[Federal Register: October 24, 2007 (Volume 72, Number 205)]
[Proposed Rules]
[Page 60483-60495]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr24oc07-30]
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DEPARTMENT OF THE INTERIOR
National Indian Gaming Commission
25 CFR Parts 502 and 546
RIN 3141-AA31
Classification Standards for Bingo, Lotto, Other Games Similar to
Bingo, Pull Tabs and Instant Bingo as Class II Gaming When Played
Through an Electronic Medium Using ``Electronic, Computer, or Other
Technologic Aids''
AGENCY: National Indian Gaming Commission (``NIGC'' or ``Commission'').
ACTION: Proposed rule.
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SUMMARY: The proposed rule clarifies the terms Congress used to define
Class II gaming. First, the proposed rule further revises the
definitions for ``electronic or electromechanical facsimile'' and
``other games similar to bingo.'' The Commission defined these terms in
1992, revised the definitions in 2002, and proposed further revisions
to the term ``electronic or electromechanical facsimile'' separate from
this proposed revision. The Commission adds a new Part to its
regulations that explains the basis for determining whether a game of
bingo or lotto, ``other game similar to bingo,'' or a game of pull-tabs
or ``instant bingo,'' meets the IGRA statutory requirements for Class
II gaming, when such games are played electronically, primarily through
an ``electronic, computer or other technologic aid,'' while
distinguishing them from Class III ``electronic or electromechanical
facsimiles.'' This new part also establishes a process for assuring
that such games are Class II before placement of the games in a Class
II tribal gaming operation. This process contains information
collection requirements. The Commission has submitted the information
collection request to OMB for approval.
DATES: Submit comments on or before December 10, 2007.
ADDRESSES: Mail comments to ``Comments on Class II Classification
Standards'' National Indian Gaming
[[Page 60484]]
Commission, Suite 9100, 1441 L Street, NW., Washington, DC 20005, Attn:
Penny Coleman, Acting General Counsel. Comments may be transmitted by
facsimile to 202-632-7066, or mailed or submitted to the above address.
Comments may also be submitted electronically to
classification_standards@nigc.gov.
FOR FURTHER INFORMATION CONTACT: Penny Coleman or John Hay, Office of
General Counsel, Telephone 202-632-7003. This is not a toll free call.
SUPPLEMENTARY INFORMATION:
Preamble Table of Contents
I. Introduction
II. Background
III. Development
IV. New Proposal
V. Changes
I. Introduction
In writing and proposing this rule, the Commission has attempted to
be mindful of the language of IGRA, Congress's intent, IGRA's
legislative history, relevant court cases, and the essential need of
the tribes for a broad, flexible and legally sustainable scope of Class
II gaming. Class II was the basis on which Indian gaming was built.
Since the enactment of IGRA in 1988, Indian gaming has grown into a $26
billion business, perhaps far eclipsing any limits which Congress may
have envisioned. Although an estimated 90% of this gross gaming revenue
is generated by compacted Class III gaming, Class II remains
significant to tribes throughout the country.
For some tribes with Class III gaming compacts, Class II is a vital
supplement, long patronized and preferred by some clientele. In other
cases, sadly, some states fail and refuse to compact with their tribes
for Class III play, notwithstanding their legal sanction of Class III
gaming activities elsewhere within those states or their tolerance of
widespread unsanctioned Class III activities. Tribes in that situation
are left to make the most of Class II gaming and have operations that
are, or were, places where the distinction between Class II and Class
III has become the most blurred and where clarity is most needed.
Further, as tribes negotiate with states for Class III compacts, they
and the states need to know that there are viable Class II games that
tribes may utilize if no agreement is reached.
As observed below, the statutory language of IGRA lacks clarity
when it makes ``computer and electronic and technologic aids'' Class II
but places ``electronic facsimiles of games of chance'' in Class III.
However, some of the Act's legislative history sheds light upon
Congress's intended goal.
In the House and Senate floor debates on IGRA, several proponents
of the legislation described the distinction as that between ``bingo''
(Class II) and ``casino gaming'' (Class III). See 134 Cong. Rec. H8157.
While ``casino gaming'' likewise lacks a crystal-clear definition,
those who spoke associated the term with gambling halls filled with
slot machines, venues separate and distinct from the bingo halls of the
1980's.
It further appears from the debates that a basis for making this
the dividing line between Class II and Class III was the complexity and
regulatory difficulties associated with slot machines and casino
gaming. See 134 Cong. Rec. H8157, 134 Cong. Rec. S12643. Some argued
that only states--then the only governments experienced with the
conduct and regulation of such activity--were up to the task of
regulating casino gaming, and thus casino gaming needed to be
compacted.
Much has changed, of course, since those debates in 1988, not the
least of which is the sophistication and excellence of the tribes' own
gaming regulation. Tribes spend hundreds of millions of dollars
annually regulating their gaming, both directly, through their own
commissions, and indirectly, by funding the regulation done by states
and the NIGC. Nonetheless, the distinctions and classifications
established in IGRA in 1988 still bind the Commission, and the proposed
rule seeks to identify and clarify the place at which Congress intended
to separate Class II from Class III.
What is abundantly clear from a study of the Act's language and the
Act's legislative history is that Congress intended to distinguish
between uncompacted and compacted gaming. If that separating line is
not clear and identifiable, Congress's intention will not be fulfilled.
Since the Act's adoption in 1988, the world has changed, and
computerization has transformed whole sectors of our economy and
society, including gaming. Those advances challenge the legislative
language that pre-dates them. Nevertheless, that language continues to
govern these distinctions. Unless or until that language or the mission
of the NIGC--in part to promulgate Federal standards for Indian
gaming--is changed, the Commission's interpretations must be based on
them.
The other legislation, of course, which applies to the use of
gambling equipment on Indian lands is the Johnson Act. See 15 U.S.C.
1171. Since it was enacted in 1953, the Johnson Act has provided that
there could be no ``gambling devices'' in Indian Country, and the term
``gambling devices'' was thereafter broadly interpreted.
The passage of IGRA in 1988 changed this in two ways. ``Gambling
devices'' could be used on Indian lands if they were used pursuant to
Class III tribal-state compacts, and tribes could use computers and
electronic and technologic aids in the play of Class II bingo and
similar games.
As Indian gaming grew and the Indian gaming industry developed
under IGRA's framework, tribes increasingly turned to technology. When
electronic and technologic features were introduced in the absence of a
tribal-state compact, some were viewed by Federal investigators and
prosecutors as ``gambling devices.'' The Ninth Circuit held that an
all-electronic form of pull tabs to be an electronic facsimile game of
chance, notwithstanding the argument that players were playing against
other players and not against the machine they were using. The
electronic replication of the traditional Class II pull tab game was
deemed a Class III electronic facsimile and hence prohibited on Indian
lands in the absence of a compact. See Sycuan Band of Mission Indians
v. Roach, 54 F.3d 535 (9th Cir. 1995).
By contrast, in a series of decisions involving an electronic bingo
game called MegaMania, courts considered electronic, computerized
player stations, which interconnected a minimum of 12 players and
displayed bingo cards and bingo balls to them. Each game took from two
to three minutes to play. Again, those responsible for enforcement of
the Johnson Act challenged the player stations as ``gambling devices''
requiring a compact for play. These challenges failed. Accordingly, the
player stations were indeed only ``aids'' to the play of bingo, which
Congress provided for in IGRA as Class II, and not electronic
facsimiles of a game of chance. Those courts, however, were careful to
note that their conclusions were limited to the facts of the cases
presented. See U.S. v. 162 Megamania Gambling Devices, 231 F.3d 713,
725 (10th Cir. 2000), U.S. v. 103 Electronic Gambling Devices, 223 F.3d
1091 (9th Cir. 2000).
Similarly, in a series of cases dealing with dispensers of paper
pull tabs known as Lucky Tab II and Magical Irish, the enforcers of the
Johnson Act became concerned when the manufacturers of these machines
added video displays to the machines. The video displayed winning and
losing pull tabs by depicting slot machine-type
[[Page 60485]]
reels and showing winning and losing combinations. These dispensers, it
was said, were ``gambling devices'' and could only be played in a
compacted Class III arrangement. The courts disagreed. Notwithstanding
the use of the entertaining displays to show slot machine-like results,
those displays were not essential to the game. The play of the game was
``in the paper''--it was the pull tabs themselves, and only the pull
tabs, that determined the outcome of the game. Thus, these courts
concluded, the electronic dispensers were only aids to the play of the
game of pull tabs and permissible without a Class III compact. Again,
the courts limited their holdings to circumstances before them. See
Diamond Game Enterprises v. Reno, 230 F.3d 365 (DC Cir. 2000), Seneca-
Cayuga Tribe of Okla. v. NIGC, 327 F.3d 1019, 1031 (10th Cir. 2003).
Thereafter, these technologies--interconnected bingo player
stations and slot machine-type video displays (not determinative of
results)--were coupled, and currently most electronic bingo systems
employ such technology. Most such systems display the results of the
bingo game in an electronic bingo card on the equipment's video
display.
Such technological advances have greatly increased the speed with
which bingo is played and have made the experience of playing very
similar to the experience of playing conventional slot machines.
In adopting IGRA, Congress observed that while computers,
electronic and technologic aids may assist the play of Class II games,
a Class III facsimile results if those electronic aids incorporate all
of ``the fundamental characteristics'' of the Class II games. See S.
Rep. No. 100-466, at 8 (1988). This, the Commission believes, is
precisely the issue raised by the proliferation of so-called ``one
touch games''--inter-connected electronic bingo player stations with
which players initiate and complete play of a bingo game with the
single touch of the screen or a button.
In such instances, the equipment has ceased to be an ``aid'' to the
play of the game, and has become one of those ``electronic facsimiles
of games of chance'' which Congress placed in Class III. When the
equipment automatically, electronically automates the play of the game
and the players' participation in the game, the Commission believes
that the play is no longer ``outside'' the equipment and that the
electronic equipment can no longer be characterized as merely an aid.
All player attention, discretion, and interface has been automated by
the equipment.
Beyond this, the full electronic automation of bingo creates
distortions in the way bingo is played. There is considerable
significance to being the first player to ``win'' the bingo game by
getting a ``bingo'' or the game-ending pattern. Many current, fully
electronic games, however, often place minimum significance on this
important characteristic of bingo and rather award the principal prizes
to interim or consolation patterns and winners. There is less
competition among players--a fundamental characteristic of bingo--for
these interim prizes than there is for the game-ending prize. If
multiple players hit the game-ending prize simultaneously, the common
practice is to split the prize among them. By contrast, it is often the
case that players who hit interim prizes are awarded the full prize,
without regard to the number of other players who have also hit it.
II. Background
The Indian Gaming Regulatory Act, 25 U.S.C. 2701-21 (``IGRA'' or
``Act''), enacted by the Congress in 1988, establishes the NIGC and
sets out a comprehensive framework for the regulation of gaming on
Indian lands. The Act establishes three classes of Indian gaming.
``Class I gaming'' means social games played solely for prizes of
minimal value or traditional forms of Indian gaming played in
connection with tribal ceremonies or celebrations. 25 U.S.C. 2703(6).
Indian tribes are the exclusive regulators of Class I gaming. 25 U.S.C.
2710(a)(1).
``Class II gaming'' means the game of chance commonly known as
bingo, whether or not electronic, computer, or other technologic aids
are used in connection therewith, including, if played in the same
location, pull-tabs, lotto, punch boards, tip jars, instant bingo, and
other games similar to bingo, and various card games so long as they
are not house banking games. 25 U.S.C. 2703(7)(A). Specifically
excluded from Class II gaming, however, are banking card games such as
blackjack, electronic or electromechanical facsimiles of any game of
chance, and slot machines of any kind. 25 U.S.C. 2703(7)(B). Indian
tribes and the NIGC share regulatory authority over Class II gaming. 25
U.S.C. 2710(a)(2). Indian tribes can engage in such gaming without any
state involvement.
``Class III gaming'' includes all forms of gaming that are not
Class I gaming or Class II gaming. 25 U.S.C. 2703(8). Class III gaming
thus includes all other games of chance, including most forms of
casino-type gaming such as slot machines of any kind, electronic or
electromechanical facsimiles of any game of chance, roulette, banking
card games such as blackjack, and pari-mutuel wagering. Class III
gaming may be conducted lawfully only if the state in which the tribe
is located and the tribe reach an agreement called a tribal-state
compact. Alternatively, a tribe may operate Class III gaming under
gaming procedures issued by the Secretary of the Interior if the tribe
and the state have not reached agreement or if the state has refused to
negotiate in good faith toward an agreement. The tribal-state compact
or Secretarial procedures may contain provisions for concurrent state
and tribal regulations of Class III gaming. In addition, the United
States Department of Justice possesses exclusive criminal and certain
civil jurisdiction over Class III gaming on Indian lands.
As a legal matter, Congress defined the parameters for game
classification when it enacted IGRA. As a practical matter, however,
the Congressional definitions were general in nature and specific terms
within the broad gaming classifications were not explicitly defined.
The Commission adopted regulations in 1992 that included definitions
for many terms used in the statutory classification scheme, including
``electronic or electromechanical facsimile'' (25 CFR 502.7),
``electronic computer or other technologic aid'' (25 CFR 502.8), and
``other game similar to bingo'' (25 CFR 502.9). The Commission revised
the definitions in 2002. See 67 FR 41166, Jun. 17, 2002, for an
extensive discussion of the reasons for the Commission's decision to
revise these key terms. However, the Commission did not define the many
other terms used in conjunction with the various Class II games.
A recurring question as to the proper scope of Class II gaming
involves the use of electronics and other technology in conjunction
with bingo and lotto as well as pull tabs, instant bingo, and other
games similar to bingo that may be Class II if played in a location
where Class II bingo is played. In IGRA, Congress recognized the right
of tribes to use ``electronic, computer or other technologic aids'' in
connection with these forms of Class II gaming. Congress provided,
however, that ``electronic or electromechanical facsimiles of any game
of chance or slot machines of any kind'' constitute Class III gaming.
Because a tribe wishing to conduct Class III gaming may do so only in
accordance with an approved tribal-state compact, it
[[Page 60486]]
is important to distinguish the two classes.
Currently, the distinction between an electronic ``aid'' to a Class
II game and an ``electronic facsimile'' of a game of chance, and
therefore a Class III game, is often unclear. With advances in
technology, the line between the two has blurred. When in IGRA,
Congress defined ``the game of chance commonly known as bingo,'' 25
U.S.C. 2703(7)(A), it could not have foreseen the technological changes
that would affect all games of chance. Likewise, by allowing electronic
aids to the game of bingo, Congress could not have foreseen that some
vendors and gaming operators would be unable or unwilling to
distinguish between Class II games, which tribes regulate, and Class
III facsimiles, which require compacts between tribes and states. The
Commission is concerned that the industry is dangerously close to
obscuring the line between Class II and Class III. It believes that the
future success of Indian gaming under IGRA depends upon tribes, states,
and manufacturers being able to recognize when games fall within the
ambit of tribal-state compacts and when they do not.
Against this backdrop, the Commission has determined that it is in
the best long term interest of Indian gaming to issue classification
standards clarifying the distinction between ``electronic, computer,
and other technologic aids'' used in the play of Class II games and
other technologic devices that are ``electronic or electromechanical
facsimiles of a game of chance'' or slot machines.
As the Commission worked through a process to develop these
classification standards, it became apparent that the revised
definitions issued by a divided Commission in June 2002, See 67 FR
41166, Jun. 17, 2002, did not provide the clarity that had been a goal
in that rulemaking. Accordingly, the Commission proposes further
revisions to the definitions for the terms ``electronic or
electromechanical facsimile'' in a separate rulemaking.
III. Development
On May 25, 2006, the NIGC published two Notices of Proposed
Rulemaking in the Federal Register. The goal of these proposed rules
was to clearly distinguish technologically-aided Class II games from
Class III ``electronic or electromechanical facsimiles of any game of
chance'' or ``slot machines of any kind.''
The first notice, 71 FR 30232, May 25, 2006, detailed a proposed
change to the definition for ``electronic or electromechanical
facsimile'' that is contained in 25 CFR 502.8. The proposed change to
the definition clarified that facsimiles of bingo are not permissible
Class II games under the IGRA.
The second notice, 71 FR 30238, May 25, 2006, likewise further
revised the definitions for ``electronic or electromechanical
facsimile'' and ``other games similar to bingo.'' The proposed revision
to the definition for ``electronic or electromechanical facsimile''
clarified that games under this section that comply with 25 CFR 546
would not be electronic or electromechanical facsimiles of any game of
chance. The proposed revision to the definition for ``other games
similar to bingo'' shifted the focus for the classification
determination from whether the game is house-banked to whether the game
had players competing against other players for the prizes. The
proposed revision removed the requirement, not present in IGRA, that
these games not be house-banked. The proposed revision also
strengthened the requirement that the games involve players competing
against other players for a common prize or prizes. Additionally, the
proposed rule defined other terms used in Class II games that had not
been previously defined. The proposed rule defined the following terms:
Game, lotto, bonus prize, progressive prize, sleep, game of pull-tabs,
electronic pull-tab, and instant bingo.
The second notice also added a new part to the Commission's
regulations (25 CFR 546) that explained the basis for determining
whether a game of bingo or lotto, and ``other game similar to bingo,''
or a game of pull-tabs or ``instant bingo,'' meets the IGRA statutory
requirements for Class II gaming, when these games are played
electronically, primarily through an ``electronic, computer or other
technologic aid,'' while distinguishing them from Class III
``electronic or electromechanical facsimiles.''
Consultation/Comments
The development of the proposed rule began formally with the March
31, 2004, appointment of an advisory committee comprised of tribal
government representatives with substantial experience in gaming
regulation and operations. A detailed history of the advisory
committee's work to that point is published in the preamble to the
original proposed rule. 71 FR 30232, May 25, 2006. After publishing
these notices the Commission embarked on an extensive consultation
schedule, meeting with over 69 tribes in individual meetings.
Additionally, the Commission held a day-long hearing and heard
testimony from tribes, manufacturers, test labs, and state regulators.
IV. New Proposal
Despite the withdrawal of the regulations the Commission still
believed that regulations distinguishing technologically-aided Class II
games from Class III ``electronic or electromechanical facsimiles of
any game of chance'' or ``slot machines of any kind'' were still
needed. The Commission gave much thought to the direction it needed to
take and is now proposing regulations that take into account many of
the concerns voiced during the previous consultation and comment
period.
V. Changes from Original Proposal
The new proposed regulations differ in some significant ways from
the original proposal. When these regulations were first proposed there
was considerable criticism that the proposed rules would result in
great economic hardship to tribes and manufacturers. The economic
impact study commissioned by the NIGC supported this proposition. The
Commission withdrew the proposed regulations and after careful
examination decided to make several changes. These changes, described
below, have the added benefit of reducing the economic impact of
compliance with the regulations.
Player Interaction/Speed of Game
One of the defining characteristics of the game of bingo is that
the winner is the first person to cover a previously designated
arrangement of numbers or patterns. Implicit in this requirement is the
notion that a player must make some overt action to win the game. It is
for this reason that the Commission has required that players cover/
daub after the numbers or patterns have been released. Originally, the
Commission felt it was necessary to have at least two releases of
numbers or patterns to ensure that there was truly a competition among
the players to be the first to cover. Further, the Commission felt that
the release of numbers should be over a period of two seconds to ensure
that players were fully engaged in the game. The Commission has given
this great thought and has tentatively concluded that this goal may be
achieved by requiring only that players press a button to start the
game and then press at least one more time to cover and claim their
prize. Therefore, the new proposed regulations eliminate a
[[Page 60487]]
required daub as well as the required time period for the release of
objects.
Patterns
As stated above, essential to the play of bingo is that individuals
are competing against each other to be the first to obtain a previously
designated arrangement of numbers or designations. The original
proposal placed a restriction on the use of different patterns
reasoning that players must be competing for the same winning pattern.
The Commission extended this reasoning to include not only the game-
winning prize but also any prizes offered. Upon further consideration
the Commission felt it could be less restrictive by allowing bonus
patterns to differ and still achieve the goal that players play against
each other for the game-winning pattern. Therefore the use of different
patterns for bonus prizes is now permitted under the proposed
regulations.
Appearance
One of the primary goals of these classification standards is to
enable tribes and regulators to distinguish Class II and Class III. The
original proposal required that each machine display the message ``This
is a Game of Bingo'' or ``This is a Game of Pull-Tabs'' in two inch
letters. The Commission still believes that it is important to identify
the game clearly but felt that a less intrusive method for doing so
could accomplish this goal. The current proposed rule requires only
that this message be prominently displayed giving manufacturers and
tribal regulators more flexibility.
Lab Certification
For these regulations to be effective there must be a method for
determining compliance with them before technologic aids are placed on
the gaming floors. The easiest way to accomplish this goal is to have
certified testing laboratories test the devices and certify that they
comply with the criteria established by these standards. In the
Commission's original proposal it was the responsibility of the NIGC to
determine which labs were suitable to conduct this testing. However,
after further consideration the Commission has determined that tribal
gaming regulatory authorities are better suited to this task and in
many instances are already certifying labs as being suitable to conduct
testing. These regulations place the responsibility for approving
gaming laboratories on the tribal gaming regulatory authority with
certain minimum criteria for determining suitability.
Grandfather Provision
Absent from the original proposal were any provisions allowing for
the continued use of games that were currently in operation. During
consultations great concern was expressed that the immediate compliance
with the proposed regulations would cause economic devastation to some
tribes as well as to some manufacturers. The present proposal includes
a grandfather provision that allows for the continued use of currently
existing Class II games for a period of five years. Within a period of
120 days after this rule is final each tribal gaming regulatory
authority will submit a list to the Commission of the Class II game
interfaces currently in use. These are the only game interfaces that
will qualify under the grandfather provision. This requirement
effectively freezes the number of grandfathered interfaces in use. This
provision also allows for software changes that ensure the proper
functioning, security, or integrity of the game. It also allows for
changes to the software that do not detract from compliance with this
part such as changes to pay tables or to game themes. The inclusion of
a grandfather provision greatly mitigates the economic impact of these
regulations. However, the proposed regulations make clear that this
grandfather provision will not provide a safe harbor to those machines
which could be considered Class III under any standards.
To the extent that provisions are identical to the first proposed
regulations, the Commission's thinking has not changed. Under the
proposed rules, the following steps describe the play of bingo, lotto,
or ``other games similar to bingo'' in an electronic medium as Class II
gaming. First, there is a request for entry into the game. The game can
proceed when there are six players or a minimum of two players after
two seconds have elapsed. There is a release of a group of numbers, one
at a time. Then there is a cover opportunity for all competing players.
Permissible Class II game play for bingo, lotto, or other games
similar to bingo utilizing linked player stations as ``electronic,
computer or other technologic aids'' will proceed as follows: To enter
and begin the game, each player selects the cards to be used by that
player and requests entry into the game by selecting an amount to wager
and touching a button. After the game begins, numbers must be randomly
drawn or electronically determined. Numbers must be released one at a
time and used immediately in real time by the competing players in the
game. Selected numbers must be used in the sequence in which they are
drawn in separate multiple rounds.
Players may cover each card they have in play by touching the video
screen at the player station or a button showing the word ``cover'' or
other similar designation. A minimum time of two seconds, or a lesser
time if all players have covered, must be available for each player to
accomplish the cover action. Players must be notified that they should
cover their cards when the numbers are revealed. For each cover
opportunity, the game must wait until at least one player covers. A
player wins the game by being the first player(s) in the game to cover
a pre-designated game-winning pattern and claiming the win by touching
the screen or a button within the time allowed by the rules of the
game, which must be at least two seconds.
A player who ``sleeps'' a potentially winning pattern forfeits the
win based on that pattern. A player who fails to cover the numbers
drawn within the time allowed may not later use those numbers in a
prize-winning pattern other than the game-winning pattern. A bingo game
cannot end until a player in the game wins the game-winning prize. The
game may end at this point or other additional criteria for the end of
the game may apply, such as the additional release(s) of numbers for a
consolation prize(s).
Each player in a game must take overt action to cover the player's
card(s) during play of the game by touching the screen or a designated
button one time after each set of numbers is released. Each released
number does not have to be covered individually by the player, i.e.,
the player need not touch each specific space on the electronic bingo
card where the called number or designation is located, but the player
must overtly touch the screen or a designated button at least one time
to cover the numbers.
The proposed regulations will also impact how these games are
viewed by the player. First, the proposed rules require a notice to
appear on the game cabinet informing the player that they are playing
the game of bingo or a game similar to bingo. Second, a two inch by two
inch card must be displayed at all times.
Economic Impact
It is likely that the proposed rule, considered separately and
apart from the Commission's proposed 25 CFR part 547, ``Technical
Standards for Electronic, Computer, or Other Technologic Aids used in
the Play of Class II Games,'' is a major rule under
[[Page 60488]]
5 U.S.C. 804.2, the Small Business Regulatory Enforcement Fairness Act.
In any event, the NIGC has commissioned an economic impact study of the
two proposals taken together. The study makes clear that the cost to
the Indian gaming industry of complying with the two proposed rules
will have an annual effect on the economy of $100 million or more, at
least for the first five years after adoption. Accordingly, the
Commission treats the proposed rule as a major rule. The economic
impact study is available for review at the Commission's Web site,
http://www.nigc.gov, or by request using the addresses or telephone
numbers above.
Regulatory Matters
Regulatory Flexibility Act
This proposed rule will not have a significant economic effect on a
substantial number of small entities as defined under the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq. Indian tribes are not considered
to be small entities for the purposes of the Regulatory Flexibility
Act.
Small Business Regulatory Enforcement Fairness Act
It is likely that the proposed rule is a major rule under 5 U.S.C.
804.2, the Small Business Regulatory Enforcement Fairness Act. The NIGC
has commissioned an economic impact study of this proposed rule as well
as a proposed rule for Technical Standards taken together. The study
makes clear that the cost to the Indian gaming industry of complying
with the two proposed rules will have an annual effect on the economy
of $100 million or more, at least for the first 5 years after adoption.
Accordingly, the Commission treats the proposed rule as a major rule.
Paperwork Reduction Act
This proposed rule requires information collection under the
Paperwork Reduction Act of 1995, 44 U.S.C. 3501, et seq., and is
subject to review by the Office of Management and Budget. The title,
description, and respondent categories are discussed below, together
with an estimate of the annual information collection burden.
With respect to the following collection of information, the
Commission invites comments on: (1) Whether the proposed collection of
information is necessary for proper performance of its functions,
including whether the information would have practical utility; (2) the
accuracy of the Commission's estimate of the burden of the proposed
collection of information, including the validity of the methodology
and assumptions used; (3) ways to enhance the quality, utility, and
clarity of the information to be collected; and (4) ways to minimize
the burden of the collection of information on respondents, including
the use of automated collection techniques, when appropriate, and other
forms of information technology.
Title: Process for Certification of games and ``electronic,
computer, and other technologic aids'' as meeting the Classification
Standards, proposed 25 CFR 546.11.
Summary of information and description of need: This provision in
the proposed rule establishes a process for assuring that bingo, lotto,
other games similar to bingo, pull tabs, and instant bingo, played
through or using electronic aids, are in fact Class II before their
placement on the casino floor in a Class II operation.
This process requires a tribe's gaming regulatory authority to
require that all such games or aids, or modifications of such games or
aids, be submitted to a qualified, independent testing laboratory for
review and analysis. That submission includes a working prototype of
the game or aid and pertinent software, all with functions and
components completely documented and described. In turn, the laboratory
will certify that the game or aids do or do not meet the requirements
of the proposed rule, and any additional requirements adopted by the
tribe's gaming regulatory authority, for a Class II game. The
laboratory will provide a written certification and report of its
analysis and conclusions, both to the tribal gaming regulatory
authority for its approval or disapproval of the game or aid, and to
the Commission for its review. In the circumstance that a laboratory
has misinterpreted the applicable regulations, the NIGC Chairman may
object to a certifying laboratory report and require its withdrawal.
This action may be reviewed by the full Commission on appeal from a
tribe or manufacturer submitting the game for its certification. A
Commission decision upholding the Chairman's objection will constitute
a ``final agency action'' that may be appealed to federal court.
This process is necessary because the distinction between an
electronic ``aid'' to a Class II game and an ``electronic facsimile''
of a game of chance, and therefore a Class III game, is often unclear.
With advances in technology, the line between the two has blurred. The
Commission is concerned that the industry is dangerously close to
obscuring the line between Class II and Class III and believes that the
future success of Indian gaming under IGRA depends upon tribes, states,
and manufacturers being able to recognize which games fall within the
realm of tribal-state compacts and which do not. The information
collection requirements are an essential component of the process.
Laboratories cannot conduct meaningful evaluation and analyses of games
without documentation from the manufacturers. Tribes cannot make
meaningful classification determinations without reports from the
laboratories. The Commission cannot meaningfully review the process
and, if necessary, object to a laboratory's findings, without reports.
Respondents: The respondents are developers and manufacturers of
Class II games and independent testing laboratories. The Commission
estimates that there are approximately 226 gaming tribes, 20
manufacturers and developers and five laboratories. The frequency of
responses to the information collection requirement will vary.
Existing Class II games do not have to comply with this regulation
for five years. After five years all existing games or aids in Class II
operations that have not been classified and come within this rule must
be submitted and reviewed if they are to continue in Class II
operations. The useful life of such machines generally ranges between
two to five years. Therefore, due to the five year grandfather
provision, the Commission expects the implementation of these
regulations to occur only as new Class II machines are developed and
older machines replaced. The Commission expects that very few of the
existing machines will be submitted to laboratories under these
regulations. Consequently, the frequency of responses will be a
function of the Class II market and the need or desire for new games or
aids.
All new Class II machines and platforms must go through this
classification process. The Commission estimates a 20% turnover in
machine games in most operations and that there are approximately 25
Class II gaming systems presently in use. Consequently, there should be
one to five new submissions each year with three to ten modifications.
The Commission also estimates that the frequency of responses will be
infrequent and occasional submissions during periods when there are a
few games, aids, or modifications brought to market, punctuated by
fairly steady periods of submissions when new games and aids are
introduced. In any event, the Commission estimates that submissions
will number approximately four to 15 in total.
[[Page 60489]]
Modifications will not require the same level of employee hours to
submit and review. The amount of documentation or size of a laboratory
certification and report is a function of the complexity of the game,
equipment, or software submitted for review. Minor modifications of
software or hardware that a manufacturer has already submitted and that
a laboratory has previously examined are a matter of little time both
for manufacturer and laboratory, while the submission and review of an
entirely new game platform can be more time consuming. Unless a tribe
imposes additional standards, we expect that tribes will rely on
classifications performed or requested by other tribes. This latter
fact is borne out by tribes' present reliance on NIGC classification
opinions.
Information Collection Burden: The preparation and submission of
documentation supporting submissions by developers and manufacturers
(as opposed to the game or aid hardware and software per se) is an
information collection burden under the Paperwork Reduction Act, as is
the preparation of certifications and reports of analyses by the test
laboratories. The amount of documentation or size of a laboratory
certification and report is a function of the complexity of the game,
equipment, or software submitted for review. Minor modifications of
software or hardware that a manufacturer has already submitted and that
a laboratory has previously examined are a matter of little time both
for manufacturer and laboratory, while the submission and review of an
entirely new game platform can be quite time consuming.
The practice of submission and review set out in the proposed rule,
however, is not new. It is already part of the regulatory requirements
in tribal, state, and provincial gaming jurisdictions throughout North
America and the world. Manufacturers already have significant
compliance personnel and infrastructure in place, and the very
existence of private, independent laboratories is due to these
requirements.
Accordingly, the Commission estimates that gathering and preparing
documentation for a single submission requires, on average, eight hours
of an employee's time for a requesting party and that following
examination and analysis, writing a report and certification requires,
on average, 10 hours of an employee's time for a laboratory.
Modifications will take approximately half that time. Based on one to
five new submissions each year and three to 10 modifications, the
Commission estimates that the information collection requirements in
the proposed rule will be a 20 to 80 hour burden on requesting parties.
The Commission estimates that the information collection requirements
in the proposed rule will be a 50 to 100 hour burden on laboratories.
We estimate that the cost to requesting parties is approximately
$50 per hour and to laboratories $100 per hour. Based on these
estimates requesting parties would pay in total an estimated $1000 to
$4000. The total estimate for laboratory costs would range from $5000
to $10,000 per year.
Comments: Pursuant to the Paperwork Reduction Act, 44 U.S.C.
3507(d), the Commission has submitted a copy of this proposed rule to
OMB for its review and approval of this information collection.
Interested persons are requested to send comments regarding the burden,
estimates, or any other aspect of the information collection, including
suggestions for reducing the burden (1) directly to the Office of
Information and Regulatory Affairs, OMB, Attention: Desk Officer for
National Indian Gaming Commission, 725 17th St., NW., Washington DC,
20503, and (2) to Penny J. Coleman, Acting General Counsel, National
Indian Gaming Commission, 1441 L. Street, NW., Washington DC 20005.
Comments must be provided by November 23, 2007.
Unfunded Mandates Reform Act
The Commission, as an independent regulatory agency within the
Department of the Interior, is exempt from compliance with the Unfunded
Mandates Reform Act. 2 U.S.C. 1502(1); 2 U.S.C. 658(1).
Takings
In accordance with Executive Order 12630, the Commission has
determined that this proposed rule does not have significant takings
implications. A takings implication assessment is not required.
Civil Justice Reform
In accordance with Executive Order 12988, the Office of General
Counsel has determined that the proposed rule does not unduly burden
the judicial system and meets the requirements of sections 3(a) and
3(b)(2) of the Order.
List of Subjects in 25 CFR Parts 502 and 546
Gambling, Indian lands, Indian tribal government, Reporting and
recordkeeping requirements.
Accordingly, for the reasons described in the preamble, the
Commission proposes to amend its regulations in 25 CFR 502 and add a
new Part 546 as follows:
PART 502--DEFINITIONS OF THIS CHAPTER
1. The authority citation for this for part 502 continues to read
as follows:
Authority: 25 U.S.C. 2701 et seq.
2. Revise Sec. 502.9 to read as follows:
Sec. 502.9 Other games similar to bingo.
Other games similar to bingo means any game played in the same
location as bingo (as defined in 25 U.S.C. 2703(7) (A) (i)) that
constitutes a variant on the game of bingo, provided that such game
requires players to compete against each other for a common prize or
prizes.
3. Add a new part 546 to read as follows:
PART 546--CLASSIFICATION STANDARDS FOR BINGO, LOTTO, OTHER GAMES
SIMILAR TO BINGO, PULL-TABS AND INSTANT BINGO AS CLASS II GAMING
WHEN PLAYED THROUGH AN ELECTRONIC MEDIUM USING ELECTRONIC,
COMPUTER, OR OTHER TECHNOLOGIC AIDS
Sec.
546.1 What is the purpose of this part?
546.2 What is the scope of this part?
546.3 What are the definitions for this part?
546.4 What are the criteria for meeting the first statutory
requirement that the game of bingo, lotto, or other games similar to
bingo be played for prizes, including monetary prizes, with cards
bearing numbers or other designations?
546.5 What are the criteria for meeting the second statutory
requirement that bingo, lotto, or other games similar to bingo be
games in which the holder of the card covers such numbers or other
designations when objects similarly numbered or designated are drawn
or electronically determined?
546.6 What are the criteria for meeting the third statutory
requirement that bingo, lotto, or other games similar to bingo be
won by the first person covering a previously designated arrangement
of numbers or designations on such cards?
546.7 What are the criteria for meeting the statutory requirement
that Class II pull-tabs or instant bingo not be electronic or
electromechanical facsimiles?
546.8 What is the process for approval, introduction, and
verification of electronic, computer, or other technologic aids
under the classification standards established by this part?
546.9 What are the steps for a compliance program administered by a
tribal gaming regulatory authority to ensure that electronic,
computer, or other technologic aids in play in tribal gaming
facilities meet the Class II certification requirements?
546.10 When must a tribe comply with this part?
[[Page 60490]]
546.11 What is the effect on this part if a section is declared
invalid?
Authority: 25 U.S.C. 2701 et seq.
Sec. 546.1 What is the purpose of this part?
This part clarifies the terms Congress used to define Class II
gaming under the Indian Gaming Regulatory Act, 25 U.S.C. 2701, et seq.
(``IGRA'' or ``Act''). Specifically, this part explains the criteria
for determining whether a game of bingo or lotto, another game similar
to bingo, or a game of pull-tabs or instant bingo, meets the statutory
requirements when these games are played primarily through an
electronic, computer or other technologic aid. This part also
establishes a process for establishing Class II certification of
electronic, computer, or other technologic aids and the games they
facilitate. These standards for classification are intended to ensure
that Class II gaming using electronic, computer, or other technologic
aids can be distinguished from Class III electronic or
electromechanical facsimiles. If the technologic aid meets the
requirements of this part, then the fundamental characteristics of the
game have not been incorporated and the aid is not an electronic or
electromechanical facsimile.
Sec. 546.2 What is the scope of this part?
This part is intended to address only games played solely with
electronic, computer, or other technologic aids as defined in part
502.7 of this chapter.
Sec. 546.3 What are the definitions for this part?
(a) What is a game of bingo or other game similar to bingo? A game
of the game of chance commonly known as bingo or another game similar
to bingo consists of the random draw or electronic determination and
release or announcement of numbers or other designations necessary to
form the pre-designated game-winning pattern on a card held by the
winning player and the participation of competing players to cover
(daub) the numbers or other designations which appear on their card(s)
when the selected numbers or other designations are released for play.
A game ends when a participating player(s) claims the win after
obtaining and covering (daubing) the pre-designated game-winning
pattern and consolation prizes, if any, are awarded in the game.
(b) What is lotto? The term lotto means a game of chance played in
the same manner as the game of chance commonly known as bingo.
(c) What is a bonus prize in the game commonly known as bingo or
other game similar to bingo? A bonus prize is a prize awarded in a game
in addition to the game-winning prize. The prize may be based on
different pre-designated and pre-announced patterns from the game-
winning pattern, may be based on achieving a winning pattern in a
specified quantity of numbers or designations drawn or electronically
determined and released, or a combination of these conditions. A bonus
prize may be awarded as an interim prize while players are competing
for the game-winning prize or as a consolation prize after a player has
won the game-winning prize.
(d) What is a progressive prize in the game commonly known as
bingo? A progressive prize is an established prize for a game, funded
by a percentage of each player's purchase or wager, that is awarded to
a player for obtaining a specified pre-designated and pre-announced
pattern within a specified quantity of numbers or designations randomly
drawn and released or electronically determined, or randomly drawn and
released or electronically determined in a specified sequence. If the
progressive prize is not won in a particular game, the prize must be
rolled over to each subsequent game until it is won. The progressive
prize is thus increased from one game to the next based on player buy-
in or wager contributions from each qualifying game played in which the
prize is not won. All contributions to the progressive prize must be
awarded to the players. A winning pattern for a progressive prize is
not necessarily the same as the game-winning prize pattern.
(e) What does it mean to sleep in the game of bingo or another game
similar to bingo? To sleep or to sleep a bingo means that a player
fails, within the time allowed by the game:
(1) To cover (daub) the previously released numbers or other
designations on that player's card(s) constituting a game-winning
pattern or other pre-designated winning pattern; and
(2) To claim any prize to which the player is entitled, having
covered (daubed) a previously designated winning pattern, thereby
resulting in the forfeiture of the prize to which the player would
otherwise be entitled.
(f) What is the game of pull-tabs? In the game of pull-tabs,
players purchase cards from a set of cards known as the deal. Each deal
contains a finite number of pull-tab cards that includes a pre-
determined number of winning cards. Each individual pull-tab within a
deal is a paper or other tangible card with hidden or covered symbols.
When those symbols are revealed, there is an arrangement of numbers or
symbols indicating whether the player has won a prize. Winning cards
with pre-established prizes are randomly spaced within the pre-arranged
deal. One deal consists of all of the pull-tabs in a given game that
could be purchased.
(g) What is an electronic pull-tab? An electronic pull-tab is an
electronic facsimile of a pull-tab that is displayed on a video screen.
(h) What is instant bingo? In instant bingo, a player purchases a
card containing a pre-selected group of numbers or designations; the
winning cards are those in which the pre-selected group of numbers or
designations on the card matches the preprinted winning arrangement
indicated elsewhere on the card. The game is functionally the same as
pull-tabs.
Sec. 546.4 What are the criteria for meeting the first statutory
requirement that the game of bingo, lotto, or other games similar to
bingo be played for prizes, including monetary prizes, with cards
bearing numbers or other designations?
(a) Each player in the game must play with one or more cards. Each
player in the game must obtain the card or cards to be used by that
player in the game before numbers or other designations for the game
are randomly drawn or electronically determined. Players cannot change
cards once play of a particular bingo game has commenced. Electronic
cards are permissible.
(b) Electronic cards in use by a player must be displayed
prominently and must be clearly visible to that player during game
play. If multiple electronic cards are used by a player, the game must
offer the player the capability of seeing each one of his or her cards.
At the conclusion of the game, each player must see his or her card
with the highest value prize or, if no prize was won, the card closest
to a bingo win. At no time shall an electronic card measure less than
two inches by two inches or four square inches if other than a square
card is used.
(c) For a game of bingo, each card must contain a five by five grid
of spaces. Each space will contain a unique number or other designation
which may not appear twice on the same card. The card may contain one
free space without a specified number or other designation, provided
the free space is in the same location on every card in play or
available to be played in the game.
(d) Each game shall prominently display the following message:
``THIS IS A GAME OF BINGO'' or ``THIS IS A GAME SIMILAR TO BINGO.''
(e) As a variant of bingo, in another game similar to bingo, each
card must
[[Page 60491]]
contain at least three equally sized spaces. Each space will contain a
unique number or other designation which may not appear twice on the
same card. One space may be designated a free space provided the card
has at least three other spaces.
(f) When a number or other designation is covered, the covering
must be indicated on the card by a change in the color of the space, a
strike-out through the space, or some other readily apparent visual
means.
(g) All prizes in the game, except for progressive prizes, must be
fixed in amount or established by formula and disclosed to all
participating players in the game. Random or unpredictable prizes are
not permitted.
(h) Each game must have a winning player and a game-winning prize
must be awarded in every game. The pattern designated as the game-
winning pattern does not need to pay the highest prize available in the
game. A game-winning prize may be less than the amount wagered,
provided that the prize is no less than one cent.
(i) Other patterns may be designated for the award of bonus prizes
in addition to the prize to be awarded based on the game-winning
pattern. Each such designated pattern or arrangement must also be
disclosed to the players upon request before the game begins.
(j) The designated winning patterns and the prizes available must
be explained in the rules of the game, which must be made available to
the players upon request.
(k) A bonus prize in a game that is designated as an interim prize
must be awarded in a random draw or electronic determination and
release of numbers or other designations that is no more than the exact
quantity of numbers or designations that are needed for the game-
winning player to achieve the game-winning pattern.
(l) A bonus prize in a game that is designated as a consolation
prize may be awarded after the game-winning pattern is achieved and
claimed by a player but only after a subsequent release of randomly
drawn or electronically determined numbers or other designations has
been made.
(m) A progressive prize may be awarded only if the game also
provides a game-winning prize as described elsewhere in this part.
(n) All prizes in a game, including progressive prizes, must be
awarded based on the outcome of the game of bingo and may not be based
on events outside the selection and covering of numbers or other
designations used to determine the winner in the game and the action of
the competing players to cover the pre-designated winning patterns. The
prize structure must not rely on an additional element of chance other
than the play of bingo.
(o) Bingo and other games similar to bingo may offer an alternative
display of the results of the game in addition to the display of the
game results on the electronic bingo card, provided that the player has
the option to disable the alternative display and play using only the
electronic card display. An alternative display may include game theme
graphics, spinning reels, or other imagery. The results may also be
displayed on mechanical reels.
Sec. 546.5 What are the criteria for meeting the second statutory
requirement that bingo, lotto, or other games similar to bingo be one
in which the holder of the card covers such numbers or other
designations when objects similarly numbered or designated are drawn or
electronically determined?
(a) In a game of bingo, the numbers or other designations used in
the game must be randomly drawn or determined electronically from a
non-replaceable pool containing 75 such numbers or other designations
and used in the sequence in which they are drawn. Each game will permit
the random draw and release or electronic determination of all numbers
or designations in the pool. A common draw or electronic determination
of numbers or designations may be utilized for separate games that are
played simultaneously.
(b) As a variant of bingo, in another game similar to bingo, the
numbers or other designations used in the game must be randomly drawn
or determined electronically from a non-replaceable pool of such
numbers or other designations greater in number than the number of
spaces on the card used in the game.
(c) All numbers or other designations used in the game must be
randomly drawn or electronically determined after the cards to be used
in the game have been assigned to or selected by the players in the
game. The cards cannot have pre-covered numbers or other designations.
(d) The numbers or other designations randomly drawn or
electronically determined must be used in real time and not stored for
later use. The numbers or other designations must be used in the
sequence in which they are drawn.
(e) To cover (daub), a player in a game must take overt action
after numbers or designations are released by touching the screen or a
designated button. A player must cover (daub) at least one time after a
set of numbers or other designations are released. The overt action of
covering (daubing) may be done simultaneously with claiming.
(f) Each released number or designation does not have to be covered
(daubed) individually by the player, i.e., the player need not touch
each specific space on the electronic bingo card where the called
number or designation is located. However, the player must have the
opportunity to cover (daub) by touching the screen or a designated
button at least one time when those numbers or other designations are
released, if those numbers or other designations appear on the player's
card. Following this action by a player, the video screen at that
player interface will display a different color on the number or
designation on that player's card, a strike-out through the space, or
some other readily apparent visible characteristic if that number or
designation has been properly covered (daubed) by the player. Players
must be notified that they should cover (daub) their cards and claim
their prize when the numbers or designations are revealed.
(g) Games may not include a feature whereby covering (daubing)
after a release occurs automatically or without overt action taken by
the player following the release.
(h) All players in a game, and not just a winning player, must be
required by the rules of the game to cover (daub) the selected numbers
or other designations that appear on their card when those numbers or
other designations are released as an indication of their participation
in a common game.
(i) Players must cover (daub) after numbers or designations are
released in order to achieve any winning pattern. In the event of
multiple releases of numbers, a player may later cover (daub) numbers
or designations slept following a previous release (catch up) for use
in obtaining the game-winning pattern. Failure to cover (daub) after
each release results in the player forfeiting use of those numbers or
other designations in any other pattern in the game. For bonus prizes
and progressive prizes, if a player fails to cover (daub) one or more
numbers or other designations, that player cannot be awarded such prize
based on a winning pattern which contains one or more of the numbers or
other designations not covered (daubed) by the player. For game-winning
prizes, if a player fails to cover the player may later cover (daub)
the number(s) or other designations and win such prize if that player
is the first player to cover all other numbers or
[[Page 60492]]
designations making up the game-winning pattern and claim the prize.
(j) If a player sleeps the game-winning pattern, the game must
continue until a player subsequently obtains and covers (daubs) and
claims the game-winning pattern.
(k) All numbers or other designations not covered (daubed) by a
player must be clearly and uniquely identified as such by displaying
them in a unique color, by drawing a strikeout through them, or by
other readily visible means. A player who sleeps a winning pattern or a
pattern yielding bonus or progressive prizes must be notified by
visible message on the video screen that the pattern was slept.
(l) After all available numbers or designations that could lead to
a game-winning prize have been randomly drawn or electronically
determined and released (i.e. no more objects could be drawn that would
assist in the formation of a game-winning prize), the game may allow an
unlimited length of time to complete the last required cover (daub) and
claim of the prize, or it may be declared void and wagers returned to
players and prizes canceled.
(m) The gaming operation or its employees may not play as a
substitute for a player.
Sec. 546.6 What are the criteria for meeting the third statutory
requirement that bingo, lotto, or other games similar to bingo be won
by the first person covering a previously designated arrangement of
numbers or designations on such cards?
(a) Because the game must be won by the first person, each game
must be played by multiple players. Players in an electronic game must
be linked through a networked system. The system must require a minimum
of two players for each game, but not limit participation to two
players, and must be designed to broaden participation in each common
game by providing reasonable and sufficient opportunity for at least
six players to enter the game. Games cannot begin until two seconds
have elapsed from the time that the first player elects to play, unless
six players enter. Nothing in this section is intended to limit games
to six players.
(b) To establish the game as a contest in which players play
against one another, the game must provide for one or more releases of
selected numbers or other designations. Each release will provide one
or more numbers or other designations randomly selected or
electronically determined. The game may end after the first release or
after subsequent releases, when the game-winning pattern is covered
(daubed) and claimed. After the game-winning pattern is covered and
claimed, there may be additional releases of randomly drawn or
electronically determined numbers or other designations for a
consolation prize(s).
(c) Each game must have one game-winning pattern or arrangement,
which must be common to all players and may be won by multiple players
simultaneously. Each game-winning pattern or arrangement must consist
of at least three spaces, not counting any free spaces used. The game-
winning pattern or arrangement must be available to players before the
game begins.
(d) Other patterns or arrangements consisting of at least two
spaces each, not counting free spaces, may be used for the award of
bonus or progressive prizes, if the patterns or arrangements are
designated and made available to players before the game begins.
(e) Events outside the play of bingo may not be used to determine
the eligibility for a prize award or the value of a prize.
(f) The set of selected numbers or other designations in the first
release may contain all of the numbers or other designations necessary
to form the game-winning pattern on a card in play in the game. The set
may contain the numbers or other designations necessary to form other
winning patterns for bonus or progressive prizes. The quantity of
numbers or designations in the second or subsequent releases may not
extend beyond the quantity of numbers or other designations necessary
to form the first available eligible game-winning pattern on a card in
play in the game. There may be additional releases to allow for
additional bonus prizes.
(g) Prizes can be claimed simultaneously when a player covers
(daubs) to end the game.
(h) Bonus or progressive prizes may be awarded based on pre-
designated patterns provided that the award of these prizes is based on
the play of bingo in the same manner as for the game-winning prize.
Bonus or progressive prizes may be based on different pre-designated
and pre-announced patterns, on achieving a winning pattern in a
specified quantity of numbers or other designations drawn or
electronically determined and released, on the order in which numbers
or other designations are drawn or electronically determined and
released, or on a combination of these criteria. Bonus or progressive
prizes may be awarded as interim prizes, before or as the game-winning
prize is awarded, or as consolation prizes after the game-winning prize
is awarded.
(i) In order for players to participate in a common game, the
probability of achieving the game-winning prize pattern or progressive
prize pattern, if any, may not vary.
(j) Prizes in a common game may be increased, or progressive prizes
offered, based upon different entry wagers.
(k) The use of a pay table is permitted. The order of, or quantity
of, numbers or other designations randomly drawn or electronically
determined may affect the prize awarded for completing any pre-
designated winning pattern in a game. A multiplier to the prize based
on a winning pattern containing a specified number or other designation
is permitted.
(l) A game-winning prize must be awarded in every game. If the
first player or a subsequent player obtaining the pre-designated game-
winning prize pattern sleeps that pattern, the game must continue until
a player achieves the game-winning pattern. The same value prize must
be awarded to a subsequent game-winning player in the game.
(m) Alternative result display options may only be utilized for
entertainment or amusement purposes and may not be used independently
to determine a winner of the game or the prizes awarded or change the
results of the bingo game in any way.
(n) An ante-up format, in which a player is required to wager
before each release as a condition of remaining in the game, is
permissible, provided the game maintains at least two participating
players. If only one player remains after one or more releases, that
player will be declared the winner of the game-winning prize, and the
game will end, provided that player obtains, covers (daubs), and claims
the game-winning pattern. If all players leave the game before a game-
winning pattern is obtained, covered (daubed), and claimed by a player,
the game will be declared void and wagers returned to players.
Sec. 546.7 What are the criteria for meeting the statutory
requirement that pull-tabs or instant bingo not be an electronic or
electromechanical facsimile?
(a) Every pull-tab card or instant bingo ticket must exist in a
tangible medium such as paper. Hereafter, the term pull-tabs also
includes the term instant bingo. A pre-printed pull-tab must be
distributed to the player as paper, plastic, or other tangible medium
at the time the pull-tab is purchased. The pull-tab presented to the
player must contain the information necessary for the player to
determine if that player has won a prize in the game. The
[[Page 60493]]
information must be presented to the player in a readable format.
(b) A pull-tab card may contain more than one arrangement of
numbers or symbols, but each arrangement must comport with the
requirements of this section. The player must pay for all of the
arrangements on that pull-tab card in advance of dispensing it.
(c) Pull-tabs that exist in a tangible medium may also be sold to
players with assistance of a technologic aid that assists in the sale.
The technologic aid may also read and display the contents of the pull-
tab as it is distributed to the player. The results of the pull-tab may
be shown on a video screen that is part of or adjacent to the
technologic aid assisting in the sale of the pull-tab.
(d) The player may also purchase a pull-tab from a person or from a
vending unit and place the pull-tab in a separate technologic aid that
reads and displays the contents of the pull-tab.
(e) If pull-tabs contain multiple arrangements of numbers or
symbols, the rules for game play must indicate the disposition of a
pull-tab in a technologic aid that is only partially played, i.e. all
arrangements have not been viewed in the technologic aid.
(f) A technologic aid may also show pull-tab results on a video
screen using alternative displays, including game-theme graphics,
spinning reels, or other imagery. The results may also be displayed on
mechanical reels. Options for players found in this alternative display
may not determine a winner of the game or the prizes awarded or change
the results of the pull-tab game in any way.
(g) If the pull-tab is a winning card, it must be redeemable for a
prize when presented at the location in the gaming facility designated
by the gaming operator.
(h) A pull-tab may not be generated or printed at the player
station.
(i) For technologic aids that are larger than the pull-tab, the
machine shall prominently display the following message: ``THIS IS THE
GAME OF PULL-TABS.''
(j) The results on the pull-tab shall be no smaller than an eight
point font.
(k) A pull-tab game is an electronic facsimile if the pull-tab does
not exist in paper, plastic, or other tangible medium at the point of
sale and is displayed only electronically.
(l) Pull-tabs that exist in a tangible medium but that are
electronically or optically read and transformed into an electronic
medium and made available to the player only as depictions on a video
screen (and not presented directly to the player in the tangible
medium) are electronic facsimiles.
Sec. 546.8 What is the process for approval, introduction, and
verification of electronic, computer, or other technologic aids under
the classification standards established by this part?
(a) An Indian tribe or a supplier, manufacturer, or game developer
sponsored by a tribe (hereafter, the ``requesting party'') wishing to
have games and associated electronic, computer, or other technologic
aids certified as meeting the classification standards established by
this part must submit the games and equipment to a testing laboratory
recognized by the tribal gaming regulatory authority under this part.
The requesting party must support the submission with materials and
software sufficient to establish that the game and equipment meets
classification standards, any other applicable regulations of the
Commission, and provide any other information requested by the testing
laboratory.
(b) For an electronic, computer, or other technologic aid to be
certified as meeting the classification standards under this part, the
tribe shall require the following:
(1) The testing laboratory will evaluate and test the submission to
the standards established by this part and any other applicable
regulations of the Commission. Issues that concern an interpretation of
the standards or the certification procedure identified during the
evaluation or testing process, if any, will initially be discussed
between the testing laboratory and the requesting party. In the event
of impasse, the requesting party and the testing laboratory may jointly
submit questions concerning the issue to the Chairman, who may decide
the issue. Questions regarding additional tribal standards will be
addressed to the appropriate tribal gaming regulatory authority.
(2) At the completion of the evaluation and testing process, the
testing laboratory will provide a formal written report to the
requesting party setting forth its findings and conclusions. The
testing laboratory will also forward a copy of its report to the
Commission. The report may be made available upon request to any
interested tribal gaming regulatory authority by the requesting party
or by the testing laboratory. Each testing laboratory will maintain a
detailed listing of the electronic, computer or other technologic aids
it certifies.
(3) Each report from a testing laboratory must state the name of
the requesting party; the type of game evaluated; name(s) and
version(s) of the game played with the electronic, computer, or other
technologic aid being evaluated; all associated game themes under which
the game will be played on the technologic aid being evaluated;
findings regarding game features and manner of play; a checklist of the
standards established by this part and any other applicable regulations
of the Commission together with an indication of the results of testing
and evaluation to each particular standard; and, a summary conclusion
as to whether the gaming conducted with the aid meets the requirements
of this part and any other applicable regulations of the Commission. A
supplemental report addressing additional game themes or other non-play
features may follow as necessary, and will contain a statement
verifying that gaming conducted with the aid continues to meet the
requirements of this part and any other applicable regulations of the
Commission.
(4) Each report will also include one or more unique signatures or
checksum values for the operating programs used with the electronic,
computer, or other technologic aid.
(5) In certifying a game or an electronic, computer, or other
technologic aid for Class II play, a requesting party or a tribe may
not rely on a report from a testing laboratory owned or operated by
that requesting party or that tribe.
(c) The Commission will maintain a generalized listing of games and
electronic, computer, or other technologic aids certified by recognized
testing laboratories as meeting the classification standards
established by this part and any other applicable regulations of the
Commission. The Commission will make its listing available to the
public. The Commission will only make available for public review
records or portions of records subject to release under the Freedom of
Information Act, 5 U.S.C. 552; the Privacy Act of 1974, 5 U.S.C. 552a;
or the Indian Gaming Regulatory Act, 25 U.S.C. 2716(a).
(d) Additional requirements established by a tribal gaming
regulatory authority.
(1) A tribal gaming regulatory authority may establish additional
classification standards that extend and exceed the standards
established by this part and any other applicable regulations of the
Commission. It may require additional testing and certification to its
own extended standards as a condition to operation of the game and
associated electronic, computer, or other technologic aid in a gaming
facility it regulates.
(2) A tribal gaming regulatory authority may elect to provide its
[[Page 60494]]
extended testing standards to the testing laboratories and require
additional tests and certification reports applicable to its own
certification of a game or electronic, computer or other technologic
aid. A requesting party wishing to meet the specific tribal
requirements will submit additional supporting materials and
documentation to the testing laboratory as may be necessary to meet the
specific tribal requirements. A testing laboratory evaluating a game
and associated equipment will include in its report to the requesting
party information relevant to the specific additional tribal
requirements and provide a copy of the report to that tribal gaming
regulatory authority and the Commission.
(e) Objections to a testing laboratory certification.
(1) (i) Within 30 days of receipt of the certification, a tribe may
object to the certification by submitting a notice of objection to the
Chairman. The objection shall specify the reasons why the certification
is erroneous and shall include supporting documentation, if any. If a
tribe timely objects, the Chairman or his or her designee shall have 60
days from receipt of the objection to concur with the tribe's
objection. The Chairman or his or her designee will notify the testing
laboratory, the requesting party and the sponsoring tribe of his
concurrence or objection.
(ii) If no objection is submitted by a tribe, the Chairman or his
or her designee will review the certifications and accompanying reports
received from testing laboratories and may object to any certification
issued by a testing laboratory by notification to the testing
laboratory, the requesting party, and the sponsoring tribe within 60
days of receipt of the certification and report.
(iii) If the Chairman receives no objection and does not object on
his or her own, the requesting party or sponsoring tribe may assume the
Chairman does not object to the certification. The Chairman may object
to a testing laboratory certification subsequent to the 60-day period
upon good cause shown. If the Chairman finds good cause to object to
the certification subsequent to the 60-day period, he or she shall do
so only after providing notice to the testing laboratory, the
requesting party, and the sponsoring tribe and an opportunity for a
hearing.
(2) The Chairman or his or her designee will conduct additional
discussions with the testing laboratory, the requesting party, and the
sponsoring tribe on any game or electronic, computer, or other
technologic aid to which the Chairman has objection and attempt to
resolve the dispute within 30 days after receiving notice of the
Chairman's objection. The Chairman and the requesting party and
sponsoring tribe may agree to the appointment of a mediator or other
third party to review the laboratory's certification and the Chairman's
objection and provide a recommendation on the matter within this 30-day
period. Following the discussions and receipt of the recommendation of
the mediator or other third party, if any, the Chairman will decide the
issue and inform the testing laboratory, the requesting party, and the
sponsoring tribe of his or her determination.
(3) Within 30 days after receiving notice of the Chairman's
determination, the requesting party or the sponsoring tribe may appeal
the Chairman's determination to the full Commission by providing
written notice of appeal along with documents and other information in
support of the appeal. The appeal will be decided by the Commission
based on the record developed by the Chairman or his or her designee
and on written submissions by the testing laboratory, the requesting
party, and the sponsoring tribe, unless the Commission requests
additional information. The appeal will not include a hearing under
Part 577 of this chapter unless directed by the Commission.
(4) If the requesting party or the sponsoring tribe does not appeal
the Chairman's determination, or if the objection is upheld after
review by the Commission following an appeal, the testing laboratory
and the requesting party will notify any tribal gaming regulatory
authority to which it has provided a certification and report on the
game and associated equipment that the Chairman has objected to the
certification and that the certification is no longer valid.
(5) An objection by the Chairman or his or her designee, upheld
after review by the Commission, will be a final agency action for
purposes of suit by the requesting party under the Administrative
Procedures Act.
(f) Recognition of Testing Laboratories. (1) A testing laboratory
may provide the examination, testing, evaluating and reporting
functions required by this section provided that:
(i) The testing laboratory demonstrates its integrity, independence
and financial stability to the tribal gaming regulatory authority;
(ii) The testing laboratory demonstrates its relevant technical
skill and capability to the tribal gaming regulatory authority;
(iii) The testing laboratory is not owned or operated by the tribe
or tribal gaming regulatory authority; and
(iv) The tribal gaming regulatory authority:
(A) Makes a suitability determination of the testing laboratory
based on requirements no less stringent than required by Sec.
533.6(b)(1)(ii)--(v) and Sec. 533.6(c) of this chapter and based upon
no less information than that required by Sec. 537.1 of this chapter,
or
(B) Accepts, in its discretion, a determination of suitability for
the testing laboratory made by any other gaming regulatory jurisdiction
in the United States.
(v) After reviewing the information provided by the testing
laboratory, the tribal gaming regulatory authority may, in its
discretion, determine that the testing laboratory is qualified to
perform testing and evaluation for games played using electronic,
computer, or other technologic aids that are offered for use in Class
II gaming.
(2) The tribal gaming regulatory authority shall:
(i) Maintain a record of all determinations made pursuant to
paragraphs (f)(1)(iv) and (f)(1)(v) of this section for a minimum of
three years and shall make the records available to the Commission upon
request. The Commission will only make available for public review
records or portions of records subject to release under the Freedom of
Information Act, 5 U.S.C. 552; the Privacy Act of 1974, 5 U.S.C. 552a;
or the Indian Gaming Regulatory Act, 25 U.S.C. 2716(a).
(ii) Place the testing laboratory under a continuing obligation to
notify it of any adverse regulatory action in any jurisdiction where
the testing laboratory conducts business.
(ii) Require the testing laboratory to provide notice of any
material changes to the information provided to the tribal gaming
regulatory authority.
Sec. 546.9 What are the steps for a compliance program administered
by a tribal gaming regulatory authority to ensure that electronic,
computer, or other technologic aids in play in tribal gaming facilities
meet Class II certification requirements?
(a) In regulating Class II gaming, a tribal gaming regulatory
authority will institute a compliance program that ensures bingo,
lotto, and other games similar to bingo and pull-tabs and instant bingo
in use in its gaming facilities, which are operated and played with
electronic, computer, or other technologic aids required to be
certified by this part, meet the requirements of this part, any other
[[Page 60495]]
applicable regulations of the Commission, and any additional tribal
standards adopted by the tribal gaming regulatory authority. The
program must include the following elements:
(1) Determination by the tribal gaming regulatory authority that
electronic, computer, or other technologic aids, along with the games
played thereon, required to be certified as meeting the standards
established by this part, have been tested and certified by a
laboratory recognized under Sec. 546.8(f) of this part as meeting all
applicable Class II standards before the equipment is placed for use in
the gaming operation.
(2) Internal controls that prevent unauthorized access to game
control software to preclude modifications that would cause the
electronic, computer, or other technologic aid and the games played
therewith to potentially fail to meet the required standards.
(3) Periodic testing of all of the servers and a random sample of
the electronic components and software to validate that the equipment
and software continue to meet the required standards and are identical
to that tested and certified by the testing laboratories.
(b) In authorizing particular Class II gaming within a gaming
facility it licenses, a tribal gaming regulatory authority shall, at a
minimum, require a finding and certification by an independent gaming
testing laboratory, recognized by the tribal gaming regulatory
authority under this part, that each electronic, computer, or other
technologic aid used in connection with such gaming meets the standards
of this part. If the tribe's gaming regulatory authority has
established classification standards that apply additional criteria,
the tribe shall require additional findings consistent with the
additional standards as a condition to authorizing a technologic aid
for use and play in the gaming facilities it regulates.
(c) The tribal gaming regulatory authority shall maintain a current
listing of each electronic, computer, or other technologic aid
including servers, player interfaces, and each game program it has
authorized for play under the classification standards governed by this
part, indicating that all such games meet the classification standards
established by this part and any additional standards established by
the tribe. The listing will show the asset identification number(s) of
each electronic, computer, or other technologic aid including servers
and player interfaces and the manufacturer's name; version number(s),
game theme titles and other unique identifier(s), of the game operating
software, for the games authorized for play as documented in a
certification report(s) issued by a testing laboratory.
Sec. 546.10 When must a tribe comply with this part?
(a) Tribes must comply with this part when placing Class II
electronic, computer, or other technologic aids governed by this part
in operation after [Insert 120 days after effective date].
(b) Tribes using Class II technologic aids governed by this part on
or before [Insert 120 days from the effective date], may continue to
operate those electronic, computer or other technologic aids for a
period of five years from the same date. During this period technologic
aids may be sold, leased, or otherwise transferred to another tribe.
(c) Individual hardware components of technologic aids governed by
this part and in use on or before [Insert 120 days from effective date]
may be repaired or replaced to ensure the proper functioning, security,
or integrity of the game. All new software versions must be certified
under this part except for changes made to ensure the proper
functioning, security, or integrity of the game and changes that will
not detract from the games overall compliance with the requirements of
this part.
(d) On or before [Insert 120 days from the effective date], each
tribal gaming regulatory authority shall submit to the Commission the
list required by Sec. 546.9(c) of this part.
(e) Nothing in this section is intended to authorize the continued
operation of uncompacted Class III machines that allow a player to play
against the machine.
Sec. 546.11 What is the effect on this part if a section is declared
invalid?
If any provision of this part be declared invalid by a court of
competent jurisdiction, such decision shall not affect the remainder of
this part.
Dated: October 17, 2007.
Philip N. Hogen,
Chairman.
Cloyce V. Choney,
Commissioner.
Norman H. DesRosiers,
Commissioner.
[FR Doc. E7-20776 Filed 10-23-07; 8:45 am]
BILLING CODE 7565-01-P
