Level II Training Book - KwaTaqNuk 2018

Level II Training Book - KwaTaqNuk 2018

July 11 - 13, 2018 KwaTaqNuk Resort & Casino Polson, MT

NIGA Seminar Institute Commissioner Certification Training LEVEL II AGENDA July 11-13, 2018 KwaTaqNuk Resort, Polson Mt.

NATIONAL INDIAN GAMING ASSOCIATION

Wednesday, July 11

8:00 AM 9:00 AM

Breakfast to be provided Journey of Submission Peter Nikiper, Director of Technical Compliance, BMM Test Labs Break Licensing: Key Employees & Primary Officials Danielle Brashear, Gaming Commission Seneca-Cayuga Nation Lunch Break Tribal Sovereign Immunity and The Gaming Regulator Liz Homer, Homer Law Break Licensing: Vendors Danielle Brashear, Gaming Commission Seneca-Cayuga Nation Thursday, July 12

9:00 AM 10:30 AM

10:30 AM 10:45 AM

10:45 AM 12:15 PM

12:15 PM 1:15 PM

1:15 PM 2:45 PM

2:45 PM 3:00 PM

3:00 PM 4:30 PM

8:00 AM 9:00 AM

Breakfast to be provided Effective Regulatory Writing Liz Homer, Homer Law Break Employment Issues for Regulators Richard McGee, Law Office of Richard McGee, LLC Lunch Break Internal Auditing-What's Required & How it Should Be Approached Sheryl Ashle y , Director of Risk Consulting, Blue Bird CPA's Break Financial Controls & Accounting Standards Sheryl Ashley, Director of Risk Consulting, Blue Bird CPA's Friday, July 13

9:00 AM 10:30 AM

10:30 AM 10:45 AM

10:45 AM 12:15 PM

12:15 PM 1:15 PM

1:15 PM 2:45 PM

2:45 PM 3:00 PM

3:00 PM 4:30 PM

8:00 AM 9:00 AM

Breakfast to be provided Roles of Surveillance Cheats & Scams Roy Hartog, Senior Investigator, Chickasaw Nation. Break Roles of Surveillance Cheats & Scams Roy Hartog, Senior Investigator, Chickasaw Nation.

9:00 AM 10:30 AM

10:30 AM 10:45 AM

10:45 AM 12:15 PM

Please plan to stay for the entire class on each day to get your certificate of completion. Please be on time for sessions

Journey of Submission What happens when a gaming machine is sent to a gaming test lab?

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Different laboratories… Do different testing.

Electrical

Safety

Gaming

And many more…

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General Process

Manufacturersubmits to a lab

The lab tests according to requested standards

The lab issues a report

The TGRA makesa finding basedon the report

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Submission to the lab 25 CFR 547.5 (c) Submission, testing, and approval – generally. Except as provided in paragraph (b) and (d) of this section, a TGRA may not permit the use of any Class II gaming system, or any associated cashless system or voucher system or any modification thereto, in a tribal gaming operation unless: …

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Submission to the lab (1) The Class II gaming system, cashless system, voucher system, or modification thereto has been submitted to a testing laboratory;

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Submission to the lab What does the lab need?

Hardware including peripherals, i.e. BV, printers

Submission letter

Math

Software

Servers

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Testing (2) The testing laboratory tests the submission to the standards established by: (i) This part; (ii) Any applicable provisions of part 543 of this chapter that are testable by the testing laboratory; and (iii) The TGRA ;

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Testing Scope of work / Submission management • Each submission is entered into a project tracking system • Kick off meeting – Engineersare assigned to the project

– Resources assigned – Timelineestablished – Any foreseen compliance issues

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Testing Random Number Generators (RNGs) • Source code review • Algorithm implementation • Samples • Analysis against Die-Hard battery

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Testing

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Testing Math Analysis • Review all combinations / patterns (wins & losses) • Calculate the game cycle • Calculate the game volatility • Calculate the RTP / hold or edge • Calculate the top award odds • Compare with manufacturers math • Emulate combinations on device and verify payouts

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Testing Functional testing

• Generate list of test scripts to be used • Based on Part 547 & 543 for Class II • Based on GLI-11/NV for Class III • Additional tests based on location or tribe the device will go to.

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Results of Testing (3) 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)(iii) of this section;

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Results of Testing (4) 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, radio frequency interference, or any other tests required by the TGRA;

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Results If everything works • Technical reviews of the testing • A draft report is generated

• A regulator and/or client review of the report • Final report issued to both regulator and client

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Results What happens if issues were found during testing? • Document the problem(s) • Steps to reproduce and/or show frequency • Assign a severity (Low to High) • Resubmission or withdrawal of the submission

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Final part of a submission (5) Following receipt of the testing laboratory’s report, the TGRA makes a finding that the Class II gaming system, cashless system, or voucher system conforms to the standards established by: (i) This part; (ii) Any applicable provisions of part 543; and (iii) The TGRA.

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Key Items for Class II • Bingo Patterns • Ball Draw Process • Bingo card distribution / generation • Minimum number of players • Game Ending Pattern • Bingo game type • Disclaimers

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Key Items for Class III • RNG Review & Analysis • Game Determination

• Game Play • Accounting • Game Recall • Emulation • Security

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7/2/18

LICENSING: KEY EMPLOYEES & PMO

Presented By: Danielle Brashear

Introduction

§ Lesson 1: Law ful Requirements § What laws require the licensure of casino employees § Definition of Key and PMO employees § Application criteria § Lesson 2: Investigative Procedures § Purpose of the license § Important background information § Reasons for investigations § Lesson 3: Determ inations § How to determine eligibility § Mitigating circumstances § Licensing denials

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LESSON 1: LAWFUL REQUIREMENTS

The laws and regulations governing the licensing requirements

Governing Authorities

§ Indian Gam ing Regulatory Act (IGRA ) 29 U .S.C . § 2701

§ N IGC Regulations 25 C .F.R . Sections 556 and 558

§ Tribal/State Gam ing Compacts

§ Tribal Gam ing O rdinance

§ Tribal Gam ing Regulato ry Autho rity (TGRA ) Rules and Regulations

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IGRA: Tribal Gaming Ordinance

• Background investigations are conducted on the primary management o fficials and key employees o f the gam ing enterprise and that oversight o f such o fficials and their management is conducted on an ongo ing basis; and § Tribal licenses fo r primary management o fficials and key employees o f the gam ing enterprise be issued w ith prompt no tification to the Comm ission [N IGC ] o f the issuance o f such licenses; § Standards whereby any person whose prio r activities, crim inal reco rd, if any, o r reputation, habits and associations pose a threat to the public interest or to the effective regulation o f gam ing, o r create o r enhance the dangers o f unsuitable, unfair, or illegal practices and methods and activities in the conduct o f gam ing shall no t be eligible for employment; and § No tification by the Indian tribe to the Comm ission [N IGC ] o f the results o f such background check before the issuance o f any o f such licenses.

Key Employee – 25 C.F.R. § 502.14

Key Employee means (a) A person who perform s one or more o f the fo llow ing functions: (1) B ingo caller; (2) Counting room superviso r; (3) Chief o f security; (4) Custodian o f gam ing supplies or cash; (5) Floo r manager; (6) Pit boss; (7) Dealer; (8) C roupier;

(9) Approver o f credit; o r (10) Custodian o f gambling devices including persons w ith access to cash and accounting records w ithin such devices; (b) If no t o therw ise included, any o ther person whose to tal cash compensation is in excess o f $50,000 per year; o r, (c) If no t o therw ise included, the four most highly compensated persons in the gam ing operation. (d) Any o ther person designated by the tribe as a key emp loyee .

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Primary Management Official – 25 C.F.R. § 502.19

Primary management o fficial means: (a) The person having management responsibility fo r a management contract; (b) Any person who has autho rity: (1) To hire and fire employees; or (2) To set up working policy for the gaming operation; or (c) The chief financial o fficer o r o ther person who has financial management responsibility. (d) Any o ther person designated by the tribe as a primary managemen t o fficial.

License Application – 25 C.F.R § 556.4

(1) Full name, other names used (oral or written), social security number(s), birth date, place of birth, citizenship, gender, all languages (spoken or written); (2) Currently and for the previous five years: Business and employment positions held, ownership interests in those businesses, business and residence addresses, and driver's license numbers; (3) The names and current addresses of at least three personal references, including one personal reference who was acquainted with the applicant during each period of residence listed under paragraph (a)(2) of this section; (4) Current business and residence telephone numbers; (5) A description of any existing and previous business relationships with Indian tribes, including ownership interests in those businesses; (6) A description of any existing and previous business relationships with the gaming industry generally, including ownership interests in those businesses; (7) The name and address of any licensing or regulatory agency with which the person has filed an application for a license or permit related to gaming, whether or not such license or permit was granted;

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License Application – 25 C.F.R § 556.4

(8) Fo r each felony fo r which there is an ongo ing prosecution o r a conviction, the charge, the name and address o f the court invo lved, and the date and disposition if any; (9) Fo r each m isdemeano r conviction o r ongo ing m isdemeano r prosecution (excluding m inor traffic vio lations) w ithin 10 years o f the date o f the application, the name and address o f the court invo lved and the date and disposition; (10) Fo r each crim inal charge (excluding m ino r traffic charges) whether o r no t there is a conviction, if such crim inal charge is w ithin 10 years o f the date o f the application and is no t o therw ise listed pursuant to paragraph (a)(8) or (a)(9) o f this section, the crim inal charge, the name and address o f the court invo lved and the date and disposition; (11) The name and address o f any licensing o r regulato ry agency w ith which the person has filed an application for an occupational license or perm it, whether or no t such license o r perm it was granted; (12) A pho tograph; (13) Any o ther in formation a tribe deem s re levan t ; and (14) Fingerprints consistent w ith procedures adopted by a tribe acco rding to §522.2(h) o f this chapter.

TGRA Rules and Regulations

§ C reate a comprehensive set o f Rules and Regulations that address all requirements and processes for licensure under the various laws and Gam ing Compact. § That outlines an Applicant’s eligibility to apply fo r and be issued a gam ing license in your jurisdiction. § That provides you w ith the autho rity to define the types o f licenses your agency shall issue. § That provides you the autho rity to condition, deny, suspend, and revoke licenses. § That outlines the term s and conditions Licensees must meet to maintain a gam ing license in your jurisdiction. § That provides you the autho rity to consider m itigating circum stances when licensing individuals. § That provides Licensees w ith due process o f law when conditioning, denying, and revoking licenses.

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LESSON 2: INVESTIGATIVE PROCEDURES

Conducting Background Investigations

Purpose of Gaming Licenses

§ Ensures that individuals who may pose a threat to the assets o f your tribe are no t employed w ithin your gam ing operations. § Ensures that individuals who may pose a threat to the public o r conduct illegal activities w ithin the gam ing operations are no t employed. § Licensing is the first line o f defense in pro tecting the assets and the integrity o f your gam ing operations. § The Gam ing License provides your jurisdiction over the licensee, allows you to enfo rce compliance w ith internal contro ls and applicable laws. § It is important that you have the authority to license all persons who work w ithin your gam ing operations, that have access to the public, and secure areas o f your gam ing facility.

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Personal Information

§ Personal identifiers (i.e., Name, SSN , DOB , etc.) consistent w ith documentation: § Is the Applicant’s name and place of birth accurate; § Are they legal residents of the U.S.; § Are there fraudulent reports on their SSN, when and where was it issued. § What are the Applicant’s aliases. § Where has the Applicant resided over the past 10 years. § What is the Applicant’s marital status. § A re there any fam ily ties w ith respect to the casino or its business relationships.

Professional History

§ What is the Applicant’s employment history and what are the identities o f their prior employers. § What are their reasons for separation from past employers. § Is the information disclosed accurate regarding the past employers. § Is there any relevant information om itted from their resume or social pro file. § Were there any controversies at a prior employer which could explain a m isrepresentation. § D id they accurately disclose their education history.

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Business Interests

§ Is the Applicant connected w ith any domestic or foreign-based corporations. § Is the Applicant connected w ith any nonpro fit organizations, charitable foundations, o r po litical action comm ittees. § Is the Applicant connected to any gam ing related corporations or business. § Is the Applicant connected to any businesses that ho ld a vendor license in your jurisdiction. § Is the Applicant connected to any tribally owned or operated businesses. § Has the Applicant ever been a significant shareho lder in a publicly -traded company. § Has the Applicant ever served as an o fficer or board member for any co rpo ration o r LLC . § Have any o f these affiliated entities been the subject o f prior controversy, bankruptcy, litigations, or sanctions.

Regulatory Issues

§ Has the Applicant (or their business affiliates) ever had a gam ing license revoked, suspended, conditioned, or denied. § Has the Applicant (or their business affiliates) ever been invo lved in any tribal, state o r federal regulato ry complaints. § Does the Applicant ho ld any pro fessional business licenses or pro fessional designations. § Has there ever been any complaints or disciplinary actions taken against the Applicant. § Has the Applicant ever been sanctioned by a tribal, state, or federal regulatory agency.

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Financial Status

§ A re there any no teworthy issues or po tential red flags in the Applicant’s credit report. § A re previous employers and business entities reported consistent w ith application.

§ Has the Applicant previously filed for bankruptcy pro tection. § Has the Applicant been a party to any civil judgments.

§ Has the Applicant had any state or federal tax liens filed against them . § Does the Applicant own any real property or o ther tangible assets such as mo tor vehicles, aircraft, or watercrafts. § Does the Applicant own any assets through entities which they contro l.

§ Has the Applicant recently pledged any assets as co llateral. § Has the Applicant had any assets repossessed by a lender.

Criminal/Civil Cases

§ Has the Applicant ever been convicted o f a local, tribal, state, or federal crime. § Has the Applicant ever been invo lved in any crim inal matters that resulted in dism issal, suspended sentencing, or deferred sentencing. § Is the Applicant currently serving a deferred sentence, probation, or an ongo ing prosecution. § Has the Applicant ever been invo lved in any tribal, state, or federal civil litigation. § Do the details o f the litigation filings provide any o ther relevant information. § Has the Applicant ever been the defendant o f a pro tective order or restraining order. § Does the Applicant have a history o f failure to pay fines and costs in crim inal matters.

§ Does the Applicant have an outstanding arrest warrant. § Does the Applicant have a negative driving record.

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News Media - Social Network - Internet Sources

§ Has the Applicant been the focus o f, or referenced in any mainstream domestic, or international news media. § Does the Applicant maintain any personal blogs, websites, or social networks. § Review Facebook, Tw itter, You Tube, type o f accounts. § What is the information the Applicant is posting. § What are fo llowers saying about the Applicant. § Conduct general internet searches on the Applicant through basic search engines such as Google, Yahoo , and B ing.

Personal References

§ Ask for the Applicant to provide personal references they have worked w ith or worked for in the past. § Ensure at least one reference has known the Applicant fo r at least 5-10 years. § Ensure personal references are no t fam ily members, ask how the Applicant knows the individuals. § If you are unable to verify addresses, ask for personal references that can verify a Applicant’s residential history. § Do former co lleagues, employers, and/or business partners have any relevant info rmation regarding the Applicant’s character. § Can references provide additional facts which may no t have been reported in the public domain.

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Reasons for Investigations

§ To verify factual info rmation provided by Applicants. § Verify all aspects o f the application. § To uncover damaging info rmation. § To determ ine the truthfulness o f the Applicant. § To determ ine the character, habits and associations o f the Applicant.

LESSON 3: LICENSING DETERMINATIONS

Analysis of investigative findings

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Investigative Report

§ C reate an investigative report that includes the steps taken in conducting the background investigation. § List all sources you obtained information from , remember a good report answers the questions:

§ Who; § What; § When; § Where; and § How. § Document all results obtained from the investigative steps. § Conclusions reached. § The basis fo r those conclusions.

Eligibility Conclusions

§ Analyze the information discovered. § Has the applicant ever been convicted o f any crime, or participated in any event invo lving fraud, dishonesty, m isrepresentation, or any gam ing-related o ffense. § Has the applicant participated in vio lence resulting in serious bodily injury, death, or weapons vio lations. § Has the Applicant had a license revocation by ano ther regulatory authority. § Financially responsible. § Has know ingly or w illfully provided false, or m isleading material, statements, o r info rmation, o r om itted info rmation on the gam ing license application. § Term ination from previous employers fo r cause o r accusations o f improper conduct.

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Mitigating Circumstances

§ The circum stances under which the o ffense occurred. § Age o f the person at the time o f the comm ission o f the crime. § Amount o f time that has elapsed since the applicant’s last crim inal activity. § Conduct and work activity o f the person prior to and fo llow ing the crim inal activity. § Evidence o f the applicant’s rehabilitation during incarceration, o r fo llow ing release. § Evidence o f the applicant’s fitness, letters o f recommendation from prosecution, law enfo rcement, co rrectional o fficers, o r o ther persons who had the applicant under direct supervision. § Relationship o f the crime to the purpose for requiring the license, and the extent to which the applicant m ight o ffer an oppo rtunity to engage in further crim inal activity o f the same type.

Tribal Eligibility Determination – 25 C.F.R. § 556.5

§ To make a finding concerning eligibility o f a Key employee o r PMO fo r granting o f a gam ing license, an autho rized tribal o fficial shall review a person’s: § Prior activities; § Criminal record, if any; and § Reputation, habits, and associations. § If the authorized tribal o fficial determ ines that licensing o f the person poses a threat to the public interest o r to the effective regulations o f gam ing, o r creates o r enhances the dangers o f unsuitable, unfair, o r illegal practices and methods and activities in the conduct o f gam ing, an authorizing tribal o fficial shall no t license that person in a key employee o r PMO position. § Use the information discovered in the background investigation to determ ine the prio r activities, reputation, habits, and associations o f a person to make a licensing determ ination.

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Notification of Results – 25 C.F.R. § 556

§ A Tribe must no tify the N IGC o f the results o f the background investigation w ithin 60 days o f an individual beginning work. § The NOR must include the fo llow ing info rmation: § Applicant’s name § Date of Birth § Social Security Number § Date they begin work, or date the temporary license was issued § The eligibility determ ination in the NOR must include a summary o f:

§ The steps taken in the investigation § Verification of all gaming licenses § Specific notations regarding previously denied and revoked licenses § Criminal charges within the last 10 years of the application § Every felony conviction

Licensure

§ A fter the subm ission o f the NOR , the N IGC has 30 days to make a determ ination whether or no t they object or concur w ith your eligibility determ ination and recommendation regarding licensure. § W ithin 30 days after the issuance o f a license, a tribe shall no tify the Comm ission o f its issuance in accordance w ith 25 C .F.R . § 558. This is a no tification o f the applicants licensed by the tribe that you subm itted NOR ’s fo r. § You must also include in your no tices all applicants no t issued a license, either because they were denied, revoked, o r quit befo re a license could be issued. § Should the N IGC object to your issuance o f a license you must ho ld a hearing and determ ine whether or no t the tribe w ill deny the Applicant. Based upon the testimony and evidence presented the tribe may decide to issue a license.

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Retention Obligations – 25 C.F.R. § 558.3

§ A tribe shall retain the fo llow ing for inspection by the Chair or his or her designee for no less than three years from the date o f term ination o f employment:

§ Applications for licensing; § Investigative Reports; and § Eligibility Determinations.

§ T IPS : Ensure you maintain the appropriate investigative materials and licensee files. Maintain a >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43 Page 44 Page 45 Page 46 Page 47 Page 48 Page 49 Page 50 Page 51 Page 52 Page 53 Page 54 Page 55 Page 56 Page 57 Page 58 Page 59 Page 60 Page 61 Page 62 Page 63 Page 64 Page 65 Page 66 Page 67 Page 68 Page 69 Page 70 Page 71 Page 72 Page 73 Page 74 Page 75 Page 76 Page 77 Page 78 Page 79 Page 80 Page 81 Page 82 Page 83 Page 84 Page 85 Page 86 Page 87 Page 88 Page 89 Page 90 Page 91 Page 92 Page 93 Page 94 Page 95 Page 96 Page 97 Page 98 Page 99 Page 100 Page 101 Page 102 Page 103 Page 104 Page 105 Page 106 Page 107 Page 108 Page 109 Page 110 Page 111 Page 112 Page 113 Page 114 Page 115 Page 116 Page 117 Page 118 Page 119 Page 120 Page 121 Page 122 Page 123 Page 124 Page 125 Page 126 Page 127 Page 128 Page 129 Page 130 Page 131 Page 132 Page 133 Page 134 Page 135 Page 136 Page 137 Page 138 Page 139 Page 140 Page 141 Page 142 Page 143 Page 144 Page 145 Page 146 Page 147 Page 148 Page 149 Page 150 Page 151 Page 152 Page 153 Page 154 Page 155 Page 156 Page 157 Page 158

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