<sONAL 'No,

“On + S

DF
S Ng

NG co man”

NOTICE OF RELEASE OF DISCUSSION DRAFT
25 C.F.R. PART 547 - 2008 (GRANDFATHERED) SYSTEMS

June 14, 2017
Dear Tribal Leader:

The Indian Gaming Regulatory Act permits the use of electronic, computer, or
other technologic aids in connection with the play of Class II games.! National Indian
Gaming Commission regulations establish the minimum technical standards governing
the use of such aids.” The Commission initially implemented the technical standards in
2008 and, recognizing that the standards were new, allowed for non-compliant games
manufactured before November 10, 2008, to continue to be offered for play during a set
“grandfather period.” The Commission extended that period in 2012 and, pursuant to the
current regulation, the “grandfather period” ends on November 10, 2018, after which all
Class II gaming systems must meet the full minimum technical standards or be removed
from play.

With this date fast approaching, the Commission is interested in the potential
impact of the November 10, 2018, deadline for 2008 (Grandfathered) Systems and what
amendments, if any, to the technical standards regarding those systems may be
appropriate. To that end, the Commission included 2008 (Grandfathered) Systems as one
of the 2017 Consultation topics. The Commission has greatly appreciated the comments
received and the opportunity to engage in dialogue with tribes and the industry on the

topic.

The Commission now proposes for your consideration a discussion draft of
amendments to the technical standards designed to address issues identified thus far and
to facilitate further dialogue with tribes and the industry. As we have considered the
potential impact of the sunset provision for 2008 Systems, we have sought to find a
potential alternative which minimizes both the economic impact of the sunset provision

"25 U.S.C. 2703(7)(A)(i).
725 C.F.R. Part 547.

NEW MAILING ADDRESS: NIGC/DEPARTMENT OF THE INTERIOR 1849 C Street NW, Mail Stop # 1621 Washington, DC 20240 Tel: 202.632.7003 Fax: 202.632.7066

REGIONAL OFFICES Portland, OR; Sacramento, CA; Phoenix, AZ; St. Paul, MN; Tulsa OK; Oklahoma City, OK
WWW.NIGC.GOV


Letter to Tribal Leaders

Re Release of Discussion Draft
June 14, 2017

Page 2 of 3

and the risk to the gaming operation and the public of systems which are not compliant
with the full set of technical standards. We have also kept in mind the original and overall
intent of the technical standards of “provid[ing] a means for TGRA’s and operators to
ensure that the integrity and security of class II games played with technologic aids is
maintained and that the games and aids are fully auditable.”

The attached discussion draft re-organizes and revises the “How do I comply with
this Part” section of the existing regulation. The overall goal is to provide clarity to tribes,
testing labs, and manufacturers regarding their obligations under the Technical Standards
and to incentivize all systems to move towards full compliance. A summary of each
subsection of the draft discussion follows:

Subsection (a): Gaming systems manufactured before November 10, 2008. The
discussion draft consolidates all “grandfathering” provisions into one subsection.
References to “Grandfather” have been removed as such systems may now be referred to
as 2008 Systems. The discussion draft removes the sunset provision but includes the
requirement from the original 2008 technical standards that the player interface
components of 2008 Systems have a date of manufacture before November 18, 2008. In
addition, the discussion draft provides for an annual review of all 2008 Systems designed
to identify 2008 Systems in play and what component modifications are necessary for the
2008 System to be brought into full compliance.

Subsection (b): Gaming system submission, testing, and approval - generally. The
discussion draft separates requirements for systems and requirements for components into
their own subsections. Subsection (b) now establishes initial requirements for gaming
systems generally.

Subsection (c): Class II gaming system component repair, replacement, or
modification. The discussion draft consolidates provisions related to component
modification into one subsection that is applicable to any system, regardless of whether it
was initially certified as a 2008 System or a fully compliant system. The discussion draft
provides that all component modifications must be tested to the fully compliant
standards. The intent is that TGRAs will receive a full report of the modifications’
compliance and non-compliance with the full standards but may only approve the
modification so long as the modification maintains or advances the system’s overall
compliance with the full standards.

> Technical Standards for Electronic, Computer, or Other Technologic Aids Used in the Play of Class I]
Games, 73 Fed. Reg. 60,508, 60,509 (Oct. 10, 2008) .


Letter to Tribal Leaders

Re Release of Discussion Draft
June 14, 2017

Page 3 of 3

4, Subsection (d)-(f): The discussion draft includes minor amendments to these
subsections intended to make references to components and recordkeeping requirements
consistent with the other sections. This consistency is accomplished by revising
references to “hardware and software modifications” to include the term “components.”

5, Subsection (g): Records. The Commission intends this section to clarify the
Commission’s intended use for the information required to be maintained and/or
submitted to the Commission under this Part. The Commission emphasizes that the
information will be used to monitor the use of Class II gaming systems, to assess the
effectiveness of the standards required by this Part, and to inform future amendments to
this Part. The Commission is also considering utilizing the information it collects to
create a regular report that can be used by the industry.

We invite you to submit written comments by July 15, 2017, by e-mail to
Vannice_Doulou@nige.gov or by U.S. mail to: NIGC, Attn: Vannice Doulou, 1849 C St.
NW, Mail Stop #1621, Washington, DC 20240.

Thank you for your consideration and participation.

Sincerely,
Wh .
Jonodev O. Chaudhuri Kathryn Isom-Clause E. Sequoyah h

Chairman Vice Chair Associate Commissioner