83 FR 26620 - Minimum Internal Control Standards

DEPARTMENT OF THE INTERIOR
National Indian Gaming Commission

Federal Register Volume 83, Issue 111 (June 8, 2018)

The National Indian Gaming Commission (NIGC) proposes to amend its minimum internal control standards for Class II gaming under the Indian Gaming Regulatory Act to correct an erroneous deletion of the key control standards and to make other minor edits and additions for clarity.

[Federal Register Volume 83, Number 111 (Friday, June 8, 2018)]
[Proposed Rules]
[Pages 26620-26623]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2018-10365]


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DEPARTMENT OF THE INTERIOR

National Indian Gaming Commission

25 CFR Part 543

RIN 3141-AA60


Minimum Internal Control Standards

AGENCY: National Indian Gaming Commission, Department of the Interior.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The National Indian Gaming Commission (NIGC) proposes to amend 
its minimum internal control standards for Class II gaming under the 
Indian Gaming Regulatory Act to correct an erroneous deletion of the 
key control standards and to make other minor edits and additions for 
clarity.

DATES: Written comments on this proposed rule must be received on or 
before July 9, 2018.

ADDRESSES: You may submit comments by any one of the following methods, 
however, please note that comments sent by electronic mail are strongly 
encouraged.
    [ssquf] Email comments to: [email protected].
    [ssquf] Mail comments to: National Indian Gaming Commission, 1849 C 
Street NW, MS 1621, Washington, DC 20240.
    [ssquf] Fax comments to: National Indian Gaming Commission at 202-
632-0045.

FOR FURTHER INFORMATION CONTACT: Jennifer Lawson at (202) 632-7003 or 
by fax (202) 632-7066 (these numbers are not toll free).

SUPPLEMENTARY INFORMATION: 

I. Background

    The Indian Gaming Regulatory Act (IGRA or Act), Public Law 100-497, 
25

[[Page 26621]]

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 in late 
2013 (78 FR 63873).

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 (77 FR 58708). 
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. In late 2013, the 
Commission published a final rule, adding kiosk drop, count, fill, and 
surveillance standards to Part 543 (78 FR 63873).
    Now, the Commission proposes additional revisions, largely 
technical in nature, that are meant to correct earlier editing 
oversights and to better clarify the intent of the provisions.

III. 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 Mandates 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 November 30, 2018.

Tribal Consultation

    The National Indian Gaming Commission is committed to fulfilling 
its tribal consultation obligations--whether directed by statute or 
administrative action such as Executive Order (E.O.) 13175 
(Consultation and Coordination with Indian Tribal Governments)--by 
adhering to the consultation framework described in its Consultation 
Policy published July 15, 2013. The NIGC's consultation policy 
specifies that it will consult with tribes on Commission Action with 
Tribal Implications, which is defined as: Any Commission regulation, 
rulemaking, policy, guidance, legislative proposal, or operational 
activity that may have a substantial direct effect on an Indian tribe 
on matters including, but not limited to the ability of an Indian tribe 
to regulate its Indian gaming; an Indian tribe's formal relationship 
with the Commission; or the consideration of the Commission's trust 
responsibilities to Indian tribes.
    The key control language proposed here is the most substantive of 
all the changes and was the subject of extensive consultation in 2012 
(77 FR 58708). The language proposed here has not changed since 
initially adopted. It was inadvertently written over with the addition 
of kiosk controls in 2013. The remaining changes are all technical in 
nature, correcting numbering and adding minor clarifications.

List of Subjects in 25 CFR Part 543

    Accounting, Administrative practice and procedure, Gambling, 
Indian--Indian lands, Reporting and recordkeeping requirements.

    For the reasons discussed in the Preamble, the Commission proposes 
to amend 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.  543.10 by revising paragraph (e) to read as follows:


Sec.  543.10   What are the minimum internal control standards for card 
games?

* * * * *
    (e) Standards for reconciliation of card room bank. Two agents--one 
of whom must be a supervisory agent--must independently count the main 
card room bank and table inventory at the end of each shift and record 
the following information:
    (1) Date;
    (2) Shift;
    (3) Table number (if applicable);
    (4) Amount by denomination;
    (5) Amount in total; and
    (6) Signatures of both agents.
* * * * *
0
 3. Amend Sec.  543.17 by revising paragraphs (d), (i)(4)(i), and (j) 
to read as follows:


Sec.  543.17   What are the minimum internal control standards for drop 
and count?

* * * * *

[[Page 26622]]

    (d) Card game drop standards. Controls must be established and 
procedures implemented to ensure security of the drop process. Such 
controls must include the following:
    (1) Surveillance must be notified when the drop is to begin so that 
surveillance may monitor the activities.
    (2) At least two agents must be involved in the removal of the drop 
box, at least one of whom is independent of the card games department.
    (3) Once the drop is started, it must continue until finished.
    (4) All drop boxes may be removed only at the time previously 
designated by the gaming operation and reported to the TGRA. If an 
emergency drop is required, surveillance must be notified before the 
drop is conducted and the TGRA must be informed within a timeframe 
approved by the TGRA.
    (5) At the end of each shift:
    (i) All locked card game drop boxes must be removed from the tables 
by an agent independent of the card game shift being dropped;
    (ii) For any tables opened during the shift, a separate drop box 
must be placed on each table, or a gaming operation may utilize a 
single drop box with separate openings and compartments for each shift; 
and
    (iii) Card game drop boxes must be transported directly to the 
count room or other equivalently secure area by a minimum of two 
agents, at least one of whom is independent of the card game shift 
being dropped, until the count takes place.
    (6) All tables that were not open during a shift and therefore not 
part of the drop must be documented.
    (7) All card game drop boxes must be posted with a number 
corresponding to a permanent number on the gaming table and marked to 
indicate game, table number, and shift, if applicable.
* * * * *
    (i) * * *
    (4) * * *
    (i) The count of each box must be recorded in ink or other 
permanent form of recordation.
* * * * *
    (j) Controlled keys. Controls must be established and procedures 
implemented to safeguard the use, access, and security of keys in 
accordance with the following:
    (1) Each of the following requires a separate and unique key lock 
or alternative secure access method:
    (i) Drop cabinet;
    (ii) Drop box release;
    (iii) Drop box content; and
    (iv) Storage racks and carts used for the drop.
    (2) Access to and return of keys or equivalents must be documented 
with the date, time, and signature or other unique identifier of the 
agent accessing or returning the key(s).
    (i) For Tier A and B operations, at least two (2) drop team agents 
are required to be present to access and return keys. For Tier C 
operations, at least three (3) drop team agents are required to be 
present to access and return keys.
    (ii) For Tier A and B operations, at least two (2) count team 
agents are required to be present at the time count room and other 
count keys are issued for the count. For Tier C operations, at least 
three (two for card game drop box keys in operations with three tables 
or fewer) count team agents are required to be present at the time 
count room and other count keys are issued for the count.
    (3) Documentation of all keys, including duplicates, must be 
maintained, including:
    (i) Unique identifier for each individual key;
    (ii) Key storage location;
    (iii) Number of keys made, duplicated, and destroyed; and
    (iv) Authorization and access.
    (4) Custody of all keys involved in the drop and count must be 
maintained by a department independent of the count and the drop agents 
as well as those departments being dropped and counted.
    (5) Other than the count team, no agent may have access to the drop 
box content keys while in possession of storage rack keys and/or 
release keys.
    (6) Other than the count team, only agents authorized to remove 
drop boxes are allowed access to drop box release keys.
    (7) Any use of keys at times other than the scheduled drop and 
count must be properly authorized and documented.
    (8) Emergency manual keys, such as an override key, for 
computerized, electronic, and alternative key systems must be 
maintained in accordance with the following:
    (i) Access to the emergency manual key(s) used to access the box 
containing the player interface drop and count keys requires the 
physical involvement of at least three agents from separate 
departments, including management. The date, time, and reason for 
access, must be documented with the signatures of all participating 
persons signing out/in the emergency manual key(s);
    (ii) The custody of the emergency manual keys requires the presence 
of two agents from separate departments from the time of their issuance 
until the time of their return; and
    (iii) Routine physical maintenance that requires access to the 
emergency manual key(s), and does not involve accessing the player 
interface drop and count keys, only requires the presence of two agents 
from separate departments. The date, time, and reason for access must 
be documented with the signatures of all participating agents signing 
out/in the emergency manual key(s).
    (9) Controls must be established and procedures implemented to 
safeguard the use, access, and security of keys for kiosks.
* * * * *
0
4. Amend Sec.  543.18 by revising paragraph (d)(6)(v) to read as 
follows:


Sec.  543.18   What are the minimum internal control standards for the 
cage, vault, kiosk, cash and cash equivalents?

* * * * *
    (d) * *
    (6) * * *
    (v) Dollar amount per financial instrument redeemed;
* * * * *
0
5. Amend 543.23 by revising paragraph (c)(1)(viii) to read as follows:


Sec.  543.23   What are the minimum internal control standards for 
audit and accounting?

* * * * *
    (c) * * *
    (1) * * *
    (viii) Drop and count standards, including supervision, count room 
access, count team, card game drop standards, player interface and 
financial instrument drop standards, card game count standards, player 
interface financial instrument count standards, collecting currency 
cassettes and financial instrument storage components from kiosks, 
kiosk count standards, and controlled keys;
* * * * *
0
6. Amend 543.24 by revising paragraphs (a) and (d)(5) to read as 
follows:


Sec.  543.24   What are the minimum internal control standards for 
auditing revenue?

    (a) Supervision. Supervision must be provided as needed for revenue 
audit by an agent(s) with authority equal to or greater than those 
being supervised.
* * * * *
    (d) * * *
    (5) Complimentary services or items. At least monthly, review the 
reports required in Sec.  543.13(c). These reports must be made 
available to those entities authorized by the TGRA or by tribal law or 
ordinance.
* * * * *

    Dated: May 1, 2018, Washington, DC.


[[Page 26623]]


     Dated: May 7, 2018.
Jonodev O. Chaudhuri,
Chairman.

    Dated: May 1, 2018.
Kathryn Isom-Clause,
Vice Chair.

    Dated: May 4, 2018.
E. Sequoyah Simermeyer,
Associate Commissioner.
[FR Doc. 2018-10365 Filed 6-7-18; 8:45 am]
 BILLING CODE 7565-01-P