Game Classification under NIGC Regulations 543 & 547

The following first appeared in the March 2016 issue of Indian Gaming Magazine. The importance of Tribal Regulators has only grown. Please share.

It has now been over three years since the final adoption of NIGC regulations Part 547 - Minimum Technical Standards for Class II Gaming Systems and Equipment and Part 543 - Minimum Internal Control Standards for Class II Gaming. These were the result of a long and sometimes contentious process. 

The NIGC and the Tribal Gaming Working Group spent several years and countless hours working out the language that was finally adopted. It was a triumph of Tribal interests collaborating with the NIGC to create an outcome that benefited Class II gaming overall and reinforced Tribal sovereignty at its core.

The most important aspect of both Parts 543 and 547 is the recognition of the primary and exclusive role Tribal Gaming Agencies (“TGA”) play in the regulation of Class II games. It is a foundational principle of IGRA that Tribal governments are the primary regulator of gaming on their lands. This is especially true with Class II gaming because there is no compact that can apply to the rules and play of the games. 

The key provisions in Parts 543 and 547 rightly defer to the TGA the legal responsibility and authority to make a classification determination as to whether a gaming system or a game is properly classified as Class II. These determinations are done on a daily basis by TGA’s all over the country. Whenever a TGRA approves a Class II game to be placed on a gaming floor for play it has affirmatively made a Classification decision as the primary regulator.

By final agency action effective October 22, 2012, the NIGC adopted regulations, 25 FCR Parts 543 and 547, which specifically and expressly acknowledged that TGAs have full responsibility and authority to approve the use of any Class II gaming system as part of the conduct of Class II bingo games on Indian lands.

The provisions of the regulations such as 543.8(g) requires the TGA [not the NIGC] to establish procedures to safeguard integrity of technologic aids to the play of bingo during installations and operations, including procedures that require: (1) the TGA [not the NIGC] to approve “all technologic aids before they are offered for play; and (2) the TGA [not the NIGC] to determine that all Class II gaming systems to comply with Part 547 standards.

Other provisions of the regulations in Part 547.4(a) require to ensure fairness as to game play on a Class II gaming system, a testing lab must calculate math expectations and submit a “report to the TGA” – [not to the NIGC]. Part 547.4(b) – requires that all components used with a Class II gaming system must be identical to the prototype reviewed by testing lab “and approved for use by the TGRA” [not the NIGC] pursuant to Part 547.5.

Most crucially Part 547.5(c) – requires that the TGA [not the NIGC] “may not permit the use of any Class II gaming system unless following receipt of the testing lab’s report, “the TGA [not the NIGC] makes a finding that the Class II gaming system” conforms to the standards established by Part 547, applicable provisions of Part 543 and those standards further established by the TGA [not the NIGC]. There are other provisions of the regulations that continue to make it clear that the TGA [not the NIGC] is to make final determinations.

It its vital to understand that any informal NIGC practices (e.g., advisory opinions) that were being followed as to reviewing electronic-linked bingo game systems prior to September 21, 2012 are now simply irrelevant and superseded by Parts 543 and 547. Attempts by the NIGC or others to use the old informal NIGC practices to circumvent or undermine a TGA classification decision made under these regulations as part of the approval of any Class II gaming system would be a violation of NIGC regulations and IGRA.

TGAs routinely make classification determinations for Class II bingo gaming systems via final agency action as part of their licensing of class II vendors to their respective gaming operations, and there is no record of the NIGC ever not endorsing those TGA decisions

In fact, neither the NIGC Chairman nor the full Commission has ever made any classification determination via final agency action as to the classification of a particular class II gaming system (except for rejecting in 2008 the Metlakatla Indian Community class II gaming ordinance permitting generally one touch bingo systems -- which analysis the NIGC now does not support as indicated by its one touch bingo pronouncement officially published in the Federal Register in June 2013).

The NIGC has never actually “rendered” any published classification determinations over the last ten years – but rather the NIGC’s only involvement with classification issues has been limited to its “acting” General Counsel writing a handful of “private letter advisories” between 2003-2009 related to some early first-generation electronic linked bingo game systems, which are not officially published in the Federal Register but merely posted on the NIGC website as “guidance.”

Many may have missed the full impact of the adoption of Parts 543 and 547. The implications as Class II gaming continues to grow and prosper are quite large and impactful. This will become more focused as states increase attacks on classification decisions that challenge what is or is not included in the definitions of compacted games. The primary role of TGAs has never been more important to the protection of Tribal sovereignty.

I would like to acknowledge the assistance of Kevin Quigley and Tom Foley of www.foleyquigleylaw.com in the writing of this article.