§ 542.17 What are the minimum internal control standards for complimentary 

services or items? 

(a) Each Tribal gaming regulatory authority or gaming operation (Tribal gaming 

regulatory authority approval recommended) shall establish and the gaming operation 

shall comply with procedures for the authorization, issuance, and tracking of 

complimentary services and items as defined in §542.2, including cash and non-cash 

gifts. Such procedures must be approved by the Tribal gaming regulatory authority 

and shall include, but shall not be limited to, the procedures by which the gaming 

operation delegates to its employees the authority to approve the issuance of 

complimentary services and items, and the procedures by which conditions or limits, if 

any, which may apply to such authority are established and modified (including limits 

based on relationships between the authorizer and recipient), and shall further include 

effective provisions for audit purposes. Each gaming operation shall maintain a 

written record of limits or conditions which may be placed on the authority of its 

employees to approve or issue complimentary services or items, and the specific job 

titles to which they apply.

Justification: An audit finding of noncompliance with a recommendation becomes an 

advisory comment instead of an exception requiring remedy. Also, it is then left to the 

discretion of the TGRA to determine whether the risk associated with a control 

established by the gaming operation, which would be property specific, warrants 

regulatory review. 

A written record of limits and conditions provides management with a tool for verifying 

proper authorization and approval of the issuance of complimentary items and services, 

provides employees with documented guidance, and provides a record for review by 

internal/external auditors. 

Comment (October): Paragraph is too long, could be confusing to some readers. 

Suggest breaking out into separate sub-paragraphs under sub-section (a). 

Response: Agree. See revised proposal (a). 

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Note: Based on industry comment, and on the inherent risk associated with 

comps, it was decided to reinstate the TGRA approval requirement in the 

proposed standard. 

Revised proposal as a result of October comment and incorporating note: 

(a) Complimentary services and items procedures. (1) Each Tribal gaming regulatory 

authority or gaming operation shall establish and the gaming operation shall comply with 

procedures for the authorization, issuance, and tracking of complimentary services and 

items as defined in §542.2, including cash and non-cash gifts. 

(2) Such The procedures must be approved by the Tribal gaming regulatory authority 

and shall include, but not be limited to, the procedures by which the gaming operation 

delegates to its employees the authority to approve the issuance of complimentary 

services and items, and the procedures by which conditions or limits, if any, which may 

apply to such authority are established and modified (including limits based on 

relationships between the authorizer and recipient), and shall further include effective 

provisions for audit purposes. 

(3) Each gaming operation shall maintain a written record of limits or conditions 

which may be placed on the authority of its employees to approve or issue 

complimentary services or items, and the specific job titles to which they apply.

Comment (December): Replace “must” with “shall” in paragraph (a) (2). 

Response: Agree.

Revised proposal as a result of December comment: 

(2) Such The procedures must shall be approved by the Tribal gaming regulatory 

authority and shall include, but not be limited to, the procedures by which the gaming 

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operation delegates to its employees the authority to approve the issuance of 

complimentary services and items, and the procedures by which conditions or limits, if 

any, which may apply to such authority are established and modified (including limits 

based on relationships between the authorizer and recipient), and shall further include 

effective provisions for audit purposes. 

(3) Each gaming operation shall maintain a written record of limits or conditions 

which may be placed on the authority of its employees to approve or issue 

complimentary services or items, and the specific job titles to which they apply.

In addition, we are proposing the following changes to the definition of complimentary as 

follows: 

Complimentary means a service or item provided at no cost, or at a reduced cost, to a 

customer at the discretion of an employee authorized to issue complimentaries. 

These services and items are provided as an inducement to wager. 

Comment (October): Strike final sentence. Comps are not necessarily or always 

issued as an inducement to wager. 

Response: Agree. See revised proposed definition. 

Revised definition as a result of October comment: 

Complimentary means a service or item provided at no cost, or at a reduced cost, to a 

customer at the discretion of an employee authorized to issue such services or items.

(b) Complimentary services and items shall include, but are not limited to, travel, 

lodging, food, beverages, or entertainment expenses provided directly to the 

customers and their guests by the gaming operation or indirectly to customers and 

their guests on behalf of the gaming operation by a third party. Complimentary 

cash gifts shall include, but are not limited to:

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(1) Public relations payments made for the purpose of resolving complaints by or 

disputes with casino customers (appeasement payments);

(2) Travel or “walk money” payments made for the purpose of enabling a customer 

to return home.

Justification: Identification of complimentary items and services will better allow 

gaming operations to distinguish complimentary items and services from promotional 

activities. 

(b) (c) At least monthly, accounting, information technology, or audit personnel that 

cannot grant or receive complimentary privileges shall prepare reports that include the 

following information for all complimentary items and services: equal to or exceeding 

$100, or an amount established by the Tribal gaming regulatory authority, which 

shall not be greater than $100: 

Justification: The reporting threshold has been moved to new subsection (d) with other 

exemptions from the reporting requirement. 

(1) Name of customer who received the complimentary service or item; 

(2) Name(s) of authorized issuer of the complimentary service or item; 

(3) The actual cash value of the complimentary service or item; 

(i) A complimentary service or item provided directly to a customer in the normal 

course of a gaming operation’s business shall be recorded at the full retail price 

normally charged for such service or item by the gaming operation.

(ii) A complimentary service or item not offered for sale to customers in the normal 

course of a gaming operation’s business, but provided directly by the gaming 

operation, shall be recorded at the actual cost to the gaming operation of providing 

such service or item. 

(iii) A complimentary service or item provided directly or indirectly to a customer 

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on behalf of a gaming operation by a third party not affiliated with the gaming 

operation shall be recorded at the actual cost to the gaming operation of having the 

third party provide such service or item. 

(iv) A complimentary service or item provided directly or indirectly to a customer 

on behalf of a gaming operation by a third party who is affiliated with the gaming 

operation shall be recorded as if the affiliated third party were the gaming 

operation.

Justification: Provides valuation guidance for the purpose of determining compliance 

with the reporting threshold, on which the section was previously silent. 

(4) The type of complimentary service or item (i.e., food, beverage, etc.); and 

(5) Date the complimentary service or item was issued. 

(d) Complimentary services or items exempt from paragraph (c) reporting 

requirements:

(1) A noncash complimentary service or item which has a value (as calculated in 

accordance with (c) (3) above) of $150.00 or less, or an amount established by the 

Tribal gaming regulatory authority, which shall not be greater than $150.

Comment (October): Paragraph is unnecessarily complex. Revise language to 

clarify. 

Response: Agree. Revised accordingly. 

Revised proposal as a result of October comment: 

(1) A non-cash complimentary service or item which has a value no greater than 

$150 (as calculated in accordance with (c) (3) above), or a lesser amount established 

by the Tribal gaming regulatory authority.

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(2) A complimentary cash gift of $100.00 or less, or an amount established by the 

Tribal gaming regulatory authority, which shall not be greater than $100.

Justification: Based on a risk analysis and considering the regulatory requirements of 

other jurisdictions, a higher reporting threshold is recommended for noncash 

complimentary items or services, which the gaming operation can generally record at 

retail in accordance with new paragraph (c)(3)(i). 

542.17(e) has been moved to proposed Revenue Audit 542.50 (h). 

(c) (e) The internal audit or accounting departments shall review the reports 

required in paragraph (b) (c) of this section at least monthly. These reports shall be 

made available to the Tribe, Tribal gaming regulatory authority, audit committee, 

other entity designated by the Tribe, and the Commission upon request.

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