§542.19 What are the minimum internal control standards for accounting?
(Adopted May 11, 2006)

\(a\) Each gaming operation shall prepare accurate, complete, legible,
and permanent records of all transactions pertaining to revenue and
gaming activities.

\(b\) Each gaming operation shall prepare general accounting records
according to Generally Accepted Accounting Principles **~~on~~**
**[using]{.underline}** a double-entry system of accounting, **[and
shall]{.underline}** maintain**~~ing~~** detailed**~~,~~**
supporting**~~,~~** subsidiary records, including, but not limited to:

\(1\) Detailed records identifying revenues, expenses, assets,
liabilities, and equity for each gaming operation;

\(2\) Detailed records of all markers, IOU\'s, returned checks,
**~~hold~~** **[held]{.underline}** checks, or other similar credit
instruments;

\(3\) Individual and statistical game records to reflect statistical
drop, statistical win, and the percentage of statistical win to
statistical drop by each table game, and **~~to reflect statistical
drop, statistical win, and the percentage of statistical win to
statistical drop~~** for each type of table game, by shift, by day,
cumulative month-to-date**[,]{.underline}** and year-to-date, and
individual and statistical game records reflecting similar information
for all other games;

\(4\) Gaming machine analysis reports which, by each machine, compare
actual hold percentages to theoretical hold percentages;

\(5\) The records required by this part and by the Tribal internal
control standards;

\(6\) Journal entries prepared by the gaming operation and by its
independent accountants; and

\(7\) Any other records specifically required to be maintained.

\(c\) Each gaming operation shall establish administrative and
accounting procedures for the purpose of determining effective control
over a gaming operation\'s fiscal affairs. The procedures shall be
designed to reasonably ensure that:

\(1\) Assets are safeguarded;

\(2\) Financial records are accurate and reliable;

(3)Transactions are performed only in accordance with management\'s
general and specific authorization;

\(4\) Transactions are recorded adequately to permit proper reporting of
gaming revenue and of fees and taxes, and to maintain accountability of
assets;

\(5\) Recorded accountability for assets is compared with actual assets
at reasonable intervals, and appropriate action is taken with respect to
any discrepancies; and

\(6\) Functions, duties, and responsibilities are appropriately
segregated in accordance with sound business practices.

\(d\) Gross gaming revenue computations.

\(1\) For table games, gross revenue equals the closing table bankroll,
plus credit slips for cash, chips, tokens or personal/payroll checks
returned to the cage, plus drop, less opening table bankroll and fills
to the table, and money transfers issued from the game through the use
of a cashless wagering system.

\(2\) For gaming machines, gross revenue equals drop, less fills,
jackpot payouts and personal property awarded to patrons as gambling
winnings. Additionally, the initial hopper load is not a fill and does
not affect gross revenue. The difference between the initial hopper load
and the total amount that is in the hopper at the end of the gaming
operation\'s fiscal year should be adjusted accordingly as an addition
to or subtraction from the drop for the year.

\(3\) For each counter game, gross revenue equals:

\(i\) The money accepted by the gaming operation on events or games that
occur during the month or will occur in subsequent months, less money
paid out during the month to **~~patrons~~** **[customers]{.underline}**
on winning wagers ("cash basis\'\'); or

\(ii\) The money accepted by the gaming operation on events or games
that occur during the month, plus money, not previously included in
gross revenue, that was accepted by the gaming operation in previous
months on events or games occurring in the month, less money paid out
during the month to **~~patrons~~** **[customers]{.underline}** as
winning wagers ("modified accrual basis\'\').

\(4\) For each card game and any other game in which the gaming
operation is not a party to a wager, gross revenue equals all money
received by the operation as compensation for conducting the game.

\(i\) A gaming operation shall not include either shill win or loss in
gross revenue computations.

**~~(ii) In computing gross revenue for gaming machines, keno and bingo,
the actual cost to the gaming operation of any personal property
distributed as losses to patrons may be deducted from winnings (other
than costs of travel, lodging, services, food, and beverages), if the
gaming operation maintains detailed documents supporting the
deduction.~~**

**[(ii) Reserved.]{.underline}**

**[(5) In computing gross revenue for gaming machines, keno and bingo,
the actual cost to the gaming operation of any personal property (other
than costs of travel, lodging, services, food, and beverages) awarded as
a payout to customers may be deducted if the gaming operation maintains
detailed documents supporting the deduction.]{.underline}**

[]{.mark}

\(e\) Each gaming operation shall establish internal control systems
sufficient to ensure that currency (other than tips or gratuities)
received from a **~~patron~~** **[customer]{.underline}** in the gaming
area is promptly placed in a locked box in the table, or, in the case of
a cashier, in the appropriate place in the cashier\'s cage, or on those
games which do not have a locked drop box, or on card game tables, in an
appropriate place on the table, in the cash register or in another
approved repository.

\(f\) If the gaming operation provides periodic payments to satisfy a
payout resulting from a wager, the initial installment payment, when
paid, and the actual cost of a payment plan, which is funded by the
gaming operation, may be deducted from winnings. The gaming operation is
required to obtain the approval of all payment plans from the **~~TGRA~~
[Tribal Gaming Regulatory Authority]{.underline}**. For any funding
method which merely guarantees the gaming operation\'s performance, and
under which the gaming operation makes payments out of cash flow (e.g.
irrevocable letters of credits, surety bonds, or other similar methods),
the gaming operation may only deduct such payments when paid to the
patron.

**~~(g) For payouts by wide-area progressive gaming machine systems, a
gaming operation may deduct from winnings only it's pro rata share of a
wide-area gaming machine system payout~~**.

**[(g)(]{.underline}~~h)~~** Cash-out tickets issued at a gaming machine
or gaming device shall be deducted from gross revenue as jackpot payouts
in the month the tickets are issued by the gaming machine or gaming
device. Tickets deducted from gross revenue that are not redeemed within
a period, not to exceed 180 days of issuance, shall be included in gross
revenue. An unredeemed ticket previously included in gross revenue may
be deducted from gross revenue in the month redeemed.

**[(h)(]{.underline}~~i)~~** A gaming operation may not deduct from
gross revenues the unpaid balance of a credit instrument extended for
purposes other than gaming.

**[(i)]{.underline}~~(j)~~** A gaming operation may deduct from gross
revenue the unpaid balance of a credit instrument if the gaming
operation documents, or otherwise keeps detailed records of, compliance
with the following requirements. Such records confirming compliance
shall be made available to the **~~TGRA~~ [Tribal Gaming Regulatory
Authority]{.underline}** or the Commission upon request:

\(1\) The gaming operation can document that the credit extended was for
gaming purposes;

\(2\) The gaming operation has established procedures and relevant
criteria to evaluate a **~~patron's~~** **[customer's]{.underline}**
credit reputation or financial resources and to then determine that
there is a reasonable basis for extending credit in the amount or sum
placed at the **~~patron's~~** **[customer's]{.underline}** disposal;

\(3\) In the case of personal checks, the gaming operation has
established procedures to examine documentation**~~,~~** which would
normally be acceptable as a type of identification when cashing checks,
and has recorded the **~~patron's~~** **[customer's]{.underline}** bank
check guarantee card number or credit card number, or has satisfied
paragraph **~~(j)~~ (i)** (2) of this section, as management may deem
appropriate for the check-cashing authorization granted;

\(4\) In the case of third-party checks for which cash, chips, or tokens
have been issued to the **~~patron~~** **[customer]{.underline}**, or
which were accepted in payment of another credit instrument, the gaming
operation has established procedures to examine documentation, normally
accepted as a means of identification when cashing checks, and has, for
the check\'s maker or drawer, satisfied paragraph **~~(j)~~ (i)** (2) of
this section, as management may deem appropriate for the check-cashing
authorization granted;

\(5\) In the case of guaranteed drafts, procedures should be established
to ensure compliance with the issuance and acceptance procedures
prescribed by the issuer;

\(6\) The gaming operation has established procedures to ensure that the
credit extended is appropriately documented, not least of which would be
the **~~patron's~~** **[customer's]{.underline}** identification and
signature attesting to the authenticity of the individual credit
transactions. The authorizing signature shall be obtained at the time
credit is extended.

\(7\) The gaming operation has established procedures to effectively
document its attempt to collect the full amount of the debt. Such
documentation **~~would~~** include**[s]{.underline}**, but
**[is]{.underline}** not **~~be~~** limited to, letters sent to the
**~~patron~~** **[customer]{.underline}**, logs of personal or telephone
conversations, proof of presentation of the credit instrument to the
**~~patron's~~** **[customer's]{.underline}** bank for collection,
settlement agreements, or other documents which demonstrate that the
gaming operation has made a good faith attempt to collect the full
amount of the debt. Such records documenting collection efforts shall be
made available to the **~~TGRA~~ [Tribal Gaming Regulatory
Authority]{.underline}** or the commission upon request.

**[(j) Deductions from gross revenue.]{.underline}**

**[(1) Any prizes, premiums, drawings, benefits or tickets that are
redeemable for cash or merchandise or other promotional allowance,
except cash or tokens paid at face value or the cost of personal
property awarded directly to a customer as the result of a specific
wager, must not be deducted.]{.underline}**

**[(2) Cash paid to fund periodic payments may be
deducted.]{.underline}**

**[(3) For gaming machines, keno, and bingo, the actual cost of any
personal property distributed to a customer as the result of a specific
legitimate wager may be deducted, but not travel expenses, food,
refreshments, lodging, or services.]{.underline}**

**[(4) A gaming operation that provides a customer with additional play
at bingo as the result of an initial wager may deduct all money or
tokens paid directly to that customer as a result of such additional
play.]{.underline}**

**[(5) A gaming operation may deduct its pro-rata share of a payout from
a game played in a wide area linked system except for a payout made in
conjunction with a card game. The amount of the deduction must be
determined based upon the written agreement among the gaming
establishments participating in the wide area linked system and the
operator of the system. All cash prizes and the value of noncash prizes
awarded during a contest or tournament conducted in conjunction with a
wide area linked system are also deductible on a pro-rata basis to the
extent of the compensation received for the right to participate in that
contest or tournament.]{.underline}**

**[(6) Deductibility of free play and promotional items:]{.underline}**

**[(i) Gaming machines:]{.underline}**

**[(A) Free pulls on a promotional gaming machine or other gaming
device - No effect on drop and no deduction of payouts.]{.underline}**

**[(B) Free pulls on a gaming machine - No effect on drop and all
payouts deductible.]{.underline}**

**[(C) Free play wagering (negotiable, including free coin/tokens) if
distinguishable and accounted for separately in the drop - No effect on
drop and all payouts deductible.]{.underline}**

**[(D) Free play wagering (non-negotiable) - No effect on drop for free
play and all payouts deductible.]{.underline}**

**[(E) Gaming machine negotiable wagering credits (If tracked
electronically when wagered) - No effect on drop and]{.underline}**
**[all payouts deductible.]{.underline}**

**[(F) Gaming machine negotiable wagering credits (If not tracked
electronically when wagered) -- Add cash value to drop and all payouts
deductible.]{.underline}**

**[(G) Non-cash prizes awarded for winning wagers -- Cost to gaming
operation deductible.]{.underline}**

**[(H) Premium points]{.underline}** **[awarded in accordance with a
payout schedule as the result of a winning wager -- Cash or cost of
prizes for redeemed points deductible. Appropriate tracking and
documentation required.]{.underline}**

**[(I) Premium points not awarded in accordance with a payout schedule
or as the result of a winning wager -- Cash or cost of prizes for
redeemed points not deductible.]{.underline}**

**[(J) Promotional activity reimbursed by an external party -- Total
amount wagered included in drop and all payouts
deductible.]{.underline}**

**[(K) Gold or silver coins paid out (legal tender) -- Purchase cost to
gaming operation deductible.]{.underline}**

**[(L) Gold or silver tokens paid out (not legal tender) -- Face value
deductible.]{.underline}**

**[(M) Tournaments/contests/drawings -- Include total amount received in
drop and payouts deductible (limited to amount received).]{.underline}**

**[(N) Bonus payouts -- Bonus payouts resulting from a winning wager
deductible.]{.underline}**

**[(O) Mystery jackpots (Only if selected by random number generator) --
All mystery jackpot payouts reflected on the payout schedule
deductible.]{.underline}**

**[(ii) Table Games:]{.underline}**

**[(A) Match play (e.g., wager five dollars and receive a ten dollar
bet) -- include cash received in drop and all payouts
deductible.]{.underline}**

**[(B) Discount wagering (negotiable) -- Discounted dollar amount (if
distinguishable) included in drop and all payouts
deductible.]{.underline}**

**[(C) Discount wagering (non-negotiable) -- Discounted dollar amount
included in drop and all payouts deductible]{.underline}**

**[(D) Free play wagering (negotiable) -- If distinguishable, no effect
on drop, all payouts deductible.]{.underline}**

**[(E) Free play wagering (non-negotiable) -- No effect on drop and all
payouts deductible.]{.underline}**

**[(F) Promotional activity reimbursed by an external party -- Total
amount wagered included in drop and all payouts
deductible.]{.underline}**

**[(G) Tournaments/contests/drawings -- Include total amount received in
drop and payouts deductible (limited to amount received).]{.underline}**

**[(H) Tournaments which include elements of a normal wager -- Include
total amount wagered in drop, payouts deductible, tournament prizes not
deductible.]{.underline}**

**[(iii) Card Games:]{.underline}**

**[(A) Buy-in coupons (e.g. \$25 in chips for \$20 buy-in) -- No effect
on revenue.]{.underline}**

**[(B) Tournaments played with negotiable chips and rake is taken --
Rake is included in revenue.]{.underline}**

**[(C) Tournaments played with non-negotiable chips, contests and
drawings -- No effect on revenue.]{.underline}**

**[(D) Prizes (e.g., \$100 prize for high hand of the week) -- No effect
on revenue.]{.underline}**

**[(E) Promotional progressive pot and/or pool payouts -- No effect on
revenue.]{.underline}**

**[(F) Shill wins and losses -- No effect on revenue.]{.underline}**

**[(iv) Keno:]{.underline}**

**[(A) Match play/discount wagering only -- Include cash received in
write, all payouts deductible.]{.underline}**

**[(B) Free play wagering (negotiable and non-negotiable) -- No effect
on write, all payouts deductible.]{.underline}**

**[(C) Non-cash prizes awarded for winning wagers -- Purchase cost to
the gaming operation deductible.]{.underline}**

**[(D) Promotional activity reimbursed by external party -- Include
total amount in write, all payouts deductible.]{.underline}**

**[(E) Tournaments/contests/drawings- No effect on write unless part of
wide area linked system.]{.underline}**

**[(F) Tournaments which include elements of a normal wager- Include
total amount wagered in write, all payouts deductible, tournament prizes
not deductible.]{.underline}**

**[(G) Appeasement payouts (payments made on non-winning tickets in
response to customer complaints) -- Not deductible.]{.underline}**

**[(v) Bingo:]{.underline}**

**[(A) Match play/discount wagering -- Include cash received in sales
and all payouts deductible.]{.underline}**

**[(B) Free play wagering (negotiable and non-negotiable) -- No effect
on sales and all payouts deductible.]{.underline}**

**[(C) Non-cash prizes -- Include cash received in sales and purchase
cost of prizes deductible.]{.underline}**

**[(D) Promotional activity reimbursement by external party -- Include
cash received sales and all payouts deductible.]{.underline}**

**[(E) Tournaments/contests/drawings- No effect on sales unless part of
wide area linked system.]{.underline}**

**[(F) Tournaments which include elements of a normal wager -- Include
total amount wagered in sales, all payouts deductible, tournament prizes
not deductible.]{.underline}**

**[(G) Appeasement payouts (payments made on non-winning cards in
response to customer complaints) -- Not deductible.]{.underline}**

**[(vi) Pull Tabs:]{.underline}**

**[(A) Match play/discount wagering -- Include cash received in sales
and all payouts deductible.]{.underline}**

**[(B) Free play wagering (negotiable and non-negotiable) -- No effect
on sales and all payouts deductible.]{.underline}**

**[(C) Non-cash prizes -- Include cash received in sales and purchase
cost of prizes deductible.]{.underline}**

**[(D) Promotional activity reimbursement by external party -- Include
cash received in sales and all payouts deductible.]{.underline}**

**[(E) Tournaments/contests/drawings- No effect on sales unless part of
wide area linked system.]{.underline}**

**[(F) Tournaments which include elements of a normal wager -- Include
total amount wagered in sales, all payouts deductible, tournament prizes
not deductible.]{.underline}**

**[(G) Appeasement payouts (payments made on non-winning pull tabs in
response to customer complaints) -- Not deductible.]{.underline}**

**[(vii) Baccarat - Uncollected baccarat commission - No effect on
drop.]{.underline}**

**[(7) Credit instruments written off as uncollectible are deductible
unless any of the following applies:]{.underline}**

**[(i) The instrument was not signed by the customer;]{.underline}**

**[(ii) The gaming operation did not have an address for the customer at
the time of accepting the instrument;]{.underline}**

**[(iii) The gaming operation does not maintain evidence that it has
made a reasonable effort to collect the debt;]{.underline}**

**[(iv) The gaming operation does not maintain evidence that it checked
the credit history of the customer before extending the
credit;]{.underline}**

**[(v) The signature of the customer on the instrument was forged and
the gaming operation has not made a written report of the forgery to the
appropriate law enforcement agency; or]{.underline}**

**[(vi) The gaming operation is unable to produce the credit instrument
within a reasonable time after a request by the Commission. (Note:
However, this shall not pertain to circumstances beyond the control of
the gaming operation e.g., custody of court, stolen,
etc.)]{.underline}**

\(k\) Maintenance and preservation of books, records, and documents.

\(1\) All original books, records, and documents pertaining to the
conduct of wagering activities shall be retained by a gaming operation
in accordance with the following schedule. A record that summarizes
gaming transactions is sufficient, provided that all documents
containing an original signature(s) attesting to the accuracy of a
gaming related transaction are independently preserved. Original books,
records, or documents shall not include copies of originals, except for
copies that contain original comments or notations on parts of
multi-part forms. The following original books, records, and documents
shall be retained by a gaming operation for a minimum of five (5) years:

\(i\) Casino cage documents;

\(ii\) Documentation supporting the calculation of table game win;

\(iii\) Documentation supporting the calculation of gaming machine win;

\(iv\) Documentation supporting the calculation of revenue received from
the games of keno, pari-mutuel, bingo, pull-tabs, card games, and all
other gaming activities offered by the gaming operation;

\(v\) Table games statistical analysis reports;

\(vi\) Gaming machine statistical analysis reports;

\(vii\) Bingo, pull-tab, keno, and pari-mutuel wagering statistical
reports;

\(viii\) Internal audit documentation and reports;

\(ix\) Documentation supporting the write-off of gaming credit
instruments and named credit instruments;

\(x\) All other books, records, and documents pertaining to the conduct
of wagering activities that contain original signature(s) attesting to
the accuracy of the gaming related transaction.

\(2\) Unless otherwise specified in this part, all other books, records,
and documents shall be retained until such time as the accounting
records have been audited by the gaming operation\'s independent
certified public accountants.

\(3\) The above definition shall apply without regard to the medium by
which the book, record or document is generated or maintained (paper,
computer-generated, magnetic media, etc.).