Osage Nation

KA.SABA nei KAS AKA OFA. DIA
John D, Red Eagle Office of the Principal Chief Scott N. BigHorse
Principal Chief Assistant Principal Chief

COMMENTS OF THE OSAGE NATION ON THE
NATIONAL INDIAN GAMING COMMISSION’S
PROPOSED RULE OF 25 C.F.R. PART 547 — TECHNICAL
STANDARDS FOR CLASS II GAMING
AND 25 C.E.R PART 543
MINIMUM INTERNAL CONTROLS

MARCH 14, 2013

VIA E-mail to reg.review@nige.gov

Tracie L. Stevens, Chairwoman
Steffani A. Cochran, Vice-Chairperson
Daniel Little, Associate Commissioner
National Indian Gaming Commission
1441 L Street, N.W., Suite 9100
Washington, D.C. 20005

Re: Comments on proposed rule Part 547: Technical Standards for Class I Gaming,
and proposed rule Part 543: Minimum Internal Control Standards for Class II Gaming

Dear Chairwoman Stevens, Vice-Chairperson Cochran and Commissioner Little:

The Osage Nation (“Nation”) appreciates the opportunity to submit the following commentson
the National Indian Gaming Commission’s (NIGC”) Proposed Rule amending the Class II
Technical Standards, published in the Federal Register on February 23, 2013, 78 Fed. Reg.
11795-11796 (February 20, 2013), and for the Proposed Rule amending the Minimum Internal
Control Standards to add standards for the drop and count and surveillance of kiosks, 78 Fed.
Reg, 11793-11795. The Nation greatly values the Tribal consultation process instituted by the
NIGC throughout this rulemaking. We appreciate your consideration of our comments and
suggestions.

L. Technical Standards — Part 547

We note that the NIGC has proposed an amendment to the final rule to harmonize the charitable
gaming exemptions in the Technical Standards and the Class II Minimum Internal Control
Standards of NIGC regulations. The NIGC noted that the MICS exempt charitable gaming
operations that earn less than the threshold amount of $3,000,000. The proposed amendment to
section 547.5(e)(5) will cause the technical standards to match that threshold amount of

627 Grandview * P.O. Box 779 * Pawhuska, Oklahoma 74056
Telephone 918-287-5555 * Fax 918-287-5562



Comments of the Osage Nation Page 2

$3,000,000, rather than the current $1,000,000. We feel that this change is fair and we approve
the change.

li. The Minimum Internal Controls — Part 543

We recognize that the 2012 regulation provided general standards for kiosks. The proposed
amendment adds additional standards for the drop and count and surveillance of kiosks to
adequately protect against risk of loss. The proposed amendment adds a definition at section
543.2 for Currency Cassette. We agree with this definition. The proposed amendment amends
section 543.17 by revising paragraphs (h) and (i) and adding paragraphs (j) Controlled Keys,
which requires controls and procedures to safeguard the use, access and security of keys, and (k)
Variances, which defers to the TGRA to determine the threshold level at which a variance must
be reviewed to determine the cause. We agree with these proposed amendments. The proposed
amendment to section 547.21 lists requirements for the surveillance system for monitoring and
recording activities at each kiosk. We agree with this additional standard.

Ill. NIGC Regulation Authority
The IGRA sets out the NIGC “powers” in the regulation of Class II gaming at 25 U.S.C.

2706(a) and (b). The powers granted to the NIGC therein do not include powers that allow the
NIGC to regulate activities that do not constitute Class II gaming. The current regulation and
the proposed regulation purport to regulate kiosks. The regulation of this activity is outside the
scope of NIGC authority. The Tribal Gaming Regulatory Authority (TGRA) is the appropriate
authority for establishing and enforcing proper standards to govern these types of interaction
with the patrons in the Nation’s governmental gaming locations. Ultimately, in accordance
with the IGRA, the TGRA is the primary regulatory authority of Class II gaming. While we
agree with the proposed amendments to existing regulations, we are compelled to recommend
the NIGC delete these sections and allow the TGRA to regulate these matters consistent with
the stated policy of IGRA.

CONCLUSION
We appreciate your consideration of our comments regarding the proposed regulations. The
Nation commends this current Commission on its efforts to improve the existing regulations and
the diligence with which you have undertaken in your efforts to consult with the Tribes on this
matter. As noted above it is our opinion that your efforts have improved the proposed rule in
many sections. Again, thank you for your time and consideration,

Kind Regards,

Principat Chief
Osage Nation

JDR/Amm/It

O. Box 779 * Pawhuska, Oklahoma 74056

627 Grandview * P.
r 1D 307 CELE HID OTE 907. 6069