PALA BAND OF
MISSION INDIANS

PMB 50, 35008 Pala Temecula Road
Pala, CA 92059
Phone 760-891-3500 | Fax 760-742-1411

June 28, 2017

Mr. Jonedev Chaudhuri, Chairman
National Indian Gaming Commission
ATTN: Vannice Doulou

C/O Department of the Interior

1849 C Street NW

Mail Stop #1621

Washington, DC 20240

Dear Chairman Chaudhuri:

The Pala Band of Mission Indians conducts Class III gaming at the Pala Casino Spa Resort in
Pala, California. We appreciate the National Indian Gaming Commission’s opportunity to
provide comment on the NIGC’s proposal to issue guidance that tribal regulators may use in
developing their own Class III internal controls, and also to maintain in the federal register the
Class III Minimum Internal Control Standards at 25 CFR Part 542 in a suspension status.

SUMMARY

We support the NIGC’s continued provision of minimum internal control standards for Class III
gaming, specifically: (1) The NIGC’s current decision to maintain the Class III MICS at 25 CFR
Part 542, in a suspension status that ensures the text adopted in 2006 will remain on the books
and also specifies that it is not enforceable without the Tribe’s express consent; and (2) The
NIGC’s current decision to provide guidance on updates or best practice recommendations for
the Class III MICS. We further urge the NIGC to specify that such guidance on updated
Class III MICS “meet or exceed” the 2006 MICS at 25 CFR Part 542, for the reasons
specified below.

PART 542: Minimum Internal Control Standards for Class III Games

As we have previously commented in writing and by testimony, the federal regulatory standards
for Class III Gaming MICS at 25 CFR Part 542 have an important and positive impact on the
industry, serving since 1999 as a uniform and solid baseline for tribes to issue their own tribal
internal control standards. The uniform federal minimum standard facilitates regulatory
compliance in such areas as external audit and shortens the learning curve for internal audit,
facility audit and regulators recruited from another state or tribal jurisdiction. The industry’s
reliance upon the federal standard has roots in the historical evolution of Indian gaming as well
as their efficiency and effectiveness.


Our Tribe has adopted the federal MICS standard, and our tribal gaming ordinance approved by
the NIGC confers regulatory oversight to the NIGC to monitor and enforce the MICS. The
federal Class III MICS currently are used as the standard in tribal-state gaming compacts,
regulations, tribal gaming ordinances, and Secretarial procedures. In California, in addition to
new compacts and compact amendments incorporating the federal Class III MICS, a state-wide
regulation called CGCC-8 enacted pursuant to the compact incorporates the federal MICS
standards. It also provides an alternative NIGC compliance section that enables California tribes
to opt for NIGC monitoring of MICS compliance, where a tribe has chosen to request such
federal oversight in its gaming ordinance. This valuable alternative is entirely voluntarily and up
to the sovereign decision of each tribe.

We agree that the federal Class III MICS standard should remain in place, and any review of
these standards and regulations at this stage should carefully take into account the important role
these standards have played and continue to play for many tribes.

Most importantly, we urge the NIGC to specify in its guidance that such guidance updates
“meet or exceed” the Class III MICS published at 25 CFR Part 542. This will avoid any
unnecessary confusion and also compliment the approach taken in many compacts, regulations,
ordinances, and Secretarial Procedures. This enables tribes the option to choose to adopt the
updates into their tribal MICS, preserving some of the federal uniformity of regulation in the
industry and avoiding costly duplication of efforts. This approach works well with the model
used in our tribal gaming ordinance approved by the NIGC, which incorporates standards that
equal or exceed the federal MICS as published at Part 542 or amended by mutual agreement of
the NIGC and the Tribe. This approach also compliments the California state-wide regulation
CGCC-8. which provides for the standard of compliance to be 25 CFR Part 542 as in effect on
October 19, 2006, or as it may be amended, as well as an alternative material compliance
standard where a tribe adopts MICS that meet or exceed 25 CFR Part 542, as in effect on
October 19. 2006. or as it may be amended. This approach also compliments new compacts in
California which refer to and require implementation of standards that are no less stringent than
those contained in the NIGC MICS published in 2006, and as they may thereafter be amended.

We appreciate this opportunity to provide written comment and look forward to any continued
consultation on these issues.

Sincerely, _ —
ee
an a

Robert Smith, Chairman

Cc: Anthony Barnes, Pala Gaming Commission Chairman
Jane Zerbi, Esq.