[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]

[[Page 63873]]



National Indian Gaming Commission

25 CFR Part 543

RIN 3141-AA27

Minimum Internal Control Standards

AGENCY: National Indian Gaming Commission, Interior.

ACTION: Final rule.


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: reg.review@nigc.gov.


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 
    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 

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).


    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:


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).

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.
* * * * *

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 
    (3) Currency cassettes and financial instrument storage components 
must be secured in a manner that restricts access to only authorized 
    (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 
    (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 
    (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 
    (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 
    (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.

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 

* * * * *
    (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,
Daniel J. Little,
Associate Commissioner.
Jonodev O. Chaudhuri,
Associate Commissioner.
[FR Doc. 2013-23977 Filed 10-24-13; 8:45 am]