regulatory role in the regulation of Grandfathered gaming systems. TRGAs have a significant
interest in protecting the integrity of tribal gaming operations, and have the expertise to craft
appropriate regulations to ensure that Grandfathered games are adequately monitored.

An additional concern is the new requirement that all modifications be tested for compliance
with Part 547. Simply put, the existing system for approval of modifications to Grandfathered
systems has worked well. The current rule includes an important exception to the testing
requirement for modifications. This exception allows TGRAs to approve a modification without
testing as long as the modification maintains and advances the overall compliance of the system.
It also provides TGRAs the necessary flexibility and control over Grandfathered systems in a
manner that permits modifications to be approved much more quickly and at a lower cost. This
important exception is eliminated in the Discussion Draft.

Finally, we find a mandatory annual review and reporting requirement to be unreasonably
burdensome on TGRAs and inconsistent with the NIGC’s oversight function. All gaming
systems are inventoried, periodically tested, and subject to recordation requirements. Such
requirements can be found in the Nation’s internal control standards. We find it much more
reasonable for the NIGC to perform a records review during its on-site compliance monitoring
activities than for the agency to impose new reporting requirements.

Conclusion

In closing, we appreciate the opportunity to provide comments regarding the proposed
amendments to 547.5. In our previous comments, the Nation has advocated that the proper
approach to framing of the Technical Standards, as well as other gaming regulation, should be a
collaborative effort. The Nation commends the NIGC’s efforts to engage Tribal governments
and solicit comments on the draft amendments prior to the implementation of a final rule.

We urge the NIGC to fully consider the concerns presented in our comments. As currently
drafted, the Discussion Draft is vulnerable to a number of potential unintended consequences. It
is our hope that the agency finds our comments constructive, which is our intent. Please note
that we share the NIGC’s interest in safeguarding the safety and integrity of all games and
gaming systems offered for play on our gaming floors. We also have an interest in fair and
reasonable regulations that ensure that tribal governments receive the full benefit of the law.

We believe that the Nation’s interests as well as those of the NIGC are achievable if we continue
to engage in meaningful discussion in an open and candid manner. We are pleased to continue to
engage with the NIGC on this and other regulatory matters and appreciate your willingness to
work through the issues and concerns of importance to the Nation and all of Indian Country.


OFFICE OF THE GOVERNOR
The Chickasaw Nation
Post Office Box 1548 * Ada, Oklahoma 74821
(580) 436-2603 * Fax (580) 436-4287

BILL ANOATUBBY http://www.chickasaw.net

GOVERNOR

July 28, 2017

Mr. Jonodev Chaudhuri, Chairman
National Indian Gaming Commission
1849 C Street NW

Mail Stop #1621

Washington, DC 20240

Dear Chairman Chaudhuri:

Included with this letter are the Chickasaw Nation’s comments regarding the
grandfathered Class II gaming systems. :

Thank you for your consideration of our comments. If you have any questions
please contact Mr. Bill Lance, Secretary, Department of Commerce at (580) 421-9500.

Sincerely,

Bill Anoatubby, Governor
The Chickasaw Nation


COMMENTS OF THE CHICKASAW NATION ON THE
NATIONAL INDIAN GAMING COMMISSION’S
PROPOSED RULE OF 25 C.F.R. PART 547 -
TECHNICAL STANDARDS FOR CLASS IT GAMING

The Chickasaw Nation (“Nation”) is pleased to submit comments to the National Indian Gaming
Commission (“NIGC”) on the Part 547 Discussion Draft, which revises Part 547.5 by creating an
alternate framework to the existing grandfather/sunset provision. First, the Nation commends the
NIGC for exploring alternatives to the hard sunset date entailing the removal of those Class II
gaming systems manufactured prior to November 10, 2008

As we have indicated in our prior comments pertaining to Part 547, Class II gaming remains an
important component of the Nations gaming activities. Class II gaming provides the Nation
significant revenues critical to the health and well-being of the Chickasaw Nation. These dollars
enable the Nation to take care of its elders, educate its children, attend to the health and welfare
of our people, and improve the overall quality of life not only for the Nation’s citizenry, but for
the community at large as well. Thanks to the income we derive from gaming, we are able to
help those in need, employ the able-bodied, and create economic opportunities that would not
otherwise be available without the successes we have achieved in the gaming arena. These are
the interests that are served by our gaming activities and impel us to pay particular attention to
anything that does or could affect them.

Until 2004, when the State of Oklahoma agreed:to enter into Class III gaming compacts with
tribal governments in Oklahoma, Class II gaming comprised the totality of the Nation’s gaming
activities. The importance of Class II gaming, both historically and currently, cannot be
overemphasized. Without a viable Class II gaming alternative, the interests and economic well-
being of the Nation and all tribal governments are compromised. Accordingly, the Nation has
and continues to make significant investments in Class II gaming technology, which makes up a
significant percentage of the Nation’s gaming activities today.

When the NIGC first proposed the promulgation of Class II technical standards, we were
concerned foremost that any such rule, unless carefully crafted, could operate to undermine the
viability and profitability of Class II gaming. We were particularly concerned that a poorly
drafted or improperly applied regulation would deprive tribal governments of the full benefit of
the law as set forth in the Indian Gaming Regulatory Act. Neither were we clear on the question
of agency authority to promulgate such standards. Our concerns deepened when early drafts of
the now existing Part 547 contained unreasonable and objectionable provisions which indeed
would have had a severe adverse financial impact on Class II gaming revenue if promulgated.
Finally, by virtue of the fact that the agency did not provide evidence or data indicating that the
promulgation of such federal regulation was supported by objective facts and data, we were not
convinced of the need for such regulations.


The technical standards were ultimately promulgated on November 10, 2008, and while many of
our concerns in relation to the language were accommodated, many remained. When the NIGC
revised Part 547 in 2013, most of our remaining concerns were accommodated, except in relation
to the sunset provision, which the NIGC now addresses in its discussion draft.

While we appreciate the NIGC’s efforts to respond to the concerns the Nation and other tribal
governments have expressed in relation to the grandfather and sunset provisions, particularly its
willingness to consider removal of the sunset provision, we are concerned that the proposed
revisions to Part 547.5 create a process that will prove expensive, onerous, and burdensome.
Moreover, we are not convinced that such process will meaningfully enhance the integrity of
grandfathered Class II gaming systems.

As proposed, the Discussion Draft amendments creates extraordinarily burdensome auditing and
reporting requirements for Tribal Gaming Regulatory Authorities (“TGRAs”) that are more
stringent than those imposed under the existing Grandfathering provisions of 547.5. The
resulting cost of compliance will potentially prove to be cost prohibitive to small gaming
facilities, ultimately outweighing the economic benefit of excising the “sunset” provision from
the regulation. We find the additional amendments to the regulation unnecessary as the
remaining provisions of Part 547.5 provide a sufficient framework for the testing and evaluation
of Grandfathered gaming systems.

In our view, the proposed amendments contained within the NIGC Discussion Draft are not only
unnecessary additions to 547.5, but the suggested amendments also result in confusing,
inconsistent requirements within the rule. For example, the 547.5 (a) amendment expands the
scope of the rule to encompass all Class II gaming systems manufactured prior to November 10,
2008. Inherent in the newly proposed language of 547.5 is an unsupported presumption that all
gaming systems manufactured prior to November 10, 2008, did not comply with the Part 547
Technical Standards. Likewise, the discussion draft fails take into account those Class II gaming
systems manufactured prior to November 10, 2008, which have since been brought into full
compliance. Consequently, there is a high likelihood that a significant number of Class II
gaming systems would be subject to the requirements of 547.5, thereby increasing the already
significant cost of compliance with the proposed rule.

Further inconsistencies are created by the NIGC proposed draft amendments at §
547.5(a)(1)(viii), wherein the language appears to bar Class II gaming systems manufactured
prior to November 10, 2008 from play unless it utilizes a player interface manufactured before
November 10, 2008. Obviously, such requirement thwarts the goal of the standards relating to
Grandfathered gaming systems. Furthermore, there is no evidence to suggest that a legacy Class
II gaming system cannot operate properly utilizing player interfaces manufactured at a later time.

The Nation is further concerned that the Discussion Draft fails to acknowledge the respective
roles of the NIGC and the TGRAs. As discussed in our earlier comments, TGRAs are the
primary regulators of Class II gaming.! Under the Discussion Draft, the TGRAs are accorded no
role in developing an appropriate regulatory scheme to monitor the Grandfathered games.
Consistent with the mandate of IGRA, TGRAs should continue to exercise their primary

125 U.S.C. § 2710(a)(2).