Date: July 18, 2005 

Subject: Minimum Internal Control Standards Revisions 

to 25 C.F.R. Part 542 

The purpose of this Bulletin is to address the final rule published on May 4, 2005, 

70 Fed. Reg. 23011, that includes revisions to the National Indian Gaming 

Commission (Commission or NIGC) Minimum Internal Control Standards (MICS) 

at 25 C.F.R. Part 542. The NlGC has worked cooperatively for over a year with a 

standing committee consisting of Tribal and NlGC representatives to develop this 

first set of revisions. Additional revisions are anticipated as the NlGC seeks to 

refine its regulations to keep pace with changes in the gaming 

industry, particularly those concerning technological advances. 

In response to the inherent risks of gaming enterprises and the resulting need for 

effective internal controls in Tribal gaming operations, the NlGC first developed 

MlCS for Indian gaming in 1999, and then later revised them in 2002. The 

Commission recognized from the outset that periodic technical adjustments and 

revisions would be necessary in order to keep the MlCS effective in protecting 

Tribal gaming assets and the interests of Tribal stakeholders and the gaming 

public. To that end, the NIGC has issued a final rule containing revisions to the 

Commission's existing MICS. These revisions are necessary to correct 

erroneous citations or references in the MICS and to clarify, improve, and update 

other existing MlCS provisions. The purpose of these final MlCS revisions is to 

address apparent shortcomings in the MlCS and various changes in Tribal 

gaming technology and methods. Public comment to these final MlCS revisions 

was received by the Commission for a period of 48 days after the date of their 

publication in the Federal Register as a proposed rule on December 1, 2004. 

Thereafter, the comment period was extended for an additional 31 days until 

February 18, 2005. After consideration of all received comments, the 

Commission has made whatever changes to the proposed revisions that it 

deemed appropriate and has now published its first set of final revisions to the 

Commission's MlCS Rule, 25 C.F.R. Part 542. 

The first set of revisions include changes to the following sections which you will 

want to review to determine if your Tribe's internal control standards need to be 

amended: 

Section 542.2 Revisions to the definitions for "Gaming Machines" and 

"Promotional Progressive Pots and/or pools" and new definitions for "Drop 

Period" and "Series Number" 

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Section 542.7 Correction of referencing and citation errors 

Section 542.8 Correction of referencing and citation errors 

Section 542.1 2 Correction of referencing and citation errors 

Section 542.13 Correction of referencing and citation errors 

Section 542.13 Revisions concerning the standards for evaluation of 

theoretical and actual hold percentages and the accountinglauditing standards 

for comparison of bill-in meter reading to the total bill acceptor drop amount 

Section 542.18 Revisions concerning the NIGC's process for reviewing 

Tribal requests for variances from the MlCS likely will not have corresponding 

provisions in Tribal internal control standards. 

Sections 542.21 (t)-(w), 542.31 (t)-(w), and 542.41 (t)-(w) New sections to 

establish minimum standards for computerized key security systems. 

NOTE: Section 542.1 6(a)(1) Although initially it was proposed to 

delete the requirement of this section that vendors adhere to Tribal internal 

controls, this standard has been retained. 

Compliance 

In accordance with the published rule, as of July 5, 2005, the Tribal gaming 

regulatory authority should have: (1) In accordance with the Tribal gaming 

ordinance, established and implemented Tribal internal control standards that 

shall provide a level of control that equals or exceeds the revised standards set 

forth herein; and (2) established a deadline no later than September I, 2005, by 

which a gaming operation must come into compliance with the Tribal internal 

control standards. However, the Tribal gaming regulatory authority may extend 

the deadline by an additional 60 days if written notice is provided to the 

Commission no later than September 1, 2005. Such notification must cite the 

specific revisions to which the extension pertains. 

These revisions will appear in the Code of Federal Regulations (CFR) when Title 

25 is published by the Government Printing Office in April 2006. However, the 

CFR website, http://www.~poaccess.qov/ecfr/, incorporates the new revisions 

and is updated frequently. 

Should you have any question, please call the Division of Audits at (503) 326- 

7050 or submit inquiries to our website at www.nigc.gov.