[Federal Register Volume 78, Number 207 (Friday, October 25, 2013)]
[Rules and Regulations]
[Pages 63873-63875]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-23977]
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DEPARTMENT OF THE INTERIOR
National Indian Gaming Commission
25 CFR Part 543
RIN 3141-AA27
Minimum Internal Control Standards
AGENCY: National Indian Gaming Commission, Interior.
ACTION: Final rule.
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SUMMARY: The National Indian Gaming Commission (NIGC) amends its
minimum internal control standards for Class II gaming under the Indian
Gaming Regulatory Act to add standards for kiosks.
DATES: Effective November 25, 2013.
FOR FURTHER INFORMATION CONTACT: National Indian Gaming Commission,
1441 L Street NW., Suite 9100 Washington, DC 20005. Telephone: 202-632-
7009; email: [email protected].
SUPPLEMENTARY INFORMATION:
I. Background
The Indian Gaming Regulatory Act (IGRA or Act), Public Law 100-497,
25 U.S.C. 2701 et seq., was signed into law on October 17, 1988. The
Act established the National Indian Gaming Commission (``NIGC'' or
``Commission'') and set out a comprehensive framework for the
regulation of gaming on Indian lands. On January 5, 1999, the NIGC
published a final rule in the Federal Register called Minimum Internal
Control Standards. 64 FR 590. The rule added a new part to the
Commission's regulations establishing Minimum Internal Control
Standards (MICS) to reduce the risk of loss because of customer or
employee access to cash and cash equivalents within a casino. The rule
contains standards and procedures that govern cash handling,
documentation, game integrity, auditing, surveillance, and variances,
as well as other areas.
The Commission recognized from their inception that the MICS would
require periodic review and updates to keep pace with technology and
has substantively amended them numerous times, most recently on
September 21, 2012. 77 FR 58708.
II. Development of the Rule
On September 21, 2012, the Commission concluded nearly two years of
consultation and drafting with the publication of comprehensive
amendments, additions, and updates to Part 543, the minimum internal
control standards (MICS) for Class II gaming operations. The
regulations require tribes to establish controls and implement
procedures at least as stringent as those described in this part to
maintain the integrity of the gaming operation.
One of the 2012 additions was the inclusion of standards for
kiosks, devices capable of redeeming vouchers and/or wagering credits
or initiating transfers from a patron deposit account. The regulation
provided general standards for kiosks but, upon further review,
additional standards are needed for the surveillance of kiosks and for
the collection and count of their contents.
The Commission published a proposed rule adding kiosk drop, count,
fill, and surveillance standards to Part 543 on February 20, 2013 (78
FR 11793). The Commission received numerous comments and, after
engaging in two tribal consultations and considering all public
comments, has revised the rule.
III. Review of Public Comments
Many commenters expressed overarching concerns with the rule's
structure and scope, questioning whether the proposed rule truly
contained minimum standards. The Commission agrees with the commenters,
and has scaled back the rule to contain minimum internal controls for
kiosks. To begin, commenters distinguished kiosks from player
interfaces and card tables, explaining that kiosks operate on an
imprest level, are maintained on the cage accountability, and do not
present the same risks as the revenue generating centers. Therefore,
they contend that it is excessive and inappropriate to apply the strict
drop and count process to kiosks. The Commission agrees. Accordingly,
references to the drop and count team have been replaced with more
general terminology (i.e., authorized agents); a provision has been
added to allow the count to take place ``in a secure area, such as the
cage or count room;'' and many of the stringent count standards have
been removed to account for those operations performing the kiosk count
in the cage and to reflect lower level of risk presented by kiosks. By
removing many of the count standards, the Commission has also resolved
specific concerns about provisions that were contained in those
standards, such as testing count equipment and assigning unique asset
identification numbers.
Commenters also suggested that the kiosk standards would be better
placed in the Cage section. The Commission acknowledges that kiosks are
maintained on the cage accountability and that some provisions may
reasonably be organized under the cage section, while others may
overlap. Accordingly, where the Cage section contains fill and report
standards, similar standards have been removed from the Drop and Count
sections to avoid redundancy. The Commission declines, however, to
relocate all kiosk standards to the Cage section because the process of
removing the currency cassettes and financial instrument storage
components is most similar to--though less stringent than--the drop and
count process for player interfaces and card tables. By removing the
report provisions, The Commission has also resolved commenters'
concerns regarding the automatic generation of the reports and any
incidental viewing of them by those removing the currency cassettes
and/or financial instrument storage components.
Commenters also expressed concerns with definitions. Two comments
suggested that the definition of kiosk should be limited only to the
type of kiosks that dispense currency. It appears, however, that the
commenters were referencing a definition of kiosk that has since been
superseded by the publication of 25 CFR 543.2 on September 21, 2012 (77
FR 58708). The Commission believes that the current definition
satisfies the commenters' concerns by appropriately limiting the term
to redemption kiosks.
Additionally, commenters objected to defining currency cassettes as
a ``locked'' compartment because not all cassettes are locked and it
would be impracticable and cost prohibitive to have a lock installed on
each cassette. The Commission agrees and has removed ``locked'' from
the definition. Additionally, the Commission has replaced the
controlled key standards for kiosks with a more general statement
requiring controls to be established and procedures implemented to
safeguard the keys for kiosks. Further, the Commission notes that Sec.
543.18(d)(3) adequately protects the integrity of currency cassettes by
requiring them to be secured with a lock or tamper resistant seal if
not placed inside a kiosk.
Commenters stated that requiring three agents to remove currency
cassettes and financial instrument storage components from kiosks is
excessive. The Commission agrees and has reduced the requirement to two
agents.
Commenters explained that requiring operations to test currency
cassettes to verify the correct denomination in each cassette is not
possible for many machines because they have multiple cassettes of the
same denomination and
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the machine must exhaust the first cassette before dispensing from the
others. The Commission appreciates this explanation and has replaced
the standard with a more general requirement for operations to
establish controls and implement procedures to ensure that cassettes
contain the correct denominations.
One commenter requested clarification of ``emergency'' as it
applies to authorized persons being permitted to access full kiosk
currency cassettes and financial instrument storage components ``in an
emergency'' for resolution of a problem. As the Commission has
explained in previous preambles (See 77 FR 58708), the tribal gaming
regulatory authorities and operation management are in the best
position to define the term and the Commission declines to substitute
its judgment.
One commenter noted that coupons have cash value and must, rather
than ``may,'' be recorded. The Commission chooses not to make this
change, but intends to consider it in the next rulemaking session.
Commenters suggested that Tier A facilities should be exempted from
the requirement to notify surveillance before removing cassettes and
components from kiosks because they are not required to have a staffed
surveillance room. The Commission acknowledges this concern, notes that
the discrepancy also appears in the drop and count standards for player
interfaces and card games, and intends to address the issue
comprehensively in the next rulemaking session. In the meantime, the
Commission does not expect operations to make futile efforts to notify
a nonexistent surveillance staff member.
Finally, commenters expressed concern that the surveillance
standard for kiosks may require more than one dedicated camera for each
kiosk, presenting a considerable expense to operations. The Commission
stresses that the cameras need only capture a general overview of each
kiosk with sufficient clarity to identify the activity and the
individuals performing it. This means, for example, that if a patron is
redeeming a voucher, someone viewing the surveillance footage should be
able to determine that the activity was a redemption. The camera is not
required to capture the amount of the voucher or the denominations of
currency being dispensed. The Commission declines to reduce the
standard further.
Regulatory Matters
Regulatory Flexibility Act
The rule will not have a significant impact on a substantial number
of small entities as defined under the Regulatory Flexibility Act, 5
U.S.C. 601, et seq. Moreover, Indian Tribes are not considered to be
small entities for the purposes of the Regulatory Flexibility Act.
Small Business Regulatory Enforcement Fairness Act
The rule is not a major rule under 5 U.S.C. 804(2), the Small
Business Regulatory Enforcement Fairness Act. The rule does not have an
effect on the economy of $100 million or more. The rule will not cause
a major increase in costs or prices for consumers, individual
industries, Federal, State, local government agencies or geographic
regions, nor will the proposed rule have a significant adverse effect
on competition, employment, investment, productivity, innovation, or
the ability of the enterprises, to compete with foreign based
enterprises.
Unfunded Mandate Reform Act
The Commission, as an independent regulatory agency, is exempt from
compliance with the Unfunded Mandates Reform Act, 2 U.S.C. 1502(1); 2
U.S.C. 658(1).
Takings
In accordance with Executive Order 12630, the Commission has
determined that the rule does not have significant takings
implications. A takings implication assessment is not required.
Civil Justice Reform
In accordance with Executive Order 12988, the Commission has
determined that the rule does not unduly burden the judicial system and
meets the requirements of sections 3(a) and 3(b)(2) of the Order.
National Environmental Policy Act
The Commission has determined that the rule does not constitute a
major federal action significantly affecting the quality of the human
environment and that no detailed statement is required pursuant to the
National Environmental Policy Act of 1969, 42 U.S.C. 4321, et seq.
Paperwork Reduction Act
The information collection requirements contained in this rule were
previously approved by the Office of Management and Budget as required
by 44 U.S.C. 3501, et seq., and assigned OMB Control Number 3141-0009.
The OMB control number expires on October 31, 2015.
Text of the Final Rule
For the reasons discussed in the preamble, the Commission amends 25
CFR part 543 as follows:
PART 543--MINIMUM INTERNAL CONTROL STANDARDS FOR CLASS II GAMING
0
1. The authority for Part 543 continues to read as follows:
Authority: 25 U.S.C. 2702(2), 2706(b)(1-4), 2706(b)(10).
0
2. Amend Sec. 543.2 by adding a definition for currency cassette in
alphabetical order to read as follows:
Sec. 543.2 What are the definitions for this part?
* * * * *
Currency cassette. A compartment that contains a specified
denomination of currency. Currency cassettes are inserted into kiosks,
allowing them to dispense currency.
* * * * *
0
3. Amend Sec. 543.17 by revising the section heading and paragraphs
(h) and (i), and adding paragraphs (j) and (k) to read as follows:
Sec. 543.17 What are the minimum internal control standards for drop
and count?
* * * * *
(h) Collecting currency cassettes and financial instrument storage
components from kiosks. Controls must be established and procedures
implemented to ensure that currency cassettes and financial instrument
storage components are securely removed from kiosks. Such controls must
include the following:
(1) Surveillance must be notified prior to the financial instrument
storage components or currency cassettes being accessed in a kiosk.
(2) At least two agents must be involved in the collection of
currency cassettes and/or financial instrument storage components from
kiosks and at least one agent should be independent of kiosk
accountability.
(3) Currency cassettes and financial instrument storage components
must be secured in a manner that restricts access to only authorized
agents.
(4) Redeemed vouchers and pulltabs (if applicable) collected from
the kiosk must be secured and delivered to the appropriate department
(cage or accounting) for reconciliation.
(5) Controls must be established and procedures implemented to
ensure that currency cassettes contain the correct
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denominations and have been properly installed.
(i) Kiosk count standards. (1) Access to stored full kiosk
financial instrument storage components and currency cassettes must be
restricted to:
(i) Authorized agents; and
(ii) In an emergency, authorized persons for the resolution of a
problem.
(2) The kiosk count must be performed in a secure area, such as the
cage or count room.
(3) If counts from various revenue centers and kiosks occur
simultaneously in the count room, procedures must be in effect that
prevent the commingling of funds from the kiosks with any revenue
centers.
(4) The kiosk financial instrument storage components and currency
cassettes must be individually emptied and counted so as to prevent the
commingling of funds between kiosks until the count of the kiosk
contents has been recorded.
(i) The count of must be recorded in ink or other permanent form of
recordation.
(ii) Coupons or other promotional items not included in gross
revenue (if any) may be recorded on a supplemental document. All
single-use coupons must be cancelled daily by an authorized agent to
prevent improper recirculation.
(5) Procedures must be implemented to ensure that any corrections
to the count documentation are permanent, identifiable, and the
original, corrected information remains legible. Corrections must be
verified by two agents.
(j) Controlled keys. Controls must be established and procedures
implemented to safeguard the use, access, and security of keys for
kiosks.
(k) Variances. The operation must establish, as approved by the
TGRA, the threshold level at which a variance must be reviewed to
determine the cause. Any such review must be documented.
0
4. Amend Sec. 543.21 by adding paragraph (c)(6) to read as follows:
Sec. 543.21 What are the minimum internal control standards for
surveillance?
* * * * *
(c) * * *
(6) Kiosks: The surveillance system must monitor and record a
general overview of activities occurring at each kiosk with sufficient
clarity to identify the activity and the individuals performing it,
including maintenance, drops or fills, and redemption of wagering
vouchers or credits.
* * * * *
Dated: September 24, 2013, Washington, DC.
Tracie L. Stevens,
Chairwoman.
Daniel J. Little,
Associate Commissioner.
Jonodev O. Chaudhuri,
Associate Commissioner.
[FR Doc. 2013-23977 Filed 10-24-13; 8:45 am]
BILLING CODE 7565-01-P