§542.8 What are the minimum internal control standards for pull tabs? 

(a) Computer applications. For any computer application utilized, alternate 

documentation and/or procedures that provide at least the level of control described by 

the standards in this section, as approved by the Tribal gaming regulatory authority in 

writing, will be acceptable. 

Justification: Based on previous MICS audits performed, gaming operations do not 

always obtain specific approval of the computer applications being utilized. Adding the 

words “in writing” will require them to obtain documentation of approval. 

(b) Pull tab inventory. (1) Pull tab inventory (including unused tickets) shall be controlled 

to assure the integrity of the pull tabs. 

(2) Purchased pull tabs shall be inventoried and secured by a person or persons 

independent of the pull tab sales. 

(3) The issue of pull tabs to the cashier or sales location shall be documented and signed 

for by the person responsible for inventory control and the cashier. The document log 

shall include the serial number of the pull tabs issued. 

(4) Appropriate documentation shall be given to the redemption booth for purposes of 

determining if the winner purchased the pull tab from the pull tabs issued by the gaming 

operation. Electronic verification satisfies this requirement. 

542.8 (b) (5) - (6) have been moved to proposed Revenue Audit 542.50 (a) (1) and (2). 

(5) At the end of each month, a person or persons independent of pull tab sales and 

inventory control shall verify the accuracy of the ending balance in the pull tab 

control by reconciling the pull tabs on hand.

(6) A monthly comparison for reasonableness shall be made of the amount of pull 

tabs sold from the pull tab control log to the amount of revenue recognized.

7-8-10 Version 

Page 1 of 8 
(c) Access. Access to pull tabs shall be restricted to authorized persons. 

(d) Transfers. Transfers of pull tabs from storage to the sale location shall be secured and 

independently controlled. 

(e) Winning pull tabs. (1) Winning pull tabs shall be verified and paid as follows: 

(i) Prize payouts of $100 or more in excess of a dollar amount determined by the 

gaming operation, as approved by the Tribal gaming regulatory authority, shall be 

verified by at least two employees, documentation required.

Justification: The standard of $100 or more was deemed reasonable by the audit division 

based on MICS audits conducted. 

Comment (July): The verification threshold should be $600 for both manual and 

automated payout systems. 

Response: Disagree. For manual payout systems, foregoing independent 

verification of payouts of at least $100 and less than $600 fails to provide an 

effective control to mitigate the inherent risk of the transaction. However, we 

agree with the commenter that $600 is a reasonable threshold when a 

computerized payout system is utilized (see below). 

Comment (October): The verification threshold should be $600 for both manual 

and automated payout systems. 

Response: On reconsideration, agree. Modify (i) to reflect comment, strike (ii). 

Comment (October): The second employee should be a supervisor, or from 

another department. 

Response: Disagree. It is left to the discretion of the TGRA to adopt a more 

stringent standard requiring the second verifier to be a supervisor, or from another 

department. 

Comment (October): The $100 threshold is too low. 

Response: Disagree, but defer to the judgment of the Committee. 

Comment (October): Retain the TGRA approval of the threshold. 

Response: Agree. TGRA approval incorporated as a recommendation only in 

revised paragraphs (i) and (iii). 

7-8-10 Version 

Page 2 of 8 
Proposed revision resulting from October meeting comments: 

(i) Prize payouts of $600 or more, or a lesser amount established by the gaming 

operation, in excess of a dollar amount determined by the gaming operation, as 

approved by the Tribal gaming regulatory authority, shall be verified by at least two 

employees, documentation required. Tribal gaming regulatory authority of this 

amount is recommended.

(ii) For computerized payout systems that initiate, validate, and print the dollar 

amount of the payout on the computer-generated form, only one employee signature 

verifying and witnessing the payout is required on the payout form for a payout 

amount of $100 or more and less than $600. For payouts of $600 or more and in 

other situations that allow an employee to input or change the dollar amount of the 

payout by more than $1 in the computer system, two employees must be physically 

involved in verifying and witnessing the payout.

Justification: Pull tab prize payouts are considered equivalent to gaming machine 

jackpot payouts and should be controlled as such. In the jackpot payout process, two 

persons are required to verify and witness all prize payouts. This is mitigated when a 

computerized system performs one of the jackpot verification procedures and the control 

is limited to payouts less than $1,200 (for IRS reporting purposes). Therefore, it is 

recommended that the equivalent controls and IRS reporting thresholds be included in the 

pull tabs section. 

Comment (July): Can the two witnesses be employees of different gaming 

facilities? 

Response: If the gaming facilities function as a single economic entity and there 

is common management control, then the procedure would be acceptable. 

Comment (July): The standard (relating to payouts of $100 or more and less than 

$600) will be very difficult to implement in an automated payout system. 

7-8-10 Version 

Page 3 of 8 
Response: Agree. The proposed standard has been revised to clarify the 

applicability of the $600 threshold relevant to prizes paid in the form of gaming 

credits. 

Proposed revision resulting from July meeting comments: 

(ii) For automated payout systems that initiate, validate, and print the dollar 

amount of the payout on a system-generated form:

(A) Only one employee signature verifying and witnessing the payout is required on 

the form for a payout of $100 or more and less than $600;

(B) For a payout of $100 or more and less than $600, if the employee can input or 

change the dollar amount of the payout by more than $1 in the automated system,

two employees must verify and witness the payout and sign the form;

(C) No employee signature verifying and witnessing the payout is required for prizes 

of less than $600 if the prize is paid through the automated system in the form of 

gaming credits;

(D) For all payouts of $600 or more, two employees must verify and witness the 

payout and sign the form.

(iii) Prize payouts over a predetermined amount shall require the signature and 

verification of a supervisory or management employee independent of the pull tab 

department (in addition to the two signatures required in paragraph (e) (1) (i) of 

this section). Alternatively, if a computerized payout system is utilized, only two 

signatures are required: one employee and one supervisory or management 

employee independent of the pull tab department. This predetermined amount shall 

be authorized by management (as approved by the Tribal gaming regulatory 

authority), documented, and maintained.

7-8-10 Version 

Page 4 of 8 
Justification: Pull tab prize payouts are considered equivalent to gaming machine 

jackpot payouts and should be controlled as such. In the jackpot payout process, two 

persons are required to verify and witness all prize payouts. This is mitigated when a 

computerized system performs one of the jackpot verification procedures and the control 

is limited to payouts less than $1,200 (for IRS reporting purposes). Therefore, it is 

recommended that the equivalent controls and IRS reporting thresholds be included in the 

pull tabs section. 

Comment (July): The automated system should be relied on for validation of 

payouts, without employee signature, except in the case of a $600 or more 

reportable transaction. 

Response: Agree. No form or signature is required for prizes of less than $600 if 

the prize is paid through the automated system in the form of gaming credits. The 

standard is applicable to only cash payments of $100 or more made by an 

employee to the customer. Strike (ii), (iii) becomes (ii).

Comment (July): Remove the final set of parentheses, or move the phrase inside 

the final set of parentheses to after “predetermined amount”. 

Response: Agree. Revised accordingly. 

Proposed revision resulting from July meeting comments: 

(iii) (ii) Prize payouts over a predetermined amount shall require the signature and 

verification of a supervisory or management employee independent of the pull tab 

department (in addition to the signatures required in paragraph (e) (1) (i) or (e) (1) 

(ii) of this section). This predetermined amount (as approved by the Tribal gaming 

regulatory authority) shall be authorized by management, documented, and 

maintained.

Note: On review, standard was revised to eliminate the 3 signature requirement, thereby 

bringing the standard into congruity with gaming machine standards. 

Proposed revision incorporating note: 

(iii) (ii) Prize payouts over a predetermined amount shall require the signature and 

verification of two employees, one of whom must be a supervisory or management 

7-8-10 Version 

Page 5 of 8 
employee independent of the pull tab department. This predetermined amount 

(Tribal gaming regulatory authority approval recommended) shall be authorized by 

management, documented, and maintained.

(iii) (ii) Total payout shall be computed and recorded by shift. 

(iv) (iii) The winning pull tabs shall be voided so that they cannot be presented for 

payment again. 

542.8 (e) (2) has been moved to proposed Revenue Audit 542.50 (a) (3). 

(2) Personnel independent of pull tab operations shall verify the amount of winning 

pull tabs redeemed each day.

(2) [Reserved]

(f) Accountability form. (1) All funds used to operate the pull tab game shall be recorded 

on an accountability form. 

(2) All funds used to operate the pull tab game shall be counted independently by at least 

two persons and reconciled to the recorded amounts at the end of each shift or session. 

Unverified transfers of cash and/or cash equivalents are prohibited. 

(g) Standards for statistical reports. (1) Records shall be maintained, which include win, 

write (sales), and a win-to-write hold percentage as compared to the theoretical hold 

percentage derived from the flare, for each deal or type of game, for: 

(i) Each shift; 

(ii) Each day; 

(iii) Month-to-date; and 

(iv) Year-to-date or fiscal year-to-date as applicable. 

Comment (July): Replace “theoretical” with “expected”. 

7-8-10 Version 

Page 6 of 8 
Response: Agree. Revised accordingly. 

Comment (July): Comparison to expected hold is only valid for games sold in 

entirety. 

Response: Agree. Revised accordingly. 

Comment (July): Comparison to expected hold is not valid for shift, day, monthto-date, or year-to-date for incomplete games. 

Response: Agree. Revised accordingly. 

Revised proposal resulting from July meeting comments: 

(g) Standards for statistical reports. (1) Records shall be maintained, which include (for 

games sold in their entirety) win, write (sales), and a win-to-write hold percentage as 

compared to the theoretical expected hold percentage derived from the flare. Records 

shall also include win and write (sales) for each deal or type of game, for: 

(i) Each shift; 

(ii) Each day; 

(iii) Month-to-date; and 

(iv) Year-to-date or fiscal year-to-date as applicable. 

(2) A manager independent of the pull tab operations shall review statistical information 

at least on a monthly basis and shall investigate any large or unusual statistical 

fluctuations. These investigations shall be documented, maintained for inspection, and 

provided to the Tribal gaming regulatory authority upon request. 

Comment (July): Comparison to theoretical (expected) hold is not valid for 

games that have been only partially sold at end of the month. 

Response: Agree. Strike (g) (3). 

Revised proposal resulting from July meeting comment: 

7-8-10 Version 

Page 7 of 8 
(3) Each month, the actual hold percentage shall be compared to the theoretical hold 

percentage. Any significant variations (3%) shall be investigated.

542.8 (h) (1 (i)-(iv) has been moved to proposed Revenue Audit 542.50 (a) (4) 

(h) Electronic equipment. (1) If the gaming operation utilizes electronic equipment 

in connection with the play of pull tabs, then the following standards shall also 

apply.

Comment (July): Gaming operations utilizing electronic equipment in 

connection with the play of pull tabs should be exempt from subsection (g).

Response: Disagree. The changes made to subsection (g) address concerns 

about applicability to electronic equipment.

(i) If the electronic equipment contains a bill acceptor, then §542.21(e) and (f), 

§542.31(e) and (f), or §542.41(e) and (f) (as applicable) shall apply. 

(ii) If the electronic equipment uses a bar code or microchip reader, the reader shall 

be tested periodically to determine that it is correctly reading the bar code or 

microchip.

(iii) If the electronic equipment returns a voucher or a payment slip to the player, 

then §542.13(n) (as applicable) shall apply.

(iv) If the electronic equipment utilizes patron customer account access cards for 

activation of play, then §542.13 (o) (as applicable) shall apply. 

Justification: The term customer is more frequently used in Part 542 whereas the 

term patron is more frequently used in Part 543.

(2) [Reserved]

7-8-10 Version 

Page 8 of 8