[Federal Register Volume 82, Number 247 (Wednesday, December 27, 2017)]
[Rules and Regulations]
[Pages 61172-61177]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-27945]



[[Page 61172]]

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NATIONAL INDIAN GAMING COMMISSION

25 CFR Part 547

RIN 3141-AA64


Minimum Technical Standards for Class II Gaming Systems and 
Equipment

AGENCY: National Indian Gaming Commission.

ACTION: Final rule.

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SUMMARY: The National Indian Gaming Commission is amending its minimum 
technical standards for Class II gaming systems and equipment. The rule 
amends the regulations that describe how tribal governments, tribal 
gaming regulatory authorities, and tribal gaming operations comply with 
the minimum technical standards.

DATES: Effective Date: January 26, 2018.

FOR FURTHER INFORMATION CONTACT: Austin Badger, National Indian Gaming 
Commission; 1849 C Street NW, MS 1621, Washington, DC 20240. Telephone: 
202-632-7003.

SUPPLEMENTARY INFORMATION: 

I. Background

    The Indian Gaming Regulatory Act (IGRA or Act), Public Law 100-497, 
25 U.S.C. 2701 et seq., was signed into law on October 17, 1988. The 
Act establishes the National Indian Gaming Commission (NIGC or 
Commission) and sets out a comprehensive framework for the regulation 
of gaming on Indian lands. On October 10, 2008, the NIGC published a 
final rule in the Federal Register establishing minimum technical 
standards for Class II gaming systems and equipment. 73 FR 60508. The 
minimum technical standards are designed to assist tribal gaming 
regulatory authorities (TGRAs) and operators with ensuring the 
integrity and security of Class II gaming, the accountability of Class 
II gaming revenue, and provide guidance to equipment manufacturers and 
distributors of Class II gaming systems. The minimum technical 
standards do not classify which games are Class II and which games are 
Class III.
    When implemented in 2008, the part 547 minimum technical standards 
introduced several new requirements for Class II gaming systems 
designed to protect the security and integrity of Class II gaming 
systems and tribal operations. The Commission understood, however, that 
some existing Class II gaming systems might not meet all of the 
requirements of the minimum technical standards. Therefore, to avoid 
any potentially significant economic and practical consequences of 
requiring immediate compliance, the Commission implemented a five-year 
sunset provision which allowed eligible gaming systems manufactured 
before November 10, 2008 (2008 Systems) to remain on the gaming floor. 
The Commission believed that a five-year period was sufficient for 
market forces to move systems toward compliance with the standards 
applicable to systems manufactured on or after November 10, 2008.
    On September 21, 2012, the NIGC published a final rule in the 
Federal Register which included an amendment delaying the sunset 
provision by an additional five years. 77 FR 58473. The Commission 
recognized that its prior analysis regarding the continued economic 
viability of 2008 Systems had proven to be mistaken. The NIGC had 
established the initial five-year period during a much stronger 
economy. Many tribal gaming operations set new priorities during the 
following economic downturn that required keeping a 2008 System on the 
gaming floor for a longer period. Balancing the economic needs of the 
industry against a risk that potentially increases as technology 
advances and 2008 Systems remain static, the Commission determined that 
2008 Systems could continue to be offered for play until November 10, 
2018.
    Now, with the November 10, 2018, sunset for 2008 Systems 
approaching, the Commission has determined that it is in the best 
interest of Indian gaming to amend the regulations that describe how 
tribal governments, tribal gaming regulatory authorities, and tribal 
gaming operations comply with the minimum technical standards. The 
amendments include removal of the sunset provision, providing for 
additional annual review of 2008 Systems by TGRAs, and requiring all 
modifications of Class II gaming systems to be subject to a uniform 
independent laboratory testing and TGRA approval process. The 
Commission has determined that the amended rule continues to fulfill 
the rule's ultimate goal of assisting tribes in ensuring the security 
and integrity of Class II games played with technologic aids, the 
auditability of the gaming revenue that those games earn, and 
accounting and allowing for evolving and new technology.

II. Development of the Rule

    The development of the rule formally began with the Commission's 
notice to tribal leaders by letter dated November 22, 2016, of the 
topic's inclusion in the Commission's 2017 tribal consultation series. 
Thereafter, on March 23, 2017, in Tulsa, OK, and April 12, 2017, in San 
Diego, CA, the NIGC consulted on the 2008 Systems and associated sunset 
provision of the minimum technical standards. The Commission also 
solicited written comments through May 31, 2017. In addition, NIGC 
staff attended meetings with the National Indian Gaming Association 
Class II Subcommittee, as well as other representatives from the gaming 
industry. The consultations and meetings, combined with the written 
comments, proved invaluable in the development of a discussion draft 
issued on June 14, 2017, which, among other proposed amendments, 
proposed removing the November 10, 2018, sunset for 2008 Systems. 
Additional written comments responsive to the discussion draft were 
solicited through July 15, 2017.
    The Commission subsequently published a proposed rule in the 
Federal Register on September 28, 2017. 82 FR 45228. The proposed rule 
included several amendments to the discussion draft prompted by the 
Commission's careful consideration of the substantive comments received 
through consultation and written submissions. The proposed rule 
included the Commission's responses to comments received and invited 
interested parties to continue to participate in the rulemaking process 
by submitting comments and any supporting data responsive to the 
proposed rule to the Commission by November 13, 2017. The comments 
received throughout this process have proven invaluable to the 
Commission in developing this rule amending the minimum technical 
standards for Class II gaming systems and equipment.

III. Review of Public Comments

    In response to the proposed rule the Commission received the 
following comments.

Removal of the Sunset Provision

    Comment: Commenters overwhelmingly supported removal of the sunset 
provision. One commenter, however, suggested that the sunset provision 
should not be removed.
    Response: The following responses seek to address each of the 
substantive arguments raised by the commenter that suggested the sunset 
provision should not be removed.
    Comment: A commenter suggested that the public and tribes would be 
best served if all Class II gaming systems adhered to a uniform minimum 
standard.

[[Page 61173]]

    Response: The Commission acknowledges that the rule permits the 
continued existence of two sets of minimum standards for Class II 
gaming systems--one for 2008 Systems and one for systems manufactured 
after November 10, 2008. The Commission disagrees, however, that a 
uniform minimum standard is necessary to best serve the needs of the 
public and tribes.
    First and foremost, the Commission's minimum technical standards 
are just that--minimums. The standards implemented by tribes applicable 
to gaming operations within their lands are not required nor intended 
to be uniform. Each tribe is empowered and encouraged to implement 
additional or more stringent tribal standards applicable to Class II 
gaming systems operating within their lands. IGRA and the Commission 
recognize that tribes have the primary responsibility for regulating 
Class II gaming within their lands. A stated purpose of IGRA is to 
promote tribal economic development, self-sufficiency, and self-
government. 25 U.S.C. 2702(1). The minimum technical standards are 
therefore designed to give TGRAs the primary role in approving Class II 
gaming systems and modifications.
    The Commission's minimum technical standards represent the 
standards that, in the Commission's judgment, are best able to assist 
TGRAs with ensuring the integrity and security of Class II gaming, 
ensuring the accountability of Class II gaming revenue, and providing 
guidance to equipment manufacturers and distributors of Class II gaming 
systems. Importantly, the minimum technical standards are one component 
of a regulatory framework that includes the Commission's minimum 
internal control standards (MICS). 25 CFR part 543. The Commission 
endeavored to place all minimum requirements for the design, 
construction, and implementation of Class II gaming systems into the 
minimum technical standards and all minimum requirements for the 
operation of such systems, and the authorization, recognition, and 
recordation of gaming and gaming-related transactions into the MICS. 
The MICS apply uniformly to the operation of all Class II gaming, 
irrespective of Class II gaming system manufacture date.
    The Commission's minimum technical standards and MICS make 
meaningful the Commission's monitoring, inspection, and examination 
authority. 25 U.S.C. 2706(b). Without such minimums, the Commission 
would be required to independently evaluate, at significant expense, 
the technical standards and internal controls implemented by each tribe 
to determine whether each tribe's technical standards and internal 
controls adequately protected the security and integrity of Indian 
gaming. With such minimums, the Commission can efficiently evaluate a 
tribal gaming operation by verifying that the operation adheres to 
standards and controls that meet or exceed Commission minimums. Thus, 
the Commission has long maintained that it has a regulatory interest in 
a uniform set of minimum standards--an interest that includes the 
efficient administration of its monitoring, inspection, and examination 
authority.
    In 2008, 2012, and now, the Commission has sought to balance its 
interest in a uniform set of minimum standards against the economic 
impact of applying those standards to systems manufactured before the 
standards were in place. The Commission recognizes that despite being 
initially certified to a subset of the standards applicable to newer 
systems, 2008 Systems have continued to operate within the overall 
regulatory framework in a manner that protects the security and 
integrity of Indian gaming. The Commission credits tribes, TGRAs and 
manufacturers for, as the Commission acknowledged in 2012, the 
relatively few problems to the patron or the gaming operations 
attributable to 2008 Systems. In balance, the Commission has determined 
that the continued operation of 2008 Systems is in the best interest of 
Indian gaming provided that such systems are subject to additional 
annual review by TGRAs. The Commission is fully prepared, however, to 
revisit the minimum technical standards, including those applicable to 
2008 Systems, if necessary to address any threat to the integrity of 
Class II gaming systems and equipment.
    Finally, the Commission acknowledges that it has previously 
expressed concern regarding risks that potentially increase as 
technology advances and 2008 Systems remain static. The Commission now 
recognizes, however, that 2008 Systems have generally not remained 
static, but instead have been modified over time in compliance with 
existing regulations. Repair and replacement of individual components 
of Class II gaming systems have been and continue to be permitted. 
Modification of components of 2008 Systems also continue to be 
permitted provided the TGRA determines that the modification either 
maintains compliance with the requirements for 2008 Systems or 
increases compliance with the requirements for newer systems. The rule 
seeks to continue to facilitate the on-going modification of 2008 
Systems as needed to respond to developments in technology with the 
goal of increased compliance with the requirements for newer systems.
    Comment: A commenter suggests that the economic needs of tribes 
considered by the Commission in 2008 and 2012 are no longer applicable.
    Response: The Commission has determined that, while the 
significance of the economic factors considered by the Commission in 
2008 and 2012 has decreased over time, economic factors remain 
applicable. As noted previously, 2008 Systems have generally been 
modified over time towards increased compliance with the standards for 
newer systems. Thus, the economic impact of the sunset provision, if 
left in place, is the cost of the remaining modifications needed to 
bring the system into compliance with the standards for newer systems. 
The Commission notes that tribes, as the customers of Class II gaming 
systems and equipment, will ultimately incur those costs.
    The Commission also recognizes that the economic health of the 
Indian gaming industry as a whole, which includes both Class II and 
Class III gaming, is not representative of the economic health of 
individual Indian gaming operations that may be affected by the sunset 
provision. Indian gaming operations vary in size and measures of 
economic success. The Commission and staff engaged extensively with the 
tribal gaming industry on the continued use of 2008 Systems and heard 
the costs of complying with the sunset provision would fall primarily 
on the tribes least able to afford it. Additionally, the Commission 
received many comments asserting that failing to remove the sunset 
provision would cause significant economic harm to tribes.
    Comment: A commenter suggests that removal of the sunset provision 
would have anti-competitive effects. The commenter suggests that 
manufacturers that maintain obsolete 2008 Systems are economically 
rewarded while new market entrants are punished.
    Response: The Commission notes that IGRA, as informed by 
consultation with tribes, forms the basis for all Commission 
regulations. Nevertheless, the Commission does not agree that removal 
of the sunset provision has a significant anti-competitive effect. 
Importantly, the rule brings parity to the independent testing 
laboratory requirements for 2008 Systems and newer systems. All 
modifications to a Class II gaming systems are now required to be 
tested against the standards for newer systems. And,

[[Page 61174]]

while TGRAs retain the authority to approve a modification to a 2008 
System that maintains compliance with 2008 System standards, 2008 
Systems are also subject to an additional annual review which is not 
applicable to newer systems.
    In addition, the minimum technical standards are not intended to 
render any particular Class II gaming system technology ``obsolete.'' 
The minimum technical standards require the implementation of certain 
features which may be implemented by a wide array of technology. The 
minimum technical standards are intended to provide all manufacturers 
with the flexibility to implement technologies unforeseen and 
undeveloped when the rule was first promulgated. Importantly, the 
minimum technical standards allow Class II gaming systems to be 
modified over time as manufacturers innovate new implementations of the 
required features. Tribes and tribal gaming regulatory authorities may 
also add additional or more stringent requirements for manufacturers to 
implement. Finally, to the extent that a specific technical standard 
potentially impedes innovation, TGRAs and gaming operations are able to 
submit to the NIGC Chairman for approval an alternate minimum standard 
that accomplishes the same purpose.
    Comment: A commenter suggests that removal of the sunset provision 
transforms the rule into a major rule having an effect on the economy 
of $100 million or more because the 2008 System provisions were 
initially implemented to avoid up to $3.7 billion in lost revenue in 
the industry.
    Response: The Commission has determined that the commenter's 
assumptions are mistaken. The Commission found that the annual cost to 
the Indian gaming industry of the technical standards, considered 
alone, was $3.1 million in 2008. 73 FR 60508, 60512. The figure cited 
by the commenter appears to have been inferred from a February 1, 2008 
economic impact study which considered not only the potential economic 
impact of minimum technical standards (part 547) but also of the MICS 
(part 543) and game classification standards (proposed but not 
adopted). The Commission has determined that there is no plausible 
basis for finding that the removal of the sunset provision from the 
minimum technical standards approximately ten years after the standards 
were first promulgated could have an effect on the economy of $100 
million or more.
    Comment: A commenter suggests that the 2008 System standards should 
meet the standards required for an alternate minimum standard for a 
newer system.
    Response: The Commission's alternate minimum standard provisions 
recognize that there may be alternatives to the Commission's minimum 
standards that will ``achieve a level of security and integrity 
sufficient to accomplish the purpose of the standard it is to 
replace.'' 25 CFR 547.17(a)(1). The 2008 System provisions are specific 
to systems manufactured before November 10, 2008. The alternate minimum 
standard provisions are equally applicable to 2008 Systems and to newer 
systems. In other words, the 2008 Systems standards are the standards 
against which an alternate minimum standard for a 2008 System would be 
evaluated against.

2008 Systems Annual Review

    Comment: Commenters suggest that the NIGC has provided no 
compelling reason to change the existing reporting requirements. 
Commenters suggest that it would be redundant to require annual re-
review of testing laboratory reports which amounts to a restatement of 
certification opinions that have already been submitted to the NIGC.
    Response: The Commission does not believe that the annual review 
requirement is unnecessary. First, the Commission believes that removal 
of the sunset provision warrants annual review specific to 2008 
Systems. The annual review requirement will ensure that 2008 Systems 
are adequately monitored and that 2008 Systems that meet the standards 
applicable to newer systems are identified by the TGRA and gaming 
operation. In addition, the annual review requirement requires the TGRA 
to identify the components of the 2008 System that prevent the system 
from being approved as a newer system. The Commission believes this 
information will be useful to the Commission, TGRAs, and gaming 
operations in considering whether the applicable technical standards, 
in conjunction with applicable internal controls, continue to 
adequately protect the integrity and security of Class II gaming and 
accountability of Class II gaming revenue.
    Second, the Commission does not believe that the annual review 
requirement is redundant. Existing 2008 System requirements require 
TGRAs to maintain records of all modifications so long as the Class II 
gaming system that is the subject of the modification remains available 
to the public for play. The rule adds as an additional requirement that 
TGRAs review the existing modification records annually to determine 
whether the 2008 Systems, as currently modified, may be approved 
pursuant to the provisions for newer systems. The required finding by 
the TGRA is based on its review of existing documentation and does not 
require TGRAs to obtain new testing laboratory reports. Components for 
which existing laboratory reports show that the component does not meet 
the standards for newer systems, as well as components for which 
laboratory reports have not been maintained, would be included in the 
required finding as components preventing approval of the system under 
the standards for newer systems. To further assist TGRAs in conducting 
the required review and developing the findings, the Commission intends 
to issue guidance specific to the annual review requirement for 2008 
Systems.

Testing Standards for All Modifications

    Comment: Commenters suggest the new requirement that modifications 
to 2008 Systems be tested to the standards for newer systems is 
unnecessary and will only result in additional costs with no practical 
benefit. Commenters suggest that TGRAs should be able to determine 
whether to test a modification to the standards for newer systems or to 
2008 System standards.
    Response: The Commission believes the new requirement appropriately 
balances laboratory testing requirements with TGRA approval 
requirements without imposing unreasonable costs. The rule requires the 
testing laboratory to test all modifications to the technical standards 
for newer systems. The rule recognizes the primary regulator status of 
the TGRA by providing that the TGRA is required to determine, among 
other requirements, whether the modification will maintain the system's 
compliance or advance the system's compliance with the standards for 
newer systems. Testing all modifications to the standards for newer 
systems therefore ensures that TGRAs are provided with the information 
needed to make such a determination.

Records

    Comment: Commenters expressed reluctance to expose sensitive 
testing and compliance records to possible public disclosure. 
Commenters suggest that records only be available for review on site by 
NIGC staff or on a government-to-government basis. Commenters request 
that the second and third sentence of paragraph (g) be removed.
    Response: The Commission believes that paragraph (g) appropriately 
describes the Commission's obligations with regards to the inspection 
and

[[Page 61175]]

release of records as set forth by IGRA, the Freedom of Information 
Act, 5 U.S.C. 552, and the Privacy Act of 1974, 5 U.S.C. 552a. The 
second sentence of paragraph (g), as limited by the third sentence, 
describes the Commission's intended internal use of such information.

Regulatory Matters

Tribal Consultation

    The National Indian Gaming Commission is committed to fulfilling 
its tribal consultation obligations--whether directed by statute or 
administrative action such as Executive Order (EO) 13175 (Consultation 
and Coordination with Indian Tribal Governments)--by adhering to the 
consultation framework described in its Consultation Policy published 
July 15, 2013. The NIGC's consultation policy specifies that it will 
consult with tribes on Commission Action with Tribal Implications, 
which is defined as: Any Commission regulation, rulemaking, policy, 
guidance, legislative proposal, or operational activity that may have a 
substantial direct effect on an Indian tribe on matters including, but 
not limited to the ability of an Indian tribe to regulate its Indian 
gaming; an Indian Tribe's formal relationship with the Commission; or 
the consideration of the Commission's trust responsibilities to Indian 
tribes. As discussed above, the NIGC engaged in extensive consultation 
on this topic and received and considered comments in developing this 
rule.

Regulatory Flexibility Act

    The rule will not have a significant impact on a substantial number 
of small entities as defined under the Regulatory Flexibility Act, 5 
U.S.C. 601, et seq. Moreover, Indian Tribes are not considered to be 
small entities for the purposes of the Regulatory Flexibility Act.

Small Business Regulatory Enforcement Fairness Act

    The rule is not a major rule under 5 U.S.C. 804(2), the Small 
Business Regulatory Enforcement Fairness Act. The rule does not have an 
effect on the economy of $100 million or more. The rule will not cause 
a major increase in costs or prices for consumers, individual 
industries, Federal, State, local government agencies or geographic 
regions. Nor will the rule have a significant adverse effect on 
competition, employment, investment, productivity, innovation, or the 
ability of the enterprises, to compete with foreign based enterprises.

Unfunded Mandates Reform Act

    The Commission, as an independent regulatory agency, 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 the rule does not have significant takings 
implications. A takings implication assessment is not required.

Civil Justice Reform

    In accordance with Executive Order 12988, the Commission has 
determined that the rule does not unduly burden the judicial system and 
meets the requirements of section 3(a) and 3(b)(2) of the Order.

National Environmental Policy Act

    The Commission has determined that the rule does not constitute a 
major federal action significantly affecting the quality of the human 
environment and that no detailed statement is required pursuant to the 
National Environmental Policy Act of 1969, 42 U.S.C. 4321, et seq.

Paperwork Reduction Act

    The information collection requirements contained in this rule were 
previously approved by the Office of Management and Budget (OMB) as 
required by 44 U.S.C. 3501 et seq. and assigned OMB Control Number 
3141- 0007, which expired in August of 2011. The NIGC is in the process 
of reinstating that Control Number.

List of Subjects in 25 CFR Part 547

    Gambling, Indian--lands, Indian--tribal government, Reporting and 
recordkeeping requirements.

    Therefore, for reasons stated in the preamble, 25 CFR part 547 is 
amended as follows:

PART 547--MINIMUM TECHNICAL STANDARDS FOR CLASS II GAMING SYSTEMS 
AND EQUIPMENT

0
1. The authority citation for part 547 continues to read as follows:

    Authority: 25 U.S.C. 2706(b).

0
2. Revise Sec.  547.5 to read as follows:


Sec.  547.5  How does a tribal government, TGRA, or tribal gaming 
operation comply with this part?

    (a) Gaming systems manufactured before November 10, 2008. (1) Any 
Class II gaming system manufactured before November 10, 2008, that is 
not compliant with paragraph (b) of this section may be made available 
for use at any tribal gaming operation if:
    (i) The Class II gaming system software that affects the play of 
the Class II game, together with the signature verification required by 
Sec.  547.8(f) was submitted to a testing laboratory within 120 days 
after November 10, 2008, or October 22, 2012;
    (ii) The testing laboratory tested the submission to the standards 
established by Sec.  547.8(b), Sec.  547.8(f), and Sec.  547.14;
    (iii) The testing laboratory provided the TGRA with a formal 
written report setting forth and certifying to the findings and 
conclusions of the test;
    (iv) The TGRA made a finding, in the form of a certificate provided 
to the supplier or manufacturer of the Class II gaming system, that the 
Class II gaming system is compliant with Sec.  547.8(b), Sec.  
547.8(f), and Sec.  547.14;
    (v) The Class II gaming system is only used as approved by the TGRA 
and the TGRA transmitted its notice of that approval, identifying the 
Class II gaming system and its components, to the Commission;
    (vi) Remote communications with the Class II gaming system are only 
allowed if authorized by the TGRA; and
    (vii) Player interfaces of the Class II gaming system exhibit 
information consistent with Sec.  547.7(d) and any other information 
required by the TGRA.
    (2) For so long as a Class II gaming system is made available for 
use at any tribal gaming operation pursuant to this paragraph (a) the 
TGRA shall:
    (i) Retain copies of the testing laboratory's report, the TGRA's 
compliance certificate, and the TGRA's approval of the use of the Class 
II gaming system;
    (ii) Maintain records identifying the Class II gaming system and 
its current components; and
    (iii) Annually review the testing laboratory reports associated 
with the Class II gaming system and its current components to determine 
whether the Class II gaming system may be approved pursuant to 
paragraph (b)(1)(v) of this section. The TGRA shall make a finding 
identifying the Class II gaming systems reviewed, the Class II gaming 
systems subsequently approved pursuant to paragraph (b)(1)(v), and, for 
Class II gaming systems that cannot be approved pursuant to paragraph 
(b)(1)(v), the components of the Class II gaming system preventing such 
approval.
    (3) If the Class II gaming system is subsequently approved by the 
TGRA pursuant to paragraph (b)(1)(v) as compliant with paragraph (b) of 
this section, this paragraph (a) no longer applies.

[[Page 61176]]

    (b) Gaming system submission, testing, and approval--generally. (1) 
Except as provided in paragraph (a) of this section, a TGRA may not 
permit the use of any Class II gaming system in a tribal gaming 
operation unless:
    (i) The Class II gaming system has been submitted to a testing 
laboratory;
    (ii) The testing laboratory tests the submission to the standards 
established by:
    (A) This part;
    (B) Any applicable provisions of part 543 of this chapter that are 
testable by the testing laboratory; and
    (C) The TGRA;
    (iii) The testing laboratory provides a formal written report to 
the party making the submission, setting forth and certifying its 
findings and conclusions, and noting compliance with any standard 
established by the TGRA pursuant to paragraph (b)(1)(ii)(C) of this 
section;
    (iv) The testing laboratory's written report confirms that the 
operation of a player interface prototype has been certified that it 
will not be compromised or affected by electrostatic discharge, liquid 
spills, electromagnetic interference, or any other tests required by 
the TGRA;
    (v) Following receipt of the testing laboratory's report, the TGRA 
makes a finding that the Class II gaming system conforms to the 
standards established by:
    (A) This part;
    (B) Any applicable provisions of part 543 of this chapter that are 
testable by the testing laboratory; and
    (C) The TGRA.
    (2) For so long as a Class II gaming system is made available for 
use at any tribal gaming operation pursuant to this paragraph (b) the 
TGRA shall:
    (i) Retain a copy of the testing laboratory's report; and
    (ii) Maintain records identifying the Class II gaming system and 
its current components.
    (c) Class II gaming system component repair, replacement, or 
modification. (1) As permitted by the TGRA, individual hardware or 
software components of a Class II gaming system may be repaired or 
replaced to ensure proper functioning, security, or integrity of the 
Class II gaming system.
    (2) A TGRA may not permit the modification of any Class II gaming 
system in a tribal gaming operation unless:
    (i) The Class II gaming system modification has been submitted to a 
testing laboratory;
    (ii) The testing laboratory tests the submission to the standards 
established by:
    (A) This part;
    (B) Any applicable provisions of part 543 of this chapter that are 
testable by the testing laboratory; and
    (C) The TGRA;
    (iii) The testing laboratory provides a formal written report to 
the party making the submission, setting forth and certifying its 
findings and conclusions, and noting compliance with any standard 
established by the TGRA pursuant to paragraph (c)(2)(ii)(C) of this 
section;
    (iv) Following receipt of the testing laboratory's report, the TGRA 
makes a finding that the:
    (A) The modification will maintain or advance the Class II gaming 
system's compliance with this part and any applicable provisions of 
part 543 of this chapter; and
    (B) The modification will not detract from, compromise or prejudice 
the proper functioning, security, or integrity of the Class II gaming 
system;
    (3) If a TGRA authorizes a component modification under this 
paragraph, it must maintain a record of the modification and a copy of 
the testing laboratory report so long as the Class II gaming system 
that is the subject of the modification remains available to the public 
for play.
    (d) Emergency Class II gaming system component modifications. (1) A 
TGRA, in its discretion, may permit the modification of previously 
approved components to be made available for play without prior 
laboratory testing or review if the modified hardware or software is:
    (i) Necessary to correct a problem affecting the fairness, 
security, or integrity of a game or accounting system or any cashless 
system, or voucher system; or
    (ii) Unrelated to game play, an accounting system, a cashless 
system, or a voucher system.
    (2) If a TGRA authorizes modified components to be made available 
for play or use without prior testing laboratory review, the TGRA must 
thereafter require the hardware or software manufacturer to:
    (i) Immediately advise other users of the same components of the 
importance and availability of the update;
    (ii) Immediately submit the new or modified components to a testing 
laboratory for testing and verification of compliance with this part 
and any applicable provisions of part 543 of this chapter that are 
testable by the testing laboratory; and
    (iii) Immediately provide the TGRA with a software signature 
verification tool meeting the requirements of Sec.  547.8(f) for any 
new or modified software component.
    (3) If a TGRA authorizes a component modification under this 
paragraph, it must maintain a record of the modification and a copy of 
the testing laboratory report so long as the Class II gaming system 
that is the subject of the modification remains available to the public 
for play.
    (e) Compliance by charitable gaming operations. This part does not 
apply to charitable gaming operations, provided that:
    (1) The tribal government determines that the organization 
sponsoring the gaming operation is a charitable organization;
    (2) All proceeds of the charitable gaming operation are for the 
benefit of the charitable organization;
    (3) The TGRA permits the charitable organization to be exempt from 
this part;
    (4) The charitable gaming operation is operated wholly by the 
charitable organization's employees or volunteers; and
    (5) The annual gross gaming revenue of the charitable gaming 
operation does not exceed $3,000,000.
    (f) Testing laboratories. (1) A testing laboratory may provide the 
examination, testing, evaluating and reporting functions required by 
this section provided that:
    (i) It demonstrates its integrity, independence and financial 
stability to the TGRA.
    (ii) It demonstrates its technical skill and capability to the 
TGRA.
    (iii) If the testing laboratory is owned or operated by, or 
affiliated with, a tribe, it must be independent from the manufacturer 
and gaming operator for whom it is providing the testing, evaluating, 
and reporting functions required by this section.
    (iv) The TGRA:
    (A) Makes a suitability determination of the testing laboratory 
based upon standards no less stringent than those set out in Sec.  
533.6(b)(1)(ii) through (v) 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 authority in 
the United States.
    (v) After reviewing the suitability determination and the 
information provided by the testing laboratory, the TGRA determines 
that the testing laboratory is qualified to test and evaluate Class II 
gaming systems.
    (2) The TGRA must:
    (i) Maintain a record of all determinations made pursuant to

[[Page 61177]]

paragraphs (f)(1)(iii) and (f)(1)(iv) of this section for a minimum of 
three years.
    (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.
    (iii) Require the testing laboratory to provide notice of any 
material changes to the information provided to the TGRA.
    (g) Records. Records required to be maintained under this section 
must be made available to the Commission upon request. The Commission 
may use the information derived therefrom for any lawful purpose 
including, without limitation, to monitor the use of Class II gaming 
systems, to assess the effectiveness of the standards required by this 
part, and to inform future amendments to this part. The Commission 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).

    Dated: December 19, 2017.
Jonodev O. Chaudhuri,
Chairman.
Kathryn Isom-Clause,
Vice Chair.
E. Sequoyah Simermeyer,
Associate Commissioner.
[FR Doc. 2017-27945 Filed 12-26-17; 8:45 am]
 BILLING CODE 7565-01-P