Morongo Gaming Agency

November 10, 2017

Jonodev Chaudhuri, Chairman
National Indian Gaming Commission
1849 C Street Northwest
Washington, D.C. 20240

ATTN: 547.5_Comments@nigc.gov

Re: Proposed Rule, 82 CFR 187, 45228-45233 (September 28, 2017)
Amending 25 C.F.R. 547.5
2008 Class II Gaming Systems

Dear Chairman Chaudhuri:

The Morongo Gaming Agency on behalf of the Morongo Band of Mission Indians
thanks NIGC for the opportunity to comment on the Proposed Rule. The effective
regulation of Indian Gaming, and the success of the Indian Gaming industry is best
served by the kind of government-to-government consultation that the NIGC has
engaged in with the affected Tribes. To that end, the MGA offers the following
substantive comments on the Proposed Rule.

First, the MGA welcomes the consolidation of “grandfathering” provisions and the
elimination of the sunset provision in Subsection (a) of the Proposed Rule. As the
NIGC notes in addressing comments on the Discussion Draft (82 CFR 187, 45,229),
“the technical standards are intended to ensure the integrity and security of Class II
gaming and the accountability of Class II gaming revenues. The MGA concurs, and
observes that eliminating the Sunset Provision recognizes that over the 10-year
grandfather period no compliance issues or incidents have been reported and that
many, if not all, of the Class II Systems in operation today have been subject to
system modifications under the provisions of the Class II technical standards, which
allow for modifications designed to maintain or to advance the overall compliance
and integrity of these systems. Under the rigorous oversight by tribal regulators,
the previously-grandfathered Class II] Systems have improved their performance
and compliance over time. The Proposed Rule, therefore, achieves the intent of the
technical standards of “providing a means for TGRA’s and operators to ensure that
the integrity and security of Class II games played with technologic aids are


maintained and that the games and aids are fully auditable.” 73 Fed. Reg. 60,508,
60,509 (Oct. 10, 2008), while recognizing the important role of tribal regulators.

The amendment to Subsection (a) also appropriately balances the regulatory
performance of these systems and the rigorous regulatory oversight of tribal
regulators with the enormous potential economic impact of eliminating these
systems, which total approximately 24,000 Class II Systems currently in operation,
collectively comprising and estimated 41% of total units in play. The Proposed Rule
achieves the NIGC’s goal of seeking a “potential alternative that minimizes both the
economic impact of the sunset provision and the risk to the gaming operation and
the public of systems that are not compliant with the full set of technical standards.”
The NIGC states that it “understand...concerns over removing non-compliant Class II
Gaming Systems from the gaming floor.” 87 FR 187, 45229. However, the MGA
observes that this response appears not to fully capture the potential adverse
impact that would have resulted from removing what have indisputably been
compliant Class I] Gaming Systems from the gaming floor in the absence of any
evidence of integrity or performance issues.

With respect to annual audit requirements, the MGA notes that the Proposed Rule
subjects Class II Gaming Systems to compliance auditing that exceeds the industry
standards for rolling compliance testing for all other gaming devices by a magnitude
of 10. The MGA believes that this treatment is inconsistent with the NIGC’s
determination to remove the “grandfathered” label from Class II Systems and to
eliminate the sunset provision, which collectively recognize that these Systems are
compliant and the MGA believes that audit requirements for these systems should
be subject to, among other things, a minimum rolling compliance certification of
10% of the electronic layer interfaces in operation at each facility where a Tribe has
Class II Gaming Systems in operation. The Proposed Rule’s annual testing and
certification of pre-November 10, 2008 Class II Gaming Systems is a significant
additional administrative burden imposed on TGRAs and maintains 547.5 as the
only Section of the technical standards in which TGRAs are not the primary
regulators of gaming. Nevertheless, the MGA appreciates the clarification that this
audit requirement will not apply to Class II gaming systems that TGRAs have
determined to meet all of the requirements of 547.5 and appreciates the NIGC’s
clarification of this issue at 547.5(a)(3), and is confident that TGRAs will meet this
responsibility fully and completely, and will continue to regulate Indian Gaming at
the very highest level of professionalism.

The MGA observes that the Proposed Rule continues to hedge on a clear statement
that sensitive, confidential and proprietary information should be made available to
but not turned over to the NIGC. The NIGC comments that “the Commission agrees
that sensitive testing and compliance records should not be disclosed” (82 FR 187,
45230), and that “confidential commercial or financial information and law
enforcement information exceptions to FOIA preclude the release of such
information.” 82 FR 187, 45231. But, these aspirational statements would be
unnecessary if the Proposed Rule made clear that such records are subject to review
but not submission to the NIGC. The MGA hopes that the final rule will provide such
clear and certain protection, because experience demonstrates at both the state and
federal level that the recipients of such information cannot always protect that
information from disclosure once it is included in an agency’s records.



MGA hopes that these comments are helpful to the NIGC and offers them with all
due respect and, again, the MGA offers it’s thanks to the NIGC for its engagement
with Tribal regulators on this important issue. If you have any questions, please feel
free to contact me at Oscar_Schuyler@Morongo.com and/or 1-800-252-4499 ext
23502

Oscar‘S. Schuyler, Executive Dir ctor
Morongo Gaming Agency

ce. Tribal Council
Joe Osterloh, Director of Compliance
George Forman, Legal

49500 Seminole Drive. Cabazon. CA (951) 849-3080 Fax (951) 755-5738