60508 Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Rules and Regulations 

to ensure that terminated users do not 

have access to system functions. 

(vi) Documentation of the quarterly 

user access review must be maintained. 

(vii) System exception information 

(e.g., changes to system parameters, 

corrections, overrides, voids, etc.) must 

be maintained. 

(4) Procedures must be established 

and implemented to ensure access 

listings are maintained which include at 

a minimum: 

(i) User name or identification 

number (or equivalent); and 

(ii) Listing of functions the user can 

perform or equivalent means of 

identifying same. 

(d) Adequate backup and recovery 

procedures must be in place that 

include: 

(1) Daily backup of data files—(i) 

Backup of all programs. Backup of 

programs is not required if the program 

can be reinstalled. 

(ii) Secured storage of all backup data 

files and programs, or other adequate 

protection to prevent the permanent loss 

of any data. 

(iii) Backup data files and programs 

may be stored in a secured manner in 

another building that is physically 

separated from the building where the 

system’s hardware and software are 

located. They may also be stored in the 

same building as the hardware/software 

as long as they are secured in a fireproof 

safe or some other manner that will 

ensure the safety of the files and 

programs in the event of a fire or other 

disaster. 

(2) Recovery procedures must be 

tested on a sample basis at least 

annually with documentation of results. 

(e) Access records. (1) Procedures 

must be established to ensure computer 

access records, if capable of being 

generated by the computer system, are 

reviewed for propriety for the following 

at a minimum: 

(i) Class II gaming systems; 

(ii) Accounting/auditing systems; 

(iii) Cashless systems; 

(iv) Voucher systems; 

(v) Player tracking systems; and 

(vi) External bonusing systems. 

(2) If the computer system cannot 

deny access after a predetermined 

number of consecutive unsuccessful 

attempts to log on, the system must 

record unsuccessful log on attempts. 

(f) Remote access controls. (1) For 

computer systems that can be accessed 

remotely, the written system of internal 

controls must specifically address 

remote access procedures including, at 

a minimum: 

(i) Record the application remotely 

accessed, authorized user’s name and 

business address and version number, if 

applicable; 

(ii) Require approved secured 

connection; 

(iii) The procedures used in 

establishing and using passwords to 

allow authorized users to access the 

computer system through remote access; 

(iv) The agents involved and 

procedures performed to enable the 

physical connection to the computer 

system when the authorized user 

requires access to the system through 

remote access; and 

(v) The agents involved and 

procedures performed to ensure the 

remote access connection is 

disconnected when the remote access is 

no longer required. 

(2) In the event of remote access, the 

information technology employees must 

prepare a complete record of the access 

to include: 

(i) Name or identifier of the employee 

authorizing access; 

(ii) Name or identifier of the 

authorized user accessing system; 

(iii) Date, time, and duration of 

access; and 

(iv) Description of work performed in 

adequate detail to include the old and 

new version numbers, if applicable of 

any software that was modified, and 

details regarding any other changes 

made to the system. 

Dated: September 24, 2008. 

Philip N. Hogen, 

Chairman. 

Norman H. DesRosiers, 

Vice Chairman. 

[FR Doc. E8–23081 Filed 10–9–08; 8:45 am] 

BILLING CODE 7565–01–P 

DEPARTMENT OF THE INTERIOR 

National Indian Gaming Commission 

25 CFR Part 547 

RIN 3141–AA29 

Technical Standards for Electronic, 

Computer, or Other Technologic Aids 

Used in the Play of Class II Games 

AGENCY: National Indian Gaming 

Commission, Interior. 

ACTION: Final rule. 

SUMMARY: The rule adds a new part to 

the Commission’s regulations 

establishing technical standards for 

Class II games—bingo, lotto, other 

games similar to bingo, pull tabs, and 

‘‘instant bingo’’—that are played using 

‘‘electronic, computer, or other 

technologic aids’’ as parts of a Class II 

gaming system. The rule establishes a 

process for ensuring the integrity of 

such games and aids—examination by 

an independent testing laboratory and 

approval by the tribal gaming regulatory 

authority—before being made available 

to the public for play in a tribal gaming 

operation. The standards will assist 

tribal gaming regulatory authorities and 

operators in ensuring the integrity and 

security of Class II gaming and the 

accountability of Class II gaming 

revenue. The standards will also 

provide guidance to equipment 

manufacturers and distributors of Class 

II gaming systems. 

The rule does not attempt to 

distinguish Class II gaming from Class 

III gaming. Rather, the rule assumes that 

the games played on Class II gaming 

systems are, in fact, Class II. 

DATES: Effective November 10, 2008. 

FOR FURTHER INFORMATION CONTACT: 

Michael Gross, Associate General 

Counsel, General Law, Office of General 

Counsel, National Indian Gaming 

Commission, 1441 L St., NW., Suite 

9100, Washington, DC 20005, telephone: 

202.632.7003. This is not a toll-free call. 

SUPPLEMENTARY INFORMATION: 

Withdrawal of Classification Standards 

and Amendment to Definition of 

Facsimile 

The Commission has withdrawn the 

Classification standards it proposed on 

October 24, 2007. ‘‘Classification 

Standards for Bingo, Lotto, Etc. as Class 

II Gaming When Played Through an 

Electronic Medium Using ‘Electronic 

Computer, or Other Technologic Aids.’ ’’ 

72 FR 60483. The Commission has also 

withdrawn the amendment to the 

definition of ‘‘electronic or 

electromechanical facsimile,’’ also 

proposed on October 24, 2007. 

‘‘Definition for Electronic or 

Electromechanical Facsimile.’’ 72 FR 

60482. See the Commission’s notices of 

withdrawal, published simultaneously. 

Background 

The Indian Gaming Regulatory Act, 25 

U.S.C. 2701–21 (‘‘IGRA’’), enacted by 

the Congress in 1988, establishes the 

National Indian Gaming Commission 

(‘‘Commission’’) and sets out a 

comprehensive framework for the 

regulation of gaming on Indian lands. 

IGRA establishes three classes of Indian 

gaming. 

‘‘Class I gaming’’ means social games 

played solely for prizes of minimal 

value or traditional forms of Indian 

gaming played in connection with tribal 

ceremonies or celebrations. 25 U.S.C. 

2703(6). Indian tribes regulate Class I 

gaming exclusively. 

‘‘Class II gaming’’ means the game of 

chance commonly known as bingo, 

whether or not electronic, computer, or 


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other technologic aids are used in 

connection therewith, including, if 

played in the same location, pull-tabs, 

lotto, punch boards, tip jars, instant 

bingo, and other games similar to bingo, 

as well as various non-house-banked 

card games. 25 U.S.C. 2703(7)(A). 

Specifically excluded from Class II 

gaming are banking card games such as 

blackjack, electronic or 

electromechanical facsimiles of any 

game of chance, and slot machines of 

any kind. 25 U.S.C. 2703(7)(B). Indian 

tribes and the Commission share 

regulatory authority over Class II 

gaming. Indian tribes can engage in 

Class II gaming without any state 

involvement. 

‘‘Class III gaming’’ includes all forms 

of gaming that are not Class I gaming or 

Class II gaming. 25 U.S.C. 2703(8). Class 

III gaming thus includes all other games 

of chance, including lotteries and most 

forms of casino gaming, such as slot 

machines, roulette, and banking card 

games like blackjack. Class III gaming 

may be conducted lawfully only if the 

tribe and the state in which the tribe is 

located enter into a tribal-state compact 

for such gaming. Alternatively, a tribe 

may operate Class III gaming under 

gaming procedures issued by the 

Secretary of the Interior. Indian tribes, 

states, and the Commission exercise 

regulatory authority over Class III 

gaming. In addition, the United States 

Department of Justice possesses 

exclusive criminal, and certain civil, 

jurisdiction over Class III gaming on 

Indian lands. 

The Commission has determined that 

it is in the best interests of Indian 

gaming to adopt technical standards that 

govern the implementation of 

electronic, computer, and other 

technologic aids used in the play of 

Class II games because no such 

standards currently exist. The rule seeks 

to provide a means for tribal gaming 

regulatory authorities and tribal 

operators to ensure that the integrity 

and security of Class II games played 

with the use of electronic, computer, or 

other technologic aids is maintained 

and that the games and aids are fully 

auditable, i.e., that they provide a means 

for the gaming authority and gaming 

operation to account for all gaming 

revenue. The rule also seeks to permit 

flexibility in the implementation of 

technology and to embrace the 

development of future technologies 

unforeseen and undeveloped. 

Development of the Rule 

The development of the rule began 

formally with the March 31, 2004, 

appointment of an advisory committee 

comprised of tribal government 

representatives with substantial 

experience and expertise in gaming 

regulation and operations, the 

Commission, and Commission staff. 

Although the Commission initially 

intended to develop one set of 

regulations, this committee’s work 

ultimately resulted in the Commission’s 

publication of a proposed rule for Class 

II classification standards, 71 FR 30238 

(May 25, 2006), and a separate proposed 

rule for Class II technical standards, 71 

FR 46336 (August 11, 2006). A detailed 

history of the advisory committee’s 

work on the technical standards to that 

point, its meetings, the Commission’s 

consultations with Indian tribes, and the 

contributions and participation of the 

interested general public is published in 

the preamble to that proposed rule. 71 

FR 46336–46337 (August 11, 2006). 

The ultimate goal of that first 

proposed set of technical standards was 

as it is here—to ensure the security and 

integrity of Class II games played with 

technologic aids, to ensure the 

auditabilty of the gaming revenue that 

those games earn, and to account and 

allow for evolving and new technology. 

Given the importance of the 

regulations to the industry, the 

Commission, which had initially set a 

comment period of 45 days, reopened 

the comment period for an additional 76 

days, from November 15, 2006, through 

January 31, 2007. 71 FR 71115 

(December 8, 2006); 71 FR 76618 

(December 21, 2006). 

Public comments made it clear to the 

Commission that the first set of 

proposed technical standards fell short 

of its goal of technological flexibility. In 

particular, commenters stated that the 

first set of proposed technical standards 

would mandate particular 

implementations of technology that 

were not practical or feasible. 

Commenters suggested that rather than 

prescribe particular implementations of 

technology, the standards should 

describe the regulatory outcomes that 

the Commission seeks to achieve and 

leave it to the industry to develop ways 

to meet those regulatory requirements. 

At a December 5, 2006, advisory 

committee meeting in Washington, DC, 

the tribal representatives to the advisory 

committee strongly agreed with this 

sentiment. The details of the solution, 

however, were not immediately 

apparent. Before providing further 

advice to the Commission, the tribal 

representatives on the committee 

wished to consult further with other 

tribal representative and regulators, and 

with industry representatives. They 

therefore suggested that they assemble a 

working group made up of 

representatives from the Class II gaming 

industry—tribal operators, tribal 

regulators, and manufacturers alike—to 

assist the advisory committee. The 

Commission agreed to allow the tribal 

representatives to work independently 

of the Commission to redraft the 

technical standards. Accordingly, the 

Commission withdrew the first 

proposed technical standards. 72 FR 

7360 (February 15, 2007). 

The tribal representatives to the 

advisory committee formed a working 

group, which met at various times, in 

person and telephonically, from the end 

of 2006 through the middle of 2007 to 

draft this new set of technical standards. 

The Commission did not participate in 

the establishment of this working group 

or in most of its work. On some 

occasions, the tribal representatives 

invited the participation of Commission 

staff members to answer questions and 

to provide explanation about the 

Commission’s regulatory goals. 

Commission staff participated in this 

capacity during in-person meetings on 

December 11–12, 2006, in Las Vegas, 

Nevada, and June 5, 2007, in Dallas, 

Texas. 

The full advisory committee, 

including the Commission, met to 

discuss drafts developed by the tribal 

representatives and the working group 

on February 22, 2007, in Albuquerque, 

New Mexico; April 26, 2007, in Seattle, 

Washington; and May 22, 2007, in 

Bloomington, Minnesota. All of these 

meetings were open to the interested 

public. 

The NIGC published its Governmentto-Government Tribal Consultation 

Policy on March 24, 2004, 69 FR 16973. 

In that policy the Commission 

recognized the government-togovernment relationship that exists 

between the NIGC and federallyrecognized tribes and stated that the 

primary focus on the NIGC’s 

consultation policies would involve 

consulting with individual tribes and 

their recognized governmental leaders. 

The Commission’s consultation policy 

also calls for providing early 

notification to affected tribes of any 

regulatory policies prior to a final 

agency decision regarding their 

formulation or implementation. 

Accordingly, throughout this entire 

period, the Commission maintained a 

busy consultation schedule, consulting 

with tribal governments and gaming 

commissions, usually at gaming 

association meetings across the country 

but also at the Commission’s 

Washington, DC, headquarters. From 

September 2005 through December 

2007, and excluding consultations 

devoted solely to the Commission’s 

Class II classification standards, the 


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Commission issued 751 invitations to 

tribes for consultation. These invitations 

resulted in consultations with 189 tribes 

or their gaming commissions. The tribes 

were invited to discuss the proposed 

technical standards, among other 

current issues. 

In addition, in July and August 2006, 

the Commission consulted with 69 

tribes and tribal gaming commissions in 

Washington, DC; Bloomington, 

Minnesota; Oklahoma City, Oklahoma; 

Tacoma, Washington; and Ontario 

California. These consultations were 

devoted primarily to discussing the 

proposed Classification standards. 

However, a few tribes took the 

opportunity to discuss the proposed 

technical standards as well. 

The Commission is immensely 

grateful to all who contributed to the 

technical standards: The tribes and 

gaming commissions who took the time 

and made the effort to consult; the tribal 

representatives on the advisory 

committee and the working group of 

tribal leaders, tribal regulators, and 

manufacturers; and all of the 

commenters who contributed their 

insight in comments. The proposed rule 

published in October 2007 was 

substantially adopted from the draft of 

descriptive technical standards that the 

tribal representatives on the advisory 

committee delivered to the Commission. 

There are some places where the 

Commission felt it could not accept the 

recommendations in the draft, and the 

October 2007 proposed rule contained 

some standards more stringent than the 

tribal representatives to the advisory 

committee would have preferred and 

some that the tribal representatives 

thought unnecessary. These differences 

are discussed in detail in the comment 

section, below. 

Purpose and Scope 

Part 547 (‘‘the Technical Standards’’) 

applies to all Class II games played 

using electronic, computer, or other 

technologic aids, or modifications of 

such games and aids. Class II games 

played through such technologic aids 

are widely used in Indian gaming 

operations, yet no uniform standards 

exist to govern their construction, 

function, or implementation. The rule 

seeks to remedy that absence and create 

a regulatory structure under which 

tribal gaming regulatory authorities and 

tribal operators are able to ensure the 

integrity and security of Class II games 

played with the use of electronic, 

computer, or other technologic aids and 

of Class II gaming revenue. 

There is a great variety in the 

technologic aids used in the play of 

Class II games and, therefore, a great 

variety in the means used to play the 

games. An operation may, for example, 

play bingo using no aids at all. A caller 

may select numbers using ping pong 

balls taken from a hopper, and players 

purchase paper cards from an employee 

of the operation and mark them with an 

inked dauber. Alternatively, numbers 

may be selected randomly using an 

electronic random number generator, 

which in turn displays the selected 

number on a display board. Instead of 

paper, players may use electronic 

handheld devices to monitor and mark 

their cards. The handheld devices are 

purchased and have cards loaded on 

them at a point-of-sale retail terminal. 

Still again, bingo may be 

implemented wholly electronically on 

client-server architectures. A common 

arrangement, but by no means the only 

one possible, is to have client machines 

on the casino floor as electronic player 

stations. These display the cards, allow 

the player to cover numbers when 

drawn, and pay any prizes won. Credits 

may be placed on the electronic player 

station by inserting cash or 

electronically drawing down an account 

separately established. The server, 

usually located off the floor, draws 

random numbers and passes them along 

data communications lines to the client 

machines for game play. 

The challenge, then, for writing 

technical standards is to address all of 

the various ways that Class II games can 

be played. Central to the Technical 

Standards, therefore, is the definition of 

‘‘Class II gaming system,’’ which refers 

to the collection of components used in 

the play of a Class II game: ‘‘All 

components, whether or not technologic 

aids in electronic, computer, 

mechanical or other technologic form, 

that function together to aid the play of 

one or more Class II games, including 

accounting functions mandated by these 

regulations.’’ The notion of the ‘‘gaming 

system’’ thus encompasses bingo played 

in all of the implementations described 

above. 

It is the ‘‘gaming system’’ that must 

meet the requirements of the Technical 

Standards. Like the gaming system 

itself, the Technical Standards are 

conceived generally so that they may be 

met by a gaming system, regardless of 

the particular components that may 

comprise it. For example, the Technical 

Standards do not refer to ‘‘bill 

validators,’’ electronic devices into 

which a patron may insert a bill in order 

to place credits on a gaming machine. 

Instead, the Technical Standards 

describe ‘‘financial instrument 

acceptors’’ and the standards they must 

meet. ‘‘Financial instrument acceptor’’ 

is broad enough in meaning to 

encompass not only a ‘‘bill validator’’ 

but also a cash drawer staffed by an 

employee of the gaming operation. The 

Technical Standards provide minimum 

standards for the security of the 

‘‘acceptors’’ and of the money or 

vouchers (generally, ‘‘financial 

instruments’’) they accept. 

In the past, when Class II gaming 

systems did not make use of as many 

sophisticated electronic components as 

they do now, there was less need for 

technical standards. Now that 

technology has come so far and been 

implemented in Class II gaming to such 

a great extent, playing a direct role in 

the outcome of Class II games, technical 

standards, independent laboratory 

analysis, and tribal gaming regulatory 

authority approval are essential parts of 

gaming regulation. 

However, because of the breadth of 

possible implementations for Class II 

gaming systems, the Technical 

Standards require that gaming 

equipment and software used with Class 

II gaming systems meet only those 

requirements that are applicable to the 

system as implemented. This is, in 

short, a rule of construction of common 

sense. For example, if a system takes 

only cash and lacks the ability to print 

or accept vouchers, then any standards 

that apply to vouchers do not apply. 

The Technical Standards are 

deliberately only minimum standards. 

Tribes and tribal gaming regulatory 

authorities may add any additional 

requirements, or more stringent 

requirements, needed to suit their 

particular circumstances. 

In order to ensure compliance, the 

Technical Standards borrow from the 

established practices of tribal, state, and 

provincial gaming jurisdictions across 

North America for handling other 

technologically sophisticated electronic 

gaming devices. The Technical 

Standards establish, as a necessary 

prerequisite to a gaming system being 

offered to the public for play, review of 

the system by a qualified, independent 

testing laboratory and approval by the 

tribal gaming regulatory authority. 

Under the Technical Standards, a 

tribe’s gaming regulatory authority will 

require all Class II gaming systems, or 

modifications thereof, to be submitted to 

a testing laboratory for review and 

analysis. That submission includes a 

working prototype of the gaming system 

or modification, all pertinent software, 

and anything else the testing laboratory 

needs for its complete and thorough 

review. In turn, the laboratory will 

review whether the gaming system does 

or does not meet the requirements of the 

Technical Standards, as well as any 

additional requirements adopted by the 


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tribe’s gaming regulatory authority. The 

laboratory will provide a written report 

of its analysis and conclusions to the 

tribal gaming regulatory authority to aid 

its approval or disapproval of the 

gaming system or modification. The 

tribal gaming regulatory authority will 

retain the report as long as the gaming 

system or modification in question 

remains available to the public for play. 

This process will help assure the 

integrity and security of Class II gaming 

technology. 

Five-Year Grandfather and Transition 

Period 

The Commission understands that 

existing Class II gaming systems likely 

do not meet all of the requirements of 

the Technical Standards. In order to 

avoid any potentially significant 

economic and practical consequences of 

requiring immediate compliance, the 

Technical Standards implement a fiveyear ‘‘grandfather period’’ for existing 

gaming systems. 

Existing gaming systems—those in 

play or manufactured by the effective 

date of the Technical Standards—may 

be grandfathered and exempt from 

compliance with the Technical 

Standards for five years if they are put 

through a similar review by a qualified 

independent testing laboratory and 

approved by a tribal gaming regulatory 

authority. Specifically, in order to be 

eligible for grandfathering, a gaming 

system must be submitted to a testing 

laboratory within 120 days of the 

Technical Standards’ effective date. The 

testing laboratory must review the 

gaming system for compliance with a 

specific, minimum set of 

requirements—random number 

generation, minimum probabilities, no 

reflexive or secondary decision-making 

after random numbers are drawn, the 

inability to change bingo cards during 

the play of a game, and a mechanism for 

verifying game software. 

The laboratory must issue a report on 

these issues to the tribal gaming 

regulatory authority, which must make 

a finding that the gaming system 

qualifies for grandfather status. Once a 

gaming system is qualified, the 

manufacturer must label each player 

interface on the system with its date of 

manufacture and certify the same to the 

tribal gaming regulatory authority. This 

requirement effectively freezes the 

number of grandfathered interfaces in 

use. 

The 120-day requirement applies only 

to the submission of the gaming system 

for testing. There is no requirement in 

the technical standards that the testing 

laboratory test the system, or the tribal 

gaming regulatory authority approve it 

as a grandfathered system, within that 

time period. It is, nonetheless, in the 

interest of gaming operations for the 

testing laboratory to complete its 

evaluation and for the tribal gaming 

regulatory authority to issue its 

grandfather certifications as quickly as 

possible. The Technical Standards 

require both of those things to occur 

before a Class II gaming system is 

grandfathered and available to the 

public for play. 

All of this is not to say, however, that 

the Technical Standards require 

grandfathered gaming systems to remain 

entirely static. Tribal gaming regulatory 

authorities may permit modifications to 

gaming system software or hardware 

that increases compliance with the 

requirements of the Technical 

Standards, even if the modifications do 

not make the system wholly compliant. 

Tribal gaming regulatory authorities 

may also authorize modifications to 

gaming system software that do not 

detract from, compromise, or prejudice 

the proper functioning, security or 

integrity of the Class II gaming system 

and the system’s overall compliance 

with the requirements of the Technical 

Standards. Changes such as new pay 

tables, new game themes, and new 

entertaining displays fall within this 

latter category. 

Withdrawal of the Classification 

Standards 

Finally, the October 2007 proposed 

rule was not intended to stand alone. 

The advisory committee pointed out, 

and the Commission agreed, that many 

of the functions placed in the technical 

standards proposed on August 11, 2006, 

and subsequently withdrawn, were 

more properly characterized as 

minimum internal control standards. 

Accordingly, along with the proposed 

technical standards, the Commission 

published, as a separate proposed rule, 

a companion set of minimum internal 

control standards for the play of bingo 

and games similar to bingo. Those two 

proposed rules were to be applied in 

conjunction with proposed 

classification standards. The final 

Technical Standards are not so 

intertwined. 

The Commission has withdrawn the 

classification standards (see notice of 

withdrawal published simultaneously) 

and has removed all cross references 

from the Technical Standards to the 

classification standards. Compliance 

with the classification standards is not 

required for compliance with the 

Technical Standards. 

Class II MICS 

Similarly, the Commission is adopting 

as 25 CFR part 543, the companion set 

of internal controls for bingo and games 

similar to bingo. The Commission has 

endeavored to place all requirements for 

the design, construction, and 

implementation of Class II gaming 

systems into the Technical Standards 

and all requirements for the operation of 

bingo gaming systems and the 

authorization, recognition, and 

recordation of gaming and gamingrelated transactions into the MICS. In 

this sense, the two rules are 

independent of one another. 

Nevertheless, there are places where 

the two rules bump up against one 

another—for example, in circumstances 

where equipment must have certain 

features to allow the application of 

appropriate internal controls. In those 

cases, a cross reference from one set of 

regulations to the other is appropriate. 

Similarly, the grandfather provisions of 

Technical Standards cross reference the 

MICS in a few places where tribal 

gaming regulatory authorities may 

permit hardware and software changes 

to a grandfathered Class II gaming 

system when those changes will 

improve compliance with the Technical 

Standards or the MICS. 

Regulatory Matters 

Regulatory Flexibility Act 

The RFA generally requires an agency 

to prepare a regulatory flexibility 

analysis of any rule subject to notice 

and comment rulemaking requirements 

under the Administrative Procedure Act 

or any other statute, unless the agency 

certifies that the rule will not have a 

significant economic impact on a 

substantial number of small entities. 

Small entities include small businesses, 

small organizations, and small 

governmental jurisdictions. 

For purposes of assessing the impact 

of the Technical Standards on small 

entities, ‘‘small entity’’ is defined as: (1) 

A small business that meets the 

definition of a small business found in 

the Small Business Act and codified at 

13 CFR 121.201; (2) a small 

governmental jurisdiction that is a 

government of a city, county, town, 

school district or special district with a 

population of less than 50,000; and (3) 

a small organization that is any not-forprofit enterprise that is independently 

owned and operated and is not 

dominant in its field. 

Indian tribes and tribal casinos do not 

meet this definition. Tribes are excluded 

from the governmental jurisdictions 

listed under (2), and tribally owned 

casinos are not ordinary commercial 


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activities but are tribal governmental 

operations. 

In determining whether a rule has a 

significant economic impact on a 

substantial number of small entities, the 

impact of concern is any significant 

adverse economic impact on small 

entities, because the primary purpose of 

the regulatory flexibility analyses is to 

identify and address regulatory 

alternatives ‘‘which minimize any 

significant economic impact of the 

proposed rule on small entities.’’ 5 

U.S.C. 603 and 604. Thus, an agency 

may certify that a rule will not have a 

significant economic impact on a 

substantial number of small entities if 

the rule relieves regulatory burden, or 

otherwise has a positive economic effect 

on all of the small entities subject to the 

rule. 

As a practical matter, the economic 

impacts of the Technical Standards will 

fall primarily upon the Indian tribes. 

The Technical Standards impose some 

direct costs upon gaming tribes— 

regulatory compliance costs, for 

example. In addition, as the ultimate 

customers, costs initially borne by 

testing laboratories and gaming 

manufacturers will be passed along. 

Accordingly, the Commission certifies 

that this action will not have a 

significant economic impact on a 

substantial number of small entities. 

Small Business Regulatory Enforcement 

Fairness Act 

When the Technical Standards were 

proposed in October 2007, the 

Commission proceeded as if they were 

a major rule under 5 U.S.C. 804.2, the 

Small Business Regulatory Enforcement 

Fairness Act. The Commission did so 

because the status of the proposed 

technical standards, considered alone— 

apart from the classification standards 

(proposed part 546), the proposed 

amended definition of 25 CFR 502.8, 

and the proposed MICS (proposed part 

543)—was unclear. The Commission 

had commissioned an economic impact 

study of the proposals taken together, 

and it made clear that the cost to the 

Indian gaming industry of complying 

with the combined proposed rules 

would have an annual effect on the 

economy of $100 million or more. 

Accordingly, the Commission treated 

the proposed technical standards as a 

major rule. 

In so proceeding, the Commission was 

required to undertake a cost-benefit 

analysis, and, in doing so, evaluated the 

costs of each proposed rule 

individually. The Commission has 

found that the annual cost to the Indian 

gaming industry of the Technical 

Standards, considered alone, is $3.1 

million dollars. The cost of the 

Technical Standards and the Class II 

MICS taken together is less than $10 

million annually. Accordingly, the 

Technical Standards are not a major rule 

within the meaning of 5 U.S.C. 804.2, 

the Small Business Regulatory 

Enforcement Fairness Act. 

The Commission’s cost-benefit 

analysis is available for review at the 

Commission’s Web site, www.nigc.gov, 

or by request using the addresses or 

telephone numbers, above. 

Unfunded Mandates Reform Act 

The Commission, as an independent 

regulatory agency within the 

Department of the Interior, is exempt 

from compliance with the Unfunded 

Mandates Reform Act. 2 U.S.C. 658(1); 

1502(1). 

Takings 

In accordance with Executive Order 

12630, the Commission has determined 

that the Technical Standards do not 

have significant takings implications. A 

takings implication assessment is not 

required. 

Civil Justice Reform 

In accordance with Executive Order 

12988, the Commission’s Office of 

General Counsel has determined that 

the Technical Standards do not unduly 

burden the judicial system and meet the 

requirements of sections 3(a) and 3(b)(2) 

of the Order. 

Paperwork Reduction Act 

The Technical Standards require 

information collection under the 

Paperwork Reduction Act of 1995, 44 

U.S.C. 3501, et seq. The title, 

description, and respondent categories 

are discussed below, together with an 

estimate of the annual information 

collection burden. 

Title: Process for Certification of 

Electronic, Computer, or other 

Technologic Aids used in the play of 

Class II games and process for 

qualification of independent testing 

laboratories, proposed 25 CFR 547.4. 

Summary and description of 

information collections: The Technical 

Standards establish a process for 

ensuring that Class II gaming systems 

have been reviewed and evaluated by a 

qualified, independent testing 

laboratory prior to their approval by a 

tribal gaming regulatory authority and 

their availability to the public for play. 

The process helps to ensure the proper 

functioning of the systems and the 

integrity, fairness, and auditability of 

games played. 

The process requires a tribe’s gaming 

regulatory authority to require that all 

Class II gaming systems, or 

modifications thereto, be submitted to a 

qualified, independent testing 

laboratory for review and analysis. That 

submission includes a working 

prototype of the game and aid, all 

pertinent software, and complete 

documentation and descriptions of all 

functions and components. In turn, the 

laboratory will determine that the 

gaming system does or does not meet 

the requirements of the Technical 

Standards and any additional 

requirements adopted by the tribe’s 

gaming regulatory authority. The 

laboratory will provide a written report 

of its analysis and conclusions to the 

tribal gaming regulatory authority, 

which in turn will approve or 

disapprove the system or modification. 

The tribal gaming regulatory authority 

will retain the laboratory report as long 

as the system or modification remains 

available to the public for play. 

This process is necessary to ensure 

the security and integrity of Class II 

gaming. Technical standards generally 

are a fundamental part of Class III 

gaming and of non-Indian, commercial 

casino gaming throughout North 

America. No uniform standards exist for 

Class II gaming, however. The 

implementation of such standards will 

assist tribal gaming regulators in 

ensuring that games are implemented 

fairly, that all gaming systems are secure 

and function properly, and that the 

tribes and operators are able to properly 

account for gaming revenue. 

The Technical Standards implement 

an analogous process for determining 

whether a Class II gaming system is 

eligible for the five-year grandfather 

period. This process again requires a 

tribe’s gaming regulatory authority to 

require that a Class II gaming system be 

submitted, within 120 days after the 

effective date, to a qualified, 

independent testing laboratory for 

review and analysis. The submission 

must include a working prototype of the 

game and aid, all pertinent software, 

and complete documentation and 

descriptions of all functions and 

components. In turn, the laboratory will 

determine that the gaming system does 

or does not meet a small set of specified 

requirements. The laboratory will 

provide a written report of its analysis 

and conclusions to the tribal gaming 

regulatory authority, which in turn will 

determine that the gaming system is or 

is not eligible for grandfather status. 

Upon a finding of eligibility, the tribal 

gaming regulatory authority will issue a 

certificate to that effect to the gaming 

system manufacturer and a description 

of the grandfathered game to the 

Commission. 


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This process is necessary to ensure a 

certain minimum integrity and security 

for games while at the same time 

avoiding potentially significant 

economic and practical consequences of 

requiring immediate and complete 

compliance with the Technical 

Standards. 

Finally, the Technical Standards 

establish a process for testing 

laboratories to establish their eligibility 

to provide testing services to the tribal 

gaming regulatory authorities. The 

testing laboratories must submit to 

suitability determinations made by the 

tribes they serve, and these 

determinations include criminal 

background checks for the laboratories’ 

principals. These determinations are 

made according to the same standards 

used to license the primary management 

officials and key employees of Indian 

gaming operations under the Indian 

Gaming Regulatory Act. All of this 

requires the submission by the 

laboratory of corporate financial 

information; qualifications of the 

engineering staff; information (and 

inspections) of the available engineering 

facilities, and personal information for 

principals, including tax returns, 

bankruptcies and law suits, work 

histories, and references. 

Given the essential role accorded to 

laboratories in ensuring the integrity, 

security, and auditability of Class II 

gaming systems, this process is essential 

to ensuring the competence, integrity, 

and independence of the testing 

laboratories and the suitability of their 

decision makers, i.e. to ensure that 

undesirable elements are kept out of 

gaming. 

Respondents: The respondents are 

independent testing laboratories, 

developers and manufacturers of Class II 

gaming systems, and Indian tribes. The 

Commission estimates that there are 

currently 20 such manufacturers, 5 such 

laboratories, and 226 gaming tribes. The 

frequency of responses to the 

information collection requirement will 

vary. 

Information Collection Burden: In 

order to qualify under the grandfather 

provisions of the Technical Standards, a 

gaming system must be submitted to a 

testing laboratory for review and 

analysis during the first 120 days after 

the effective date of the rule. The 

Commission estimates that there are 

approximately 25 Class II gaming 

systems in existence and that all will be 

submitted during this period. 

Following the initial 120-day period, 

the frequency of submissions of new 

gaming systems or of modifications to 

existing gaming systems will be entirely 

market driven. The Commission 

anticipates approximately a 20% 

turnover each year for the five-year 

grandfather period. Consequently, there 

should be approximately five 

submissions of new gaming systems 

each year. 

Submissions of modifications are, as a 

matter of course, a more common 

practice. Software in particular 

commonly goes through many iterations 

in development and continues to be 

improved and revised even after sale 

and placement on a gaming operation’s 

floor. That said, the submission of 

modifications tends to be sporadic, with 

less frequent or occasional submissions 

punctuated by fairly steady periods of 

submissions when new systems or 

modifications are introduced. The 

Commission anticipates there will be 

approximately 300 submissions of 

modifications and thus 300 reports 

produced by testing laboratories each 

year following the 120-day period that 

begins on the effective date of the rule. 

The preparation and submission of 

supporting documentation by 

manufacturers or a tribal gaming 

operation (as opposed to gaming system 

hardware and software per se) is an 

information collection burden under the 

Paperwork Reduction Act, as is the 

preparation of reports by the testing 

laboratories or the preparation of a 

grandfather certificate and explanation 

of gaming system by a tribal gaming 

regulatory authority. 

It is the existing practice in the 

gaming industry, both Indian and nonIndian alike, for the game manufacturer 

to submit a gaming system to a testing 

laboratory for review and analysis. The 

Technical Standards leave open the 

possibility that a tribal gaming 

regulatory authority may require the 

management of a gaming operation to 

make a required submission. The 

Commission anticipates, however, that 

it will be the responsibility of the 

gaming system manufacturers to make 

the submissions to testing laboratories. 

The amount of documentation 

submitted by a manufacturer as part of 

a submission of a gaming system and 

the size of a laboratory report is a 

function of the complexity of the 

gaming system submitted for review. 

Submission for minor modifications to 

software or hardware already submitted 

and examined will be a matter of little 

time both for manufacturer and 

laboratory, while the submission and 

review of an entirely new game platform 

will be time consuming. The provision 

of a grandfather certificate and a 

description of a gaming system’s 

component are small matters as that 

information can be taken directly from 

a testing laboratory’s report. 

Accordingly, based upon the 

discussions with leading testing 

laboratories and with manufacturers for 

the Indian gaming and non-Indian 

gaming markets, the Commission 

estimates that gathering and preparing 

documentation for a submission of a 

single, complete gaming system will 

require, on average, 8 hours for a 

manufacturer’s employee. The 

Commission estimates that following 

examination and analysis, writing a 

report for a complete gaming system 

will require, on average, 10 hours of a 

laboratory engineer’s time. For the 

submission of modifications to a gaming 

system, the Commission estimates 4 

hours for a manufacturer’s employee. 

For the report on a modification, the 

Commission estimates 5 hours for a 

laboratory engineer. 

Thus, the information collection 

requirements will be a 200-hour burden 

on manufacturers industry-wide during 

the first 120 days after the Technical 

Standards become effective and a 1,200- 

hour burden industry-wide thereafter. 

The information collection requirements 

will be a 250-hour burden on 

laboratories for the grandfather 

submissions made during the first 120 

days and a 1,500-hour burden thereafter. 

Next, the Commission anticipates that 

tribal gaming regulatory authorities will 

issue grandfather certificates to 

manufacturers and send a description of 

grandfathered systems to the 

Commission for all of the approximately 

25 existing gaming systems. The 

preparation of these certificates and 

descriptions will be a small matter as all 

of the necessary information is 

contained in the testing laboratory 

reports and will take no more than 0.5 

hours to prepare. 

Finally, the Technical Standards 

require tribal gaming regulatory 

authorities to maintain laboratory 

reports as long as the game system or 

modification at issue is available for 

play. This, however, is a ministerial 

function that involves little more than 

filing, and occasionally retrieving, the 

report. As this is already common 

practice among tribal gaming regulatory 

authorities, the Commission estimates 

that 0.1 hours per report will be 

dedicated to these tasks. 

The following table summarizes the 

annual hour burden: 


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60514 Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Rules and Regulations 

Provision Respondents Number of 

respondents 

Collections, 

1st 120 

days 

Hours per 

collection 

Total 

annual 

hours 

Collections, 

day 121 

forward, per 

annum 

Hours per 

collection 

Total 

annual 

hours 

25 CFR 547.4 ... Laboratories ........ 5 25 10 250 300 5 1,500 

25 CFR 547.4 ... Manufacturers ..... 20 25 8 200 300 4 1,200 

25 CFR 547.4 ... Tribal Gaming 

Operations.

226 0 0 0 0 0 0 

25 CFR ............. Tribal Gaming 

Regulatory Authorities.

226 25 .5 12 .5 300 0 .1 30 

The Technical Standards require a 

determination of suitability for each of 

the approximately 5 testing laboratories. 

The information required can be 

substantial: Corporate financial 

information; qualifications of the 

engineering staff; information (and 

inspections) of the engineering facilities 

available; and personal information for 

principals, including tax returns, 

bankruptcies and lawsuits, work 

histories, and references. 

However, the 5 existing testing 

laboratories have already collected and 

provided this information—multiple 

times—in order to be licensed in tribal 

and non-tribal gaming jurisdictions 

nationwide. The Commission estimates 

that the re-submission of such 

information would take the necessary 

laboratory employees 20 hours to 

accomplish once. As the gaming tribes 

typically use only one gaming 

laboratory, the submission of suitability 

determinations to 226 tribal gaming 

regulatory authorities would total 4,520 

hours. 

The Commission believes, however, 

that the hour burden is not likely to be 

nearly this high. Rather than require 

each tribal gaming regulatory authority 

to make a new suitability determination 

for each testing laboratory it uses, the 

Technical Standards permit a tribal 

gaming regulatory authority to rely upon 

a suitability determination already made 

by another gaming jurisdiction in the 

United States. The existing testing 

laboratories are already licensed or 

approved in numerous jurisdictions 

throughout the United States, and the 

Commission believes that 

approximately 90%—203 of 226—of the 

tribal gaming authorities will accept 

existing suitability determinations from 

other jurisdictions or will already have 

made one under their own vendor 

licensing programs. The submission by 

a testing lab of an existing suitability 

determination amounts to the writing of 

a letter. The Commission estimates that 

the submission of such letters will take 

the necessary laboratory employees 0.5 

hours to accomplish once. As each of 

the gaming tribes typically uses only 

one gaming laboratory, the submission 

of suitability determinations to 203 

tribal gaming authorities would total 

101.5 hours. For the remaining 10% or 

23 tribal gaming regulatory authorities, 

the submission burden on laboratories is 

20 hours per tribe or 460 hours. 

Review of Public Comments Concerning 

Information Collections 

On February 19, 2008, the Office of 

Management and Budget (OMB) took 

action on the Commission’s request for 

approval of the information collections 

in the Technical Standards and required 

the Commission to explain how it has 

‘‘maximized the practical utility of the 

collection and minimized the burden.’’ 

OMB required as well that the 

Commission respond to public comment 

on the information collections. 

The Commission has maximized the 

utility of the information collections 

and minimized the burden on the 

industry by adopting industry-standard 

practices already required and in place 

across non-tribal gaming throughout 

North America and already common in 

tribal gaming. In this way, the Technical 

Standards require little that is new. 

First and foremost, as stated above, 

the review of gaming systems by testing 

laboratories and their subsequent 

approval by tribal gaming regulatory 

authorities is essential to the integrity of 

Indian gaming. The process enables 

tribal gaming regulators to ensure that 

games are implemented fairly, that all 

gaming systems are secure and function 

properly, and that the tribes and 

operators are able to properly account 

for gaming revenue. This process and 

the information collections that it 

necessitates are already in place. 

Independent testing laboratories owe 

their very existence to the widespread 

use of this practice. They are, in 

essence, in the business of testing and 

examining gaming equipment against a 

set of regulatory standards and then 

issuing a report of their findings. They 

are, thus, already set up to comply with 

the information collections required by 

the Technical Standards. Likewise, 

gaming manufacturers are already in the 

business of submitting gaming 

equipment and software for laboratory 

review and are already set up to provide 

the information collections required 

here. What is more, many tribal gaming 

regulatory authorities already require 

manufacturers to submit gaming 

equipment and software to testing 

laboratories for review and already keep 

the resulting reports, just as a matter of 

sound regulatory practice. The 

Technical Standards merely make the 

requirement applicable nationwide. 

The Technical Standards reduce the 

information collection burden on tribes, 

manufacturers, and testing laboratories 

by rules of common sense and nonrepetition. There are 226 gaming tribes, 

and manufacturers, of course, seek to 

sell gaming systems to as many tribes as 

possible. The Technical Standards do 

not require that a gaming system be 

resubmitted to a testing laboratory for 

each tribal gaming operation. Once a 

testing laboratory has issued a report for 

a given gaming system or modification, 

every tribal gaming regulatory authority 

may rely upon it. Further, the 

information collection burden 

surrounding the submission, review, 

and approval of gaming equipment and 

software is eased still further in that the 

Technical Standards permit electronic 

means of providing, receiving, and 

storing information at the convenience 

of all parties concerned. 

Second and finally, as stated above, 

the Technical Standards require testing 

laboratories to submit to suitability 

determinations by tribal gaming 

regulatory authorities. Again, assuring 

the competence, integrity, and 

independence of the testing laboratories 

and the suitability of their decisionmakers is essential to the integrity of 

gaming. This information collection, 

though essential, has the potential to be 

burdensome. The Technical Standards 

reduce this burden as much as is 

practicable. 

Again, the Technical Standards piggyback on processes already established. 


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The existing testing laboratories have 

already collected and provided the 

necessary information—multiple 

times—in order to be approved in tribal 

and non-tribal gaming jurisdictions 

nationwide. Similarly, the Technical 

Standards reduce unnecessary 

duplication. Testing Laboratories need 

not submit 226 separate suitability 

applications. Tribal gaming regulatory 

authorities are free to accept any 

suitability determination made by any 

state or tribal regulatory authority in the 

United States. Finally, electronic 

submission, receipt, and maintenance of 

this information collection is permitted. 

For all of these reasons, then, the 

Commission believes that the Technical 

Standards have maximized the practical 

utility of the information collections 

they require while at the same time 

minimizing the burden they place upon 

the industry. 

Paperwork Reduction Act Comments 

Comment: One commenter stated that 

the Commission did not properly figure 

the burden upon tribes of the 

information collection burdens imposed 

by the Technical Standards. The 

Commission’s focus was on the burdens 

on gaming laboratories, which are not 

burdened at all since their services are 

compensated. 

Response: The Commission disagrees. 

The Commission’s cost estimates do, in 

fact, list the 226 tribal gaming 

operations and 226 tribal gaming 

regulatory authorities as respondents. 

The burden upon them is minimal, 

however. Though the tribal gaming 

regulatory authority or gaming operation 

may choose to submit a Class II gaming 

system to a testing laboratory for 

evaluation, the standard practice is to 

place that obligation on the 

manufacturers. They are the ones best 

situated to provide all necessary 

prototype hardware, software and 

documentation to the testing 

laboratories and to respond to testing 

laboratory concerns and inquiries. 

Indeed, manufacturers already have 

such systems set up for compliance with 

the regulatory requirements of 

commercial gaming jurisdictions. The 

emphasis on the information collection 

burdens is, therefore, properly on the 

manufacturers and the laboratories. The 

burden upon the tribes is minimal and 

involves retaining laboratory reports, a 

standard existing practice; identifying a 

finite number of grandfathered Class II 

gaming systems to the Commission; and 

suitability determinations of laboratory 

principals. 

Comment: A few commenters stated 

that because the Technical Standards 

will take effect ‘‘all at once,’’ the 

Commission underestimates the 

turnover rate of gaming systems and the 

associated paperwork burdens. 

Response: The Commission disagrees. 

The Technical Standards provide for a 

five-year grandfather period in which 

existing Class II gaming systems may be 

brought into compliance. The 

Commission believes that existing Class 

II systems will be brought closer to or 

into compliance due to regular 

upgrades, and the Technical Standards 

specifically allow for this possibility. 

547.4(b)(4). The Commission further 

believes that many new, compliant 

systems will be brought to market over 

this period, as they have during other 

five-year periods. Neither market 

condition suggests an immediate 

turnover of existing gaming systems or 

that the Commission underestimated the 

paperwork burden associated with 

turnover. 

Comment: A few commenters stated 

that the Commission has failed to take 

any steps to minimize information 

collection burdens by providing for the 

use of automated information collection, 

maintenance or submission techniques. 

Response: The Commission disagrees. 

There is no limitation in the Technical 

Standards on the technology usable for 

information collections. Paperless 

submission, maintenance, and 

collection of information is perfectly 

acceptable. 

Comment: One commenter stated that 

the Commission underestimates the 

time it will take the testing laboratories 

to test Class II gaming systems for 

grandfather compliance, depending on 

whether the software random number 

generator has already been approved. 

The commenter therefore recommends 

revising upward the hours burden on 

the testing laboratories. 

Response: Whether or not the 

Commission underestimated the time 

laboratory testing may take, this is not 

an information burden placed upon the 

testing laboratories. The information 

burden refers to the time it will take the 

testing laboratory to write the reports of 

their findings and results. That time 

does not change, even if the time for 

testing does. 

National Environmental Policy Act 

The Commission has determined that 

the Technical Standards do 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.). 

Review of Public Comments 

A number of commenters made 

miscellaneous editorial suggestions not 

intended to change the substance of the 

Technical Regulations but to improve 

sentence structure, correct grammar, 

preserve consistency of usage 

throughout the document, etc. 

Response: The Commission has 

accepted all such changes where they 

improve clarity and editorial 

consistency, and these are reflected 

throughout the final rule. Substantive 

changes are addressed in the responses 

to comments below. 

General Comments 

Comment: A number of commenters 

objected to the adoption of the 

Technical Standards and request their 

withdrawal unless the Commission 

accept, without alteration, the draft of 

the Technical Standards provided to it 

by its tribal advisory committee. Based 

upon these differences, and the inability 

of the Commission to come to consensus 

with the advisory committee about 

them, others commenters asked that the 

Commission not proceed with the 

Technical Standards but return to the 

advisory committee for further drafting 

and for consultation with tribes. 

Response: As said above, the 

Commission greatly values and 

appreciates the work on the technical 

standards done by the tribal advisory 

committee and the working group of 

tribal leaders, tribal regulators, and 

manufacturers who advised them. 

During drafting, the Commission did 

state to the Committee members that 

their role was advisory and that the 

Commission could, as the final 

decision-maker, choose to depart from 

the draft provided. The Commission 

believes that this was appropriate 

insofar as this is consistent with its 

federal regulatory oversight mission. 

Nonetheless, most of what the 

Commission proposed as part 547 was 

taken verbatim from the draft that the 

advisory committee supplied. 

There were, of course, some 

departures from the advisory 

committee’s draft, and the one that has 

received the most comments—all in 

opposition—is the requirement that 

compliance with the Technical 

Standards also requires compliance 

with the proposed part 546, 

classification standards. As the 

Commission has withdrawn the 

proposed classification standards (see 

notice of withdrawal published 

simultaneously), the Commission has 

removed all references to them. 

Nonetheless, the rule still departs 

from the recommended draft in a few 


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ways. The rule still requires a certain 

minimum probability, the recall of 

entertaining displays, and hardware 

compliance. As explained in detail 

below, the Commission believes that 

these requirements are appropriate. That 

said, in order to stay abreast of advances 

in technology, the Commission intends 

to regularly revisit its technical 

standards, and in doing so it will pay 

particular attention to these provisions 

that have caused such disagreement. In 

so doing, the Commission intends to 

consult further. 

Other departures from the advisory 

committee draft have been raised as 

comments, and the Commission’s 

responses to those comments are also 

set out below. 

Comment: Several comments stated 

that the comment period was not long 

enough. 

Response: In the October 24, 2007 

notice of proposed rulemaking, the 

Commission initially provided that the 

comment period would end on 

December 10, 2007, a period of 47 days. 

Because early comments requested 

additional time, the Commission 

extended the comment period until 

March 9, 2008, creating a total comment 

period of 138 days (including the date 

of publication). The Commission 

believes that this period was more than 

sufficient, given the extensive and 

thoughtful comments it received and 

that have informed this final rule. 

Comment: A number of commenters 

faulted the Commission’s consultation 

with tribes about the Technical 

Standards. Some stated that the 

Commission’s use of advisory 

committees was not a substitute for 

consultation. Others stated that the 

Commission did not consult, or consult 

sufficiently, on the Technical Standards, 

particularly after the advisory 

committee provided its final draft to the 

Commission. 

Response: The Commission stands by 

its record on consultation. The 

Commission does not believe that its 

use of the advisory committee was a 

substitute for consultation, and it has set 

out the details of its consultations 

above. 

As to the quality of consultation, 

some commenters fault the Commission 

for not allotting sufficient time for 

individual consultation sessions. The 

Commission understands and 

appreciates this concern. The 

Commission would point out, however, 

that it goes to great time and expense 

traveling to large regional and national 

gaming association meetings to make 

itself available for consultations, and 

this minimizes the burdens of time and 

expense for the tribes. The Commission 

would point out as well that with 

approximately 225 tribes engaged in 

gaming, balancing the time spent in 

consultations on the one hand with the 

Commission’s other duties and 

obligations on the other is difficult. 

Further, the Commission believes that 

the criticism concerning the quality of 

consultation about the technical 

standards, however, is an unfair one, 

when only 25% of the tribes accepted 

invitations for consultation between 

September 2005 and December 2007 

and only a minority of those that 

accepted actually chose to discuss the 

Technical Standards. 

That said, the Commission recognizes 

that there are many views about what 

consultation is and how it may best be 

done. The Commission is not married to 

its consultation practices and has 

already begun a dialogue and 

collaboration with tribal leaders, 

through the National Congress of 

American Indians and the National 

Indian Gaming Association, about 

finding mutually satisfactory methods of 

consultation. 

Finally, the Commission would note 

that its extensive consultation was 

successful and resulted in significant 

changes to the Technical Standards—all 

for the better, the Commission believes. 

Most prominent among these was the 

Commission’s decision to abandon its 

first proposed technical standards to 

begin the process of drafting technical 

standards over again from the 

beginning. 

Comment: A number of commenters 

suggested that the Technical Standards 

will, alone or in combination with the 

proposed Classification standards and 

MICS, have a devastating economic 

effect on Class II gaming, as 

demonstrated by the Commission’s own 

economic impact study. These and other 

commenters felt that study is itself 

flawed, as it both improperly calculates 

some economic effects and ignores 

others, such as local effects and costs. In 

addition to the obvious direct economic 

consequences, a few commenters also 

saw a loss of negotiating power in future 

dealings with the states. 

Response: The Commission disagrees. 

The Commission does not see an 

economic collapse of Class II gaming as 

a result of the Technical Standards. 

There is no support for that proposition. 

While the economic impact study of Dr. 

Alan Meister of the Analysis Group does 

find that there will be costs to comply 

with the Technical Standards, the vast 

majority of the economic impact from 

the set of four regulations proposed in 

October 24, 2007, stems from the 

projected revenue loss and the 

compliance costs associated with the 

now-discarded classification standards. 

This is so, even assuming the 

calculation and under-counting 

criticisms of the study are in fact 

correct. 

Further, the Commission’s costbenefit analysis finds that the Technical 

Standards, considered independently, 

are not a major rule. They impose an 

annual cost of approximately $3 

million—hardly an onerous cost when 

compared to the $25 billion in gross 

gaming revenue the industry earned in 

2007. Taken together with the proposed 

Class II MICS, the annual costs are not 

much higher. Adoption of the Technical 

Standards, therefore, alone or with the 

MICS, will not imperil the viability of 

Class II gaming and will not impair the 

tribes’ negotiating power in dealings 

with the states. 

Comment: One commenter felt that 

the Technical Standards will not work 

because they are built upon the 

mistaken assumption that Class II 

gaming is based upon gaming 

components. 

Response: The Commission disagrees. 

The Technical Standards do not assume 

that Class II gaming is based upon 

components. Central to the Technical 

Standards is the idea of the Class II 

gaming system, which allows the 

Technical Standards to address all of 

the various ways that Class II games can 

be played. The notion of the ‘‘gaming 

system,’’ for example, encompasses 

bingo whether it is played electronically 

on client-server architectures, with ping 

pong balls drawn from a hopper and 

cards marked by an electronic minder 

purchased at a point-of-sale retail 

station, or with some other system. 

Necessarily, then, the definition of 

system makes reference to 

‘‘components,’’ for it is the unique 

collection of components that makes up 

a gaming system. It is, however, the 

system, and not individual components, 

that must comply with the requirements 

of the Technical Standards. 

Comment: A number of commenters 

suggested that the Commission’s rulemaking process was itself flawed, over 

and above any consideration of 

economic effect the Technical Standards 

might have. Some commenters felt that 

the Commission is not an independent 

regulatory agency and, as such, it has 

failed to comply with the requirements 

of Executive Orders 12875, 12866, and 

13175 and the Unfunded Mandates 

Reform Act. 2 U.S.C. 658(1); 1502(1). A 

few felt that the Commission has failed 

to comply with the Federal Advisory 

Committees Act (FACA) or the 

Government Performance and Results 

Act (GPRA). Others felt that the 

Commission should not have published 


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the proposed rules before the economic 

impact study was ready and should 

have considered other regulatory 

alternatives. Others still find that the 

regulations, if made final, would result 

in a regulatory taking, contrary to the 

Commission’s finding in the proposed 

rule. 

Response: The Commission disagrees. 

Congress has made abundantly clear 

that it intended the Commission to be 

an independent regulatory agency and, 

as such, exempt from the requirements 

of these Executive Orders and the 

Unfunded Mandates Reform Act. The 

Senate report accompanying the passage 

of IGRA provides Congress’s intention 

clearly and unambiguously: The bill 

‘‘established a National Indian Gaming 

Commission as an independent agency 

within the Department of Interior.’’ S. 

Rep. No. 100–446, at 1 (1988). When it 

amended IGRA in 2005, Congress 

reiterated its intention: 

Additionally, it is to be noted that the 

NIGC is an independent regulatory agency. 

This status has ramifications, including, that 

the agency is not governed by Executive 

Order 13175, which compels agencies other 

than independent regulatory agencies to 

consult tribal officials in the development of 

regulatory policies that have tribal 

implications. The Executive Order 

encourages independent agencies to observe 

its precepts, however, and the Committee 

notes with approval that the Commission, 

through its current consultation policy, has 

endeavored to do so. 

S. Rep. No. 109–122 at 3 (2005). 

As to the publication of the economic 

analysis after publication of the rule, 

that, while not ideal, did not deprive the 

industry or the interested public of the 

benefit of the report, as the careful 

comments submitted about its 

methodological failings make clear. 

Likewise, the Commission has 

considered regulatory alternatives, not 

the least of which is its withdrawal of 

the proposed Classification standards. 

As to compliance with FACA, the 

Commission’s advisory committees are 

exempt from the requirements of FACA 

because the non-Commission members 

were elected officials of tribal 

governments, or their authorized 

designees, acting in their official 

capacities. 41 CFR 102–3.40(g). 

As to compliance with GPRA, the 

Commission agrees that Public Law 

109–221, the Native American 

Technical Corrections Act of 2006, 

provides that the NIGC shall be subject 

to the GPRA. On September 30, 2007, 

the NIGC submitted a draft performance 

and accountability report with the 

Office of Management and Budget for 

review. The Commission is currently 

making revisions to its GPRA plan. 

Further, on September 18, 2008, the 

Commission released a draft five-year 

strategic plan to tribes, tribal trade 

associations, and Congress for 

comments. The strategic plan, like the 

performance plan, is required by GPRA. 

Finally, the comment about regulatory 

taking is premised upon the wholesale 

disappearance of the Class II gaming 

industry as a result of adoption of the 

Technical Standards. As the 

Commission said above, with the 

relatively small cost of the Technical 

Standards alone, or together with the 

MICS, there will be no complete 

destruction of Class II gaming. There 

will be no complete loss of the 

economically beneficial or productive 

use of tribes’ Class II investments and, 

by definition, no regulatory taking. See, 

e.g., Lucas v. South Carolina Coastal 

Council, 505 U.S. 1003, 1015 (1992). 

Comment: A few commenters 

suggested that the Commission lacks the 

statutory authority to promulgate the 

Technical Standards, one analogizing 

the situation to that in Colorado Indian 

Tribes v. NIGC, 466 F.3d 134 (DC Cir. 

2006) (CRIT), where the DC Circuit 

ultimately found that the Commission 

lacked the authority to promulgate and 

enforce Class III minimum internal 

control standards. 

Response: The Commission disagrees. 

IGRA does give the Commission the 

authority to adopt the Technical 

Standards. Congress was expressly 

concerned that gaming under IGRA be 

‘‘conducted fairly and honestly by both 

the operator and players.’’ 25 U.S.C. 

2702(2). The Technical Standards are 

specifically designed to protect the 

integrity, fairness and safety of Class II 

gaming. Adopting the Technical 

Standards is consistent with the 

authority granted the Commission to 

monitor, inspect, and examine Class II 

gaming, 25 U.S.C. 2706 (b)(1)–(4), and to 

promulgate such regulations as it deems 

appropriate to implement the provisions 

of IGRA. 25 U.S.C. 2706(b)(10). The 

Commission disagrees with the 

commenter who drew the opposite 

conclusion. 

The Commission likewise believes 

that this reading distinguishes this 

circumstance from the CRIT case. There, 

the Court found that 2706(b)(10) could 

not be a source of authority for Class III 

MICS because there are no applicable 

provisions in IGRA concerning day-today Class III regulatory authority that 

the Commission could implement 

through rulemaking. Here, by contrast, 

the Commission is implementing its 

monitoring, inspecting, and examining 

authority over Class II gaming, 

specifically granted by IGRA in 25 

U.S.C. 2706(b). 

In particular, the Technical Standards 

make meaningful the Commission’s 

monitoring, inspection, and 

examination authority. As stated above, 

the Technical Standards do not, and are 

not designed to, prescribe the design or 

features of Class II gaming systems. To 

the contrary, the Technical Standards 

set out various minimum ways that 

gaming systems can meet IGRA’s goal of 

ensuring that gaming is conducted fairly 

and honestly, both by operators and by 

the public, 25 U.S.C. 2702(2), leaving 

specific implementations designed to 

meet those regulatory goals to the tribal 

gaming regulatory authorities and 

industry. 

For example, the Technical Standards 

require components that store financial 

instruments and that are not operated 

under the control of a gaming operation 

employee ‘‘shall be located within a 

secure and locked area or in a locked 

cabinet or housing that is of a robust 

construction designed to resist 

determined illegal entry and to protect 

internal components.’’ How exactly 

‘‘robust construction’’ is to be 

implemented, the Technical Standards 

do not say, but the purpose of the 

standard is clear—assets held in gaming 

equipment are to be secure from theft 

and tampering. 

Similarly, the Technical Standards 

require that progressive awards on Class 

II gaming systems have a minimum 

chance of being hit of 1 in 100,000,000. 

What precisely the chances of hitting 

the award are or should be, the 

Technical Standards do not say, leaving 

the matter instead to the tribal gaming 

regulatory authorities and the market. 

As stated below, the purpose of the 

minimum probability requirement is to 

ensure fairness in the play of Class II 

games by eliminating advertised awards 

that will never be hit because the 

chances of doing so are astronomically 

low. 

Before a Class II gaming system may 

be placed on the floor and offered to the 

public for play, it must be submitted to 

a independent gaming laboratory, which 

will test the system for compliance with 

the Technical Standards. The testing 

laboratory will then submit a report of 

its findings to the tribal gaming 

regulatory authority, which in turn will 

approve the system for play (or not). 

The tribal gaming regulatory authority 

will keep the testing laboratory’s report 

and a record of its approval. 

It is this, then, that enables the 

Commission, through its monitoring, 

inspection and examination authority to 

ensure the security of Class II gaming 

systems and assets, to ensure the 

fairness of Class II games, and to ensure 

that tribes are the primary beneficiaries 


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of their gaming. 25 U.S.C. 2702(2). The 

Commission achieves these regulatory 

goals by monitoring, inspecting, and 

examining the gaming systems and the 

documentation of its compliance with 

the Technical Standards. Given all of 

this, the Commission disagrees with the 

commenter who concluded that it lacks 

the authority to promulgate the 

Technical Standards. 

Comment: A few commenters 

objected to the Technical Standards as 

encroaching too far into the primary 

authority and responsibility tribes have 

to regulate Class II gaming and 

overstepping the Commission’s 

oversight regulatory role. 

Response: The Commission is keenly 

aware that the primary responsibility for 

regulating Class II gaming belongs to the 

tribes and has no desire to intrude upon 

it. The Commission is also aware of the 

substantial sums tribes spend upon 

regulation and the excellent job they do. 

The Commission does not believe that 

the Technical Standards improperly 

intrude upon the tribes’ role as primary 

regulators. Rather, the Technical 

Standards have been drafted and 

redrafted to ensure that the tribes 

remain the primary regulators. 

The Technical Standards are designed 

to be minimum standards. They give the 

tribal gaming regulatory authorities the 

primary role in approving Class II 

gaming systems and modifications 

thereto. Indeed, the Commission plays 

no direct role under the Technical 

Standards save when a tribal gaming 

regulatory authority seeks a variance. 

Further, the Technical Standards 

specifically contemplate the primacy of 

the tribal gaming regulatory authorities 

insofar as they may, in their discretion, 

supplement the Technical Standards by 

adopting additional standards or 

standards more stringent than the 

minimum standards. § 547.5(a). The 

Commission therefore disagrees with 

the commenter who characterized the 

Technical Standards as directing a 

specific course of action and eliminating 

alternatives. 

The Commission also disagrees, as 

one commenter states, that 25 U.S.C. 

2701(5) demonstrates that the 

Commission has improperly encroached 

upon the tribes’ authority: ‘‘Indian tribes 

have the exclusive right to regulate 

gaming activity on Indian lands if the 

gaming activity is not specifically 

prohibited by Federal law and is 

conducted within a State which does 

not, as a matter of criminal law and 

public policy, prohibit such gaming 

activity.’’ This Congressional finding 

does not mean that tribes may regulate 

Class II gaming to the exclusion of the 

Commission. Rather, this paragraph is 

merely a restatement of the holding in 

California v. Cabazon Band of Mission 

Indians, 480 U.S. 202 (1987). From that 

fundamental starting point, the 

regulatory structure established by 

IGRA, including the Commission’s role 

in the regulation of Class II gaming, was 

built. 

Comment: One commenter stated that 

the Technical Standards do not 

recognize the regulatory authority and 

capability of tribes that have earned a 

Class II self-regulation certificate. 

Response: The Commission agrees 

that the Technical Standards do not 

explicitly refer to self-regulating tribes, 

but there is no intent to slight or to 

diminish the regulatory authority and 

capabilities of self-regulating tribes, 

which are evident to all by the fact of 

their self-regulation. 

As stated above, the Technical 

Standards are not intended to encroach 

on the regulatory authority of any tribal 

gaming regulatory authority. The 

Technical Standards adopt minimum 

standards and already-existing best 

practices such as the testing of gaming 

equipment by testing laboratories. As 

such, they should impose only the most 

minimal new burdens on the selfregulating tribe. 

The most obvious is the procedure 

surrounding the testing and certification 

of grandfathered gaming systems. That, 

however, is matter of national 

uniformity. It allows the Commission 

both to ensure that all grandfathered, 

non-compliant Class II gaming systems 

across the nation meet certain minimal 

standards and to identify and track all 

of them. 

Though self-regulating tribes do have 

to follow Commission regulations, 25 

CFR 518.4(a)(4), the Technical 

Standards do not change the 

applicability of IGRA’s self-regulation 

provisions. Self-regulating tribes are still 

exempt from certain of the 

Commission’s powers as delimited in 25 

U.S.C. 2710(c)(5). 

Comment: One commenter suggested 

that the adoption of the Technical 

Standards is arbitrary and capricious 

primarily because the Technical 

Standards do not fix an identifiable 

problem or fill a regulatory void, 

because their onerous compliance 

obligations bear no reasonable 

relationship to the regulatory benefit 

that they will provide, and because the 

Commission has provided no rational 

basis for the standards. 

Response: The Commission disagrees. 

As a matter of regulatory best practices, 

all commercial gaming jurisdictions and 

many, if not most, tribal gaming 

jurisdictions require the testing of 

gaming equipment against technical 

standards and the subsequent approval 

of the relevant governmental authority. 

The Technical Standards are designed 

to uniformly implement a minimum set 

of these best practices across Indian 

gaming. That they are not so 

implemented now, and in some places 

technical standards are not 

implemented at all, is justification 

enough for their need. All of Indian 

gaming benefits when the nationwide 

gaming public may be assured of the 

integrity and fairness of Class II gaming, 

no matter where implemented. 

Accordingly, the Commission also 

disagrees with the commenters who 

suggested that the Technical Standards 

be issued not as regulations but as a 

non-binding bulletin. 

The Commission disagrees that this 

regulatory benefit is outweighed by 

onerous compliance obligations. To the 

contrary, the Commission believes that 

compliance with the Technical 

Standards is not onerous, financially or 

otherwise. While the economic impact 

study of Dr. Alan Meister of the 

Analysis Group does find that there will 

be costs to comply with the Technical 

Standards, the vast majority of the 

economic impact from the set of four 

regulations proposed in October 24, 

2007, stems from the projected revenue 

loss and the compliance costs associated 

with the now-discarded classification 

standards. Again, the Commission’s 

cost-benefit analysis finds that the 

Technical Standards, considered 

independently, are not a major rule. 

They impose an annual cost of 

approximately $3 million—hardly an 

onerous cost when compared to the $25 

billion in gross gaming revenue the 

industry earned in 2007. 

Further, the general rule expressed in 

the Technical Standards is that 

laboratory review and tribal gaming 

regulatory authority approval is 

required before a Class II gaming system 

may be offered to the public for play. In 

establishing this procedure, the 

Technical Standards merely formalize 

the best practices that already exist both 

in tribal and non-tribal gaming 

jurisdictions alike. As such, the 

Commission does not believe that the 

testing procedure is onerous. 

Comment: One commenter stated that 

the Technical Standards will have a 

chilling effect upon Class II technology, 

limiting use to today’s technology and 

inhibiting or prohibiting its 

development and advancement. IGRA, 

by contrast, states that the tribes are to 

have maximum flexibility in the use of 

technology. 

Response: The Commission disagrees. 

The Commission discarded the draft 

proposed technical standards published 


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in August 2006 for precisely this reason. 

The current proposed part 547 was 

therefore specifically designed not to 

prescribe how equipment is to be built 

but to state the desired regulatory 

outcome, leaving it to the ingenuity of 

the industry to figure out compliant 

designs, whatever form the new 

technology may take. 

Comment: One commenter stated that 

the Technical Standards are improperly 

retroactive because the Commission 

lacks the authority under IGRA to 

promulgate retroactive regulations. 

Response: The Commission disagrees 

that the Technical Standards are 

retroactive. The Technical standards 

apply prospectively only and do not 

alter the legal consequences of actions 

completed before their effective date. 

The Technical Standards, in other 

words, attach no liability to any 

operation of any non-compliant Class II 

gaming systems that occurred prior to 

their effective date. Indeed, given the 

grandfather provisions in § 547.4, they 

attach no liability to the operation of 

non-compliant systems for five years 

after the effective date either. As such, 

the Commission disagrees with the 

commenters who characterized the 

grandfather provisions as unreasonable. 

That said, the Technical standards 

can without question upset settled 

expectations based upon prior law and 

impose economic burdens on past 

conduct. Some tribes will have invested 

in Class II gaming systems that will have 

to be modified or replaced during the 

five-year grandfather period. This 

unsettling of expectations and the 

imposition of unexpected economic 

burdens in this way, however, does not 

make the Technical Standards 

retroactive. See Landgraf v. USI Film 

Products, 511 U.S. 244, 269 n. 24 (1994) 

(‘‘Even uncontroversially prospective 

statutes may unsettle expectations and 

impose burdens on past conduct: * * * 

a new law banning gambling harms the 

person who had begun to construct a 

casino before the law’s enactment 

* * *.’’) 

Comments Upon § 547.3, Definitions 

Comment: One commenter suggested 

that the definitions in the Technical 

Standards should conform to the 

definitions in the companion MICS, 

§ 543.2, unless there is an appropriate 

reason for different terms. 

Response: The Commission agrees 

and, where possible, the Commission 

has used terms consistently in the two 

rules. It was, however, not always 

possible to do so as the two rules have 

different objectives. The Technical 

Standards are intended to define the 

technical specifications of Class II 

gaming systems, while the companion 

MICS are intended to set minimum 

standards, consistent with industry best 

practices, for the authorization, 

recognition, and recordation of gaming 

and gaming-related transactions. 

Consequently, users should be well 

aware of the definition section 

accompanying each rule. 

Comment: A number of commenters 

suggested broadening the definition of 

‘‘agent’’ to include any person 

authorized by the gaming operation and 

the tribal gaming regulatory authority to 

undertake specified decisions, actions, 

or tasks, whether or not they are 

employees of the operation or licensed 

by the tribal gaming regulatory 

authority. 

Response: As the Commission 

understands the comment, the 

definition of ‘‘agent’’ is too restrictive 

and places unnecessary regulatory 

obstacles in the way of routine activities 

by requiring licensure when that is not 

always necessary. The Commission 

agrees. 

The Technical Standards use the term 

‘‘agent’’ when prescribing security 

standards for financial instrument 

storage components, financial 

instrument acceptors, financial 

instrument dispensers, and components 

that determine game outcome. One 

standard applies when such 

components are operated under the 

direct control of an agent—e.g., a cash 

drawer—and another applies when such 

components are operated automatically, 

independently of such control—e.g., a 

bill acceptor. These individuals may or 

may not be key employees, and 

therefore IGRA may or may not require 

their licensure. Accordingly, the 

Commission believes that when such 

individuals are key employees they 

must be licensed, and when they are not 

key employees, their licensure is a 

matter left to the tribal gaming 

regulatory authorities. 

The Commission has edited the 

definition of ‘‘agent’’ in conformance 

with the comment to read, ‘‘An 

employee or other person authorized by 

the gaming operation, as approved by 

the tribal gaming regulatory authority, 

designated for certain decisions, tasks 

and actions in the gaming operation.’’ 

Comment: One commenter suggested 

changing the proposed definitions of 

‘‘agent’’ and ‘‘employee’’ to create a 

distinction between the two and using 

‘‘employee or agent’’ throughout part 

547, where the proposed text says only 

‘‘agent.’’ An ‘‘employee’’ would mean 

an employee of a gaming operation 

licensed by the tribal gaming regulatory 

authority, and an ‘‘agent’’ would be a 

non-employee ‘‘authorized by a gaming 

operation to make decisions for, or 

perform tasks or action on behalf of, the 

gaming operation.’’ 

Response: See response to previous 

comment. 

Comment: A number of commenters 

suggested restoring a definition of 

‘‘promotional account’’ to mean ‘‘a file, 

record or other data structure that 

records transactions involving a patron 

or patrons that are not otherwise 

recorded in a patron deposit account.’’ 

That definition was included in the 

draft provided to the Commission by its 

tribal advisory committee. Similarly, 

these commenters suggest restoring the 

reference to ‘‘promotional account’’ to 

the definition of ‘‘cashless transaction’’ 

that the tribal advisory committee had 

provided. 

Response: The Commission disagrees. 

The Commission removed the term 

‘‘promotional account’’ from the 

Technical Standards’ definitions 

because the term appears nowhere else 

in the text. Therefore the definition of 

the term is unnecessary. 

Comment: One commenter suggested 

for editorial consistency a change to the 

definition of Random Number Generator 

from that which produces ‘‘outputs that 

are effectively random’’ to one that 

produces ‘‘outputs that comply with the 

provisions of section 547.14.’’ 

Response: The Commission believes 

that the proposed definition is 

sufficiently clear and that adopting the 

suggested comment would create a 

peculiar and undesirable result: A 

random number generator that did not 

comply with the requirements of 

§ 547.14 would, by definition, not be a 

random number generator at all, as 

opposed to merely a non-compliant one. 

Comments Upon § 547.4, Compliance 

Section Title 

Comment: One commenter suggested 

that the title of this section should be 

changed from ‘‘How do I comply with 

this part’’ to ‘‘How does a tribal 

government, tribal gaming regulatory 

authority, or tribal gaming operation 

comply with this part?’’ These entities, 

rather than unspecified individuals, are 

the parties required to comply. 

Response: The Commission agrees 

and has adopted the change as 

suggested. 

Section 547.4(a)(1)—Limited Immediate 

Compliance 

Comment: One commenter suggested 

edits that would specifically require the 

supplier or manufacturer to submit the 

Class II gaming system software to a 

testing laboratory for verification. 

Response: The Commission disagrees. 

The Commission recognizes that the 


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standard practice is for the 

manufacturer or supplier to make 

laboratory submissions, and nothing in 

the Technical Standards prohibits that. 

The Commission did not specify that it 

be the manufacturer or supplier who 

makes the submission so that the tribal 

gaming regulatory authority could 

choose whether this obligation should 

fall on the manufacturer or supplier, the 

gaming operation, or the tribal gaming 

regulatory authority itself. 

Comment: One commenter suggested 

that the submission be accompanied by 

‘‘any hardware, documentation or other 

information necessary to test such 

software.’’ 

Response: The Commission disagrees 

as the edit is unnecessary. Rather than 

attempt to specify everything that must 

be submitted, and perhaps omit 

something that might be necessary in 

individual or unusual cases, the 

Technical Standards attempt to leave 

what is required for testing to the testing 

laboratories themselves. 

Section 547.4(a)(2)—Limited Immediate 

Compliance 

Comment: One commenter suggested 

that this paragraph setting out the 

requirement of limited immediate 

compliance appears to have omitted 

mention of § 547.8(f), the requirement 

that there be some means of software 

signature verification for game software. 

It is included and required elsewhere in 

the section, e.g., in the requirements of 

the report that the testing laboratory 

must issue in § 547.4(a)(4). 

Response: The Commission agrees 

and has corrected the omission. 

Section 547.4(a)(4)—Limited Immediate 

Compliance 

Comment: One commenter suggested 

that the section does not, but should, 

address what happens when the gaming 

laboratory does not issue its report 

within 120 days after the effective date 

of part 547. 

Response: The comment makes clear 

that the section does not read in the way 

the Commission intended. The 

Commission did not intend to confine 

the entire limited immediate 

compliance process to the first 120 days 

after the effective date. Rather, it 

intended to allow grandfathered systems 

to be certified as such no matter how 

long the lab process took, provided that 

the submission was made within the 

first 120 days after the effective date of 

part 547. The Commission has changed 

the wording in this paragraph to make 

this clear. It has removed the 120-day 

requirement language from 547.4(a) and 

placed it within 547.4(a)(1), thus 

making the time limit applicable only to 

the submission of the gaming system to 

the lab. Paragraph 547.4(a)(1) now 

reads: ‘‘* * * Require that all Class II 

gaming system software that affects the 

play of the Class II game be submitted, 

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 the effective date of this part; 

* * *’’ 

That said, however, it is in the 

interest of gaming operations for the 

testing laboratory to complete its 

evaluation and for the tribal gaming 

regulatory authority to issue its 

grandfather certifications as quickly as 

possible. Section 547.4(b) requires both 

of those things to occur before a Class 

II gaming system is grandfathered and 

available for play under the Technical 

Standards. 

Comment: One commenter suggested 

that the submission process is 

unworkable in the circumstance where 

a tribe no longer has a relationship with 

the manufacturer(s) of its gaming 

systems. 

Response: The Commission disagrees. 

As stated above, there is no requirement 

that the manufacturer make the 

submission to the testing laboratory for 

grandfather review. The tribal gaming 

regulatory authority may require the 

operation to do so. In the alternative, if 

one tribe requires a manufacturer to 

submit a system to a lab, another tribe 

running that same gaming system may 

rely on the same laboratory report. 

Comment: One commenter suggested 

that the language of this paragraph be 

clarified to provide the tribal gaming 

regulatory authority 120 days to issue a 

certificate of grandfather status after 

receiving the testing laboratory’s report. 

Response: Given the comment and 

resulting change above, the Commission 

believes that this change is unnecessary. 

The tribal gaming regulatory authority 

will issue a certificate of grandfather 

status as it deems appropriate. 

Comment: One commenter suggested 

that as drafted, § 547(a)(4) does not 

make sufficiently clear that ‘‘the testing 

laboratory only certifies that the 

submitted game software complies with 

the specified standards,’’ while the 

tribal gaming regulatory authority 

certifies that the Class II gaming system 

is eligible for grandfather status. 

Response: The Commission disagrees. 

As an initial matter, the testing 

laboratory is not required to ‘‘certify’’ 

that game software meet any standards. 

Rather, it is required only to issue a 

report as to its findings. Beyond that, 

the Commission believes that the this 

paragraph, as proposed, makes the 

respective responsibilities of the testing 

laboratory and the tribal gaming 

regulatory authority clear. The 

Commission has, however, made a few 

minor editorial changes to ensure that 

clarity. 

Section 547.4(b)(2) and Elsewhere, 

Compliance With Classification 

Standards 

Comment: For many and varied 

reasons, many commenters objected to 

requiring compliance with the 

Commission’s proposed Classification 

regulations, proposed 25 CFR part 546, 

72 FR 60483 (Oct. 24, 2007), as part of 

the Technical Standards. These 

commenters asked, therefore, that all 

such cross-references and crosscompliance requirements be deleted. 

Response: As the Commission has 

withdrawn the proposed classification 

standards (see notice of withdrawal 

published simultaneously), the 

Commission has removed all references 

to them. 

Section 547.4(b)(4) and Elsewhere, 

Compliance With Class II MICS 

Comment: Many commenters objected 

to requiring compliance with the 

Commission’s Class II Minimum 

Internal Control Standards as part of the 

Technical Standards, pointing out that 

the two sets of rules serve different 

purposes. Technical Standards contain, 

in essence, design standards to which 

laboratories can test before a gaming 

system goes into operation, while MICS 

contain operational standards that apply 

after gaming systems go into operation. 

Further, testable design standards 

should be placed in the Technical 

Standards, while operational standards 

belong in the Class II MICS and crossreferences should be removed. 

Response: For the most part, the 

Commission agrees. However, the line 

between the two kinds of regulation is 

not impermeable. There are times when 

the means for complying with a 

particular internal control standard is 

built into a component of the Class II 

gaming system and can be tested by the 

testing laboratory. In those cases, a cross 

reference from one set of regulations to 

the other is appropriate. Such cross 

references therefore appear in § 547.4(c), 

testing and approval of Class II gaming 

systems generally, and § 547.4(d), 

emergency hardware and software 

changes, and require compliance with 

any testable standards in the MICS. 

Further, §§ 547.5(b)(4)(i), (ii), and 

(iii)(B) all contain references to the Class 

II MICS. These paragraphs state that that 

among the permissible modifications of 

grandfathered Class II gaming systems 

are those that advance the system’s 

overall compliance not only with the 


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Technical Standards but also with the 

MICS. These cross-references, insofar as 

they both advance regulatory 

compliance and maintain the economic 

viability of grandfathered gaming 

systems, will remain. 

Section 547.4(b)—Grandfather 

Provisions 

Comment: One commenter suggested 

rewriting this paragraph to make clear 

that a Class II gaming system can qualify 

for grandfather status if it was placed in 

a tribal gaming facility by the effective 

date of the Technical Standards or was 

manufactured by that date. 

Response: The Commission believes 

that the commenter has correctly stated 

the intent of § 547.4(b) and that the 

language of the proposed rule already 

stated this clearly. 

Section 547.4(b), (c)(3)—Grandfather 

Clause, Duration 

Comment: A number of commenters 

suggested making player interfaces 

permanently exempt from the 

requirements of the Technical 

Standards. One commenter suggested 

that all existing Class II gaming 

technology be permanently exempt from 

the Technical Standards. To do 

otherwise, the commenters suggested, 

will have significant negative financial 

consequences for Indian gaming. Others, 

similarly, suggested that the grandfather 

period was too short because five years 

is not the proper measure of the useful 

life of a Class II gaming system. A few 

others suggested that the grandfather 

period was inadequate because there are 

no compliant systems on the market 

today. 

Response: The Commission does not 

agree that perpetually exempting player 

interfaces or all existing Class II 

technology from the Technical 

Standards is appropriate or that the fiveyear term is insufficient. While Dr. 

Meister’s economic impact report does 

find that there will be costs to comply 

with the Technical Standards, the vast 

majority of the economic impact stems 

from the projected revenue loss and the 

compliance costs associated with the 

now-discarded classification standards. 

Again, the cost to the industry of 

complying with the Technical 

Standards is approximately $3 million 

annually. 

Further, there is a good regulatory 

reason for grandfathering existing 

hardware for only five years. By 

definition, grandfathered hardware is 

not compliant with all of the 

requirements of the technical standards. 

Perpetually grandfathering existing 

hardware will create a permanent class 

of non-compliant equipment. That is not 

consistent with the regulatory purpose 

of the technical standards, namely to 

ensure the integrity and security of 

Class II gaming systems and the 

accountability of Class II gaming 

revenue. What is more, the Commission 

believes that market forces will move 

equipment toward greater compliance 

and that if most current systems are not 

compliant, they are not far from 

compliant either. Thus, the Technical 

Standards specifically provide that 

tribal gaming regulatory authorities, in 

their discretion, may require or permit 

changes to grandfathered equipment 

that will bring the equipment into better 

(if still incomplete) compliance, or even 

complete compliance. 547.4(b)(4)(ii). 

Finally, as most systems in play today 

were put into play long before the 

effective date of the Technical 

Standards, they will have a useful life 

longer than five years, even if they are 

removed from play at the end of the 

grandfather period. 

Section 547.4(d)—Emergency Hardware 

and Software Changes 

Comment: One commenter suggested 

that the use of the term ‘‘game software’’ 

in this paragraph is unnecessarily 

limiting. The section contemplates 

emergency changes necessary to correct 

problems ‘‘affecting the fairness, 

security, or integrity of a game or 

accounting system or any cashless 

system, or voucher system.’’ However, 

the paragraph then only contemplates 

modified ‘‘game software,’’ which by 

definition excludes software for cashless 

systems or voucher systems. The 

commenter recommends changing 

‘‘game software’’ to ‘‘software’’ to 

accommodate emergency changes to 

these systems as well. 

Response: The Commission agrees 

and has made the suggested change. 

§ 547.4(d)(2)(ii)—Emergency Hardware 

or Software Changes, Subsequent 

Submission to Testing Laboratory 

Comment: A number of commenters 

suggested changing the procedures 

applicable to emergency hardware of 

software changes to eliminate 

submission to a testing laboratory when 

the modifications would not affect the 

outcome of the game. 

Response: The Commission disagrees. 

The Technical Standards are an attempt 

to provide a regulatory means for 

assuring the integrity and security of 

Class II gaming. These ends are best met 

when all Class II gaming hardware and 

software, and all modifications to 

gaming hardware and software, are 

verified by an independent testing 

laboratory and subject to the 

supervision of a tribal gaming regulatory 

authority. Providing an exception to this 

verification and supervision does not 

serve this end. All modifications should 

be reviewed so that the integrity and 

security of Class II gaming systems are 

not inadvertently compromised. 

Section 547.4(f)—Testing Laboratories, 

Generally 

Comment: One commenter suggested 

that it should be the Commission, rather 

than the tribal gaming regulatory 

authorities, that selects the testing 

laboratories used for testing under the 

Technical Standards. Doing so, the 

commenter reasons, would ensure the 

independence of the laboratories. 

Response: The Commission disagrees. 

The tribes have the primary 

responsibility for regulating gaming 

under IGRA, and the Technical 

Standards attempt to acknowledge this 

and place primary regulatory 

responsibility with tribal gaming 

regulatory authorities where it belongs. 

For example, part 547 provides 

minimum standards that tribal gaming 

regulatory authorities may supplement 

to suit their individual needs and 

standards; it places the responsibility 

for approving grandfathered gaming 

systems, and changes to those systems, 

with them; it places primary authority 

for approval of variances with them. As 

the tribal gaming regulatory authorities 

are already responsible under IGRA for 

licensing employees and management 

officials, and many are responsible 

under tribal law for licensing vendors, 

it is appropriate that they approve the 

use of testing laboratories as well. The 

Commission believes that the 

independence of the testing laboratories 

is assured by the limitation in 

§ 547.4(f)(1)(iii), which states that a 

testing laboratory owned by a tribe may 

not test games or gaming equipment for 

that tribe’s gaming operations. 

Comment: A number of commenters 

objected to the role assigned to the 

independent testing laboratories by the 

Technical Standards. Some described 

the laboratories as ‘‘unaccountable third 

parties;’’ others described the 

verification process as ‘‘outsourcing’’ 

tribal sovereignty or letting the testing 

laboratories interpret IGRA and 

expressed concern about the process’s 

complexity and cost. 

Response: The Commission disagrees. 

The general rule is that laboratory 

review and tribal gaming regulatory 

authority approval is required before a 

Class II gaming system may be offered 

to the public for play. In establishing 

this procedure, the Technical Standards 

merely formalize the best practices that 

already exist both in tribal and nontribal gaming jurisdictions alike. As 


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such, the Commission does not believe 

that the testing procedure is either 

overly complex or overly expensive. 

Further, the testing laboratories are 

hardly unaccountable. The Technical 

Standards require the tribal gaming 

regulatory authorities to make 

suitability determinations for the 

principals of testing laboratories that 

they use, and the tribal gaming 

regulatory authorities may require that 

the laboratories be subject to whatever 

vendor licensing standards they feel 

appropriate. Further, the role of the 

testing laboratory is confined to 

providing an independent analysis of a 

particular gaming system’s or 

modification’s compliance with the 

technical standards. All questions of 

approval over gaming systems, 

grandfathering, changes to gaming 

systems, etc., belong not to the testing 

laboratory or the Commission but to the 

tribal gaming regulatory authority. As 

such, the Commission does not agree 

that there is an outsourcing of 

sovereignty. 

Section 547.4(f)(1)(iii)—Testing 

Laboratories, Ownership 

Comment: A number of commenters 

strongly objected to a perceived 

discriminatory prohibition in the 

Technical Standards that would 

prohibit tribal ownership of a testing 

laboratory. Tribal governments, like 

state governments, should be allowed to 

own and operate testing laboratories. 

Response: The Commission agrees. Of 

course tribes can own and operate 

testing laboratories. There is not, and 

there has never been, any intent to make 

a blanket prohibition on tribal 

ownership or operation of testing 

laboratories. The Commission has 

reworded the proposed § 547.4(f)(iii) to 

eliminate the possibility of such an 

interpretation. The paragraph now 

reads: ‘‘A testing laboratory may provide 

the examination, testing, evaluating and 

reporting functions required by this 

section provided that: * * * [i]t is not 

owned or operated by the same tribe or 

tribal gaming regulatory authority for 

whom it is providing the testing, 

evaluating, and reporting functions 

required by this section.’’ 

The only restriction intended in this 

section is a narrow one: that a lab 

owned or operated by a tribe should not 

test games for that tribe’s gaming 

operations. The restriction is intended 

as means to ensure the independence of 

the laboratory 

Section 547.4(f)(1)(iv)(A)—Testing 

Laboratories, Suitability Determinations 

Comment: One commenter pointed 

out that there is a redundancy in making 

the principals of testing laboratories 

subject to suitability determinations no 

less stringent than those in 25 CFR 

533.6(b)(1)(ii)–(v) and in 25 CFR 

533.6(c), because 533.6(b)(1)(v) and 

533.6(c) contain the same standard, the 

former for Class II gaming management 

contracts and the latter for Class III 

gaming management contracts. 

Response: The Commission agrees 

and has removed the redundancy. The 

paragraph now reads, ‘‘Makes a 

suitability determination of the testing 

laboratories no less stringent than that 

required by §§ 533.6(b)(1)(ii)–(v) of this 

chapter and based upon no less 

information than that required by 

§ 537.1 of this chapter * * *.’’ 

Comment: One commenter objected to 

the requirement that testing laboratories 

be subject to suitability determinations. 

The requirement, the commenter 

argued, acts as a barrier to entry to new 

tribally owned testing laboratories, 

which have not yet been subject to 

suitability determinations, and as a 

protectionist measure for the business of 

existing non-tribal testing laboratories, 

which have received such 

determinations. 

Response: The Commission believes 

that the measure is necessary. Positions 

directly responsible for the integrity of 

gaming in any gaming jurisdiction, 

tribal or commercial—are, or ought to 

be, subject to licensure or suitability 

determinations. The comment seeks, in 

effect, exemption from this sound 

regulatory principle on the ground of 

commercial disadvantage, real or 

perceived. 

Comments on § 547.5, Fairness 

Standards and Rules of General 

Application 

Section 547.5(c)—Minimum Probability 

Standards 

Comment: A number of commenters 

suggested that the minimum probability 

standards of 1 in 50,000,000 for 

progressive prizes and 1 in 25,000,000 

for other prizes either be eliminated as 

contrary to IGRA or, if maintained, be 

lowered to match odds permitted by 

state lotteries, approximately 1 in 

175,000,000, or Class III slot machines, 

1 in 400,000,000 or less. 

Response: The Commission disagrees 

that a minimum probability requirement 

is inconsistent with IGRA. As discussed 

in greater detail above, the Commission 

has the authority under IGRA to adopt 

minimum probability requirements for 

the same reason that it has the authority 

to adopt the Class II technical standards 

and Class II minimum internal control 

standards. Congress was expressly 

concerned that gaming under IGRA be 

‘‘conducted fairly and honestly by both 

the operator and players.’’ 25 U.S.C. 

2702(2). Both parts 543 and 547 are 

designed to protect the integrity of Class 

II gaming. The Technical Standards are 

intended to assure the fairness, integrity 

and safety of Class II games and 

equipment themselves, and the MICS 

are intended to assure the protection of 

tribal assets when the games and 

equipment are in operation in the 

gaming facility. Promulgating both of 

these sets of standards is consistent with 

the Commission’s authority to monitor, 

inspect, and examine, Class II gaming, 

25 U.S.C. 2706 (b)(1)–(4), and to 

promulgate such regulations as it deems 

appropriate to implement the provisions 

of IGRA. 25 U.S.C. 2706(b)(10). 

Section 547(c) embodies a general 

prohibition upon cheating or misleading 

players. It contains two specific rules 

that implement this general prohibition. 

One is a requirement that all prizes 

advertised be available to win, and the 

other, which is related, is the minimum 

probability requirement. Having a 

minimum probability requirement 

ensures that there are no prizes that are 

theoretically available but will never, as 

a practical matter, be won. 

For example, assume in a 75-ball 

bingo game the progressive prize is 

awarded when a unique 20-space 

pattern is hit on the first 20 numbers 

drawn. The chances of that occurring 

are 1 in 803,167,998,494,073,240. This 

is a prize that never will be hit. To put 

the number in perspective, it is not 

quite twice as many seconds as have 

elapsed since the Big Bang. 

Nevertheless, as the intention of the 

minimum probability requirement is to 

mark an outer bound within which 

wagers are fair, the Commission agrees 

that the proposed limits of 1 in 50 

million for progressive awards and 1 in 

25 million for other award is not low 

enough and is changing the requirement 

to 1 in 100 million for progressive 

awards and 1 in 50 million for other 

awards. 

These limits should provide an 

appropriate outer bound of fairness. For 

example, a progressive award with one 

chance to win in 100 million will hit, 

on average, one time every 100 million 

plays. If a system or systems linked to 

a common progressive award averages 

250,000 plays a day, that works out to 

about 7.5 million plays per month, and 

it will take a little over one year, on 

average, to hit the award. The 

Commission believes that this sets an 

appropriate outer bound as players 

demand greater frequency in progressive 

awards than that. 


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Section 547.5(c)—Fairness Standards 

Comment: One commenter suggested 

that the requirements of this 

paragraph—that Class II gaming systems 

shall not cheat, mislead, or disadvantage 

patrons—are not design standards, 

cannot be tested by a testing laboratory, 

and should be deleted. If the 

Commission retains them, the 

commenter suggested that the paragraph 

read that no gaming system ‘‘shall be 

designed to’’ do these things. Finally, 

the commenter suggested that as a 

standard, ‘‘disadvantaging’’ a player is 

subjective, not testable, could be 

construed to require that players always 

get their money back, and is not 

required in any gaming jurisdiction. 

Response: The Commission disagrees 

in part and agrees in part. The word 

‘‘disadvantage’’ adds nothing to the 

section an has been deleted. Other than 

this, however, the section remains as 

proposed. Simply put, gaming patrons 

should not be cheated or duped, 

unintentionally or intentionally. 

Comments Upon § 547.7, Minimum 

Hardware Standards 

Section 547.7(b)—Printed Circuit Boards 

Comment: One commenter suggested 

striking the requirement that switches or 

jumpers on circuit boards that have the 

potential to affect the outcome or 

integrity of games, progressive awards, 

financial instruments, cashless 

transactions, voucher transactions, or 

accounting records be capable of being 

sealed. The commenter argued that the 

requirement is unnecessary and unduly 

burdensome. 

Response: The Commission disagrees. 

The paragraph does not mandate that 

such switches or jumpers actually be 

sealed. Rather, the paragraph only 

requires that the switches or jumpers be 

capable of being sealed in the event that 

the tribal gaming regulatory authority so 

requires. 

Section 547.7(g)—Financial Instrument 

Storage Components, Security 

Comment: A number of commenters 

suggested that only those storage 

components not ‘‘designed to be’’ 

operated under the direct control of an 

employee be located in a secured 

cabinet. As written, this paragraph 

requires those components not actually 

so operated be located in a secured 

cabinet. Adding the words ‘‘designed to 

be’’ provides a standard to which a 

testing laboratory can test. 

Response: The Commission disagrees 

with the necessity of such a change. Of 

course a testing laboratory can only 

assess a prototype’s design and cannot 

assess what happens once equipment is 

placed on the gaming floor. The 

Commission is confident, however, that 

in most cases, equipment will be tested 

and used according to its intended 

design. In particular, however, the 

proposed change could have the 

unintended effect of handicapping the 

regulator. If, for example, a component 

designed to be used by an individual— 

say a point-of-sale cash drawer—could 

in practice be left alone without 

sufficient safeguard. Such a 

circumstance is undesirable and 

insecure but nevertheless compliant 

with the technical standards if they read 

as the commenters propose because the 

cash drawer was ‘‘designed to be’’ used 

under the control of an employee or 

agent. 

Section 547.7(k)(2)—Door Access 

Detection, Sensors 

Comment: One commenter suggested 

that the standard for door sensor 

security was impossible to meet—‘‘It 

shall not be possible to disable a door 

open sensor * * *’’—and should be 

replaced with ‘‘shall be secure against 

attempts to disable * * *’’ 

Response: On the basis of this 

comment, the Commission reviewed 

this paragraph and determined both that 

it was both unclear and redundant. The 

security of door open sensors and 

components within cabinets is already 

addressed elsewhere under paragraph 

(k). The Commission therefore deleted 

547.7(k)(2) and renumbered the 

remainder of paragraph (k) accordingly. 

Comments Upon § 547.8, Minimum 

Software Standards 

Section 547.8(a)(1)(ii)—Display of Game 

Results 

Comment: One commenter suggested 

that the requirement that a player 

interface display ‘‘game results’’ be 

clarified and read ‘‘game results for the 

cards displayed on that player 

interface.’’ This would remove any 

implication that all other players’ 

results also have to be displayed. 

Response: The Commission disagrees 

and believes the standard as written is 

sufficiently clear. Current electronic 

game systems are designed to display 

each player’s individual results, and 

nothing else is intended or should be 

read here. 

Section 547.8(a)(2)(ii) and Elsewhere— 

Game Recall, Alternate, Entertaining 

Displays. 

Comment: A number of commenters 

objected to the requirement that game 

recall functions have to be able to recall 

not only the final results of the last 

game played but also any associated 

‘‘alternative’’ display of results such as 

video reels that do not determine game 

outcome but are additional, separate, 

ways of displaying results for the player. 

The commenters contended that the 

Commission lacks the statutory 

authority to impose such a requirement. 

The commenters suggested as well that 

the requirement imbues alternative 

displays with legal significance that 

they do not have and that this can blur 

the line between Class II and Class III 

gaming. Finally, the commenters 

suggested that the requirement may 

work against its intended regulatory 

goal—to make easier the investigation 

and resolution of patron disputes—and 

give patrons legal rights based on the 

alternate displays that they otherwise 

would not have. 

Response: The Commission disagrees. 

As a preliminary matter, the 

Commission observes that a number of 

major gaming system manufacturers 

already provide this feature. Thus, as 

they do by requiring independent 

laboratory testing of gaming systems, the 

Technical Standards do no more than 

formalize existing best practices. 

The broad regulatory goal of the 

requirement is, as Congress stated, to 

ensure that gaming is ‘‘conducted fairly 

and honestly by both the operator and 

players.’’ 25 U.S.C. 2702(2). The 

requirement attempts to achieve this 

goal by creating a mechanism that gives 

tribal gaming regulatory authorities as 

much information as is possible when 

called upon to resolve patron disputes 

over the outcome of games. The 

investigating tribal gaming regulatory 

authority will have available to it both 

the results of the bingo game and of any 

entertaining display. Further, as this 

requirement formalizes existing 

practices, the Commission disagrees that 

it will inhibit, rather than make easier, 

the investigative job of the tribal gaming 

regulatory authority. 

Requiring recall of entertaining 

displays will not blur the necessary 

distinction between Class II and Class III 

gaming. Indeed, the presence or absence 

of entertaining displays in a Class II 

game does not affect the classification of 

the game at all. Drawing that line was 

the primary regulatory goal of the nowdiscarded Classification regulations. 

The Technical Standards do not attempt 

to draw such a line. Rather, they assume 

that such a line already exists. They are, 

by design, applicable only to Class II 

gaming and are specifically designed to 

be applicable only to Class II gaming. 

They are organized around the concept 

of the ‘‘Class II gaming system’’ central 

to Class II gaming. 

There is no intention by this 

requirement to give any legal 


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significance to entertaining displays. An 

entertaining display that malfunctions 

and appears to land on a winning 

combination when the game, in fact, 

was not won does not entitle a patron 

to any award, because prizes are 

determined only by bingo or the Class 

II game in question. 547.16(b)(1). Any 

malfunction, whether in a bingo game or 

in an entertaining display voids all 

prizes and plays. 547.16(b)(2). That said, 

to avoid any implication of legal 

significance in the term ‘‘alternate 

display,’’ the Commission has changed 

the term to ‘‘entertaining display’’ 

throughout. 

Finally, the Commission has the 

authority to promulgate the requirement 

here, just as it has the authority to 

promulgate the Technical Standards as 

a whole. As discussed in greater detail 

above, Congress was expressly 

concerned that gaming under IGRA be 

‘‘conducted fairly and honestly by both 

the operator and players.’’ 25 U.S.C. 

2702(2). The Technical Standards are 

designed to protect the integrity of Class 

II gaming. The Technical Standards are 

intended to assure the fairness, integrity 

and safety of Class II games and 

equipment themselves. Promulgating 

the Technical Standards is consistent 

with the Commission’s authority to 

monitor, inspect, and examine Class II 

gaming, 25 U.S.C. 2706 (b)(1)–(4), and to 

promulgate such regulations as it deems 

appropriate to implement the provisions 

of IGRA. 25 U.S.C. 2706(b)(10). 

Section 547.8(b)(1)—Game Initiation 

and Play 

Comment: A number of commenters 

suggested that the prohibition that 

‘‘there shall be no automatic or 

undisclosed changes of rule’’ be 

amended to say that ‘‘there shall be no 

undisclosed changes of rules.’’ 

Response: The Commission disagrees. 

The prohibition is to be read with the 

first sentence of the paragraph, ‘‘[e]ach 

game played on the Class II gaming 

system shall follow and not deviate 

from a constant set of rules for each 

game provided to players. * * * There 

shall be no automatic or undisclosed 

changes of rules.’’ The intention is to 

prohibit the use of games or systems 

that base the outcome of a particular 

play, or that adjust the overall return to 

the player, on the outcome of previous 

plays. The outcome of any one 

particular game played must be 

independent of the outcome of all other 

games played. 

This section is not intended to 

address, nor should it be construed to 

address, downloadable game software, 

which can occur automatically on a preprogrammed schedule. Downloadable 

games are governed by § 547.12. 

Section 547.8(c)(2)—Audit Mode 

Comment: One commenter suggested 

defining what is meant by the 

requirement that audit mode be 

accessible by a ‘‘secure method.’’ 

Response: The Commission agrees 

and has added descriptive language. 

The paragraph now reads, ‘‘Audit mode 

shall be accessible by a secure method 

such as an employee PIN and key or 

other auditable access control.’’ 

Section 547.8(b)(2) and Elsewhere— 

Applicability to Games Similar to Bingo 

Comment: A number of commenters 

requested that the Commission make 

part 547 applicable to bingo alone, 

rather than to games similar to bingo 

and other Class II games as well. Games 

similar to bingo may have individual 

considerations not addressed here and 

should be addressed in regulations 

designed specifically for them. 

Response: The Commission disagrees. 

While games similar to bingo are not 

bingo, they are substantially similar, by 

definition, and can be played on the 

same systems. Failure to include games 

similar to bingo has the potential to 

leave some systems uncovered by this 

part. To the extent that a requirement in 

the technical standards is obviously 

inapplicable to a system offering a 

‘‘game similar to bingo,’’ then it does 

not apply. 547.5(b). To the extent that a 

requirement in the technical standards 

is ill fit to a ‘‘game similar to bingo’’ 

system, that can be managed through a 

variance, and part 547 will remain 

applicable to all games played on Class 

II gaming systems. 

Section 547.8(d)(4)(vii) and Elsewhere— 

Applicability to Pull Tabs 

Comment: A number of commenters 

requested that the Commission make 

part 547 applicable to bingo alone, 

rather than include pull tabs. Pull tabs 

may have individual considerations not 

addressed here and should be addressed 

in regulations designed specifically for 

them. 

Response: The Commission disagrees. 

Again, failure to include pull tabs has 

the potential to leave some Class II 

gaming systems uncovered by this part. 

To the extent that a requirement in the 

technical standards is obviously 

inapplicable to a system offering pull 

tabs, then it does not apply. 547.5(b). To 

the extent that a requirement in the 

technical standards is ill fit to a pull 

tabs system, that can be managed 

through a variance. Part 547 will remain 

applicable to all games played on Class 

II gaming systems. 

Section 547.8(d)(4)(vii)—Pull Tabs 

Comment: A number of commenters 

stated that for pull tabs, it is not 

possible to comply with all of the 

requirements of this section. 

Response: The Commission disagrees. 

The requirements of § 547.8(d)(4)(vii) 

are specific to systems running pull tabs 

games. If there are portions of § 547.8 

that are not obviously applicable to a 

Class II gaming system offering pull 

tabs, and if it is not possible to comply 

with some requirements because they 

are inapplicable, that is of no matter. 

The Technical Standards were 

specifically designed to be broadly and 

generally applicable to Class II gaming 

systems, no matter how any individual 

system implemented a particular game. 

Thus, bingo systems consisting of 

electronic client-server architectures 

and bingo systems involving a manual 

number draw and electronic bingo 

minders sold from a point-of-sale station 

are, for example, both within the ambit 

of the Technical Standards. Inevitably, 

there will be systems and situations 

where the Standards prescribe 

requirements that are simply 

inapplicable. When that is the case, the 

inapplicable standards are ignored, as 

the Technical Standards themselves 

instruct. Section 547.5(b) requires that 

gaming systems meet only ‘‘applicable 

requirements of this part.’’ 

Comments Upon § 547.9, Accounting 

Section 547.9(a)—Required Accounting 

Data 

Comment: A number of commenters 

suggested that Class II gaming systems 

should track not only ‘‘amount in’’ and 

‘‘amount out,’’ as those terms are 

described, but also ‘‘Bingo Sales’’ and 

‘‘Prize Payouts,’’ terms used in the 

proposed minimum internal control 

standards of part 543. 

Response: The Commission disagrees. 

As the Technical Standards are 

designed to apply to Class II gaming 

systems essentially independent of what 

game is played on them, the more 

general terms ‘‘amount in’’ and ‘‘amount 

out’’ are more appropriate. The 

Commission would prefer ‘‘Bingo sales’’ 

and ‘‘prize payouts’’ only if it had 

decided to limit the application of the 

Technical Standards to bingo. 

Comment: A number of commenters 

suggested that the descriptions and 

requirements of ‘‘amount in’’ and 

‘‘amount out’’ would be clearer if 

financial instruments accepted had to be 

tracked ‘‘independently per financial 

instrument acceptor’’ and financial 

instruments dispensed had to be tracked 

‘‘independently per financial 

instrument dispenser.’’ 


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Response: The Commission agrees 

and has made the suggested change. 

Comments Upon § 547.11, Money and 

Credit Handling 

Section 547.11(b)(5)(i)—Vouchers 

Comment: One commenter suggested 

that there is no need to require both a 

gaming operation name and its location 

on coupons and vouchers. Moreover, 

the meaning of ‘‘location’’ is unclear as 

a location may be identified any number 

of ways. 

Response: The Commission believes 

that the standard is appropriate as 

written. The purpose is to match 

vouchers and coupons to the gaming 

facility that issues and accepts them. 

Whether ‘‘location’’ is implemented as a 

city and state, as a street address, as a 

reservation, or as some combination of 

these is left up to the tribal gaming 

regulatory authority in its discretion. 

Comments Upon § 547.12, Software 

Downloads 

Comment: A number of commenters 

suggested that some of the requirements 

in these paragraphs are not testable 

design standards but are operational 

standards that belong in the Class II 

MICS. These include the requirements 

that downloads shall be conducted only 

‘‘as authorized’’ and that ‘‘the tribal 

gaming regulatory authority shall 

confirm verification’’ of the download. 

Response: The Commission believes 

that these are some of the requirements 

that belong equally in the Technical 

Standards and MICS. To the extent that 

they appear in the Technical Standards, 

the requirements should be construed to 

mean that there must be some 

mechanism in the gaming system that 

will allow downloads to be 

authorized—e.g., password entry by an 

appropriate official—or to be 

confirmed—e.g. an audit trail 

reviewable by the tribal gaming 

regulatory authority. Accordingly, the 

Commission has amended the last 

sentence of § 547.12(b) to read, ‘‘Using 

any method it deems appropriate, the 

tribal gaming regulatory authority shall 

confirm the verification.’’ The 

complementary MICS governing access 

to and authorizations for information 

technology is found in § 543.16(a)–(c), 

and complementary standards for access 

verification are found in § 543.16(e). 

Comments Upon § 547.13, Program 

Storage Media 

Comment: One commenter suggested 

that write-protected hard disks be 

permitted using software write 

protection verifiable by testing labs, 

such as Microsoft Enhanced Write 

Filter. 

Response: The Commission agrees 

and has made the suggested change. The 

paragraph now reads, ‘‘Write protected 

hard disks are permitted if the hardware 

means of enabling the write protect is 

easily viewable and can be sealed in 

place. Write protected hard disks are 

permitted using software write 

protection verifiable by a testing 

laboratory.’’ 

Comments Upon § 547.14, Random 

Number Generation 

Comment: One commenter suggested 

exempting bingo ball RNGs from the 

requirements of this section because 

broad tolerance levels in bingo balls 

manufacture create too great a variance 

in randomness. Testing bingo ball RNGs 

to the standards of this section is 

therefore not meaningful. 

Response: The Commission agrees. 

However, § 547.14, by its terms, only 

applies to electronic RNGs. Bingo Ball 

RNGs are already exempt from the 

requirements of § 547.14. 

Comments Upon § 547.15, Electronic 

Data Communications Between System 

Components 

Comment: One commenter suggested 

that the following should be deleted 

from § 547.15(e) as untestable by a 

testing laboratory and more 

appropriately placed in the MICS: 

‘‘Remote communications shall only be 

allowed if authorized by the tribal 

gaming regulatory authority.’’ 

Response: The Commission believes 

that these are also requirements that 

belong equally in the Technical 

Standards and MICS. To the extent that 

they appear in the Technical Standards, 

the requirements should be construed to 

mean that there be some mechanism in 

the gaming system that will enable and 

disable remote communications. This 

will allow the tribal gaming regulatory 

authority to authorize and control 

remote communications. 

Complementary MICS governing remote 

access are found in § 543.16(f). 

Comments Upon § 547.16—Game 

Artwork, Glass, Rules Etc. 

Comment: One commenter suggested 

revising the section heading to refer to 

‘‘information that must be made 

available to players.’’ 

Response: The Commission believes 

that the intent and meaning of this 

section is adequately described by the 

language of the proposed rule. 

Comments Upon § 547.17—Variances 

Comment: One commenter suggested 

that the heading in this section 

improperly refers to a ‘‘gaming 

operation’’ requesting a variance and 

that it properly should refer to a ‘‘tribal 

gaming regulatory authority’’ requesting 

a variance as that is the apparent intent 

of the section. 

Response: The Commission agrees 

and has made the suggested change. 

§ 547.17(c)(6)—Appellate Procedure 

Comment: A number of commenters 

suggested that this paragraph be 

amended to automatically affirm the 

tribal gaming regulatory authority’s 

determination if the Commission fails to 

make a decision on appeal within the 

time provided. 

Response: The Commission agrees in 

part and has made the suggested change. 

In addition, the Commission recognizes 

that in rare or unusual instances, 

circumstances may require more than 30 

days to issue a decision. Therefore, the 

Commission has added a provision 

enabling it to extend the deadline for 

decision an additional 30 days, but only 

upon the consent of the appellant tribal 

gaming regulatory authority. This 

calendaring mechanism also appears in 

25 CFR part 539 governing management 

contract appeals, and the Commission 

finds that it works well. 

List of Subjects in 25 CFR Part 547 

Gambling, Indian—lands, Indian— 

tribal government, Reporting and 

recordkeeping requirements. 

■ For the reasons set forth in the 

preamble, the Commission amends 25 

CFR Chapter III by adding Part 547 to 

read as follows: 

PART 547—MINIMUM TECHNICAL 

STANDARDS FOR GAMING 

EQUIPMENT USED WITH THE PLAY 

OF CLASS II GAMES 

Sec. 

547.1 What is the purpose of this part? 

547.2 How do these regulations affect state 

jurisdiction? 

547.3 What are the definitions for this part? 

547.4 How does a tribal government, tribal 

gaming regulatory authority, or tribal 

gaming operation comply with this part? 

547.5 What are the rules of interpretation 

and of general application for this part? 

547.6 What are the minimum technical 

standards for enrolling and enabling 

Class II gaming system components? 

547.7 What are the minimum technical 

hardware standards applicable to Class II 

gaming systems? 

547.8 What are the minimum technical 

software standards applicable to Class II 

gaming systems? 

547.9 What are the minimum technical 

standards for Class II gaming system 

accounting functions? 

547.10 What are the minimum standards for 

Class II gaming system critical events? 

547.11 What are the minimum technical 

standards for money and credit 

handling? 


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547.12 What are the minimum technical 

standards for downloading on a Class II 

gaming system? 

547.13 What are the minimum technical 

standards for program storage media? 

547.14 What are the minimum technical 

standards for electronic random number 

generation? 

547.15 What are the minimum technical 

standards for electronic data 

communications between system 

components? 

547.16 What are the minimum standards for 

game artwork, glass, and rules? 

547.17 How does a tribal gaming regulatory 

authority apply for a variance from these 

standards? 

Authority: 25 U.S.C. 2706(b). 

§ 547.1 What is the purpose of this part? 

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. 

§ 547.2 How do these regulations affect 

state jurisdiction? 

Nothing in this part shall be 

construed to grant to a state jurisdiction 

over Class II gaming or to extend a 

state’s jurisdiction over Class III gaming. 

§ 547.3 What are the definitions for this 

part? 

For the purposes of this part, the 

following definitions apply: 

Account access component. A 

component within a Class II gaming 

system that reads or recognizes account 

access media and gives a patron the 

ability to interact with his or her 

account. 

Account access medium. A magnetic 

stripe card or any other medium 

inserted into, or otherwise made to 

interact with, an account access 

component in order to give a patron the 

ability to interact with an account. 

Audit mode. The mode where it is 

possible to view Class II gaming system 

accounting functions, statistics, etc. and 

perform non-player-related functions. 

Agent. An employee or other person 

authorized by the gaming operation, as 

approved by the tribal gaming 

regulatory authority, designated for 

certain decisions, tasks and actions in 

the gaming operation. 

Cancel credit. An action initiated by 

the Class II gaming system where some 

or all of a player’s credits are removed 

by an attendant and paid to the player. 

Cashless system. A system that 

performs cashless transactions and 

maintains records of those cashless 

transactions. 

Cashless transaction. A movement of 

funds electronically from one 

component to another, often to or from 

a patron deposit account. 

CD–ROM. Compact Disc—Read Only 

Memory. 

Chairman. The Chairman of the 

National Indian Gaming Commission. 

Class II game. The same as ‘‘class II 

gaming’’ in 25 U.S.C. 2703(7)(A). 

Class II gaming system. All 

components, whether or not technologic 

aids in electronic, computer, 

mechanical, or other technologic form, 

that function together to aid the play of 

one or more Class II games, including 

accounting functions mandated by these 

regulations. 

Commission. The National Indian 

Gaming Commission established by the 

Indian Gaming Regulatory Act, 25 

U.S.C. 2701 et seq. 

Coupon. A financial instrument of 

fixed wagering value, usually paper, 

that can only be used to acquire noncashable credits through interaction 

with a voucher system. This does not 

include instruments such as printed 

advertising material that cannot be 

validated directly by a voucher system. 

Critical memory. Memory locations 

storing data essential to the 

functionality of the Class II gaming 

system. 

DLL. A Dynamic-Link Library file. 

Download package. Approved data 

sent to a component of a Class II gaming 

system for such purposes as changing 

the component software. 

DVD. Digital Video Disk or Digital 

Versatile Disk. 

Electromagnetic interference. The 

physical characteristic of an electronic 

component to emit electronic noise 

either into free air, onto the power lines, 

or onto communication cables. 

Electrostatic discharge. A singleevent, rapid transfer of electrostatic 

charge between two objects, usually 

resulting when two objects at different 

potentials come into direct contact with 

each other. 

EPROM. Erasable Programmable Read 

Only Memory—a storage area that may 

be filled with data and information, that 

once written is not modifiable, and that 

is retained even if there is no power 

applied to the machine. 

Fault. An event that when detected by 

a Class II gaming system causes a 

discontinuance of game play or other 

component functions. 

Financial instrument. Any tangible 

item of value tendered in Class II game 

play, including, but not limited to, bills, 

coins, vouchers and coupons. 

Financial instrument acceptor. Any 

component that accepts financial 

instruments. 

Financial instrument dispenser. Any 

component that dispenses financial 

instruments. 

Financial instrument storage 

component. Any component that stores 

financial instruments. 

Flash memory. Non-volatile memory 

that retains its data when the power is 

turned off and that can be electronically 

erased and reprogrammed without being 

removed from the circuit board. 

Game software. The operational 

program or programs that govern the 

play, display of results, and/or awarding 

of prizes or credits for Class II games. 

Gaming equipment. All electronic, 

electro-mechanical, mechanical, or 

other physical components utilized in 

the play of Class II games. 

Hardware. Gaming equipment. 

Interruption. Any form of misoperation, component failure, or 

interference to the Class II gaming 

equipment. 

Modification. A revision to any 

hardware or software used in a Class II 

gaming system. 

Non-cashable credit. Credits given by 

an operator to a patron; placed on an 

Class II gaming system through a 

coupon, cashless transaction or other 

approved means; and capable of 

activating play but not being converted 

to cash. 

Patron deposit account. An account 

maintained on behalf of a patron, for the 

purpose of depositing and withdrawing 

cashable funds for the primary purpose 

of interacting with a gaming activity. 

Player interface. Any component or 

components of a Class II gaming system, 

including an electronic or technologic 

aid (not limited to terminals, player 

stations, handhelds, fixed units, etc.), 

that directly enables player interaction 

in a Class II game. 

Prize schedule. The set of prizes 

available to players for achieving predesignated patterns in the Class II game. 

Program storage media. An electronic 

data storage component, such as a CD– 

ROM, EPROM, hard disk, or flash 

memory on which software is stored 

and from which software is read. 

Progressive prize. A prize that 

increases by a selectable or predefined 

amount based on play of a Class II game. 

Random number generator (RNG). A 

software module, hardware component 

or combination of these designed to 

produce outputs that are effectively 

random. 

Reflexive software. Any software that 

has the ability to manipulate and/or 

replace a randomly generated outcome 

for the purpose of changing the results 

of a Class II game. 

Removable/rewritable storage media. 

Program or data storage components 


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that can be removed from gaming 

equipment and be written to, or 

rewritten by, the gaming equipment or 

by other equipment designed for that 

purpose. 

Server. A computer that controls one 

or more applications or environments 

within a Class II gaming system. 

Test/diagnostics mode. A mode on a 

component that allows various tests to 

be performed on the Class II gaming 

system hardware and software. 

Testing laboratory. An organization 

recognized by a tribal gaming regulatory 

authority pursuant to § 547.4(f). 

Tribal gaming regulatory authority. 

The entity authorized by tribal law to 

regulate gaming conducted pursuant to 

the Indian Gaming Regulatory Act. 

Voucher. A financial instrument of 

fixed wagering value, usually paper, 

that can only be used to acquire an 

equivalent value of cashable credits or 

cash through interaction with a voucher 

system. 

Voucher system. A component of the 

Class II gaming system or an external 

system that securely maintains records 

of vouchers and coupons; validates 

payment of vouchers; records successful 

or failed payments of vouchers and 

coupons; and controls the purging of 

expired vouchers and coupons. 

§ 547.4 How does a tribal government, 

tribal gaming regulatory authority, or tribal 

gaming operation comply with this part? 

(a) Limited immediate compliance. A 

tribal gaming regulatory authority shall: 

(1) Require that all Class II gaming 

system software that affects the play of 

the Class II game be submitted, 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 

November 10, 2008; 

(2) Require that the testing laboratory 

test the submission to the standards 

established by § 547.8(b), § 547.8(f), 

§ 547.14, the minimum probability 

standards of § 547.5(c), and to any 

additional technical standards adopted 

by the tribal gaming regulatory 

authority; 

(3) Require that the testing laboratory 

provide the tribal gaming regulatory 

authority with a formal written report 

setting forth and certifying to the 

findings and conclusions of the test; 

(4) Make 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, but only 

upon receipt of a testing laboratory’s 

report that the Class II gaming system is 

compliant with § 547.8(b), § 547.8(f), the 

minimum probability standards of 

§ 547.5(c), § 547.14, and any other 

technical standards adopted by the 

tribal gaming regulatory authority. If the 

tribal gaming regulatory authority 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), the minimum probability 

standards of § 547.5(c), § 547.14, or any 

other technical standards adopted by 

the tribal gaming regulatory authority, 

then the gaming system shall 

immediately be removed from play and 

not be utilized. 

(5) Retain 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; 

(6) Retain 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; and 

(7) Require the supplier of any player 

interface to designate with a 

permanently affixed label each player 

interface with an identifying number 

and the date of manufacture or a 

statement that the date of manufacture 

was on or before the effective date of 

this part. The tribal gaming regulatory 

authority shall also require the supplier 

to provide a written declaration or 

affidavit affirming that the date of 

manufacture was on or before November 

10, 2008. 

(b) Grandfather provisions. All Class 

II gaming systems manufactured or 

placed in a tribal facility on or before 

the effective date of this part and 

certified pursuant to paragraph (a) of 

this section are grandfathered Class II 

gaming systems for which the following 

provisions apply: 

(1) Grandfathered Class II gaming 

systems may continue in operation for 

a period of five years from November 

10, 2008. 

(2) Grandfathered Class II gaming 

system shall be available for use at any 

tribal gaming facility subject to approval 

by the tribal gaming regulatory 

authority, which shall transmit its 

notice of that approval, identifying the 

grandfathered Class II gaming system 

and its components, to the Commission. 

(3) As permitted by the tribal gaming 

regulatory authority, individual 

hardware or software components of a 

grandfathered Class II gaming system 

may be repaired or replaced to ensure 

proper functioning, security, or integrity 

of the grandfathered Class II gaming 

system. 

(4) All modifications that affect the 

play of a grandfathered Class II gaming 

system must be approved pursuant to 

paragraph (c) of this section, except for 

the following: 

(i) Any software modifications that 

the tribal gaming regulatory authority 

finds will maintain or advance the 

system’s overall compliance with this 

part or any applicable provisions of 

parts 542 and 543 of this chapter, after 

receiving a new testing laboratory report 

that the modifications are compliant 

with the standards established by 

§ 547.8(b), the minimum probability 

requirements of § 547.5(c), § 547.14, and 

any other standards adopted by the 

tribal gaming regulatory authority; 

(ii) Any hardware modifications that 

the tribal gaming regulatory authority 

finds will maintain or advance the 

system’s overall compliance with this 

part or any applicable provisions of 

parts 542 and 543 of this chapter; and 

(iii) Any other modification to the 

software of a grandfathered Class II 

gaming system that the tribal gaming 

regulatory authority finds will not 

detract from, compromise or prejudice: 

(A) The proper functioning, security, 

or integrity of the Class II gaming 

system, and 

(B) The gaming system’s overall 

compliance with the requirements of 

this part or any applicable provisions of 

parts 542 and 543 of this chapter. 

(iv) No such modification may be 

implemented without the approval of 

the tribal gaming regulatory authority. 

The tribal gaming regulatory authority 

shall maintain a record of the 

modification so long as the Class II 

gaming system that is the subject of the 

modification remains available to the 

public for play and shall make the 

record available to the Commission 

upon request. The Commission will 

only make available for public review 

records or portions of records subject to 

release under the Freedom of 

Information Act, 5 U.S.C. 552; the 

Privacy Act of 1974, 5 U.S.C. 552a; or 

the Indian Gaming Regulatory Act, 25 

U.S.C. 2716(a). 

(c) Submission, testing, and 

approval—generally. Except as provided 

in paragraphs (b) and (d) of this section, 

no tribal gaming regulatory authority 

shall permit in a tribal gaming operation 

the use of any Class II gaming system, 

or any associated cashless system or 

voucher system or any modification 

thereto, unless: 

(1) The Class II gaming system, 

cashless system, voucher payment 

system, or modification has been 

submitted to a testing laboratory; 

(2) The testing laboratory tests the 

submission to the standards established 

by: 

(i) This part; 


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(ii) Any applicable provisions of parts 

542 and 543 of this chapter that are 

testable by the testing laboratory; and 

(iii) The tribal gaming regulatory 

authority; 

(3) The testing laboratory provides a 

formal written report to the party 

making the submission, setting forth 

and certifying to its findings and 

conclusions; and 

(4)(i) Following receipt of the testing 

laboratory’s report, the tribal gaming 

regulatory authority makes a finding 

that the Class II gaming system, cashless 

system, or voucher system conforms to 

the standards established by: 

(A) This part; 

(B) Any applicable provisions of parts 

542 and 543 of this chapter that are 

testable by the testing laboratory; and 

(C) The tribal gaming regulatory 

authority. 

(ii) The tribal gaming regulatory 

authority shall retain a copy of the 

testing laboratory’s report so long as the 

Class II gaming system, cashless system, 

voucher system, or modification thereto 

that is the subject of the report remains 

available to the public for play in its 

gaming operation. 

(d) Emergency hardware and software 

modifications. (1) A tribal gaming 

regulatory authority, in its discretion, 

may permit modified hardware or 

software to be made available for play 

without prior laboratory testing or 

review if the modified hardware or 

software is: 

(i) Necessary to correct a problem 

affecting the fairness, security, or 

integrity of a game or accounting system 

or any cashless system, or voucher 

system; or 

(ii) Unrelated to game play, an 

accounting system, a cashless system, or 

a voucher system. 

(2) If a tribal gaming regulatory 

authority authorizes new or modified 

software or hardware to be made 

available for play or use without prior 

testing laboratory review, the tribal 

gaming regulatory authority shall 

thereafter require the hardware or 

software manufacturer to: 

(i) Immediately advise other users of 

the same hardware or software of the 

importance and availability of the 

update; 

(ii) Immediately submit the new or 

modified hardware or software to a 

testing laboratory for testing and 

verification of compliance with this part 

and any applicable provisions of parts 

542 and 543 of this chapter that are 

testable by the testing laboratory; and 

(iii) Immediately provide the tribal 

gaming regulatory authority with a 

software signature verification tool 

meeting the requirements of § 547.8(f) 

for any new or modified software. 

(3) If a tribal gaming regulatory 

authority authorizes a software or 

hardware modification under this 

paragraph, it shall maintain a record of 

the modification and a copy of the 

testing laboratory report so long as the 

Class II gaming system that is the 

subject of the modification remains 

available to the public for play and shall 

make the record available to the 

Commission upon request. The 

Commission will only make available 

for public review records or portions of 

records subject to release under the 

Freedom of Information Act, 5 U.S.C. 

552; the Privacy Act of 1974, 5 U.S.C. 

552a; or the Indian Gaming Regulatory 

Act, 25 U.S.C. 2716(a). 

(e) Compliance by charitable gaming 

operations. This part shall not apply to 

charitable gaming operations, provided 

that: 

(1) The tribal government determines 

that the organization sponsoring the 

gaming operation is a charitable 

organization; 

(2) All proceeds of the charitable 

gaming operation are for the benefit of 

the charitable organization; 

(3) The tribal gaming regulatory 

authority permits the charitable 

organization to be exempt from this 

part; 

(4) The charitable gaming operation is 

operated wholly by the charitable 

organization’s employees or volunteers; 

and 

(5) The annual gross gaming revenue 

of the charitable gaming operation does 

not exceed $1,000,000. 

(f) Testing laboratories. (1) A testing 

laboratory may provide the 

examination, testing, evaluating and 

reporting functions required by this 

section provided that: 

(i) It demonstrates its integrity, 

independence and financial stability to 

the tribal gaming regulatory authority. 

(ii) It demonstrates its technical skill 

and capability to the tribal gaming 

regulatory authority. 

(iii) It is not owned or operated by the 

same tribe or tribal gaming regulatory 

authority for whom it is providing the 

testing, evaluating, and reporting 

functions required by this section. 

(iv) The tribal gaming regulatory 

authority: 

(A) Makes a suitability determination 

of the testing laboratory based upon 

standards no less stringent than those 

set out in §§ 533.6(b)(1)(ii) through (v) of 

this chapter and based upon no less 

information than that required by 

§ 537.1 of this chapter, or 

(B) Accepts, in its discretion, a 

determination of suitability for the 

testing laboratory made by any other 

gaming regulatory authority in the 

United States. 

(v) After reviewing the suitability 

determination and the information 

provided by the testing laboratory, the 

tribal gaming regulatory authority 

determines that the testing laboratory is 

qualified to test and evaluate Class II 

gaming systems. 

(2) The tribal gaming regulatory 

authority shall: 

(i) Maintain a record of all 

determinations made pursuant to 

paragraphs (f)(1)(iv) and (f)(1)(v) of this 

section for a minimum of three years 

and shall make the records available to 

the Commission upon request. The 

Commission will only make available 

for public review records or portions of 

records subject to release under the 

Freedom of Information Act, 5 U.S.C. 

552; the Privacy Act of 1974, 5 U.S.C. 

552a; or the Indian Gaming Regulatory 

Act, 25 U.S.C. 2716(a). 

(ii) Place the testing laboratory under 

a continuing obligation to notify it of 

any adverse regulatory action in any 

jurisdiction where the testing laboratory 

conducts business. 

(iii) Require the testing laboratory to 

provide notice of any material changes 

to the information provided to the tribal 

gaming regulatory authority. 

§ 547.5 What are the rules of interpretation 

and of general application for this part? 

(a) Minimum standards. A tribal 

gaming regulatory authority may 

establish and implement additional 

technical standards that are as stringent 

as, or more stringent than, those set out 

in this part. 

(b) Only applicable standards apply. 

Gaming equipment and software used 

with Class II gaming systems shall meet 

all applicable requirements of this part. 

For example, if a Class II gaming system 

lacks the ability to print or accept 

vouchers, then any standards that 

govern vouchers do not apply. 

(c) Fairness. No Class II gaming 

system shall cheat or mislead users. All 

prizes advertised shall be available to 

win. No progressive prize shall have a 

probability of winning less than 1 in 

100,000,000. No other prize shall have 

a probability of winning less than 1 in 

50,000,000. 

(d) Approved equipment and software 

only. All gaming equipment and 

software used with Class II gaming 

systems shall be identical in all respects 

to a prototype reviewed and tested by a 

testing laboratory and approved for use 

by the tribal gaming regulatory authority 

pursuant to § 547.4(a) through (c). 

Unapproved software shall not be 

loaded onto or stored on any program 


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storage medium used in a Class II 

gaming system, except as provided in 

§ 547.4(d). 

(e) Proper functioning. All gaming 

equipment and software used with Class 

II gaming systems shall perform 

according to the manufacturer’s design 

and operating specifications. 

(f) No Limitation of Technology. This 

part should not be interpreted to limit 

the use of technology or to preclude the 

use of technology not specifically 

referenced. 

(g) Severability. If any provision of 

this part is declared invalid by a court 

of competent jurisdiction, such decision 

shall not affect the remainder of this 

part. 

§ 547.6 What are the minimum technical 

standards for enrolling and enabling Class 

II gaming system components? 

(a) General requirements. Class II 

gaming systems shall provide a method 

to: 

(1) Enroll and unenroll system 

components; 

(2) Enable and disable specific system 

components. 

(b) Specific requirements. Class II 

gaming systems shall: 

(1) Ensure that only enrolled and 

enabled system components participate 

in gaming; and 

(2) Ensure that the default condition 

for components shall be unenrolled and 

disabled. 

§ 547.7 What are the minimum technical 

hardware standards applicable to Class II 

gaming systems? 

(a) General requirements. (1) The 

Class II gaming system shall operate in 

compliance with applicable regulations 

of the Federal Communications 

Commission. 

(2) Prior to approval by the tribal 

gaming regulatory authority pursuant to 

§ 547.4(c), the Class II gaming system 

shall have obtained from Underwriters’ 

Laboratories, or its equivalent, relevant 

certification(s) required for equipment 

of its type, including but not limited to 

certifications for liquid spills, 

electromagnetic interference, etc. 

(b) Printed circuit boards. (1) Printed 

circuit boards that have the potential to 

affect the outcome or integrity of the 

game, and are specially manufactured or 

proprietary and not off-the-shelf, shall 

display a unique identifier such as a 

part number and/or revision number, 

which shall be updated to reflect new 

revisions or modifications of the board. 

(2) Switches or jumpers on all circuit 

boards that have the potential to affect 

the outcome or integrity of any game, 

progressive award, financial instrument, 

cashless transaction, voucher 

transaction, or accounting records shall 

be capable of being sealed. 

(c) Electrostatic discharge. Class II 

gaming system components accessible 

to the public shall be constructed so that 

they exhibit immunity to human body 

electrostatic discharges on areas 

exposed to contact. Static discharges of 

±15 kV for air discharges and ±7.5 kV for 

contact discharges may not cause 

damage, or inhibit operation or integrity 

of the Class II gaming system. 

(d) Physical enclosures. Physical 

enclosures shall be of a robust 

construction designed to resist 

determined illegal entry. All 

protuberances and attachments such as 

buttons, identification plates, and labels 

shall be sufficiently robust to avoid 

unauthorized removal. 

(e) Player interface. The player 

interface shall include a method or 

means to: 

(1) Display information to a player; 

and 

(2) Allow the player to interact with 

the Class II gaming system. 

(f) Account access components. A 

Class II gaming system component that 

reads account access media shall be 

located within a secure, locked or 

tamper-evident area or in a cabinet or 

housing that is of a robust construction 

designed to resist determined illegal 

entry and to protect internal 

components. In addition, the account 

access component: 

(1) Shall be constructed so that 

physical tampering leaves evidence of 

such tampering; and 

(2) Shall provide a method to enable 

the Class II gaming system to interpret 

and act upon valid or invalid input or 

error condition. 

(g) Financial instrument storage 

components. Any Class II gaming 

system components that store financial 

instruments and that are not operated 

under the direct control of a gaming 

operation employee or agent shall be 

located within a secure and locked area 

or in a locked cabinet or housing that is 

of a robust construction designed to 

resist determined illegal entry and to 

protect internal components. 

(h) Financial instrument acceptors. (1) 

Any Class II gaming system components 

that handle financial instruments and 

that are not operated under the direct 

control of an agent shall: 

(i) Be located within a secure, locked 

and tamper-evident area or in a locked 

cabinet or housing that is of a robust 

construction designed to resist 

determined illegal entry and to protect 

internal components; 

(ii) Be able to detect the entry of valid 

or invalid financial instruments and to 

provide a method to enable the Class II 

gaming system to interpret and act upon 

valid or invalid input or error condition; 

and 

(iii) Be constructed to permit 

communication with the Class II gaming 

system of the accounting information 

required by § 547.9(a) and by applicable 

provisions of any Commission and tribal 

gaming regulatory regulations governing 

minimum internal control standards. 

(2) Prior to completion of a valid 

financial instrument transaction by the 

Class II gaming system, no monetary 

amount related to that instrument shall 

be available for play. For example, 

credits shall not be available for play 

until currency or coupon inserted into 

an acceptor is secured in the storage 

component. 

(3) The monetary amount related to 

all valid financial instrument 

transactions by the Class II gaming 

system shall be recorded as required by 

§ 547.9(a) and the applicable provisions 

of any Commission and tribal gaming 

regulatory authority regulations 

governing minimum internal control 

standards. 

(i) Financial instrument dispensers. 

(1) Any Class II gaming system 

components that dispense financial 

instruments and that are not operated 

under the direct control of a gaming 

operation employee or agent shall: 

(i) Be located within a secure, locked 

and tamper-evident area or in a locked 

cabinet or housing that is of a robust 

construction designed to resist 

determined illegal entry and to protect 

internal components; 

(ii) Provide a method to enable the 

Class II gaming system to interpret and 

act upon valid or invalid input or error 

condition; and 

(iii) Be constructed to permit 

communication with the Class II gaming 

system of the accounting information 

required by § 547.9(a) and by applicable 

provisions of any Commission and tribal 

gaming regulatory regulations governing 

minimum internal control standards. 

(2) The monetary amount related to 

all valid financial instrument 

transactions by the Class II gaming 

system shall be recorded as required by 

§ 547.9(a), the applicable provisions of 

parts 542 and 543 of this chapter, and 

any tribal gaming regulatory authority 

regulations governing minimum internal 

control standards. 

(j) Game Outcome Determination 

Components. Any Class II gaming 

system logic components that affect the 

game outcome and that are not operated 

under the direct control of a gaming 

operation employee or agent shall be 

located within a secure, locked and 

tamper-evident area or in a locked 

cabinet or housing that is of a robust 


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construction designed to resist 

determined illegal entry and to protect 

internal components. DIP switches or 

jumpers that can affect the integrity of 

the Class II gaming system must be 

capable of being sealed by the tribal 

gaming regulatory authority. 

(k) Door access detection. All 

components of the Class II gaming 

system that are locked in order to meet 

the requirements of this part shall 

include a sensor or other methods to 

monitor an open door. A door open 

sensor, and its components or cables, 

shall be secure against attempts to 

disable them or interfere with their 

normal mode of operation; 

(l) Separation of functions/no 

limitations on technology. Nothing 

herein shall prohibit the account access 

component, financial instrument storage 

component, financial instrument 

acceptor, and financial instrument 

dispenser from being included within 

the same component, or separated into 

individual components. 

§ 547.8 What are the minimum technical 

software standards applicable to Class II 

gaming systems? 

This section provides general software 

standards for Class II gaming systems for 

the play of Class II games. 

(a) Player interface displays. (1) If not 

otherwise provided to the player, the 

player interface shall display the 

following: 

(i) The purchase or wager amount; 

(ii) Game results; and 

(iii) Any player credit balance. 

(2) Between plays of any game and 

until the start of the next play, or until 

the player selects a new game option 

such as purchase or wager amount or 

card selection, whichever is earlier, if 

not otherwise provided to the player, 

the player interface shall display: 

(i) The total purchase or wager 

amount and all prizes and total credits 

won for the last game played; 

(ii) The final results for the last game 

played, including entertaining displays 

of results, if any; and 

(iii) Any default purchase or wager 

amount for the next play. 

(b) Game initiation and play. (1) Each 

game played on the Class II gaming 

system shall follow and not deviate 

from a constant set of rules for each 

game provided to players pursuant to 

§ 547.16. Any change in rules 

constitutes a different game. There shall 

be no automatic or undisclosed changes 

of rules. 

(2) For bingo games and games similar 

to bingo, the Class II gaming system 

shall not alter or allow to be altered the 

card permutations or game rules used 

for play of a Class II game unless 

specifically chosen by the player prior 

to commitment to participate in the 

game. No duplicate cards shall be sold 

for any common draw. 

(3) No game play shall commence 

and, no financial instrument or credit 

shall be accepted on the affected player 

interface, in the presence of any fault 

condition that affects the outcome of the 

game, open door, or while in test, audit, 

or lock-up mode. 

(4) The player must choose to 

participate in the play of a game. 

(c) Audit Mode. (1) If an audit mode 

is provided, the Class II gaming system 

shall provide, for those components 

actively involved in the audit: 

(i) All accounting functions required 

by § 547.9, by applicable provisions of 

any Commission regulations governing 

minimum internal control standards, 

and by any internal controls adopted by 

the tribe or tribal gaming regulatory 

authority; 

(ii) Display player interface 

identification; and 

(iii) Display software version or game 

identification; 

(2) Audit mode shall be accessible by 

a secure method such as an employee 

PIN and key or other auditable access 

control. 

(3) Accounting function data shall be 

accessible by an authorized person at 

any time, except during a payout, 

during a handpay, or during play. 

(4) The Class II gaming system shall 

disable financial instrument acceptance 

on the affected player interface while in 

audit mode, except during financial 

instrument acceptance testing. 

(d) Last game recall. The last game 

recall function shall: 

(1) Be retrievable at all times, other 

than when the recall component is 

involved in the play of a game, upon the 

operation of an external key-switch, 

entry of an audit card, or a similar 

method; 

(2) Display the results of recalled 

games as originally displayed or in text 

representation, including entertaining 

display results implemented in video, 

rather than electro-mechanical, form, if 

any, so as to enable the tribal gaming 

regulatory authority or operator to 

clearly identify the game sequences and 

results that occurred; 

(3) Allow the Class II gaming system 

component providing game recall, upon 

return to normal game play mode, to 

restore any affected display to the 

positions, forms and values displayed 

before access to the game recall 

information; and 

(4) Provide the following information 

for the current and previous four games 

played and shall display: 

(i) Game start time, end time, and 

date; 

(ii) The total number of credits at the 

start of play, less the purchase or wager 

amount; 

(iii) The purchase or wager amount; 

(iv) The total number of credits at the 

end of play; and 

(v) The total number of credits won as 

a result of the game recalled, and the 

value in dollars and cents for 

progressive prizes, if different. 

(vi) For bingo games and games 

similar to bingo only, also display: 

(A) The card(s) used by the player; 

(B) The identifier of the bingo game 

played; 

(C) The numbers or other designations 

drawn, in the order that they were 

drawn; 

(D) The numbers or other designations 

and prize patterns covered on each card; 

(E) All prizes won by the player, 

including winning patterns and 

entertaining displays implemented in 

video, rather than electro-mechanical 

form, if any; and 

(F) The unique identifier of the card 

on which prizes were won; 

(vii) For pull-tab games only, also 

display: 

(A) The result(s) of each pull-tab, 

displayed in the same pattern as on the 

tangible pull-tab; 

(B) All prizes won by the player; 

(C) The unique identifier of each pull 

tab; and 

(D) Any other information necessary 

to fully reconstruct the current and four 

previous plays. 

(e) Voucher and credit transfer recall. 

Notwithstanding the requirements of 

any other section in this part, a Class II 

gaming system shall have the capacity 

to: 

(1) Display the information specified 

in § 547.11(b)(5)(ii) through (vi) for the 

last five vouchers or coupons printed 

and the last five vouchers or coupons 

accepted; and 

(2) Display a complete transaction 

history for the last five cashless 

transactions made and the last five 

cashless transactions accepted. 

(f) Software signature verification. 

The manufacturer or developer of the 

Class II gaming system must provide to 

the testing laboratory and to the tribal 

gaming regulatory authority an industrystandard methodology, acceptable to the 

tribal gaming regulatory authority, for 

verifying the Class II gaming system 

game software. By way of illustration, 

for game software stored on rewritable 

media, such methodologies include 

signature algorithms and hashing 

formulas such as SHA–1. 

(g) Test, diagnostic, and 

demonstration modes. If test, diagnostic, 


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and/or demonstration modes are 

provided, the Class II gaming system 

shall, for those components actively 

involved in the test, diagnostic, or 

demonstration mode: 

(1) Clearly indicate when that 

component is in the test, diagnostic, or 

demonstration mode; 

(2) Not alter financial data on that 

component other than temporary data; 

(3) Only be available after entering a 

specific mode; 

(4) Disable credit acceptance and 

payment unless credit acceptance or 

payment is being tested; and 

(5) Terminate all mode-specific 

functions upon exiting a mode. 

(h) Multi-game. If multiple games are 

offered for player selection at the player 

interface, the player interface shall: 

(1) Provide a display of available 

games; 

(2) Provide the means of selecting 

among them; 

(3) Display the full amount of the 

player’s credit balance; 

(4) Identify the game selected or being 

played; and 

(5) Not force the play of a game after 

its selection. 

(i) Program interruption and 

resumption. The Class II gaming system 

software shall be designed so that upon 

resumption following any interruption, 

the system: 

(1) Is able to return to a known state; 

(2) Shall check for any fault condition 

upon resumption; 

(3) Shall verify the integrity of data 

stored in critical memory; 

(4) Shall return the purchase or wager 

amount to the player in accordance with 

the rules of the game; and 

(5) Shall detect any change or 

corruption in the Class II gaming system 

software. 

(j) Class II gaming system components 

acting as progressive controllers. This 

paragraph applies to progressive 

controllers and components acting as 

progressive controllers in Class II 

gaming systems. 

(1) Modification of progressive 

parameters shall be conducted in a 

secure manner approved by the tribal 

gaming regulatory authority. Such 

parameters may include: 

(i) Increment value; 

(ii) Secondary pool increment(s); 

(iii) Reset amount(s); 

(iv) Maximum value(s); and 

(v) Identity of participating player 

interfaces. 

(2) The Class II gaming system 

component or other progressive 

controller shall provide a means of 

creating a progressive balancing report 

for each progressive link it controls. At 

a minimum, that report shall provide 

balancing of the changes of the 

progressive amount, including 

progressive prizes won, for all 

participating player interfaces versus 

current progressive amount(s), plus 

progressive prizes. In addition, the 

report shall account for, and not be 

made inaccurate by, unusual events 

such as: 

(i) Class II gaming system critical 

memory clears; 

(ii) Modification, alteration, or 

deletion of progressive prizes; 

(iii) Offline equipment; or 

(iv) Multiple site progressive prizes. 

(k) Critical memory. (1) Critical 

memory may be located anywhere 

within the Class II gaming system. 

Critical memory is any memory that 

maintains any of the following data: 

(i) Accounting data; 

(ii) Current credits; 

(iii) Configuration data; 

(iv) Last game recall information 

required by § 547.8(d); 

(v) Game recall information for the 

current game, if incomplete; 

(vi) Software state (the last normal 

state software was in before 

interruption); 

(vii) RNG seed(s), if necessary for 

maintaining integrity; 

(viii) Encryption keys, if necessary for 

maintaining integrity; 

(ix) Progressive prize parameters and 

current values; 

(x) The five most recent financial 

instruments accepted by type, excluding 

coins and tokens; 

(xi) The five most recent financial 

instruments dispensed by type, 

excluding coins and tokens; and 

(xii) The five most recent cashless 

transactions paid and the five most 

recent cashless transactions accepted. 

(2) Critical memory shall be 

maintained using a methodology that 

enables errors to be identified and acted 

upon. All accounting and recall 

functions shall be verified as necessary 

to ensure their ongoing integrity. 

(3) The validity of affected data stored 

in critical memory shall be checked 

after each of the following events: 

(i) Every restart; 

(ii) Each attendant paid win; 

(iii) Each attendant paid progressive 

win; 

(iv) Each sensored door closure; and 

(v) Every reconfiguration, download, 

or change of prize schedule or 

denomination requiring operator 

intervention or action. 

(l) Secured access. Class II gaming 

systems that use a logon or other means 

of secured access shall include a user 

account lockout after a predetermined 

number of consecutive failed attempts 

to access system. 

§ 547.9 What are the minimum technical 

standards for Class II gaming system 

accounting functions? 

This section provides standards for 

accounting functions used in Class II 

gaming systems. 

(a) Required accounting data. The 

following minimum accounting data, 

however named, shall be maintained by 

the Class II gaming system. 

Title Description 

(1) Amount In ............................................................... The total value of all financial instruments and cashless transactions accepted by the 

Class II gaming system. Each type of financial instrument accepted by the Class II 

gaming system shall be tracked independently per financial instrument acceptor, and 

as required by applicable requirements of any Commission and tribal gaming regulatory authority regulations governing minimum internal control standards. 

(2) Amount Out ............................................................ The total value of all financial instruments and cashless transactions paid by the Class II 

gaming system, plus the total value of attendant pay. Each type of financial instrument 

paid by the Class II Gaming System shall be tracked independently per financial instrument dispenser, and as required by applicable requirements of any Commission 

and tribal gaming regulatory authority regulations governing minimum internal control 

standards. 

(b) Accounting data storage. If the 

Class II gaming system electronically 

maintains accounting data: 

(1) Accounting data shall be stored 

with at least eight decimal digits. 

(2) Credit balances shall have 

sufficient digits to accommodate the 

design of the game. 


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(3) Accounting data displayed to the 

player may be incremented or 

decremented using visual effects, but 

the internal storage of this data shall be 

immediately updated in full. 

(4) Accounting data shall be updated 

upon the occurrence of the relevant 

accounting event. 

(5) Modifications to accounting data 

shall be recorded, including the identity 

of the person(s) making the 

modifications, and be reportable by the 

Class II gaming system. 

(c) Rollover. Accounting data that 

rolls over to zero shall not corrupt data. 

(d) Credit balance display and 

function. (1) Any credit balance 

maintained at the player interface shall 

be prominently displayed at all times 

except: 

(i) In audit, configuration, recall and 

test modes; or 

(ii) Temporarily, during entertaining 

displays of game results. 

(2) Progressive prizes may be added to 

the player’s credit balance provided: 

(i) The player credit balance is 

maintained in dollars and cents; 

(ii) The progressive accounting data is 

incremented in number of credits; or 

(iii) The prize in dollars and cents is 

converted to player credits or 

transferred to the player’s credit balance 

in a manner that does not mislead the 

player or cause accounting imbalances. 

(3) If the player credit balance 

displays in credits, but the actual 

balance includes fractional credits, the 

Class II gaming system shall display the 

fractional credit when the player credit 

balance drops below one credit. 

§ 547.10 What are the minimum standards 

for Class II gaming system critical events? 

This section provides standards for 

events such as system critical faults, 

deactivation, door open or other 

changes of states, and lockup within the 

Class II gaming system. 

(a) Fault events. (1) The following 

events are to be treated as described 

below: 

Events Definition and action to be taken 

(i) Component fault ...................................................... Reported when a fault on a component is detected. When possible, this event message 

should indicate what the nature of the fault is. 

(ii) Financial storage component full ........................... Reported when a financial instrument acceptor or dispenser includes storage, and it becomes full. This event message should indicate what financial storage component is 

full. 

(iii) Financial output component empty ....................... Reported when a financial instrument dispenser is empty. The event message should indicate which financial output component is affected, and whether it is empty. 

(iv) Financial component fault ..................................... Reported when an occurrence on a financial component results in a known fault state. 

(v) Critical memory error .............................................. Some critical memory error has occurred. When a non-correctable critical memory error 

has occurred, the data on the Class II gaming system component can no longer be 

considered reliable. Accordingly, any game play on the affected component shall 

cease immediately, and an appropriate message shall be displayed, if possible. 

(vi) Progressive communication fault .......................... If applicable; when communications with a progressive controller component is in a 

known fault state. 

(vii) Program storage medium fault ............................. The software has failed its own internal security check or the medium itself has some 

fault. 

Any game play on the affected component shall cease immediately, and an appropriate 

message shall be displayed, if possible. 

(2) The occurrence of any event 

identified in paragraph (a)(1) of this 

section shall be recorded. 

(3) Upon clearing any event identified 

in paragraph (a)(1) of this section, the 

Class II gaming system shall: 

(i) Record that the fault condition has 

been cleared; 

(ii) Ensure the integrity of all related 

accounting data; and 

(iii) In the case of a malfunction, 

return a player’s purchase or wager 

according to the rules of the game. 

(b) Door open/close events. (1) In 

addition to the requirements of 

paragraph (a)(1) of this section, the Class 

II gaming system shall perform the 

following for any component affected by 

any sensored door open event: 

(i) Indicate that the state of a sensored 

door changes from closed to open or 

opened to closed; 

(ii) Disable all financial instrument 

acceptance, unless a test mode is 

entered; 

(iii) Disable game play on the affected 

player interface; 

(iv) Disable player inputs on the 

affected player interface, unless test 

mode is entered; and 

(v) Disable all financial instrument 

disbursement, unless a test mode is 

entered. 

(2) The Class II gaming system may 

return the component to a ready to play 

state when all sensored doors are 

closed. 

(c) Non-fault events. (1) The following 

non-fault events are to be treated as 

described below, if applicable: 

Event Definition and action to be taken 

(i) Player interface power off during play .................... This condition is reported by the affected component(s) to indicate power has been lost 

during game play. 

(ii) Player interface power on ...................................... This condition is reported by the affected component(s) to indicate it has been turned on. 

(iii) Financial instrument storage component container/stacker removed.This condition is reported when a financial instrument storage container has been removed. The event message should indicate which storage container was removed. 

§ 547.11 What are the minimum technical 

standards for money and credit handling? 

This section provides standards for 

money and credit handling by a Class II 

gaming system. 

(a) Credit acceptance, generally. (1) 

Upon any credit acceptance, the Class II 

gaming system shall register the correct 

number of credits on the player’s credit 

balance. 

(2) The Class II gaming system shall 

reject financial instruments deemed 

invalid. 

(b) Credit redemption, generally. (1) 

For cashable credits on a player 

interface, players shall be allowed to 


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cash out and/or redeem those credits at 

the player interface except when that 

player interface is: 

(i) Involved in the play of a game; 

(ii) In audit mode, recall mode or any 

test mode; 

(iii) Detecting any sensored door open 

condition; 

(iv) Updating the player credit 

balance or total win accounting data; or 

(v) Displaying a fault condition that 

would prevent cash-out or credit 

redemption. In this case a fault 

indication shall be displayed. 

(2) For cashable credits not on a 

player interface, the player shall be 

allowed to cash out and/or redeem those 

credits at any time. 

(3) A Class II gaming system shall not 

automatically pay an award subject to 

mandatory tax reporting or withholding. 

(4) Credit redemption by voucher or 

coupon shall conform to the following: 

(i) A Class II gaming system may 

redeem credits by issuing a voucher or 

coupon when it communicates with a 

voucher system that validates the 

voucher or coupon. 

(ii) A Class II gaming system that 

redeems credits by issuing vouchers and 

coupons shall either: 

(A) Maintain an electronic record of 

all information required by paragraphs 

(b)(5)(ii) through (vi) of this section; or 

(B) Generate two identical copies of 

each voucher or coupon issued, one to 

be provided to the player and the other 

to be retained within the machine for 

audit purposes. 

(5) Valid vouchers and coupons shall 

contain the following: 

(i) Gaming operation name and 

location; 

(ii) The identification number of the 

Class II gaming system component or 

the player interface number, as 

applicable; 

(iii) Date and time of issuance; 

(iv) Alpha and numeric dollar 

amount; 

(v) A sequence number; 

(vi) A validation number that: 

(A) Is produced by a means 

specifically designed to prevent 

repetition of validation numbers; and 

(B) Has some form of checkcode or 

other form of information redundancy to 

prevent prediction of subsequent 

validation numbers without knowledge 

of the checkcode algorithm and 

parameters; 

(vii) For machine-readable vouchers 

and coupons, a bar code or other form 

of machine readable representation of 

the validation number, which shall have 

enough redundancy and error checking 

to ensure that 99.9% of all misreads are 

flagged as errors; 

(viii) Transaction type or other 

method of differentiating voucher and 

coupon types; and 

(ix) Expiration period or date. 

(6) Transfers from an account may not 

exceed the balance of that account. 

(7) For Class II gaming systems not 

using dollars and cents accounting and 

not having odd cents accounting, the 

Class II gaming system shall reject any 

transfers from voucher payment systems 

or cashless systems that are not even 

multiples of the Class II gaming system 

denomination. 

(8) Voucher redemption systems shall 

include the ability to report 

redemptions per redemption location or 

user. 

§ 547.12 What are the minimum technical 

standards for downloading on a Class II 

gaming system? 

This section provides standards for 

downloading on a Class II gaming 

system. 

(a) Downloads. (1) Downloads are an 

acceptable means of transporting 

approved content, including but not 

limited to software, files, data, and prize 

schedules. 

(2) Downloads of software, games, 

prize schedules, or other download 

packages shall be conducted only as 

authorized by the tribal gaming 

regulatory authority. 

(3) Downloads shall use secure 

methodologies that will deliver the 

download data without alteration or 

modification, in accordance with 

§ 547.15(a). 

(4) Downloads conducted during 

operational periods shall be performed 

in a manner that will not affect game 

play. 

(5) Downloads shall not affect the 

integrity of accounting data. 

(6) The Class II gaming system or the 

tribal gaming regulatory authority shall 

log each download of any download 

package. Each log record shall contain 

as a minimum: 

(i) The time and date of the initiation 

of the download; 

(ii) The time and date of the 

completion of the download; 

(iii) The Class II gaming system 

components to which software was 

downloaded; 

(iv) The version(s) of download 

package and any software downloaded. 

Logging of the unique software signature 

will satisfy this requirement; 

(v) The outcome of any software 

verification following the download 

(success or failure); and 

(vi) The name and identification 

number, or other unique identifier, of 

any individual(s) conducting or 

scheduling a download. 

(b) Verifying downloads. Following 

download of any game software, the 

Class II gaming system shall verify the 

downloaded software using a software 

signature verification method that meets 

the requirements of § 547.8(f). Using any 

method it deems appropriate, the tribal 

gaming regulatory authority shall 

confirm the verification. 

§ 547.13 What are the minimum technical 

standards for program storage media? 

This section provides minimum 

standards for removable, (re-)writable, 

and nonwritable storage media in Class 

II gaming systems. 

(a) Removable program storage media. 

All removable program storage media 

shall maintain an internal checksum or 

signature of its contents. Verification of 

this checksum or signature is to be 

performed after every restart. If the 

verification fails, the affected Class II 

gaming system component(s) shall lock 

up and enter a fault state. 

(b) Nonrewritable program storage 

media. (1) All EPROMs and 

Programmable Logic Devices (PLDs) that 

have erasure windows shall be fitted 

with covers over their erasure windows. 

(2) All unused areas of EPROMs shall 

be written with the inverse of the erased 

state (e.g., zero bits (00 hex) for most 

EPROMs), random data, or repeats of the 

program data. 

(3) Flash memory storage components 

intended to have the same logical 

function as ROM, i.e. not to be 

dynamically written, shall be writeprotected or otherwise protected from 

unauthorized modification. 

(4) The write cycle shall be closed or 

finished for all CD–ROMs such that it is 

not possible to write any further data to 

the CD. 

(5) Write protected hard disks are 

permitted if the hardware means of 

enabling the write protect is easily 

viewable and can be sealed in place 

Write protected hard disks are permitted 

using software write protection 

verifiable by a testing laboratory. 

(c) Writable and rewritable program 

storage media. (1) Writable and 

rewritable program storage, such as hard 

disk drives, Flash memory, writable 

CD–ROMs, and writable DVDs, may be 

used provided that the software stored 

thereon may be verified using the 

mechanism provided pursuant to 

§ 547.8(f). 

(2) Program storage shall be structured 

so there is a verifiable separation of 

fixed data (e.g. program, fixed 

parameters, DLLs) and variable data. 

(d) Identification of program storage 

media. All program storage media that 

is not rewritable in circuit, (e.g. EPROM, 


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CD–ROM) shall be uniquely identified, 

displaying: 

(1) Manufacturer; 

(2) Program identifier; 

(3) Program version number(s); and 

(4) Location information, if critical 

(e.g. socket position 3 on the printed 

circuit board). 

§ 547.14 What are the minimum technical 

standards for electronic random number 

generation? 

This section provides minimum 

standards for electronic RNGs in Class 

II gaming systems. 

(a) Properties. All RNGs shall produce 

output having the following properties: 

(1) Statistical randomness; 

(2) Unpredictability; and 

(3) Non-repeatability. 

(b) Statistical Randomness. (1) 

Numbers produced by an RNG shall be 

statistically random individually and in 

the permutations and combinations 

used in the application under the rules 

of the game. For example, if a bingo 

game with 75 objects with numbers or 

other designations has a progressive 

winning pattern of the five numbers or 

other designations on the bottom of the 

card and the winning of this prize is 

defined to be the five numbers or other 

designations are matched in the first 

five objects drawn, the likelihood of 

each of the 75C5 combinations are to be 

verified to be statistically equal. 

(2) Numbers produced by an RNG 

shall pass the statistical tests for 

randomness to a 99% confidence level, 

which may include: 

(i) Chi-square test; 

(ii) Equi-distribution (frequency) test; 

(iii) Gap test; 

(iv) Poker test; 

(v) Coupon collector’s test; 

(vi) Permutation test; 

(vii) Run test (patterns of occurrences 

shall not be recurrent); 

(viii) Spectral test; 

(ix) Serial correlation test potency and 

degree of serial correlation (outcomes 

shall be independent from the previous 

game); and 

(x) Test on subsequences. 

(c) Unpredictability. (1) It shall not be 

feasible to predict future outputs of an 

RNG, even if the algorithm and the past 

sequence of outputs are known. 

(2) Unpredictability shall be ensured 

by reseeding or by continuously cycling 

the RNG, and by providing a sufficient 

number of RNG states for the 

applications supported. 

(3) Re-seeding may be used where the 

re-seeding input is at least as 

statistically random as, and 

independent of, the output of the RNG 

being re-seeded. 

(d) Non-repeatability. The RNG shall 

not be initialized to reproduce the same 

output stream that it has produced 

before, nor shall any two instances of an 

RNG produce the same stream as each 

other. This property shall be ensured by 

initial seeding that comes from: 

(1) A source of ‘‘true’’ randomness, 

such as a hardware random noise 

generator; or 

(2) A combination of timestamps, 

parameters unique to a Class II gaming 

system, previous RNG outputs, or other, 

similar method. 

(e) General requirements. (1) Software 

that calls an RNG to derive game 

outcome events shall immediately use 

the output returned in accordance with 

the game rules. 

(2) The use of multiple RNGs is 

permitted as long as they operate in 

accordance with this section. 

(3) RNG outputs shall not be 

arbitrarily discarded or selected. 

(4) Where a sequence of outputs is 

required, the whole of the sequence in 

the order generated shall be used in 

accordance with the game rules. 

(5) The Class II gaming system shall 

neither adjust the RNG process or game 

outcomes based on the history of prizes 

obtained in previous games nor make 

any reflexive or secondary decision that 

affects the results shown to the player 

or game outcome. Nothing in this 

paragraph shall prohibit the use of 

entertaining displays. 

(f) Scaling algorithms and scaled 

numbers. An RNG that provides output 

scaled to given ranges shall: 

(1) Be independent and uniform over 

the range; 

(2) Provide numbers scaled to the 

ranges required by game rules, and 

notwithstanding the requirements of 

paragraph (e)(3) of this section, may 

discard numbers that do not map 

uniformly onto the required range but 

shall use the first number in sequence 

that does map correctly to the range; 

(3) Be capable of producing every 

possible outcome of a game according to 

its rules; and 

(4) Use an unbiased algorithm. A 

scaling algorithm is considered to be 

unbiased if the measured bias is no 

greater than 1 in 100 million. 

§ 547.15 What are the minimum technical 

standards for electronic data 

communications between system 

components? 

This section provides minimum 

standards for electronic data 

communications with gaming 

equipment or components used with 

Class II gaming systems. 

(a) Sensitive data. Communication of 

sensitive data shall be secure from 

eavesdropping, access, tampering, 

intrusion or alteration unauthorized by 

the tribal gaming regulatory authority. 

Sensitive data shall include, but not be 

limited to: 

(1) RNG seeds and outcomes; 

(2) Encryption keys, where the 

implementation chosen requires 

transmission of keys; 

(3) PINs; 

(4) Passwords; 

(5) Financial instrument transactions; 

(6) Transfers of funds; 

(7) Player tracking information; 

(8) Download Packages; and 

(9) Any information that affects game 

outcome. 

(b) Wireless communications. (1) 

Wireless access points shall not be 

accessible to the general public. 

(2) Open or unsecured wireless 

communications are prohibited. 

(3) Wireless communications shall be 

secured using a methodology that makes 

eavesdropping, access, tampering, 

intrusion or alteration impractical. By 

way of illustration, such methodologies 

include encryption, frequency hopping, 

and code division multiplex access (as 

in cell phone technology). 

(c) Methodologies shall be used that 

will ensure the reliable transfer of data 

and provide a reasonable ability to 

detect and act upon any corruption of 

the data. 

(d) Class II gaming systems shall 

record detectable, unauthorized access 

or intrusion attempts. 

(e) Remote communications shall only 

be allowed if authorized by the tribal 

gaming regulatory authority. Class II 

gaming systems shall have the ability to 

enable or disable remote access, and the 

default state shall be set to disabled. 

(f) Failure of data communications 

shall not affect the integrity of critical 

memory. 

(g) The Class II gaming system shall 

log the establishment, loss, and reestablishment of data communications 

between sensitive Class II gaming 

system components. 

§ 547.16 What are the minimum standards 

for game artwork, glass, and rules? 

This section provides standards for 

the display of game artwork, the 

displays on belly or top glass, and the 

display and disclosure of game rules, 

whether in physical or electronic form. 

(a) Rules, instructions, and prize 

schedules, generally. The following 

shall at all times be displayed or made 

readily available to the player upon 

request: 

(1) Game name, rules, and options 

such as the purchase or wager amount 

stated clearly and unambiguously; 

(2) Denomination; 

(3) Instructions for play on, and use 

of, the player interface, including the 

functions of all buttons; and 


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Federal Register / Vol. 73, No. 198 / Friday, October 10, 2008 / Rules and Regulations 60535 

(4) A prize schedule or other 

explanation, sufficient to allow a player 

to determine the correctness of all prizes 

awarded, including; 

(i) The range and values obtainable for 

any variable prize; 

(ii) Whether the value of a prize 

depends on the purchase or wager 

amount; and 

(iii) The means of division of any 

pari-mutuel prizes; but 

(iv) For bingo and games similar to 

bingo, the prize schedule or other 

explanation need not state that subsets 

of winning patterns are not awarded as 

additional prizes (e.g. five in a row does 

not also pay three in a row or four in 

a row), unless there are exceptions, 

which shall be clearly stated. 

(b) Disclaimers. The Class II gaming 

system shall continually display: 

(1) ‘‘Malfunctions void all prizes and 

plays’’ or equivalent; and 

(2) ‘‘Actual Prizes Determined by 

Bingo [or other applicable Class II game] 

Play. Other Displays for Entertainment 

Only.’’ or equivalent. 

§ 547.17 How does a tribal gaming 

regulatory authority apply for a variance 

from these standards? 

(a) Tribal Gaming Regulatory 

Authority approval. (1) A tribal gaming 

regulatory authority may approve a 

variance from the requirements of this 

part if it has determined that the 

variance will achieve a level of security 

and integrity sufficient to accomplish 

the purpose of the standard it is to 

replace. 

(2) For each enumerated standard for 

which the tribal gaming regulatory 

authority approves a variance, it shall 

submit to the Chairman within 30 days, 

a detailed report, which shall include 

the following: 

(i) An explanation of how the 

variance achieves a level of security and 

integrity sufficient to accomplish the 

purpose of the standard it is to replace; 

and 

(ii) The variance as granted and the 

record on which it is based. 

(3) In the event that the tribal gaming 

regulatory authority or the tribe’s 

government chooses to submit a 

variance request directly to the 

Chairman for joint government to 

government review, the tribal gaming 

regulatory authority or tribal 

government may do so without the 

approval requirement set forth in 

paragraph (a) (1) of this section. 

(b) Chairman Review. (1) The 

Chairman may approve or object to a 

variance granted by a tribal gaming 

regulatory authority. 

(2) Any objection by the Chairman 

shall be in written form with an 

explanation why the variance as 

approved by the tribal gaming 

regulatory authority does not provide a 

level of security or integrity sufficient to 

accomplish the purpose of the standard 

it is to replace. 

(3) If the Chairman fails to approve or 

object in writing within 60 days after 

the date of receipt of a complete 

submission, the variance shall be 

considered approved by the Chairman. 

The Chairman and the tribal gaming 

regulatory authority may, by agreement, 

extend this deadline an additional 60 

days. 

(4) No variance may be implemented 

until approved by the tribal gaming 

regulatory authority pursuant to 

paragraph (a)(1) of this section or the 

Chairman has approved pursuant to 

paragraph (b)(1) of this section. 

(c) Commission Review. Should the 

tribal gaming regulatory authority elect 

to maintain its approval after written 

objection by the Chairman, the tribal 

gaming regulatory authority shall be 

entitled to an appeal to the full 

Commission in accordance with the 

following process: 

(1) Within 60 days of receiving an 

objection, the tribal gaming regulatory 

authority shall file a written notice of 

appeal with the Commission that may 

include a request for an oral hearing or 

it may request that the matter be 

decided upon written submissions. 

(2) Within 10 days after filing a notice 

of appeal the tribal gaming regulatory 

authority shall file a supplemental 

statement specifying the reasons why 

the tribal gaming regulatory authority 

believes the Chairman’s objection 

should be reviewed, and shall include 

supporting documentation, if any. 

(3) Failure to file an appeal or submit 

the supplemental statement within the 

time provided by this section shall 

result in a waiver of the opportunity for 

an appeal. 

(4) If an oral hearing is requested it 

shall take place within 30 days of the 

notice of appeal and a record shall be 

made. 

(5) If the tribal gaming regulatory 

authority requests that the appeal be 

decided on the basis of written 

submission, the Commission shall issue 

a written decision within 30 days of 

receiving the supplemental statement. 

(6) The Commission shall uphold the 

objection of the Chairman, only if, upon 

de novo review of the record upon 

which the Chairman’s decision is based, 

the Commission determines that the 

variance approved by the tribal gaming 

regulatory authority does not achieve a 

level of security and integrity sufficient 

to accomplish the purpose of the 

standard it is to replace. 

(7) The Commission shall issue a 

decision within 30 days of the oral 

hearing unless the tribal gaming 

regulatory authority elects to provide 

the Commission additional time, not to 

exceed an additional 30 days, to issue 

a decision. In the absence of a decision 

by the Commission within the time 

provided, the decision of the tribal 

gaming regulatory authority shall be 

deemed affirmed. 

(8) The Commission’s decision shall 

constitute final agency action. 

Dated: September 24, 2008. 

Philip N. Hogen, 

Chairman. 

Norman H. DesRosiers, 

Vice Chairman. 

[FR Doc. E8–23084 Filed 10–9–08; 8:45 am] 

BILLING CODE 7565–01–P 


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