final order of 
the Commission and has not been vacated; and
    (2) Each violation shall be considered whether or not it led to a 
civil fine.
    (d) Negligence or willfulness. The Chairman may adjust the amount of 
a civil fine based on the degree of fault of the respondent in causing 
or failing to correct the violation, either through act or omission.
    (e) Good faith. The Chairman may reduce the amount of a civil fine 
based on the degree of good faith of the respondent in attempting to 
achieve rapid compliance after notification of the violation.



Sec. 575.5  Procedures for assessment of civil fines.

    (a) Within 15 days after service of a notice of violation, or such 
longer period as the Chairman may grant for good cause, the respondent 
may submit written information about the violation to the Chairman. The 
Chairman shall consider any information so submitted in determining the 
facts surrounding the violation and the amount of the civil fine.
    (b) The Chairman shall serve a copy of the proposed assessment on 
the respondent within thirty (30) days after

[[Page 886]]

the notice of violation was issued, when practicable.
    (c) The Chairman may review and reassess any civil fine if necessary 
to consider facts that were not reasonably available on the date of 
issuance of the proposed assessment.



Sec. 575.6  Settlement, reduction, or waiver of civil fine.

    (a) Reduction or waiver. (1) Upon written request of a respondent 
received at any time prior to the filing of a notice of appeal under 
part 577 of this chapter, the Chairman may reduce or waive a civil fine 
if he or she determines that, taking into account exceptional factors 
present in a particular case, the fine is demonstrably unjust.
    (2) All petitions for reduction or waiver shall contain:
    (i) A detailed description of the violation that is the subject of 
the fine;
    (ii) A detailed recitation of the facts that support a finding that 
the fine is demonstrably unjust, accompanied by underlying 
documentation, if any; and
    (iii) A declaration, signed and dated by the respondent and his or 
her counsel or representative, if any, as follows: Under penalty of 
perjury, I declare that, to the best of my knowledge and belief, the 
representations made in this petition are true and correct.
    (3) The Chairman shall serve the respondent with written notice of 
his or her determination under paragraph (a) of this section, including 
a statement of the grounds for the Chairman's decision.
    (b) Settlement. At any time prior to the filing of a notice of 
appeal under part 577 of this chapter, the Chairman and the respondent 
may agree to settle an enforcement action, including the amount of the 
associated civil fine. In the event a settlement is reached, a 
settlement agreement shall be prepared and executed by the Chairman and 
the respondent. If a settlement agreement is executed, the respondent 
shall be deemed to have waived all rights to further review of the 
violation or civil fine in question, except as otherwise provided 
expressly in the settlement agreement. In the absence of a settlement of 
the issues under this paragraph, the respondent may contest the assessed 
civil fine before the Commission in accordance with part 577 of this 
chapter.



Sec. 575.9  Final assessment.

    (a) If the respondent fails to request a hearing as provided in part 
577 of this chapter, the proposed civil fine assessment shall become a 
final order of the Commission.
    (b) Civil fines assessed under this part shall be paid by the person 
assessed and shall not be treated as an operating expense of the 
operation.
    (c) The Commission shall transfer civil fines paid under this 
subchapter to the U.S. Treasury.

[58 FR 5844, Jan. 22, 1993, as amended at 58 FR 16495, Mar. 29, 1993]

                           PART 576 [RESERVED]



PART 577_APPEALS BEFORE THE COMMISSION--Table of Contents




Sec.
577.1 Scope.
577.3 Request for hearing.
577.4 Hearing deadline.
577.6 Service.
577.7 Conduct of hearing.
577.8 Request to limit disclosure of confidential information.
577.9 Consent order or settlement.
577.12 Intervention.
577.13 Transcript of hearing.
577.14 Recommended decision of presiding official.
577.15 Review by Commission.

    Authority: 25 U.S.C. 2706, 2713, 2715.

    Source: 58 FR 5845, Jan. 22, 1993, unless otherwise noted.



Sec. 577.1  Scope.

    (a) This part provides procedures for appeals to the Commission 
regarding:
    (1) A violation alleged in a notice of violation;
    (2) Civil fines assessed by the Chairman;
    (3) Whether an order of temporary closure issued by the Chairman 
should be made permanent or be dissolved; and
    (4) The Chairman's decision to void or modify a management contract 
under part 535 of this chapter subsequent to initial approval.
    (b) Appeals from determinations of the Chairman under 25 U.S.C. 2710 
and 2711 (regarding management contracts)

[[Page 887]]

and 2710 (regarding tribal gaming ordinances) are addressed in parts 539 
and 524 of this chapter respectively.



Sec. 577.3  Request for hearing.

    (a) A respondent may request a hearing to contest the matters listed 
in Sec. 577.1(a)(1)-(4) by submitting a notice of appeal to the 
Commission within thirty (30) days after service of:
    (1) A notice of violation;
    (2) A proposed civil fine assessment or reassessment;
    (3) An order of temporary closure; or
    (4) An order voiding or modifying a management contract subsequent 
to initial approval.
    (b) A notice of appeal shall reference the notice or order from 
which the appeal is taken.
    (c) Within ten (10) days after filing a notice of appeal, the 
respondent shall file with the Commission a supplemental statement that 
states with particularity the relief desired and the grounds therefor 
and that includes, when available, supporting evidence in the form of 
affidavits. If the respondent wishes to present oral testimony or 
witnesses at the hearing, the respondent shall include a request to do 
so with the supplemental statement. The request to present oral 
testimony or witnesses shall specify the names of proposed witnesses and 
the general nature of their expected testimony, and whether a closed 
hearing is requested and why. The respondent may waive in writing his or 
her right to an oral hearing and instead elect to have the matter 
determined by the Commission solely on the basis of written submissions.



Sec. 577.4  Hearing deadline.

    (a) The Commission shall designate a presiding official who shall 
commence a hearing within 30 days after the Commission receives a timely 
notice of appeal from the respondent. At the request of the respondent, 
the presiding official may order the hearing to commence at a time more 
than 30 days after the respondent files a notice of appeal. The 
Commission shall transmit the administrative record of the case to the 
presiding official upon designation.
    (b) If the subject of an appeal is whether an order of temporary 
closure should be made permanent or be dissolved, the hearing shall be 
concluded within 30 days after the Commission receives a timely notice 
of appeal, unless the respondent waives this requirement. 
Notwithstanding any other provision of this part, the presiding official 
shall conduct such a hearing in a manner that will enable him or her to 
conclude the hearing within the period required by this paragraph, while 
ensuring due process to all parties.



Sec. 577.6  Service.

    (a) A respondent who initiates an appeal under this part shall serve 
copies of the initiating documents on the Commission at the address 
indicated in the notice or order that is the subject of the appeal. All 
filings shall be made with the Commission until a presiding official is 
designated and the parties are so notified, after which all filings 
shall be made with the presiding official. Any party or other person who 
subsequently files any other document with the Commission or the 
presiding officer shall simultaneously serve copies of that document on 
any other parties to the proceeding, except to that extent Sec. 577.8 
of this part may govern the disclosure of confidential information 
contained in a filing.
    (b) Copies of documents by which a proceeding is initiated shall be 
served on all known parties personally, by facsimile, or by registered 
or certified mail, return receipt requested. All subsequent documents 
shall be served personally, by facsimile, or by first class mail.
    (c) Service of copies of all documents is complete at the time of 
personal service or, if service is made by mail or facsimile, upon 
transmittal.
    (d) Whenever a representative (including an attorney) has entered an 
appearance for a party in a proceeding initiated under this part, 
service thereafter shall be made upon the representative.
    (e) In computing any period of time prescribed for filing and 
serving a document, the first day of the period so computed shall not be 
included. The last day shall be included unless it is a

[[Page 888]]

Saturday, Sunday, or federal legal holiday, in which case the period 
shall run until the end of the next business day.
    (f)(1) The presiding official may extend the time for filing or 
serving any document except a notice of appeal.
    (2) A request for an extension of time must be filed within the time 
originally allowed for filing.
    (3) For good cause the presiding official may grant an extension of 
time on his or her own initiative.



Sec. 577.7  Conduct of hearing.

    (a) Once designated by the Commission, the presiding official shall 
set the case for hearing. The respondent may appear at the hearing 
personally, through counsel, or personally with counsel. The respondent 
shall have the right to introduce relevant written materials and to 
present an oral argument. At the discretion of the presiding official, a 
hearing under this section may include an opportunity to submit oral and 
documentary evidence and cross-examine witnesses.
    (b) When holding a hearing under this part, the presiding official 
shall:
    (1) Administer oaths and affirmations;
    (2) Issue subpoenas authorized by the Commission;
    (3) Rule on offers of proof and receive relevant evidence;
    (4) Authorize exchanges of information (including depositions and 
interrogatories in accordance with 25 CFR part 571, subpart C) among the 
parties when to do so would expedite the proceeding;
    (5) Regulate the course of the hearing;
    (6) When appropriate, hold conferences for the settlement or 
simplification of the issues by consent of the parties;
    (7) At any conference held pursuant to paragraph (b)(6) of this 
section, require the attendance of at least one representative of each 
party who has authority to negotiate the resolution of issues in 
controversy;
    (8) Dispose of procedural requests or similar matters;
    (9) Recommend decisions in accordance with Sec. 577.14 of this 
part; and
    (10) Take other actions authorized by the Commission consistent with 
this part.
    (c) The presiding official may order the record to be kept open for 
a reasonable period following the hearing (normally five days), during 
which time the parties may make additional submissions to the record. 
Thereafter, the record shall be closed and the hearing shall be deemed 
concluded. Within 30 days after the record closes, the presiding 
official shall issue a recommended decision in accordance with Sec. 
577.14 of this part.



Sec. 577.8  Request to limit disclosure of confidential information.

    (a) If any person submitting a document in a proceeding that 
involves more than two parties claims that some or all of the 
information contained in that document is exempt from the mandatory 
public disclosure requirements under the Freedom of Information Act (5 
U.S.C. 552), is information referred to in 18 U.S.C. 1905 (disclosure of 
confidential information), or is otherwise exempt by law from public 
disclosure, the person shall:
    (1) Indicate that the document in its entirety is exempt from 
disclosure or identify and segregate information within the document 
that is exempt from disclosure; and
    (2) Request that the presiding official not disclose such 
information to the parties to the proceeding (other than the Chairman, 
whose actions regarding the disclosure of confidential information are 
governed by Sec. 571.3 of this chapter) except pursuant to paragraph 
(b) of this section, and shall serve the request upon the parties to the 
proceeding. The request to the presiding official shall include:
    (i) A copy of the document, group of documents, or segregable 
portions of the documents marked ``Confidential Treatment Requested''; 
and
    (ii) A statement explaining why the information is confidential.
    (b) A party to a proceeding may request that the presiding official 
direct a person submitting information under paragraph (a) of this 
section to provide that information to the party. The presiding official 
shall so direct if the

[[Page 889]]

party requesting the information agrees under oath and in writing:
    (1) Not to use or disclose the information except directly in 
connection with the hearing; and
    (2) To return all copies of the information at the conclusion of the 
proceeding to the person submitting the information under paragraph (a) 
of this section.
    (c) If a person submitting documents in a proceeding under this part 
does not claim confidentiality under paragraph (a) of this section, the 
presiding official may assume that there is no objection to disclosure 
of the document in its entirety.
    (d) If the presiding official determines that confidential treatment 
is not warranted with respect to all or any part of the information in 
question, the presiding official shall so inform all parties by 
telephone, if possible, and by facsimile or express mail letter directed 
to the parties' last known addresses. The person requesting confidential 
treatment then shall be given an opportunity to withdraw the document 
before it is considered by the presiding official, or to disclose the 
information voluntarily to all parties.
    (e) If the presiding official determines that confidential treatment 
is warranted, the presiding official shall so inform all parties by 
facsimile or express mail directed to the parties' last known address.
    (f) When a decision by a presiding official is based in whole or in 
part on evidence not included in the public record, the decision shall 
so state, specifying the nature of the evidence and the provision of law 
under which disclosure was denied, and the evidence so considered shall 
be retained under seal as part of the official record.



Sec. 577.9  Consent order or settlement.

    (a) General. At any time after the commencement of a proceeding, but 
at least five (5) days before the date set for hearing under Sec. 577.7 
of this part, the parties jointly may move to defer the hearing for a 
reasonable time to permit negotiation of a settlement or an agreement 
containing findings and an order disposing of the whole or any part of 
the proceeding.
    (b) Content. Any agreement containing consent findings and an order 
disposing of the whole or any part of a proceeding shall also provide:
    (1) A waiver of any further procedural steps before the Commission;
    (2) A waiver of any right to challenge or contest the validity of 
the order and decision entered into in accordance with the agreement; 
and
    (3) That the presiding official's certification of the findings and 
agreement shall constitute dismissal of the appeal and final agency 
action.
    (c) Submission. Before the expiration of the time granted for 
negotiations, the parties or their authorized representatives may:
    (1) Submit to the presiding official a proposed agreement containing 
consent findings and an order;
    (2) Notify the presiding official that the parties have reached a 
full settlement and have agreed to dismissal of the action, subject to 
compliance with the terms of the settlement; or
    (3) Inform the presiding official that agreement cannot be reached.
    (d) Disposition. In the event a settlement agreement containing 
consent findings and an order is submitted within the time granted, the 
presiding official shall certify such findings and agreement within 
thirty (30) days after his or her receipt of the submission. Such 
certification shall constitute dismissal of the appeal and final agency 
action.



Sec. 577.12  Intervention.

    (a) Persons other than the respondent may be permitted to 
participate as parties if the presiding official finds that:
    (1) The final decision could directly and adversely affect them or 
the class they represent;
    (2) They may contribute materially to the disposition of the 
proceedings;
    (3) Their interest is not adequately represented by existing 
parties; and
    (4) Intervention would not unfairly prejudice existing parties or 
delay resolution of the proceeding.
    (b) If a tribe has jurisdiction over lands on which there is a 
gaming operation that is the subject of a proceeding under this part, 
and the tribe is not already a named party, such

[[Page 890]]

tribe may intervene as a matter of right.
    (c) A person not named as a party and who wishes to participate as a 
party under this section shall submit a petition to the presiding 
official within ten (10) days after the person knew or should have known 
about the proceeding. The petition shall be filed with the presiding 
official and served on each person who has been made a part at the time 
of filing. The petition shall state concisely:
    (1) Petitioner's interest in the proceeding;
    (2) How his or her participation as a party will contribute 
materially to the disposition of the proceeding;
    (3) Who will appear for petitioner;
    (4) The issues on which petitioner wishes to participate; and
    (5) Whether petitioner wishes to present witnesses.
    (d) Objections to the petition may be filed by any party within ten 
(10) days after service of the petition.
    (e) When petitions to participate as parties are made by individuals 
or groups with common interests, the presiding official may request all 
such petitioners to designate a single representative, or he or she may 
recognize one or more petitioners.
    (f) The presiding official shall give each petitioner, as well as 
the parties, written notice of the presiding official's decision on the 
petition. For each petition granted, the presiding official shall 
provide a brief statement of the basis of the decision. If the petition 
is denied, the presiding official shall briefly state the grounds for 
denial and may then treat the petition as a request for participation as 
amicus curiae (that is, ``friend of the court'').



Sec. 577.13  Transcript of hearing.

    Hearings under this part that involve oral presentations shall be 
recorded verbatim and transcripts thereof shall be provided to parties 
upon request. Fees for transcripts shall be at the actual cost of 
duplication.



Sec. 577.14  Recommended decision of presiding official.

    (a) Recommended decision. Within thirty (30) days after the record 
closes, the presiding official shall render his or her recommended 
decision. The recommended decision of the presiding official shall be 
based upon the whole record and shall include findings of fact and 
conclusions of law upon each material issue of fact or law presented on 
the record.
    (b) Filing of objections. Within ten (10) days after the date of 
service of the presiding official's recommended decision, the parties 
may file with the Commission objections to any aspect of the decision, 
and the reasons therefor.



Sec. 577.15  Review by Commission.

    The Commission shall affirm or reverse, in whole or in part, the 
recommended decision of the presiding official by a majority vote within 
thirty (30) days after the date on which the presiding official issued 
the decision. The Commission shall provide a notice and order to all 
parties stating the reasons for its action. In the absence of a majority 
vote by the Commission within the time provided by this section, the 
recommended decision of the presiding official shall be deemed affirmed 
except that, if the subject of the appeal is an order of temporary 
closure issued under Sec. 573.6 of this chapter, the order of temporary 
closure shall be dissolved.

                        PARTS 578	579 [RESERVED]



                         SUBCHAPTER H [RESERVED]



                        PARTS 580	589 [RESERVED]

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                         SUBCHAPTER I [RESERVED]



                        PARTS 590	599 [RESERVED]

[[Page 893]]