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United Auburn Indian Community
of the Auburn Rancheria

Gene Whitehouse John L. Williams Calvin Moman Jason Camp Gabe Cayton
Chairman: Vice Chairman Secretary ‘Treasurer Council Member
June 21, 2017

Via Email (vannice_doulou@nige.gov) & U.S. Mail

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 United Auburn Indian Community conducts Class III gaming at the Thunder Valley
Casino Resort in Lincoln, 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 [II 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.

Our comment on the specific proposed updated guidance is also provided below.

Tribal Office 10720 Indian Hill Road Auburn, CA 95603 (530) 883-2390 FAX (530) 883-2380


Part 542: Minimum Internal Control Standards for Class ITI 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.



Comment on Specific Guidelines Proposed

The proposed guidance contains an update for the MICS Gaming Machines section
currently at Section 542.13(g)(4). The existing MICS pertains to gaming machines with
potential jackpots in excess of $100,000. Specifically, Section 542.13(g)(4) provides:
“Gaming machines with potential jackpots in excess of $100,000 shall have the game
software circuit boards locked or physically sealed. The lock or seal shall necessitate the
presence of a person independent of the gaming machine department to access the device
game program EPROM, or other equivalent game software media.”

The proposed guidance, at Section 4 “Gaming Machines” at subsection (5)(iv), eliminates
the exception for games with a potential jackpot less than $100,000 and requires the
presence of a person independent of the gaming department to access all game circuit
boards.

We request that the NIGC consider amending the guidance in the “Gaming Machines”
Section 4 at (e)(5)(iv) to include an exception for games that do not meet “high access
requirements” (potential jackpots in excess of $100,000, ram clear capability without
physical access program, or $10 denomination and higher) and where a Keywatcher
System (which requires a person independent of the gaming department to remove a key
to access game circuit boards) and surveillance prior notification and contemporaneous
coverage are utilized to ensure secure access to such game circuit boards. The new
proposed guidance requiring a person independent of the gaming machine department to
be present for access to each circuit board for games under the “high access
requirements” will be unnecessarily burdensome for high volume properties where
security is adequately safeguarded by the Keywatcher System and surveillance
notification and coverage prior to and during such access to the circuit board.

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

Sincergfy, _
Gene Whitehouse

Chairman

Ce: Ed Machado, UAIC Tribal Gaming Agency Chairperson
Jane Zerbi, Esq.