Daily Rules, Proposed Rules, and Notices of the Federal Government
The Indian Gaming Regulatory Act (IGRA or Act), Public Law 100-497, 25 U.S.C. 2701
On November 18, 2010, the NIGC issued a Notice of Inquiry and Notice of Consultation advising the public that the NIGC endeavored to conduct a comprehensive review of its regulations and requesting public comment on which were most in need of revision, in what order the Commission should review its regulations, and the process NIGC should utilize to make revisions. 75 FR 70680. On April 4, 2011, after consulting with tribes and reviewing all comments, the NIGC published a Notice of Regulatory Review Schedule (NRR) setting out a consultation schedule and process for review. 76 FR 18457. Part 547 was included in the third regulatory group reviewed pursuant to the NRR.
On July 8, 2011, the Commission began a series of tribal consultations on part 547. Based in part on the recommendations to the Commission during consultations, on August 10, 2011, the Commission requested tribes nominate tribal representatives to serve on a Tribal Advisory Committee (TAC) to assist the Commission in drafting changes to part 543 and these technical standards. Beginning on October 20, 2011, the TAC held four meetings in which the Commission participated. All of the meetings were open to the public and three of the four were transcribed. On January 12, 2011, as a result of those meetings, the TAC submitted a proposed part 547 regulation to the Commission.
Upon reviewing the TAC's recommendation, and taking into consideration comments received through tribal consultations, the Commission published a discussion draft of the amended technical standards on its Web site. The discussion draft adopted a number of the TAC's recommendations, such as moving requirements that more appropriately belong to the Minimum Internal Control Standards found at 25 CFR part 543.
After publishing the discussion draft, the Commission conducted consultations in Mayetta, KS and San Diego, CA. In addition to tribal consultations, the Commission requested public comment on the discussion draft. Considering the comments received in response to the discussion draft, the Commission published a Notice of Proposed Rulemaking (“NPRM”) on June 1, 2012. 77 FR 32465. The NPRM invited interested parties to participate in the rulemaking process by submitting comments and any supporting data to the NIGC by July 31, 2012. After receiving several requests to extend the comment period, the Commission published notification in the
In addition to soliciting public comment in the
In response to our Notice of Proposed Rulemaking, published June 1, 2012, 77 FR 32465, we received the following comments.
Upon review of the standards, the Commission concluded that this definition is not necessary and has led to confusion. Therefore, it was removed from the proposed rule and not reinserted into this final rule.
When implemented in 2008, the part 547 technical standards introduced several new requirements for Class II gaming systems designed to protect the security and integrity of Class II gaming systems and tribal operations. The Commission understood, however, that some existing Class II gaming systems might not meet all of the requirements of the technical standards. Therefore, to avoid any potentially significant economic and practical consequences of requiring immediate compliance, the Commission implemented a five-year “grandfather period” for eligible gaming systems. The Commission believed that a five year period was sufficient for market forces to move equipment toward compliance with the standards.
To qualify as a grandfathered game pursuant to the current regulations, a gaming system must have been submitted to a testing laboratory within 120 days of November 10, 2008. The testing laboratory must have then reviewed the gaming system for compliance with a specific, minimum set of requirements, and have issued a report to the applicable TGRA, which must have then approved the gaming system for grandfather status. At the end of the five year period—November 10, 2013—the grandfathered systems must be brought into compliance with the requirements of part 547 or removed from play.
Other commenters noted that grandfathered games are valid, legal games, which have never presented, nor do they now present a risk of any kind to either the tribes or patrons. Commenters stated that they do not understand how a game can be safe and reliable one day, but not the very next. According to these commenters, no evidence has been provided that grandfathered games present some hidden danger. If there is something wrong with a particular game, though, the TGRA will act to correct it.
Other commenters point out that tribes obtained court decisions determining that certain grandfathered games are lawful Class II games. Some commenters request the NIGC include a provision explicitly stating that nothing in this part is intended to prohibit the continued use of any gaming system or component ruled to be Class II by any judicial rulings.
In lieu of mandating grandfathered systems by removed by a specific date, other commenters suggested that a more reasoned regulatory approach would be one in which grandfathered Class II gaming systems are eliminated from operation through attrition and/or market forces. One commenter noted the Commission's calculation that such removal through attrition or market forces would have occurred within the five year sunset provision was clearly wrong.
The Commission agrees with commenters, however, that the prior Commission's analysis regarding the continued economic viability of the grandfathered systems has proven to be mistaken. The Commission established the five year sunset provision in the midst of a much stronger economy. In the time that has followed the economic downturn, though, many tribal gaming operations have set new priorities that may require keeping a grandfathered system on the gaming floor for a longer period of time.
Balancing those economic needs against a risk that increases as technology advances and grandfathered machines remain static, the Commission extended the grandfathered system by an additional five years. Under this final rule, a grandfathered system may continue in operation until November 10, 2018.
The Commission declines, however, to insert language conveying that nothing in this part is intended to prohibit the continued use of any gaming system or component ruled to be Class II by any judicial rulings. Including such a provision may lead to the false impression that this part is intended to address classification. It is not. Nothing in part 547 bears on the classification of a game as Class II or Class III. The provision requires only that, for any Class II game to be available for play, the game must have
The Commission understands, however, there are several Class II gaming systems manufactured before November 10, 2008 that may not have been submitted for grandfathering certification within 120 days of November 10, 2008, as the current rule requires. The Commission heard myriad reasons as to why a manufacturer or gaming operation may not have submitted systems for grandfathering certification. For example, Class II systems that, at the time, seemed unmarketable have once again become in demand for economic reasons. The Commission agrees that games that would otherwise be usable as grandfathered Class II system should be eligible for certification. For this reason, the Commission is reopening the time period to certify a Class II gaming system manufactured before November 10, 2008, as a grandfathered system.
The Commission also amended the language of § 547.5(b) to clarify that, if a grandfather system is brought into full compliance with this part, it is no longer considered a grandfathered system and the strictures of §§ 547.5(a) and (b) no longer apply.
“Any financial instrument storage components managed by Class II gaming system software must be located within
“Attendant paid win” does not encompass “attendant paid progressive wins.” They are industry terms that have separate and distinct meanings. For example, Arizona Class III gaming compacts require that an attendant paid jackpot meter “shall not accumulate progressive amounts,” because attendant paid progressive payouts are recorded separately. As a result, if the Commission leaves “each attendant paid progressive win” off of the list of events that trigger a check of the affected data, it would be leaving a gap in the testing standards for critical memory. Therefore, the Commission has reinserted the requirement in this final rule.
The NPRM removed references to entertaining displays from both of these sections. Nearly all of the comments expressed support for the change. Comments focused on the fact that the entertaining display has no significance to the outcome of the game. One commenter, however, opposed this change. The commenter suggested that the revision to § 547.8(a)(2)(ii) would require the game display to “go blank” between games.
The commenter also objected to the discussion draft no longer requiring last game recall to include the entertaining display. The commenter noted that when a pay-table on a player interface indicates that certain combinations of symbols will result in certain prizes, a player has a reasonable right to expect a prize if that combination of symbols appears on the pay line of the “entertainment only” display. The commenter asserts that if a game posts a prize schedule corresponding to the entertaining display instead of, or in addition to, the bingo card, and a prize paying combination of symbols appears in the entertaining display but no prizes are awarded, the integrity of the gaming system and reputation of the tribe may be called into question.
The Commission agrees that the reputation of an operation is of utmost importance and can reach beyond a particular facility to bolster or harm the reputation of Indian gaming. However, the game of bingo is dictated by the ball draw and the bingo card, not the entertaining display. This is made clear by the disclaimer required by § 547.16, clarifying that actual prizes are determined by bingo play not the entertaining display. For the technical standards to require last game recall to include the entertaining display would incorrectly emphasize an aspect of the game that has no bearing on its outcome.
The Commission also disagrees with the commenter's assessment that, if the entertaining display indicates a win, the patron should be paid regardless of the bingo results. Prizes should only be awarded on Class II electronic bingo games if the patron has won according to the bingo card.
Finally, this final rule clarifies that the TGRA may appeal the Chair's decision to approve or object to an alternate standard pursuant to 25 CFR subchapter H. The Commission believes that, because the rule requires the TGRA to approve and submit the alternate standard for NIGC review, the TGRA should be the entity to appeal a Chair decision it disagrees with.
The rule will not have a significant impact on a substantial number of small
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 rule have a significant adverse effect on competition, employment, investment, productivity, innovation, or the ability of the enterprises, to compete with foreign based enterprises.
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.
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.
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,
The information collection requirements contained in this rule were previously approved by the Office of Management and Budget (OMB) as required by 44 U.S.C. 3501
Gambling, Indian—Indian lands, Indian—tribal government.
25 U.S.C. 2706(b).
The Indian Gaming Regulatory Act, 25 U.S.C. 2703(7)(A)(i), permits the use of electronic, computer, or other technologic aids in connection with the play of Class II games. This part establishes the minimum technical standards governing the use of such aids.
For the purposes of this part, the following definitions apply:
(1) The TGRA submits the Class II gaming system software that affects the play of the Class II game, together with the signature verification required by § 547.8(f) to a testing laboratory recognized pursuant to paragraph (f) of this section within 120 days after October 22, 2012;
(2) The testing laboratory tests the submission to the standards established by § 547.8(b), § 547.8(f), § 547.14, and any additional technical standards adopted by the TGRA;
(3) The testing laboratory provides the TGRA with a formal written report setting forth and certifying to the findings and conclusions of the test;
(4) The TGRA makes a finding, in the form of a certificate provided to the supplier or manufacturer of the Class II gaming system, that the Class II gaming system qualifies for grandfather status under the provisions of this section. A TGRA may make such a finding only upon receipt of a testing laboratory's report that the Class II gaming system is compliant with § 547.8(b), § 547.8(f), § 547.14, and any other technical standards adopted by the TGRA. If the TGRA does not issue the certificate, or if the testing laboratory finds that the Class II gaming system is not compliant with § 547.8(b), § 547.8(f), § 547.14, or any other technical standards adopted by the TGRA, then the gaming system must immediately be removed from play and not be utilized.
(5) The TGRA retains a copy of any testing laboratory's report so long as the Class II gaming system that is the subject of the report remains available to the public for play; and
(6) The TGRA retains a copy of any certificate of grandfather status so long as the Class II gaming system that is the subject of the certificate remains available to the public for play.
(1) Grandfathered Class II gaming systems may continue in operation for a period of ten years from November 10, 2008.
(2) Grandfathered Class II gaming systems may only be used as approved by the TGRA. The TGRA must transmit its notice of that approval, identifying the grandfathered Class II gaming system and its components, to the Commission.
(3) Remote communications may only be