self regulation.

Mics Proposed Changes or Question Viejas Comments
section
CFR 25 | Gaming Ordinances YES
Part 523 | Should part 523 be eliminated as being obsolete? The Commission believe that
there may not be any such ordinances that have not been submitted.
CFR 25 | Collateral Agreements NO
Part 531 | Should the Commission consider whether is has authority to approve collateral
agreements to a management contract? Some tribes have asked the Commission
to review the contract and collateral agreements to determine if they have a
detrimental accumulative effect on the tribe. For example, if the management
portion of the contract only requires payment of 5% of the net win, collateral
agreements can result in excess of 80% being paid resulting in a loss for the tribe.
CFR 25 | Submission Requirements for Management Contracts Additional guidance is helpful as long as it doesn't
Part 533 | Should the commission issue an amendment that would clarify the trustee restrict things so narrowly as to remove all
standard by adding two additional grounds for the possible disapproval of a judgment. The trustee standard sounds to me like it
management contract. If the contract was not submitted in accordance with the allows the NIGC to reject agreements on
submission requirements of part 533, or if the contract does not include the the grounds that a "reasonable person” would not
regulatory requirements for approval pursuant to Part 531. enter into the agreement. If they may meet all
technical standards, but due to various terms or
conditions be outside the industry standard.
CFR 25 | Background Submission for Management Contractor We understand the information provided by the
Part 537 | Should the Commission revise part 537 as there has been confusion as to whether NIGC is outdated if a response is ever received, the
@ management contractor must submit the Class I! background information when majority of the time, no response is the response. If
the contract only includes class II! gaming. IGRA does specify the approval of this is the case then we don't believe this is an
contracts for both Class II and Ill as a power of the Chairwoman. effective addition, however if this process could be
revised to be more meaningful and the information
accurate, then this information would be beneficial to
the Tribe.
CFR 25 | Appeat of NOV Yes, we do agree that if the NIGC has the authority
Part 537 | Should the Commission consider more comprehensive and detailed procedural to make decisions that they must have a

tules, especially in areas such as motion practice, that are largely unaddressed by

clearly outlined process for dispute that protects all

3



CFR 25 Facility License Notifications, Renewals, an Submissions We have meet the standard.
Part 559
Should the Commission promulgate a regulation concerning withdrawal of a NOV
after it has been issued? Under what conditions or concerns the NOV could be
withdrawn? Would it be withdrawn at the sole discretion of the Chairwoman?
Records Access It would seem implied that access to alll
Should the Commission revise the regulations to clarify that the access includes means all no matter where they are located. If
CFR 25 access to records at off-site locations including sites maintained by third parties? some
Part 571.1 tribes have not understood this, clarification
may be warranted. Emphasis of the matter
can
help serve as a reminder to all.
CFR 25 Enforcement It makes sense to have a mechanism to
Part 573 Should the Commission promulgate a regulation concerning withdrawal of a NOV withdraw an NOV when the facts surrounding
after it has been issued? Under what conditions or concerns the NOV could be the issuance of the NOV are erroneous or
withdrawn? Would it be withdrawn at the sole discretion of the Chairwoman? when there are mitigating circumstances that
change the Commission's view of the matter.
The Chair should be the one who would have
the discretion to withdraw the NOV since the
Chair has the discretion to issue it in the first
place.
Potential | Tribal Advisory Committee A tribal advisory committee should be
New Should the Commission develop a regulation or policy identifying when a tribal established. The advisory committee could
Regulations advisory committee will be formed to provide input and advice to the NIGC and if provide the NIGC with useful input and

so how the members will be selected?

perspective on most issue before the NIGC.
The Commission could accept nominations
from the industry and make selections to get a
reasonable cross-section of the industry.
Representatives should come from each
fegion and from varying sizes of operations.
The number of representatives should be
determined based on the size of each

market so that all areas are properly

represented.



Mics Proposed Changes or Question Viejas Comments

section

CFR 25 | NIGC Fee Calculation Calculating the fee on an calendar year basis is

Part 514 not overly onerous on casinos who have fiscal
Should the calculation of NIGC fees be changed to "fiscal" year rather than year ends that differ. Casino's must track and
“calendar” year for calculation? If this revision is helpful, what is the best method teport W-2g, 1099 and W-2s on a calendar year
for implementation? Should they provide for 18 months for transition? How would basis. if the casino has adequate accounting
the commission set dates for payment due dates as tribes have different fiscal systems and processes, the difference is not really
years? burdensome.

CFR 25 | Gross Gaming Revenue Definition In practice, some CPAs apply the definition of

Part 514 gross gaming revenues differently than others. A
Should the Commission define gross gaming revenue to be consistent with GAAP clear definition from the NIGC helps insure
definition of the term? Would this make fee calculation easier? consistent calculation of the fees due.

CFR25_ | Should this section be revised to include fingerprint processing fees? Should it We believe that most fingerprint fees are paid by

Part 514 | specify that fee collected from the gaming tribes for processing fingerprints with operation if not should be. We believe that a
the FBI are included in the total revenue collected by the Commission that is fequirement to adjust for current processing fee's
subject to statutory limitation? Should the Commission include a requirement for is reasonable and this language should be
it to review fingerprint processing costs on an annual basis and, if necessary, inserted.
adjust the fingerprint processing fee accordingly?

CFR 25 | Late Payment System We agree that a better process is needed. While

Part 514 | Should the Commission consider a late payment system in lieu of a Notice of collection of the fees are vital
Violation for submitting late fees? As an NOV could lead to closure of a gaming to the Commission's operation, the threat of
facility, the Commission questions whether an NOV is an appropriate response to closure for untimely payment of an amount that is
a late fee submittal caused by a change in employees or other minor issue? Should inconsequential to each casino seems out of
the Commission consider adding a type of "ticket" system to part 514 so that an place. A ticketing or progressive step system of
NOV would only be issued in instances of gross negligence or wanton behavior, or penalties seems like a more appropriate solution.
in a dollar amount that allowed the tribe to reap an economic benefit from is
failure to pay in a timely manner.

CFR 25_ | Self Regulation YES

Part 518 | Should the Commission revise part 518, Self Regulation of Class Il gaming? They

have been told that this regulation is overly burdensome and that the burden of
completing the process to obtain certification outweighs any benefits gained from



the present rules?

parties involved

Mics
section

Proposed Changes or Question

Viejas Comments

CFR 25
Part 542

Class IIt Minimum Interna! Control Standards

Should the Class III MICS be struck as suggested? The Commission is seeking
comment on whether the Class III MICS has a positive impact on the industry, and,
if changed to a guideline (recommended), what, if any, impact might this have on
tribal gaming? Many tribal gaming regulatory authorities have relied on the
regulation to define the foundation of their minimum internal contro! standards,
others have merely adopted the federal rule verbatim, while others have drafted
their own.

Since the MICS are "minimum", we believe
that they are helpful to the industry and should
remain as required standards. Tribes certainly
have the right to have more controls or word
things in their own way as long as the goal of
each minimum standard is met. In any event
the requirement helps to insure that the tribe's
assets and interests are protected.

CFR 25
Part 542

Class Itt Minimum Internal Control Standards
Additionally, how would the state compacts that incorporate the Class III MICS be
affected?

However since most of the Compacts are not
very specific on the technical requirements
and in the compact they have deferred to the
MICS when the regulation provides more
control we do not believe there would be a
significant change.

CFR 25
Part 542

Class ili Minimum Internal Control Standards

If struck and revised but not placed in to regulation, how should the Commission
publish them? A Tribal Advisory Committee? Does it need to be comprised of
different members than the Class II MICS TAC? How should the member be
selected? What process should the NIGC utilize to make revisions?

A tribal advisory committee should be
established and it could initially propose
changes to the current proposed draft before it
is put out for comment. The Commission
could accept nominations from the industry
and make selections to get a reasonable
cross-section of the industry. Representatives
should come from each region and from
varying sizes of operations.

CFR 25
Part 542

Class Il Minimum Internal Control Standards

The process of revising the Class Il MICS has been under significant scrutiny and
objection. The Commission is dedicated to making revisions using a process that is
inclusive of all interested parties. Should tribal gaming regulatory authorities be
provided an opportunity to proved comment on the proposed rule before public

A process that allowed tribal gaming
regulators to comment first would be helpful.
They are the

ones who will have to enforce the standards
and assess compliance. We believe input
from the accounting profession would also be

4



Potential
New
Regulations

Sole Proprietary Interest Regulation

The IGRA requires that the tribe have sole proprietary interest in the gaming
operation. Should the Commission consider a regulation identifying when the sole
proprietary interest provision is violated and providing a process whereby at the
tribe's request the NIGC will review the documents of agreements and make a
determination?

We believe that guidance from the
Commission on this issue would be helpful to
the tribes and their legal counsels who
request assist in drafting agreements.

Potential
New
Regulations

Communication policy or regulation identifying when and how the NIGC
communicates with tribes.

Should the NIGC develop a regulation or include as part of a regulation a process
for determining how it communicates with tribes? The NIGC has a government to
government relationship with federally recognized tribes, however, the NIGC staff
often communicates primarily with the Gaming Commissions or Tribal Gaming
Regulatory Authority. On issues related to broad policy change or compliance
issues such as NOVs. How should the NIGC communicate when the tribe and the
TGRA are at odds with each other? Should the NIGC consider requiring a
resolution from the elected tribal council setting forth which entity communicates
with the NIGC? Alternatively, should the NIGC promulgate a regulation or policy
establishing a default method of formal communication unless otherwise directed
by resolution?

No, the NIGC should inprove its internal
process.

Potential
New
Regulations

Buy Indian Act Regulation

The Commission is considering adopting a regulation which would require the
NIGC to give preference to qualified Indian-owned businesses when purchasing
goods or services as defined by the "Buy Indian Act". The Commission seeks
comment on whether this is appropriate?

It certainly seems appropriate that the NIGC
would give preference to Native American
owned businesses for its own purchasing.

Other

Regulations

Part 501 Purpose and Scope, Part 503 Commission Information Collection
Requirements under the Paperwork Reduction Act: OMB Control Numbers and
Expiration Dates, Part 513 Debt Collection, Part 515 Privacy Act Procedures, Part
517 Freedom of Information Act Procedures, Part 522 Submission of Gaming
Ordinance or Resolution, Part 531 Content of Management Contracts, Part 535
Post Approval Procedures, Part 571.8 - 571.11 Subpoenas and Depositions, Part
571.12 - 571.14 Annual Audits, Part 575 Civil Fines

We believe that these areas should be review
at some piont for further revision.



VIEJAS

TRIBAL GOVERNMENT
GAMING COMMISSION

February 9, 2011

Ms. Tracy Stevens, Chairwoman
National Indian Gaming Commission
1441 1 ST. NW, Ste. 9100

Washington, DC 20005

VIA Email: reg.review@nigc.gov

Re: Notice of Inquiry - Comments on Regulations to Implement IGRA

Dear Chairwomen Stephens:

We are pleased to have the opportunity to comment on the regulations to implement IGRA. Our
Commission works extensively with many Tribal Gaming Commissions. These comments are from the
staff's perspective developed through your comment period and our daily hands-on experience.

The comments are summary from the Tribal Gaming Commissioner and staff. If you have further
questions or would like to discuss any items further, please contact Tracy Burris, tburris@viejas.com or
619-659-2005

Sincerely,
Pe ae

} (eA Oe
Tracy Burris

Viejas Commissioner

5000 Willows Road, Alpine, CA 91901 * 619.659.1703


meetings? Should comment be sought from accounting practitioners?

helpful. Internal controls are a key element in
accounting processes and the majority of
transactions and processes within a casino
give rise to accounting transactions.

CFR 25 Class I! Minimum Internal Control Standards A tribal advisory committee would be an
Part 542 Should a tribal advisory committee be assembled to provide advice to the NIGC in excellent aid to the Commission in the
the administration of the rule once adopted? administration and creation or revision of this
or any standards the Commission issues.
CFR 25 Class [I Minimum Internal Control Standards A tribal advisory committee should be
Part 542 How should the Commission process the revisions of the Class II MICS? Should established and it could initially propose
they start with the current proposed draft? Should they establish a tribal advisory changes to the current proposed draft before it
committee to participate? How would the members be selected? What will the is put out for comment. The Commission
revision process be? could accept nominations from the industry
and make selections to get a reasonable
cross-section of the industry. Representatives
should come from each region and from
varying sizes of operations.
CFR 25 Minimum Internal Control Standards for Gaming Equipment Used with the Play | A tribal advisory committee should be
Part 547 of Class Il Games established and it could initially propose
changes to the current proposed draft before it
Should this section be further revised? Should the NIGC start with the current is put out for comment. The Commission
proposed draft? Should they establish a tribal advisory committee? How would could accept nominations from the industry
the members be selected? and make selections to get a reasonable
cross-section of the industry. Representatives
should come from each region and from
varying sizes of operations.
CFR 25 Background and Licensing \t should be formalized.
Part 556
Should the pilot program be formalized?
CFR 25 Fingerprinting for Vendors, Consultants, and other Non-Employees Since many tribes license vendors and other
Part 556 Should the Commission adopt regulations that would allow tribes to submit non-employees it would be beneficial to them

fingerprint cards to the Commission for vendors, consultants, and other
nonemployees?

for the Commission to process fingerprint
cards for such applicants.





MICs Proposed Changes or Question Viejas Comments
section
CFR 25 | Net Revenues Clarification would be helpful. Depending on the way the
Part casino is organized, it may have a statement of revenues,
502 expenses and changes in fund balance, not an income
Should the Commission consider further defining "Net Revenues-Management statement. Since the captions on the statements differ, it
Fee"? may be confusing to tribal leaders and accountants when
trying to apply the definition as it stands. Distributions to
the tribe are subtracted from revenues to arrive at the
bottom line "change in Fund Balance”, but are not on an
traditional income statement.
CFR 25 | Net Revenue Allowable Uses Rather than focusing on “allowable uses" the real
Part emphasis should be on “allowable distributions."
502 Should the Commission consider further defining "Net Revenues-Allowable Uses” to
be based on cash flow? For example, should the new definition be "Cash Flow"
equals “Net income plus depreciation minus principal loan payments and reserve
funding?" The purpose of this would be to consider the overall financial integrity
of the gaming operation before funding other tribal programs.
CFR 25 | Management Contract The definition of management contracts should not be
Part expanded to include contracts based ona
502 Should the definition of management contract be expanded to include any percent of gaming revenues. Contracts should be
contract, such as slot lease agreements, that pays a fee based on a percentage of evaluated on the basis of what the contract
gaming revenues? itself provides. Gaming machine vendors generally do not
manage the casino's operation, but merely provide games.
The revenue sharing arrangements have allowed many
tribes to operate casinos without having to come up with
the capital necessary to purchase the machines. If the
definition of management contracts were extended to slot
lease agreements we believe the number of vendors
offering games to casinos would decline due to the
extensive management contract approval process.
CFR 25 | Management Contract Acceptable Compensation Depending on where a casino is in it's life cycle it is
Part understandable that a developer might receive more cash
502 Should there by a definition regarding acceptable compensation to a manager than the tribe. That being said, the types of reimbursement

contractor?

and compensation should be defined and, to the extent
practical,
upper limits set as it is with management fees themselves.