[Federal Register: May 25, 2006 (Volume 71, Number 101)]
[Proposed Rules]               
[Page 30237-30261]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25my06-27]                         


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Part III





Department of the Interior





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National Indian Gaming Commission



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25 CFR Parts 502 and 546



Classification Standards; Class II Gaming; Bingo, Lotto, et al.; 
Proposed Rule


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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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DATES: Submit comments on or before August 23, 2006.
    Consultation: The Commission will be conducting government-to-
government consultations with Tribes on this proposed rule at the 
following times:

July 10-11 Minneapolis, Minnesota
July 12-13 Denver, Colorado
July 18-19 Washington, DC
July 24-25 Tacoma, Washington
July 26-27 Ontario, California
August 8-9 Oklahoma City, Oklahoma

Invitations will be mailed out to Tribal leaders in the coming weeks. 
These consultation meetings will be transcribed. To schedule a 
consultation please contact Natalie Hemlock, Special Assistant to the 
Commission, at (202) 632-7003.

ADDRESSES: Mail comments to ``Comments on Class II Classification 
Standards'' National Indian Gaming Commission, Suite 9100, 1441 L 
Street, NW., Washington, DC 20005, Attn: Penny Coleman, Acting General 
Counsel. Comments may be transmitted by facsimile to 202-632-0045, or 
mailed or submitted to the above address.

FOR FURTHER INFORMATION CONTACT: Penny Coleman or John Hay, Office of 
General Counsel, Telephone 202-632-7003. This is not a toll free call.
SUMMARY: The proposed rule 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''). First, the proposed rule further revises 
the definitions for ``electronic or electromechanical facsimile'' and 
``other games similar to bingo'' that appear in part 502 of Commission 
regulations (25 CFR part 501 et seq.). 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 proposed rule offers further 
revision that would incorporate the new part 546 into the definitions. 
The Commission adds a new Part to its regulations (part 546) 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 
subject to the Paperwork Reduction Act of 1995. The Commission has 
submitted the information collection request to OMB for approval.

SUPPLEMENTARY INFORMATION: 

Preamble Table of Contents

I. Background
II. Development
III. Purpose and Scope
IV. Definitions
V. Criteria for Meeting the Class II Requirements for Bingo, Lotto, 
and Other Games Similar to Bingo Established by IGRA
VI. Bingo, Lotto, and Other Games Similar to Bingo Are Games Played 
for Prizes, Including Monetary Prizes, With Cards Bearing Numbers or 
Other Designations
VII. Bingo, Lotto, and Other Games Similar to Bingo Are Games in 
Which the Holder of the Card Covers the Numbers or Other 
Designations on the Player's Card When Objects Similarly Numbered or 
Designated Are Drawn or Electronically Determined
VIII. Bingo, Lotto, and Other Games Similar to Bingo Are Games Won 
by the First Person Covering a Previously Designated Arrangement of 
Numbers or Other Designations on the Card or Cards Held By the 
Player
IX. Use of ``Electronic, Computer or Other Technologic Aids'' in the 
Play of Bingo, Lotto, and ``Other Games Similar to Bingo'' Through 
an Electronic Medium
X. Alternative Display of the Results of the Game on the Video 
Screen at the Player Station
XI. The Relationship of ``Other Games Similar to Bingo'' as Class II 
Gaming to the Requirements for Bingo Specified in IGRA
XII. Use of State Law in Determining Whether a Game Is Bingo, Lotto, 
or an ``Other Game Similar to Bingo'' Under IGRA
XIII. Additional Comment Regarding Player Against Player Competition 
in Bingo, Lotto, and ``Other Games Similar to Bingo''
XIV. Classification Standards for Pull-Tabs, Electronic Pull-Tabs 
and ``Instant Bingo''
XV. Process for Certification of Games and ``Electronic, Computer, 
and Other Technologic Aids'' as Meeting the Classification Standards

I. Background

    The Indian Gaming Regulatory Act, 25 U.S.C. 2701-21 (IGRA), 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.
    ``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. 
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 NIGC also 
exercises regulatory authority over Class III gaming under IGRA, and 
the United States Department of Justice and United States Attorneys 
possess exclusive

[[Page 30239]]

criminal jurisdiction over Class III gaming on Indian lands and also 
possess certain civil jurisdiction over such gaming.
    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 (June 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 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 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.
    This approach is somewhat different from the approach taken by the 
previous Commission when it proposed a rule on Classification of Games 
in November 1999 (See 64 FR 61234). After considering the comments of 
tribes and the public to the proposal, the Commission withdrew the 
proposed rule in July 2002 (See 67 FR 46134). At that time, the 
Commission expressed the view that the proposed rule would have more 
likely satisfied the concerns of all had there been greater opportunity 
for tribal input during its development. The Commission recommended 
that for any future such rulemaking, a tribal advisory committee be 
established to advise the Commission as to the nature and content of 
such a rule.
    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) 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, as well as revisions to the 
definitions of facsimile herein that incorporate part 546.
    In a related matter, the Commission is also developing specific 
technical standards for Class II ``electronic, computer and other 
technologic aids'' utilized in Indian gaming operations. These 
technical standards will be presented in a separate proposed rule.

II. Development of the Proposed Rule Through Consultation With Indian 
Tribes

    In recognition of tribal sovereignty and the fundamental importance 
of game classification to the operation and regulation of gaming on 
Indian lands under IGRA, the Commission developed a policy and process 
for consultation with Indian tribes that would provide opportunity for 
early and meaningful tribal input regarding formulation of these 
proposed Class II gaming regulations.
    In particular, while initially advising tribes of the Commission's 
intention to develop these Class II Game Classification Standards, the 
Commission also actively consulted with tribes regarding formulation of 
the Commission's first-ever official government-to-government tribal 
consultation policy. After several months of consultation with tribes, 
the Commission's official tribal consultation policy was adopted and 
published in the Federal Register on March 31, 2004 (See 69 FR 16973). 
The Commission purposely established this policy in order to have 
consultation policy guidelines in place for pre-rulemaking tribal 
consultation on the Class II classification standards and other planned 
Commission rulemaking initiatives.
    The Commission's tribal consultation policy calls for the 
Commission, to the extent practicable and permitted by law, to engage 
in regular, timely, and meaningful government-to-government 
consultation with Indian tribes when formulating proposed new or 
revised administrative regulations that may substantially affect the 
operation or regulation of gaming on Indian lands. To fulfill this 
policy commitment to consult with tribes on these proposed Class II 
regulations, the Commission devised a three-part plan to afford tribes 
a reasonable and practicable opportunity to consult with the Commission 
and to provide early input in formulation of the regulations before 
they were published as proposed new rules in the Federal Register and 
the actual rulemaking process began.
    First, the Commission endeavored to consult in person at least 
twice with each gaming tribe between May 2003 and March 2006 regarding 
development of these proposed regulations. During this time period, the 
Commission sent out over 500 separate invitations to individual tribes 
to consult with the Commission and provide input. Many tribes accepted 
one or more of the Commission's invitations to consult during this pre-
rulemaking period and participated in separate government-to-government 
consultation meetings with the Commission regarding the proposed 
regulations and other matters. While some tribes declined the 
Commission's invitation(s) to consult, between May 2003 and March 2006 
the Commission conducted over 300 separate

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government-to-government consultation meetings with individual tribes 
and their leaders or representatives regarding development and 
formulation of these proposed regulations.
    Second, the Commission established a joint Federal-Tribal advisory 
committee on March 31, 2004, composed of both Commission and tribal 
representatives to assist the Commission in formulating these proposed 
Class II gaming regulations. In January 2004, the Commission requested 
all gaming tribes across the country to nominate tribal representatives 
to serve on this advisory committee. From the tribal nominations 
received, the Commission selected the following seven tribal 
representatives on March 31, 2004, to serve on the committee: Norm Des 
Rosiers, Gaming Commissioner, Viejas Band of Kumeyaay Indians; Joseph 
Carlini, Gaming Commission Executive Director, Agua Caliente Band of 
Cahuilla Indians; Kenneth Ermatinger, Gaming Commission Executive 
Director, Sault Ste. Marie Tribe of Chippewa Indians of Michigan; Jamie 
Hummingbird, Gaming Commission Director, Cherokee Nation, Oklahoma; 
Mark Garrow, Gaming Commission Inspections Manager, St. Regis Mohawk 
Tribe; Melvin Daniels, General Manager, Muckleshoot Indian Bingo, 
Muckleshoot Indian Tribe; Charles Lombardo, Sr. Vice-President for 
Gaming Operations, Seminole Tribe of Florida.
    To date, the advisory committee has held six (6) meetings: May 13, 
2004, in Washington, DC; August 2-3, 2004, Washington, DC; September 
13-14, 2004, Cherokee, North Carolina; December 1-3, 2004, Oklahoma 
City, Oklahoma; January 12-13, 2005, Palm Springs, California; and 
March 11, 2005, Chicago, Illinois. During these meetings, all of which 
were open to the public, the committee discussed the various 
characteristics of Class II and Class III games of chance, their play, 
and related gaming technology and methods. In addition, the Committee 
also discussed, reviewed, critiqued and commented on four (4) 
different, successive preliminary working drafts of the proposed Class 
II classification standards, which were prepared by the Commission 
representatives on the committee.
    The seven tribal committee representatives provided early tribal 
input and valuable insight, advice, and assistance to the Commission in 
developing each of the respective working drafts, as well as the 
current proposed regulations. Although there were many instances of 
accord, there were also many times during the development of the 
proposed regulations that the tribal committee representatives strongly 
disagreed with decisions made by the Commission.
    In particular, tribal representatives strongly advocated automatic 
daubing (covering) for the entire game of bingo; elimination of any 
time delays for either adding players or covering in bingo; elimination 
of any requirement for multiple bingo draws or releases; authorization 
of wholly electronic pull-tab games; and no change to the current rule 
definition of ``electronic or electromechanical facsimile'' of games of 
chance. While understanding the tribal representatives' position on 
these issues and their general desire to assure that the games are 
economically viable, the Commission is bound by Congress's intent, as 
expressed in IGRA, to promulgate rules that 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.'' Accordingly, the Commission concluded that it could not 
accept some of the tribal representatives' recommendations in 
formulating proposed rule.
    The Commission's establishment of the joint Federal-Tribal advisory 
committee was the subject of a legal challenge while the Commission was 
preparing the proposed rule for publication.
    On March 10, 2005, nearly one year after the Commission established 
the committee, the Confederated Salish and Kootenai Tribes of the 
Flathead Nation and the Santa Rosa Rancheria Indian Community filed 
suit against the Commission alleging that several of the committee 
members were not eligible to participate on the committee. Following a 
hearing in Federal court, at which the request for temporary 
restraining order was denied, the Commission determined that it should 
proceed to publish the proposed rule for comment while the legal 
standing of the committee was further litigated. The Commission also 
sought clarification from those tribes nominating the committee members 
concerning the member's role as an official representative of the 
tribe. As a result of this clarification, and, out of an abundance of 
caution, the Commission regretfully requested that two members of the 
Committee step down.
    The third component of the Commission's effort to consult with 
tribes during the development of these proposed regulations was to make 
the various preliminary working drafts of the proposed regulations 
available to all tribes and their leaders for review and comment 
independent of the joint Federal-Tribal advisory committee. All five 
preliminary drafts were published on the Commission's Web site. In 
addition, the third and fourth preliminary drafts were successively 
mailed to each tribe inviting written comment. Many tribes and the 
public submitted written comments on these respective working drafts. 
The tribal comments were shared with the members of the advisory 
committee for their review and carefully considered by the Commission 
in formulating these proposed regulations.
    In addition to forming the advisory committee, scheduling and 
conducting individual tribal consultation meetings and advisory 
committee meetings, and requesting and considering written tribal 
comments to preliminary drafts of the proposed regulations, the 
Commission also facilitated further pre-rulemaking consultation with 
tribes by other means. In particular, the Commission attended and 
addressed several different assemblies of tribal leaders and tribal 
gaming operators and regulators at meetings and conferences between 
January 2003 and March 2006 organized by state and regional tribal 
gaming associations, the National Indian Gaming Association, and the 
National Congress of American Indians. At these meetings and 
conferences, the Commission advised tribal leaders of its intention and 
plan to develop these regulations and provided periodic updates 
regarding the progress and status of the regulations development. The 
Commission also made itself available at these meetings to answer any 
questions from tribal leaders regarding the proposed regulations or 
their formulation.
    In addition, the Commission also met individually with several 
tribes and their leaders in its Washington, DC, offices, at each 
tribe's request, to discuss these proposed regulations and their 
formulation and implementation.
    Through each of these various means, the Commission actively 
endeavored to provide all tribes with a reasonable and practical 
opportunity over the past twenty-six months to meet and consult with 
the Commission on a government-to-government basis and provide early 
and meaningful tribal input regarding the formulation and 
implementation of these proposed regulations.
    By April of 2005, the Commission was prepared to send the fifth 
draft to the Federal Register for publication as a proposed rule. 
However, the Department of Justice (``DOJ'') contacted the Commission 
and expressed concern that the draft regulations might not be 
consistent with the Johnson Act. The Commission spent five months 
meeting

[[Page 30241]]

with DOJ to resolve its concerns. As a result of these meetings the DOJ 
drafted amendments to the Johnson Act. Following several consultation 
sessions with Tribes the DOJ sent the draft amendments to the Office of 
Management and Budget earlier this year. So much time has elapsed that 
it is not likely that the proposed legislation will pass the 109th 
Congress. The need to regulate Class II technologic aids has not 
diminished and the Commission is compelled to proceed with these 
regulations. The proposed regulations differ from the fifth draft that 
was provided to the public in April of 2005. The changes to that draft 
are a result of the Commission addressing the concerns of DOJ that 
these regulations clearly distinguish between Class II and Class III 
games. These changes relate to the size of the bingo card as well as 
the time period for the release of numbers. Additionally, the proposed 
changes require a fixed written notification to the player that the 
game they are playing is a game of bingo, a game similar to bingo, or a 
game of pull tabs. Finally, they prohibit pull tab machines from paying 
winnings in any form.

III. Purpose and Scope

    The proposed revision to the current definitions regulation and the 
proposed classification regulation are intended to clarify terms used 
by the Congress to define Class II gaming under IGRA. Through a 
separate regulation, the Commission has proposed to revise the current 
definitions. The change to the definition for the terms ``electronic or 
electromechanical facsimile'' and ``other games similar to bingo'' 
provides consistency and clarity in understanding Class II gaming 
concepts intended by Congress. The classification standards serve to 
distinguish the use of ``electronic, computer, or other technologic 
aids'' in the play of Class II bingo, lotto, ``other games similar to 
bingo,'' pull tabs, and instant bingo from the play of Class III gaming 
machines.
    These standards focus on the play of bingo, lotto, and ``other 
games similar to bingo'' when these games are played through an 
electronic medium using ``electronic, computer, or other technologic 
aids.'' The Commission's intent with classification standards is not to 
prescribe rules for how a tribal gaming operation conducts its live 
session bingo. The only exception to this general approach is when a 
tribal gaming operation conducts its live session bingo exclusively 
through networked electronic player stations when these devices 
essentially perform all the functions of bingo play normally undertaken 
by the players. Games played in such a manner on these electronic 
player stations are included within the parameters of bingo, lotto, and 
``other games similar to bingo'' games played through an electronic 
medium addressed in the Classification Standards.
    These standards apply only in bingo, lotto, other games similar to 
bingo, pull-tabs, and instant bingo played primarily through an 
electronic medium. They apply only to the electronic format because in 
an electronic format it becomes too easy to use features such as the 
instantaneous, rather than serial, release of numbers and the automatic 
covering (daubing) of those numbers on a player's electronic card as a 
pretext to fundamentally change or distort the nature of the game such 
that it becomes an ``electronic facsimile'' of the game. In live 
session bingo, the pace and style of the game will normally preclude 
such distortions.
    In many respects, the current generation of electronic bingo games 
shows features that turn bingo on its head. Many games offer players 
the opportunity to play with as few as one other player in games where 
the object is to obtain and cover one or more ``interim'' prize 
patterns which offer significant monetary reward. The game-winning 
pattern is more often than not a pattern with a low-value, 
inconsequential prize. The machines, offered as ``technologic aids'' to 
the play of bingo, are often designed to play close to the line by 
using alternative displays of the game results to resemble the 
experience of a slot machine for the player. This is not inherently 
wrong nor does it necessarily make such machines Class III devices. But 
it does make them more difficult to distinguish from Class III devices.
    Faced with the explosion of these ``technologic aids'' on the 
floors of Class II gaming facilities, or on the floors of Class III 
gaming facilities as an exception to the number of slot machines 
authorized for the facility under a tribal-state compact, the 
Commission has determined that some bright-line classification 
standards must be developed to distinguish Class II games from the slot 
machines they mimic. The standards interpret in operational terms 
Congress's prescribed legal criteria for Class II bingo, lotto, and 
other games similar to bingo. As to pull-tabs and instant bingo, the 
standards fully embrace the Federal court decisions that have dealt 
with the technologic aids to the game. The standards demand in some 
cases, and prohibit in others, certain play features. In short, the 
purpose in describing play features is to distinguish the play of these 
``technologic aids'' from the play of ``electronic facsimiles of a game 
of chance or slot machines of any kind,'' which is Class III gaming 
under the IGRA. The standards clarify the terms Congress used when it 
defined Class II gaming, not knowing the full potential of modern 
technology that could be brought to the industry.
    IGRA defines Class II bingo with three statutory criteria. It is 
the game of chance commonly known as bingo * * *
    (1) Which is played for prizes, including monetary prizes, with 
cards bearing number or other designations;
    (2) In which the holder of the card covers such numbers or other 
designations when objects, similarly numbered or designated, are drawn 
or electronically determined; and
    (3) In which the game is won by the first person covering a 
previously designated arrangement of numbers or designations on such 
cards[.]

25 U.S.C. 2703(7)(A). The game of ``lotto'' and ``other games similar 
to bingo'' were not defined in the Act. The terms were defined in 1992 
by the Commission as having the same requirements as bingo. The term 
``other games similar to bingo'' was also defined by the 1992 
Commission as requiring that the games could not be house-banked. In 
reviewing the definition of ``other games similar to bingo,'' the 2002 
Commission retained this non-house-banked requirement but only 
described these games as a variant of bingo. What constituted a 
``variant'' was not explained. Furthermore, the Commission in its 
advisory opinions has been unable to identify what constitutes a 
variant of bingo. It has only described what is not a variant--e.g., a 
pre-drawn bonanza bingo game.
    IGRA also allows for advances in technology to aid the way the game 
is played. Speaking on another aspect of the game, the U.S. Court of 
Appeals for the Ninth Circuit observed that bingo is not necessarily 
the ``traditional'' game that ``was played in our childhoods or home 
towns.'' 223 F.3d 1091,1096 (9th Cir. 2000). At the same time, IGRA has 
not changed. In it, Congress delegated to NIGC the task of implementing 
the Act's provisions. The three statutory criteria for bingo must 
continue to be the fundamental principles on which a Class II 
classification is based. It is this balance between capitalizing on 
technological advances while continuing to give IGRA's definitions 
meaning that the NIGC is attempting to strike in these Classification 
Standards. These standards explain the statutory criteria and represent 
the Commission's

[[Page 30242]]

effort to distinguish Class II bingo, lotto, and ``other games similar 
to bingo'' from Class III gaming.
    The Commission also addresses the games of pull tabs and ``instant 
bingo'' in the classification standards. These games are not defined in 
IGRA, but have been discussed in Federal court cases. These cases 
provide guidance for distinguishing the Class II versions of these 
games from ``electronic and electromechanical facsimiles'' of the games 
which are Class III. The Classification Standards specifically rely on 
this case law.
    Finally, these regulations address a problem highlighted by the 
Commission in 2002, but left unresolved. As noted by the Commission, 
the process for classifying games has been an imperfect process. Under 
the current informal process, the Commission's Office of General 
Counsel issues advisory classification opinions. Often these are 
obsolete as soon as they are released. Looking forward, electronic 
games change much too rapidly to encourage dependence on a small legal 
staff to provide the appropriate classification guidance. The advisory 
opinions also suffer from major drawbacks. For example, it is sometimes 
difficult to identify whether the games described in the advisory 
opinions are the same games as those that are offered for play in a 
tribal gaming facility. In addition, the advisory opinions are not 
final agency action and therefore are not subject to judicial review.
    A second method for classifying games, the issuance of a Notice of 
Violation and Closure Order, while subject to judicial review, also has 
drawbacks. This formal enforcement process is often slow and expensive, 
forces tribes to defend games they often believe in good faith are 
permissible games, and can result in decisions that have little impact 
on the new games that replace those that are the subject of the 
enforcement action.
    A third method, leaving the decision entirely to tribal gaming 
commissions, has other problems. Decisions are sometimes inconsistent 
with those of other commissions. Disagreements between tribes and 
states arise, and all of the concerned parties, including 
manufacturers, as a practical matter need a central authority to decide 
what games can be played as Class II.

Definitions in Part 502

a. ``Electronic or Electromechanical Facsimile''
    The Commission proposes to revise the definition for ``Electronic 
or electromechanical facsimile'' contained in Sec.  502.8. The revision 
clarifies that games under this section that comply with part 546 are 
not electronic or electromechanical facsimiles of any game of chance.
b. ``Other Games Similar to Bingo''
    The Commission proposes to revise the definition for ``other games 
similar to bingo'' contained in Sec.  502.9. The revision to the 
definition shifts the focus for the classification determination in an 
other game similar to bingo from whether the game is house-banked to 
whether the game has players competing against other players for the 
prizes. The revision removes the requirement, not present in IGRA, that 
these games not be house-banked. The revision also strengthens the 
requirement that the games involve players competing against other 
players for a common prize or prizes.
    As to house banking, IGRA defines as Class II bingo and, if played 
in the same location, pull-tabs, punch boards, tip jars, and games 
similar to bingo, but makes no requirement that any of these games be 
house-banked, or not be housed-banked. IGRA's only requirement about 
the banking of Class II games is to exclude house-banked card games 
from the definition and make them Class III. Congress has, in other 
words, defined both bingo and games similar to bingo as Class II, 
regardless of how they are banked. Some, but not all bingo games are 
played in a house-banked format. Accordingly, the Commission proposes 
to remove the limitation on house-banking for games similar to bingo as 
inconsistent with IGRA.
    The revision maintains that part of the definition that describes 
``other games similar to bingo'' as variants of bingo. Proposed Part 
546 explains what variants are contemplated.

IV. Definitions for 25 CFR Part 546

    The Commission proposes definitions for terms not previously 
defined in its regulations. These definitions apply only to these terms 
as used in the proposed Part 546 and do not necessarily have other 
general application.
    The Commission defines what is a ``game'' of the ``game of chance 
commonly known as bingo'' or ``other games similar to bingo'' so that a 
player will know when the game begins, when the game ends, and what the 
player must do to participate and win in an individual game. Each bingo 
game should have a distinct reference number visible on the screen at 
each player station and used subsequent to the game to track game play 
and results.
    The Commission has previously defined the game of ``lotto'' as a 
game played in the same manner as bingo. 25 CFR 502.3. Accordingly, the 
classification standards for bingo apply to ``lotto'' the same as they 
apply to defining bingo. The term ``lotto'' does not mean ``lottery'' 
in general or the type of lottery operated by various states and 
denominated ``lotto'' or some derivative thereof.
    The Commission defines ``the game of pull tabs'' and ``electronic 
pull tab'' using terminology commonly accepted in the federal courts. 
See Cabazon Band v. NIGC, 827 F. Supp. 26, 28 n. 2(D.D.C. 1993), aff'd 
14 F.3d 633 (D.C. Cir. 1994).
    The Commission defines the term ``instant bingo'' by relying on 
federal case law. See Julius M. Israel Lodge of B'nai B'rith v. 
Commissioner of Internal Revenue, 98 F.3d 190 (5th Cir. 1996). In its 
decision, the court set out some fundamental differences between bingo 
and instant bingo. Using common definitions of bingo from dictionaries, 
the court stated:

    The taxpayer's Instant Bingo is devoid of the critical element 
of bingo that runs through these ordinary, everyday definitions--
that players place markers over randomly called numbers in an 
attempt to form a preselected pattern. Instant Bingo involves only 
the player's purchase of a prepackaged card * * *, and winning cards 
are those in which the preprinted appearance of numbers on the front 
of the card * * * matches the preprinted winning arrangement 
indicated on the reverse side of the card * * *.

Julius M. Israel Lodge of B'nai B'rith, 98 F. 3d at 192-93.
    The Commission defines the terms ``bonus prize'' and ``progressive 
prize'' in bingo, lotto, or other games similar to bingo to distinguish 
them from the game-winning prize. See the discussion below on prizes 
generally.

V. Criteria for Meeting the Class II Requirements for Bingo, Lotto, and 
Other Games Similar to Bingo Established by IGRA

    IGRA establishes three requirements in defining the game of bingo 
as a Class II gaming activity. The intent of the proposed rule is to 
clarify the terms used in this statutory definition when the game is 
played primarily though ``electronic, computer, or other technologic 
aids.'' In drafting the standards, the Commission has been careful to 
derive criteria from the statutory language.

[[Page 30243]]

VI. Bingo, Lotto, and Other Games Similar to Bingo Are Games Played for 
Prizes, Including Monetary Prizes, With Cards Bearing Numbers or Other 
Designations

    This section of the proposed rule deals with two essential elements 
of bingo, lotto and ``other games similar to bingo'': Cards and prizes. 
It offers criteria for the card so that it is visible and useful to the 
game. It explains criteria for prizes but permits a wide variety of 
prizes for a game.

Cards

    Central to the game of bingo is that participants play the game on 
bingo-faced cards and compete against other players to win prizes in 
the game. Pursuant to IGRA's second statutory element, players cover 
numbers or other designations on their cards ``when'' those numbers or 
other designations are drawn. This necessarily means that the player 
has the card in her possession before the numbers are drawn. This also 
means that players cannot change cards once the game begins and the 
numbers are being drawn and displayed, although they certainly may do 
so before a new game starts.
    There is no statutory requirement that bingo be played with paper 
cards as in a traditional bingo game. In fact, case law and NIGC's 
regulations provide that Class II bingo games may be played with 
electronic cards. The U.S. Court of Appeals for the Tenth Circuit, in 
U.S. v. 162 Megamania Gambling Devices, 231 F. 3d 713 (10th Cir. 2000), 
ruled that a game, Megamania, was Class II because it met the three 
statutory criteria for bingo, among them, that the game ``is played 
with an electronic card that looks like a regular paper bingo card 
containing a grid of numbers * * *'' Id. at 719. The Ninth Circuit also 
affirmed the Class II status of Megamania, observing that the game 
consisted of ``electronic game 'cards.''' U.S. v. 103 Electronic 
Gambling Devices, 223 F. 3d 1091, 1093 (10th Cir. 2000). NIGC's 
regulation on technologic aids, 25 CFR 502.7(c), explicitly names 
``electronic cards for participants in bingo games'' as an example of 
an aid, which is allowable for Class II games under 25 CFR 502.3(a).
    Because bingo is a game played with the cards, the cards must be 
clearly visible to the player on the video screen of the ``electronic, 
computer, or other technologic aid'' displaying the card. In order to 
ensure visibility the Commission proposes that the screen always 
display a card that is at least one half the available space on the 
screen. A larger card would be useful for better visibility, but the 
Commission recognizes that the stated minimum size serves the purpose 
of having a visible card and at the same time allows flexibility for 
placing other information and features on the video screen.
    In the traditional ``game of chance commonly known as bingo,'' the 
card contains a grid of 25 spaces in 5 horizontal rows and 5 vertical 
columns. This is not clearly stated in the statute although it is the 
norm for the game. The Commission believes that a game using other than 
25 spaces placed in a 5 by 5 grid would more properly be considered an 
``other game[s] similar to bingo.'' While a previous Commission 
explained that the bingo game would not be limited to a grid of 5 rows 
and 5 columns, in giving meaning to the term ``other games similar to 
bingo,'' the Commission now believes Congress had in mind a traditional 
bingo card when it drafted the sections on Class II bingo since it 
expressly referred to ``the game of chance commonly known as bingo'' 
when listing the statutory elements of the game.
    As a major variant from the game of bingo, for other games similar 
to bingo, the card has many possibilities. The only stated restriction 
is that each card must have at least three (3) spaces to be covered, in 
addition to any ``free space,'' because a winning pattern in the game 
must have at least three (3) spaces, as explained elsewhere in this 
preamble.
    Each card must have unique numbers or other designations that 
appear only once on the card. This means a number could appear twice, 
so long as a qualifying factor such as color established the unique 
character, e.g., a ``blue 5'' and a ``red 5'' could both appear on the 
card but each would be unique. The unique number or designation can 
appear only once in order to give meaning to game play. The term 
``other designations'' includes letters, figures or symbols.
    Except as noted below, the card must always be displayed for the 
player in a clear and visible manner. If multiple bingo cards are in 
use by a player, the player station must have capability to display for 
the player on the video screen any of the bingo cards being used by the 
player in the game during play. Before game play, a single card may be 
shown. During game play, if only one card is shown, the default card 
being shown will be the card closest to a bingo win or the card with 
the highest value prize, if a winning card, with each such card display 
meeting the specified visibility requirements. At the end of the game, 
a player must have the option of reviewing all the cards used by the 
player in the game.
    An exception to the requirement that the card must always be shown 
is made for alternative display during a graphical display presented as 
a second screen during a bonus prize round which is intended for 
entertainment only. The screen will return to its normal display, 
including a card, at the conclusion of the round.
    The card may contain one free (covered) space without a specified 
number or other designation, provided the free space is located 
identically on every card in play or available to be played in the 
game.
    When the Commission issued regulations in 1992, it recognized that 
Congress did not intend to limit bingo to its classic form and that, if 
it had, Congress could have spelled out further requirements such as 
cards having the letters B I N G O across the top with numbers 1-15 in 
the first column, etc. See 57 FR 12382 (April 9, 1992). This early 
rulemaking was not specifically directed at distinguishing between play 
of bingo on electronic player stations from the play of a Class III 
electronic facsimiles or slot machines. The Commission also found that 
in defining Class II to include games similar to bingo, Congress 
intended to include more than bingo in its classic form in that class.
    This interpretation, however, begs the question of what IGRA meant 
by the phrase ``game of chance commonly known as bingo.'' In 
differentiating between bingo and other games similar to bingo, the 
Commission now understands that Congress did intend bingo to be played 
in its ``classic form'' (i.e., its common form) which includes the 
traditional 25 space card but that tribes should also be able to take 
advantage of modern technology to play the game. Accordingly, the 
proposed rule clarifies that bingo played in an electronic medium 
through an ``electronic, computer or other technologic aid'' will be 
played on the classic bingo card, but this may be an electronic card.
    ``Other games similar to bingo'' are games that are bingo-like and 
would not necessarily be played on the classic form of bingo card. With 
the corresponding change to the definition of ``other games similar to 
bingo'' set out in this proposed rule, the Commission believes it is 
not taking a step back on what is included within Class II but giving 
correct meaning to the terminology. Bingo is played on a classic card; 
games that are similar to bingo, but still Class II, can be played on 
non-traditional cards.

[[Page 30244]]

    This is consistent with the holdings in the MegaMania cases. As the 
Tenth Circuit noted:

    In this case, MegaMania meets these three criteria. Specifically 
it is played with an electronic card that looks like a regular paper 
bingo card containing a grid of numbers and the first persons to 
cover a previously designated arrangement of numbers--in this case 
five straight line spaces and the necessary corner spaces--wins a 
monetary prize.

U.S. v. 162 Megamania Gambling Devices, 231 F. 3d 713, 719 (10th Cir. 
2000).

Prizes

    Because bingo is ``played for prizes'' and ``won by the first 
player'' covering, the winning prize must have meaningful value 
compared to the entry fee for the game. The Commission believes that 
while this prize need not be the highest value prize in the game, or be 
greater than the amount wagered, it should have significant value. 
Accordingly, the Commission places a value of at least 20% of the 
amount wagered and one cent as the minimum value for a game-winning 
prize.
    Other prizes, referred as to ``bonus prizes'' and ``progressive 
prizes,'' to distinguish them from ``game winning prize,'' may also be 
awarded based on a player completing another pre-designated pattern 
during the game. Each such designated pattern or arrangement must also 
be disclosed to the players upon request before the game begins.
    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 than 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 based 
on a combination of these conditions. The bonus prize may also be 
limited by game rule to obtaining the required pre-designated pattern 
in a specified quantity of numbers or other designations released 
before the game-winning pattern is obtained by a player in the game. 
Bonus prizes take two forms: Interim and consolation. Interim prizes 
are prizes won before or at the same time the game winning prize is won 
but based on the player covering a pre-designated pattern other than 
the pre-designated winning pattern. Consolation prizes are won by 
another player in the game after the winning player successfully covers 
the pre-designated game-winning pattern. The difference is that 
consolation prizes require an additional release of numbers or other 
designations.
    In bingo, lotto, and ``other games similar to bingo,'' the game is 
``won'' by the first player covering the pre-designated winning 
pattern. Consequently play must stop, or pause, when the last number or 
other designation that forms the pre-designated game-winning pattern is 
released to the players for the game-winning player to cover the 
pattern, announce bingo, and claim the win. A player may win an interim 
prize using the quantity of numbers or other designations necessary to 
form the game winning pattern or a lesser quantity of such numbers or 
other designations and claim that prize at the same time the game-
winning player claims the game-winning prize. However, another release 
of numbers or designations is required for the players remaining in the 
game to receive the numbers or other designations that appear on their 
card(s) and try to obtain the pre-designated pattern for a consolation 
prize(s), assuming the game does not end with the award of the game-
winning prize and continues through one or more consolation prize 
rounds.
    Under the proposed regulation, each game must provide an equal 
chance of obtaining any winning pattern for each card played by an 
active player in the game. The probability of achieving any particular 
pre-designated winning pattern must be the same for all cards played in 
a game and may not vary based on the amount wagered except that a 
minimum wager may be established as a condition of eligibility to win a 
progressive prize. All prizes in the game must be fixed in amount or 
established by formula and disclosed to all participating players in 
the game. Prizes that are not fixed or established by formula, i.e., 
prizes that are random or unpredictable, are not permitted.
    The Commission recognizes that game designers may establish various 
wagering levels in a game. This is permissible provided that all 
players in the game are eligible to compete for all winning patterns in 
the game. The higher wager or entry fee can result in a higher value 
prize but that prize must be based on a pattern or patterns available 
to all players. For example a player entering a game at the one credit 
wager level could cover a particular pattern and win a five (5) credit 
prize, but another player entering at the ten (10) credit level could 
win a higher multiple of the prize based on covering the same pattern.
    A multiplier to the prize or other bonus based on a winning pattern 
containing a specified number or other designation is permitted. 
Similarly, the order of, or quantity of, numbers or other designations 
randomly drawn or electronically determined may affect the prize 
awarded for completing any previously designated winning pattern in a 
game.
    Prizes may not be based on an event not directly related to bingo 
play, such as the spinning of a wheel with eligibility to spin having 
been determined by a player obtaining and covering a specific pattern 
in the game. This subsequent ``chance'' event is not bingo, lotto, or 
an ``other game[s] similar to bingo'' and is not a Class II gaming 
activity. Consequently, it follows that prizes must be established 
before the game begins. A ``second screen'' or ``bonus round'' feature 
is permitted, however, provided the round is for entertainment only and 
the prize was determined through the play of the underlying game of 
bingo, lotto or other game similar to bingo before the bonus round 
commenced. An alternative display may show the award of free games.
    A progressive prize is an established prize for a game, funded by a 
percentage of each player's buy-in 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 jackpot 
must be awarded to the players. A winning pattern for a progressive 
prize is not necessarily the same as the game-winning prize pattern.
    The method of determining the winner of a progressive prize in a 
game must be based only on the play of the game of bingo and may not be 
based on events outside the random selection of numbers or other 
designations and the action of the competing players to cover such 
numbers or other designations on their respective cards to achieve the 
pre-designated winning patterns in the game. As an example, an 
acceptable basis for awarding a progressive prize would be for the 
winning player to obtain a winning bingo pattern in the first five 
numbers drawn in the exact order in which they are drawn.

[[Page 30245]]

    A pattern used to establish the progressive prize must be a pre-
designated pattern that can be obtained by all players in the game. The 
game may provide that only players wagering at or above a certain entry 
level are eligible to win the progressive prize associated with that 
pattern. However, other participants in the game not playing at the 
required minimum entry level to win the progressive prize must be 
eligible to win some other prize if the pre-designated pattern is 
obtained and covered by that player, and the prize claimed.
    Progressive awards with only one participating player station, 
usually called ``stand-alone progressives'' or ``personal 
progressives,'' are not permitted in Class II bingo, lotto, or other 
games similar to bingo played through an electronic medium. In 
``personal progressives,'' eligibility to participate and win is based 
upon some identifying factor, such as a player tracking card. As an 
example, a prize for the lone eligible player might be greater on the 
player's 1000th game or a game between 500 and 600 as determined by a 
random number generator. These formats introduce an additional element 
of chance into the prize award not involved in the play of the game by 
all the participants in the game and, thus, fall outside the definition 
of Class II gaming.
    ``Mystery Jackpots,'' where winners are determined from events 
outside the play of game, e.g., a format in which a player's bet causes 
a hidden jackpot amount to be exceeded thus enabling the player to play 
for that jackpot, are not permitted. In this format, an event outside 
the play of bingo, lotto, or an other game similar to bingo triggers 
the unique prize award for that player.
    A ``gamble feature,'' sometimes called a double up, double play, or 
double pay, etc., may not be used with Class II bingo, lotto, or other 
games similar to bingo played through an electronic medium. They are a 
pretext to alter the fundamental concepts under the IGRA by which 
prizes in a bingo or lotto game or an other game similar to bingo are 
awarded. These prize multipliers provide the opportunity, after the 
completion of the game, for a separate ``double or nothing'' wager. As 
such, they do not fall within the definition of Class II games.
    Similarly, a separate game or wager to convert the fractional 
amount left in player credits to either the coin value of the game or 
nothing, often called ``residual credit removal,'' does not fall within 
the definition of Class II gaming. These credits must stay on the 
player station credit meter for use by the current or a subsequent 
player until their accumulated value reaches the coin value of the 
game.
    The award of additional ``free'' games as a marketing tool is 
permitted so long as all players that participated in the game that 
initiated the prize of a free game or games receive the same number of 
free games. This is not considered to be the award of a prize outside 
the play of the game. Essentially, as part of its marketing program, 
the house determines that all players in a particular game will receive 
additional game credits to use in later games.
    Finally, a tribal gaming operation may in its discretion offer 
extraneous marketing prizes such as a ``good neighbor prize'' awarded 
to the player sitting next to a player winning a large jackpot 
progressive prize. This prize is not the result of consideration paid 
by the player winning the progressive or by the player winning the good 
neighbor prize. It is merely the gaming operation exercising a 
marketing decision.

VII. Bingo, Lotto, and Other Games Similar to Bingo Are Games in Which 
the Holder of the Card Covers the Numbers or Other Designations on the 
Player's Card When Objects Similarly Numbered or Designated Are Drawn 
or Electronically Determined

    In the game of chance commonly known as bingo, numbers or other 
designations are drawn from a pool of 75 such numbers or other 
designations. The term ``designations'' can mean letters or figures and 
may include attributes such as color which provide a unique quality to 
a number, letter, or figure that is used more than once in the game. 
The random draw or electronic determination of the numbers or other 
designations must be from a non-replaceable pool, meaning that, for 
each game, the numbers or other designations randomly drawn or 
electronically determined are not put back in the pool to be drawn 
again in that game. For example, if the number B-15 is drawn or 
electronically determined, it cannot be used again in that game. At the 
end of the game, all numbers or other designations are returned to the 
pool to be drawn in the next game.
    In bingo and lotto, the use of a non-replaceable pool of 75 numbers 
or other designations is matched with a card containing 25 non-
repeating spaces. For ``other games similar to bingo'' the Commission 
believes that the non-replaceable pool of numbers or other designations 
must consist of a number greater than the number of spaces on the card 
to be used in the game.
    A common draw or electronic determination of numbers or 
designations may be utilized for separate games that are played 
simultaneously.
    In bingo, lotto, and ``other games similar to bingo'' played 
through an electronic medium, cards containing pre-covered numbers or 
designations cannot be used. The term ``pre-covered numbers or 
designations'' means that the numbers or designations were selected 
before an individual game begins or before players accept the card or 
cards each will play and are marked as having been covered. 
Accordingly, the proposed rule provides that numbers must be selected 
in real time during the game, as part of the game, and not drawn early 
and stored for later use. No exception is made for ``bonanza bingo'' 
style games, although the Commission acknowledges that this form of 
play may be found in live session bingo play.
    Under IGRA, a game is Class II bingo only if players are required 
to cover the numbers or other designations on their cards in ``real 
time'' (the actual time that it takes a process to occur) or ``near 
real time'' response to those numbers or other designations being 
drawn, and if the first person to cover a designated pattern of those 
numbers or other designations on a card held by that player wins the 
game. The requirement that a player cover when objects are drawn means 
that games that use pre-drawn numbers cannot constitute bingo or an 
other game similar to bingo. Some have argued that for the purposes of 
IGRA ``when'' means ``after'' and that it should not matter how long 
after balls are drawn that the card is daubed, thus allowing for pre-
drawn numbers. This is contrary to the common meaning of the word 
``when.'' Webster's Collegiate Dictionary (10th ed.) defines the 
conjunction ``when'' as:

    1a: at or during the time that: WHILE * * * b: just at the 
moment that * * * c: at any or every time that * * * 2: in the event 
that: IF * * * 3a: considering that * * * b: in spite of the fact 
that: ALTHOUGH * * * 4: the time or occasion at or in which * * *.

    This definition is counter to the proposition that ``when'' means 
``at any point after.''
    The random draw by either a bingo blower or some other method where 
numbers are ``electronically determined'' must occur in real time or 
very near in real-time to the actual play of the particular bingo game. 
The act of covering the numbers must occur in close proximity to the 
drawing of those numbers or in real time. Allowing a game time to 
distribute numbers through a network of terminals to help ensure 
continuity of fast paced

[[Page 30246]]

electronic bingo games would be logical. In the Commission's view, 
however, consistent with statutory intent, such ``near real-time'' play 
contemplates only the lapse of a minimal period of time necessary to 
accomplish these objectives. This time period would be measured in 
seconds, not minutes or hours.
    In games with pre-selected numbers or designations, the numbers or 
other designations are chosen by a random number generator at some time 
prior to the cards being sold and then the completed games are stored 
in the host computer and sold to players. By the time the player begins 
participating, the game has been played within the machine or a server 
for the network and the machine distributes the completed game to the 
player. The winning cards are determined at the time the computer draws 
the numbers and matches them against the existing deck, not during the 
course of play. Therefore, the bingo player is not ``covering'' a 
previously designated arrangement and the ``covering'' is not happening 
``when'' the objects are drawn.
    An acceptable ``electronic, computer, or other technologic aid'' to 
the play of bingo, lotto, or ``other games similar to bingo'' could 
include the capability for the player to cover all of the numbers or 
other designations drawn and released to the point the player instructs 
the aid to perform the cover action on the electronic card used by that 
player in the game. In other words, the player does not have to touch 
each number or other designation on the card to cover the number, or 
use an electronic pen or ``dauber'' to mark each number or designation. 
Instead, the player can touch the screen or a designated button to 
perform this function. This action must occur after each release of 
numbers or other designations in the game because players must cover 
``when'' numbers or designations are released, as discussed above. (The 
numbers may be released in rounds, each round containing one number or 
a set of numbers. In a game designed in this manner, the required cover 
action by players must occur after each round or release of a set of 
numbers.)
    An ``electronic, computer or other technologic aid'' cannot employ 
a feature whereby the ``aid'' accepts instruction from the player at 
the beginning of the game to later cover (daub) the numbers that will 
be drawn in later rounds or releases of numbers or other designations 
This is sometimes referred to as total ``auto-daub'' meaning a feature 
incorporated into an aid to the play of bingo, lotto, or an other game 
similar to bingo that automatically performs the requirements for the 
player to cover (daub) numbers or designations on the player's 
electronic card. Use of this feature would mean players were not 
covering ``when'' those numbers were drawn and released. Similarly, the 
equipment would lose its character as an ``electronic, computer, or 
other technologic aid'' to Class II gaming and would become an 
``electronic facsimile'' of the game if it performed all of the 
``cover'' functions for the player without specific player direction or 
if it performed those functions following an instruction from the 
player to cover at some later point ``when'' and if the numbers other 
designations were drawn. The device would essentially play the game for 
the player. The player would merely start the game, watch play unfold, 
and be paid any amounts won without further action.
    It follows that a player should have a reasonable opportunity to 
cover the numbers or other designations after those numbers or other 
designations are released before forfeiting the use of the covered 
numbers or designations. The Commission believes a minimum time of two 
(2) seconds is appropriate in each round for players to have an 
opportunity to accomplish this function. If all players have covered 
sooner, the game may proceed.
    To ``sleep'' or to ``sleep a bingo'' means that a player fails, 
within the time allowed by the game: (i) 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, or (ii) to claim the 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.
    Because each game of bingo, lotto, or other game similar to bingo 
must have a winning player (game is ``won by the first player'' 
covering a pre-designated pattern), it follows that a player who fails 
to cover the game-winning pattern on that player's card(s) under the 
time permitted by the rules of the game ``sleeps'' that game-winning 
pattern, and the game must continue for some player in the game to win 
following a subsequent release of numbers or designations. Game rules 
may specify a time period of not less than two seconds for this cover 
opportunity to facilitate movement in the game and speed play. If the 
game waited endlessly for a non-attentive player to cover, other 
players would be stuck in the game waiting for additional numbers or 
other designations to be drawn and released, and the opportunity to 
play the subsequent round. A player who fails to cover the numbers or 
designations making up that game-winning pattern released in the first 
round or in a subsequent round may later cover those numbers or 
designations (``catch-up'') and still remain eligible to win the game-
winning prize, provided that prize has not been awarded to another 
player who covered the numbers or other designations making up the 
pattern and claimed the prize. However, a player failing to cover 
(daub) those numbers or designations within the permitted time loses 
the opportunity to make a pattern from those numbers or designation 
that could result in a bonus or progressive prize.

VIII. Bingo, Lotto, and Other Games Similar to Bingo Are Games Won by 
the First Person Covering a Previously Designated Arrangement of 
Numbers or Other Designations on the Card or Cards Held by the Player

    Key to understanding IGRA's third statutory element is an 
examination of the term ``first person.'' The Commission understands 
Congress's use of this term to indicate that bingo, lotto, and ``other 
games similar to bingo'' must be played by more than one person if 
there is to be a ``first person.'' In the Commission's view, bingo, 
lotto and ``other games similar to bingo'' are games where broad 
participation is favored, although the Commission recognizes that a 
simplistic reading of the IGRA requirements would allow the game to be 
played only by two (2) players. Furthermore, players must be competing 
for all available winning patterns in the game including all patterns 
associated with the bonus prizes and the progressive prize, if any, in 
the game. In other words, the game and all prize patterns associated 
with it must be played by more than one (1) person and preferably by 
many players.
    The need for multiple players is also a factor distinguishing 
``electronic, computer, or other technologic aids'' from electronic 
facsimiles of a game of chance in that an ``aid'' facilitates broad 
participation in the game. Accordingly, the Commission wants to make 
clear that a network of linked player stations for the play of bingo, 
lotto, or other games similar to bingo must be designed to facilitate 
broad participation and not limit play to two (2) players. In an effort 
to quantify this for game design, the Commission proposes that games 
encourage play with six (6) or more participants. It has drafted the 
rule to allow a short but reasonable period for these additional 
players to enter the game after the first player enters. If six

[[Page 30247]]

(6) players do not enter within two (2) seconds, the game can begin 
with a minimum of two players.
    When played with electronic player stations, players must be linked 
through a networked system. Participating linked player stations may be 
located adjacent to or separately from one another at each location at 
which a common game is played. The networked system may also extend to 
electronic player stations at multiple tribal gaming locations. Players 
at electronic player stations in different locations may be linked into 
a common game.
    The location of any ``electronic, computer, or other technologic 
aid'' assisting game play by providing the random draw or electronic 
determination of numbers or designations used in the game, controlling 
a progressive game, or allowing a player to participate in the game 
must be located on ``Indian lands'' as that term is defined in the 
IGRA. Electronic, computer, or other technologic systems which only 
monitor game revenue may be located elsewhere.
    The patterns or arrangement of numbers or designations which the 
players strive to cover in the game have minimum requirements under the 
proposed rule. A game-winning pattern will have at least three spaces 
on the card in addition to any free space used. Other winning patterns 
will have at least two (2) spaces on the card in addition to any free 
space used. The maximum number of spaces for any winning pattern in a 
game is the number of spaces on the card.
    A game may have more than one game-winning player. In other words, 
ties are permitted. To constitute a tie, each game-winning player must 
use the same number or other designation drawn and released in the game 
that finalizes the game-winning pattern for each player and must cover 
and claim the prize under the procedures described.
    The requirement that there must be a ``first person must cover'' a 
pattern also has important implications for the game. Participants must 
take an active role during the competition in covering the numbers or 
other designations on their cards when the numbers are drawn.
    The third statutory requirement also means that there must be at 
least two (2) releases of numbers before a winning game-ending pattern 
is created. The statutory language, ``won by the first person,'' 
describes a contest or race among players to be the first to win. 
Central to ``the game of chance commonly known as bingo'' is the 
competition built up over the course of successive ball draws, as each 
player covers matching numbers or designations in an attempt to be the 
first to cover the winning pattern. No such challenge exists where all 
of the balls are revealed at once. Said differently, if all the balls 
necessary to produce a game-winning pattern are drawn at once, the game 
will likely end with only one ball draw, thereby removing the contest 
element.
    This interpretation of the statutory definition, requiring balls to 
be released in multiple rounds during the course of the game, is 
supported by case law. In the Ninth and Tenth Circuits' opinions on 
MegaMania, the courts found that the game was Class II. U.S. v. 103 
Electronic Gambling Devices, 223 F.3d 1091 (9th Cir. 2000); U.S. v. 162 
MegaMania Gambling Devices, 231 F. 3d 713 (10th Cir. 2000). The courts 
reached their decisions after an analysis of the play of the game for 
whether it met the statutory criteria for bingo. According to the 
courts, in MegaMania numbers are drawn by a bingo blower and released 
three balls serially at a time. If a player wants to continue playing 
the game after the first three balls are drawn, the player pays 
additional money to stay in the game for the release of the next three 
balls. The game is won by the first person to cover a five-space 
straight line on an electronic bingo card.
    Intrinsic to the play of MegaMania were the successive rounds that 
a player must engage in to win the game. The game cannot be won after a 
single release or numbers or other designations. The Ninth Circuit's 
ruling-limited as it was to the facts-recognized an inherent character 
of bingo: that the game requires a player to participate in a process 
of numbers being revealed. MegaMania could be won by two successive 
releases and so the Commission does not require more than two releases 
of one or more numbers or other designations. However, the Commission's 
interpretation of IGRA's definition of bingo, with the winner being the 
first to cover, does require more than one release. Consequently, the 
quantity of numbers or other designations released in the first round 
must be some number less than the number of balls required for a player 
to achieve the win, that is, cover the game-winning pattern.
    Furthermore, in Megamania, the balls, although released in clusters 
of three, they each rolled out one at a time. They did not pop out 
three at a time. This roll out of each individual ball allowed players 
to track the balls and the game. We believe that this serial release of 
the balls is a practical approach for allowing players to identify what 
numbers they are covering. The requirement that the release take 2 
seconds also allows the player a minimum time to view the balls as they 
are released.
    The Commission is wholly cognizant of the Ninth Circuit's caveat 
that, ``Whatever a nostalgic inquiry into the vital characteristics of 
the game as it was played in our childhood or home towns might 
discover, IGRA's three explicit criteria constitute the sole legal 
requirements for the game to count as class II bingo. `` 103 Electronic 
Gambling Devices, 223 F.3d at 1096. This interpretation of the third 
statutory element, consistent with both case law and the statutory 
definition, respects what the Commission understands ``the game of 
chance commonly known as bingo'' to be. As previously discussed, the 
Commission is concerned that the lines between what constitute Class II 
and Class III games are being blurred by technological advances that 
Congress could not have foreseen and did not explicitly address in 1988 
when it enacted IGRA, with its three simple statutory criteria for what 
constituted bingo. The Commission nonetheless must continue to 
distinguish Class II from Class III games because Congress 
distinguished between them. The Committee Report on the bill that 
became IGRA noted that ``both state and tribal governments have 
significant governmental interests in the conduct of class III 
gaming.'' S. Rep. 100-446, p. 13. Having weighed the merits of 
different interpretations of the third statutory requirement, the 
Commission believes that requiring multiple ball releases, in the 
format described, is in keeping with the statutory language, case law, 
and with its concern that play of bingo must be distinguishable from 
the play of a slot machine, over which Congress intended tribes and 
states to compact.

IX. Use of ``Electronic, Computer or Other Technologic aids'' in the 
Play of Bingo, Lotto, and ``Other Games Similar to Bingo'' Through an 
Electronic Medium.

    In light of the Commission's understanding of IGRA's statutory 
requirements as well as the distinction between ``aids'' and 
``facsimiles,'' the Commission believes the following steps describe 
the play of bingo, lotto, or ``other games similar to bingo'' in an 
electronic medium, as Class II gaming.
    (1) A request for entry into the game;
    (2) A release of a group of balls, one at a time, in no less then 
two seconds;
    (3) A first cover (daub) opportunity of at least two seconds for 
all competing players in the game to cover (daub) the numbers or other 
designations on their cards that correspond to the numbers or

[[Page 30248]]

other designations drawn and released in the first round and action by 
the players to cover (daub) the numbers or other designations on their 
cards following this release;
    (4) A second cover (daub) opportunity of at least two seconds for 
all competing players in the game to cover (daub) the numbers or other 
designations on their cards that correspond to the numbers or other 
designations drawn and released in the second round and an action by 
the players to cover (daub) the numbers or other designations on their 
cards following this second release together with an action to claim 
any prize won.
    The minimum two-second opportunity for covering (daubing) the 
selected numbers or other designations in each release that appear on 
players' cards may be shortened, and the game may proceed, if all 
players in the game cover (daub) their cards in less time.
    One or more additional releases and cover (daub) opportunities may 
be necessary, if there is not a winner in the game following the second 
release and cover (daub) opportunity. A game design may provide for 
more than two releases prior to a winner being determined.
    Using these three steps, 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:
    (1) To enter and begin the game, each player accepts the card or 
cards to be used by that player and requests entry into the game by 
selecting an amount to wager and pressing or touching a button showing 
the word ``play'' or other similar designation. The cards must meet the 
requirements specified in Part 546 and any Technical Standards issued 
by the Commission.
    (2) After the game begins, one or more unique numbers or other 
designations must be randomly drawn or electronically determined, 
without replacement, from a finite pool of numbers or other 
designations. For example, if the number B-15 is drawn or 
electronically determined, it cannot be used again in that game.
    (3) Each game must permit the random draw and release or electronic 
determination of all numbers or designations in the non-replacement 
pool of such numbers or other designations. Numbers or other 
designations must be selected and used immediately in real time by the 
competing players in the game for which they are drawn or 
electronically determined, that is they cannot be selected and released 
until all players have entered and the game has actually commenced. 
Selected numbers or other designations must be used in the sequence in 
which they are drawn or electronically determined.
    (4) Numbers or other designations will be randomly drawn or 
electronically determined and released to players in separate multiple 
rounds. Each round may consist of one number or other designation or a 
set of numbers or other designations. The numbers or other designations 
selected must be displayed to the player in the sequence they are used 
in the game. When each release of numbers or designations occurs, the 
technologic aid may highlight the numbers or designations on the card 
that a player should cover (daub) by a change of color that changes 
again when the player covers (daubs) those numbers or designations.
    (5) Prizes cannot be won in the first release of numbers or other 
designations, meaning that players are required to participate and 
compete through the random determination and release of at least two 
rounds as part of the contest to be the first to cover the winning 
pattern.
    (6) All players must have an opportunity to cover (daub) their 
cards after each release to reflect their participation in a common 
game. Players may cover (daub) 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 (daub) action. Following this 
action by a player, the video screen at that player station must 
display a different color or other marking on the number or designation 
on that player's card if that number or designation has been properly 
covered (daubed) by the player. Players must be notified that they 
should cover (daub) their cards when the numbers or designations are 
revealed. For each cover opportunity, the game must wait (indefinitely) 
until at least one player performs the cover (daub) action.
    (7) After the first release and cover (daub) opportunity by all 
players, a subsequent number or set of numbers or other designations 
must be released. The quantity of numbers or designations released in 
each subsequent round 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. Following each 
subsequent release, all players must again have the opportunity to 
cover (daub) the spaces on their cards that contain any of the numbers 
or designations randomly drawn and released or electronically 
determined. Numbers or other designations covered (daubed) by a player 
must stay covered throughout the play of the game.
    (8) A player wins the game by being the first player(s) in the game 
to cover (daub) a pre-designated game-winning pattern or arrangement of 
numbers or other designations and, after the release of at least the 
second set of numbers or other designations, claiming the win by 
touching the screen or a button showing the word ``cover,'' ``daub,'' 
``claim'' or other similar designation within the time allowed by the 
rules of the game which must be at least two seconds.
    (9) A player who ``sleeps'' a potentially winning pattern or fails 
to timely claim that winning pattern and thereby forfeits the win based 
on that pattern, must be informed by an indication on the player 
station video screen that the player has ``slept'' the win. Numbers or 
other designations that have been slept must be clearly and uniquely 
marked on the player's card. Note that a player who fails to cover 
(daub) the numbers or other designations drawn and released in the 
first round, or a subsequent round, within the time allowed may not 
later use those numbers or other designations in a prize-winning 
pattern other than the game-winning pattern. The player may later cover 
(daub) the numbers or designations (``catch-up'') and be awarded the 
game-winning prize provided the player is the first player(s) in the 
game to cover (daub) the numbers or other designations making up the 
game-winning pattern and claim the win.
    (10) A bingo game cannot end until a player in the game wins the 
game winning prize i.e. obtains a pre-designated game-winning pattern, 
timely covers (daubs) all of the numbers or other designations in the 
pattern, and timely claims the win in the manner prescribed by the 
rules of the game. 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 randomly drawn or electronically determined numbers or 
other designations for a consolation prize(s), provided such criteria 
are clearly stated in the rules available to the players.
    (11) After all available numbers or designations have been randomly 
drawn or electronically determined and released that could lead to a 
game winning prize (i.e. no more balls could be drawn that would assist 
in the formation of a game winning prize), the game may allow an 
unlimited length of

[[Page 30249]]

time to complete the last required cover (daub) and claim the prize, or 
be declared void and wagers returned to players and prizes canceled--
the latter action is only to be permitted under strict security control 
of the gaming facility.
    (12) Each player in a game must take overt action to cover (daub) 
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 or other 
designations is released. Each released number or designation 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 
(daub) the numbers or designations drawn and released in each round 
that appear on the player's card. When each release of numbers or other 
designations occurs, the technologic aid may highlight the numbers or 
designations on the card that a player should cover (daub) by a change 
of color that changes again when the player covers (daubs) those 
numbers or designations.

X. Alternative Display of the Results of the Game on the Video Screen 
at the Player Station.

    An electronic player station may offer an alternative technologic 
display of the results of the game in addition to the display of the 
game results on the electronic bingo card. The game results may be 
shown on a video screen using a game theme display such as spinning 
reel icons. If the alternative display is presented, the video screen 
must continue to display the bingo card and results to the player. The 
alternative display of bingo game results may also be shown on a 
secondary display screen.
    The alternative technologic display of bingo game results may be 
shown on a technologic aid using mechanical reels, but only if there is 
also a screen which is a component of the technologic aid which always 
shows the results of the bingo game as well as other important player 
information such as the current bet amount.
    Alternative result display options may only be utilized for 
entertainment or amusement purposes and may not be used to 
independently determine a winner of the game or the prizes awarded or 
change the results of the bingo game in any way.
    Each game must give the player the option to select only the bingo 
card display on a video screen and to play the game using that display 
alone. The video screen may revert to the combined screen with 
alternative display if the credit meter reaches zero.
    If both the electronic bingo card and the additional depiction of 
the results using a game theme display are presented simultaneously, 
the bingo card must be displayed in a manner (size, color, location, 
etc.) that allows the player to clearly see the numbers or other 
designations on the bingo card and any results of covering (daubing). 
At the conclusion of a game, the screen must reflect whether the player 
has won and the value of any win without reference to the alternative 
display.

XI. The Relationship of ``Other Games Similar to Bingo'' as Class II 
Gaming to the Requirements for Bingo Specified by IGRA

    IGRA does not define ``other games similar to bingo.'' The 
Commission initially defined the term to mean any game that met all the 
requirements for bingo and was not a house-banking game. See 57 FR 
12382 (April 9, 1992). In 2002, the Commission revised the definition 
as:

    Any game played in the same location as bingo * * * constituting 
a variant on the game of bingo, provided that such game is not house 
banked and permits players to compete against each other for a 
common prize or prizes.

25 CFR 502.9.
    In the preamble comment to the 2002 revision, the Commission 
explained that under the previous definition, ``other games similar to 
bingo'' were games that met the same precise statutory criteria set for 
bingo. Such a definition would be illogical, the Commission said, 
because a game that met each of the statutory requirements of bingo 
would simply be bingo, making a class of games similar to bingo 
unnecessary. Instead, the Commission said, games similar to bingo 
should be understood to be games:

    that are bingo-like, but that do not fit the precise statutory 
definition of bingo. * * * ``[O]ther games similar to bingo'' 
constitute a ``variant'' on the game and do not necessarily meet 
each of the elements specified in the statutory definition of bingo.

67 FR 41171 (June 17, 2002). In its 2002 revised definition, the 
Commission did not include the statement that such games similar to 
bingo ``do not necessarily meet each of the elements specified in the 
statutory definition of bingo.'' It relegated that idea instead to the 
preamble commentary. The Commission also did not define the term 
``variant.''
    Application of the 2002 definition has been limited and difficult. 
Subsequent to the definition's publication, the Commission endeavored 
to clarify exactly what statutory requirements ``other games similar to 
bingo'' would or would not include. In Bulletin 03-03, for example, the 
Commission determined that at least some of the statutory requirements 
for bingo also had to be met by ``other games similar to bingo'':
    The question before us then is whether any characteristics of bingo 
are so fundamental that a game without them cannot even be said to rise 
to the level of a variant of bingo and, if so, whether numbers drawn 
after the player enters the game is one of them.
    We conclude that there are characteristics of bingo that are so 
critical that games lacking them cannot even be said to be a variant or 
bingo-like.
    In NIGC Bulletin 03-03 (September 23, 2003), p. 5. the Commission 
concluded that having numbers drawn after game play commenced was so 
critical to the character of bingo that games with pre-drawn numbers 
could not even be said to be a game similar to bingo. IGRA requires 
that a player cover when the numbers or objects are drawn [25 U.S.C. 
2703(7)(A)(i)(II)], the Commission observed. The act of covering the 
numbers must occur in close proximity to the drawing of those numbers 
or in ``real time.'' Covering numbers substantially later than numbers 
are drawn or determined is not consistent with the dictionary 
definition of ``when.'' As a result, games in which numbers are not 
drawn and covered after play begins do not meet the second statutory 
criterion and are not bingo, the Commission reasoned. Neither can these 
games be ``other games similar to bingo,'' it stated.
    The Commission continues to believe that pre-drawn numbers are 
anathema to games similar to bingo. The Commission also believes that 
the other IGRA requirements are so critical to bingo that games lacking 
them cannot be ``other games similar to bingo'' within the definition 
for Class II gaming. For example, the Commission views the requirement 
that the game is won by the first to cover a pre-designated pattern or 
arrangement of numbers or other designations to be a characteristic of 
bingo so critical that games lacking this feature cannot be games 
similar to bingo.
    While the Commission believes it cannot dispense with these 
important statutory criteria when evaluating ``other games similar to 
bingo'' for Class II determination, it also believes there can be a 
variation in applying the statutory criteria. This approach gives

[[Page 30250]]

meaning to the category of games to which Congress referred in IGRA as 
``other games similar to bingo'' within Class II but which were not 
specifically defined.
    The proposed regulation on ``games similar to bingo,'' born out of 
the Commission's experience with past definitions, its desire to 
clarify what constitutes a ``variant,'' and its observations about 
advancing bingo technology, thus has the following effect. ``Other 
games similar to bingo'' will not include games with pre-selected 
numbers, although such games may be ``pull-tabs'' or ``instant bingo.'' 
(These are games distinct from ``other games similar to bingo.'') 
Players also must cover the numbers or other designations on their 
cards, whatever the size or shape of the card may be, ``when'' numbers 
or other designations are randomly determined and released and the 
winning player will be the first to cover a pre-designated pattern on 
the card. Games in which players do not play for pre-designated 
patterns or do not require the winning player to be the first player to 
cover numbers or other designations making up a pre-designated game-
winning pattern on a card cannot be Class II bingo, lotto, or an 
``other game similar to bingo'' under the IGRA definition.
    Under the revised definition for ``other games similar to bingo,'' 
the game of ``keno'' will continue to be viewed by the Commission as a 
Class III game because it is not played with pre-designated patterns as 
an objective and players are not competing against each other to be the 
player to cover a pre-designated winning pattern. In keno players 
simply bet that they have selected the winning numbers to be drawn from 
a pool of such numbers, usually 80.
    The proposed regulation also departs from the previous definition 
in that it deletes the requirement that ``other games similar to 
bingo'' not be a house-banked game. The proposed regulation also 
emphasizes that the format of the game must require players to compete 
against each other for a common prize or prizes rather than merely 
permitting player competition.
    In short, the Commission believes that a ``variant'' of the game of 
bingo is a game that is bingo-like but is played on a card displaying 
numbers or other designations that is not the classic bingo card 
format. Additionally, the winning numbers will be drawn from a pool no 
larger then 75. In other words, under the revised definition, all of 
the statutory requirements for bingo would be present, but the game 
would be played on a variant of the typical bingo card. This 
interpretation of the term ``variant,'' along with elimination of the 
requirement that the game not be house-banked, will mean that bingo, 
lotto, and ``other games similar to bingo'' will be treated equally for 
purposes of defining the limits of Class II gaming. The fundamental 
aspects of each game as Class II gaming under the IGRA definition will 
be the same. Game designers will have the opportunity to design games 
that are not tied to a classic bingo card, but the games will always be 
played in a bingo-like manner.

XII. Use of State Law in Determining Whether a Game is Bingo, Lotto, or 
an ``Other Game Similar to Bingo'' Under IGRA

    As noted in Commission Bulletin 03-03, the holding in Julius M. 
Israel Lodge of B'nai B'rith v. Commissioner of Internal Revenue, 98 F. 
3d 190 (5th Cir. 1996) also supports the Commission's view that state 
laws allowing play of games do not affect the analysis of what 
constitutes bingo, lotto, or an ``other game similar to bingo'' under 
IGRA. The taxpayer in the case argued that bingo and instant bingo were 
authorized under Texas law. The Fifth Circuit dismissed the argument, 
saying ``As a threshold matter, we dismiss the taxpayer's contention 
that we must look to Texas state law in determining whether Instant 
Bingo is exempt from federal taxation under the federal tax code.'' 98 
F. 3d at 191, n. 2.
    States may designate whatever games are legal within their borders. 
That some state codes describe, for example, bonanza bingo as a pre-
drawn game and allow it for play as it would a bingo game does not 
address the question of what constitutes bingo, lotto, and ``other 
games similar to bingo'' for the purposes of IGRA.

XIII. Additional Comment Regarding Player Against Player Competition in 
Bingo, Lotto, and ``Other Games Similar to Bingo.''

    The Commission believes that Congress intended the play of Class II 
bingo, lotto, and ``other games similar to bingo'' to involve 
competition among players to determine the winner. In other words, 
players do not compete against the house to win but against others 
playing the game simultaneously. This application is simple enough in 
live session bingo in which the house sponsors a game at a particular 
time, sells bingo-faced cards, calls numbers, and awards a prize to the 
first player covering a pre-designated pattern on the card held by the 
player. The application is more difficult when the players engage in a 
fast play game on electronic player stations with electronic cards. The 
conclusion that Congress intended Class II bingo to be a competition 
with and against other players is also key to the distinction between 
Class II bingo using ``electronic, computer, or other technologic 
aids,'' in which players actively play against each other throughout 
the course of the game, and Class III electronic facsimiles of a game, 
in which players play against a machine.
    The Commission notes the trend in ``electronic bingo'' games using 
technologic aids is to offer a player the opportunity to compete 
against other players for a pre-designated ``game-winning'' pattern 
(referred to in some game designs as a ``game-ending'' pattern) while 
at the same time offering players the opportunity to compete for higher 
value, pre-designated, ``interim prize'' patterns. In these games 
players ostensibly compete against one or more other players to be the 
first to obtain the necessary numbers and then cover the pre-designated 
``game-winning'' pattern. The result is that the game ends and the 
winning player registers the credits associated with that pattern on 
the credit meter at his or her player station. More often than not, 
this prize has only minimum value. More important to the player, the 
games offer the opportunity to win larger value prizes if the player is 
successful in obtaining one or more of the many other pre-designated 
bonus--prize winning patterns rather than the ``game-winning'' or 
``game-ending'' pattern offering minimum prizes. There is a fine line 
between whether play for these other patterns is play against the 
machine or the controlling game server, which is a Class III gaming 
activity, and competition against other players, which is Class II.
    In an effort to preserve the sense that these games involve player 
against player competition, the Commission interprets the statutory 
requirements for bingo, lotto, and ``other games similar to bingo'' to 
mean that all players in an individual ``game'' must be competing for 
the same set of these other pre-designated winning patterns and each 
player's successful quest for these patterns must be accomplished by 
the time the first player obtaining the so-called ``game-winning'' 
pattern obtains and then covers the numbers on the card producing that 
pattern. In other words, the competition for the patterns producing the 
higher value ``interim prizes'' must be in sync with the competition 
for the game-winning pattern. If it is not, the players are not in 
competition with one another but in

[[Page 30251]]

competition with the controlling game server, and in that respect, the 
house. This would make the game an ``electronic facsimile'' of a 
lottery.

XIV. Classification Standards for Pull Tabs, Electronic Pull-Tabs and 
``Instant Bingo''

    The proposed regulation includes definitions for the terms ``Pull-
tabs'' and ``Instant Bingo.'' The definitions used by the Commission 
are drawn from federal case law.
    The definition of a pull-tab game is drawn from the definition used 
by the Court in Cabazon Band v. NIGC, 827 F. Supp. 26, 28 (n. 2)(D.D.C. 
1993), aff'd 14 F.3d. 633 (D.C. Cir. 1994) wherein the Court described 
the game as follows:

    The game of pull-tabs is a game of chance played traditionally 
as a paper game. Players purchase outwardly identical cards from a 
stack of cards (the ``deal''). The deal includes a pre-determined 
number of winning and losing cards. The player opens the tab and 
finds out if the card is a winner.

Under IGRA and Commission regulations, the paper game of pull-tabs is 
Class II when played in the same location as bingo. See 25 U.S.C. 2703 
(7)(A)(i)(III) and 25 CFR 502.3(b).
    A wholly electronic version of pull-tabs is played with a similar 
underlying concept, but without any tangible or paper pull-tab deals. A 
player obtains an electronic ``card'' or ``ticket'' that is displayed 
for the player on a video monitor from a ``stack'' of similar ``cards'' 
or ``tickets'' stored electronically. Using the electronic equipment 
available to the player, the player ``opens'' the electronic pull-tab 
and examines the combinations on the video screen to determine if she 
has a winning combination. As with paper pull-tabs, the ``deal'' is 
finite which is to say that the numbers of winning and losing tickets 
are known when the ``deal'' is loaded electronically into the gaming 
equipment. In some versions, the deal is contained in a cartridge or 
series of cartridges that are loaded individually into a single player 
terminal. In others, the deal is loaded into a central computer that 
can be accessed through a number of individual player terminals.
    In either of these instances, the game does not exist in paper 
format or any other tangible format, but only in an ``electronic'' 
format. As such, the game becomes an ``electronic facsimile'' game of 
paper pull-tabs and, by the statutory definition, cannot be a class II 
game. See 25 U.S.C. 2703(7)(B)(ii).
    This analysis finds support in Cabazon Band of Mission Indians v. 
National Indian Gaming Commission, 14 F.3d 633, 636 (D.C. Cir. 1994) 
(Cabazon II) wherein the Court noted:

    There is now a computerized version of pull-tabs. The computer 
randomly selects a card for the gambler, pulls the tab at the 
gambler's discretion, and displays the result on the screen. The 
computer version, like the paper version has a fixed number of 
winning cards in each deal. The computer may be interconnected so 
that each gambler simultaneously plays against other gamblers in 
pods or banks of as many as forty machines.
* * * * *
    [T]he tribes concede that the video version of pull-tabs is the 
same game as the paper version. * * * Because class II gaming does 
not include ``electronic or electromechanical facsimiles of any game 
of chance'' (25 U.S.C. Sec.  2703(7)(B)(ii)), this concession alone 
demonstrates that the video game is not in the class II category. 
``By definition, a device that preserves the fundamental 
characteristics of a game is a facsimile of the game.'' Sycuan Band 
of Mission Indians v. Roach, (S.D. Cal. 1992). As commonly 
understood, facsimiles are exact copies or duplicates. Although 
there may be room for a broader interpretation of ``facsimile,'' the 
video version of pull-tabs falls within the core meaning of 
electronic facsimile. It exactly replicates the paper version of the 
game, and if that is not sufficient to make it a facsimile, we doubt 
* * * that anything could qualify.
* * * * *
    * * * [T]he Act's exclusion of electronic facsimiles removes 
games from the class II category when those games are wholly 
incorporated into an electronic or electromechanical version.

Cabazon II, 14 F.3d, at 636.
    See also Sycuan Band v. Roache, 54 F.3d 535 (9th Cir. 1995) which 
considered an electronic pull-tab device known as the Autotab Model 101 
and found the device to be class III. (``The `Autotab Model 101 
electronic pull-tab dispenser' is a self-contained unit containing a 
computer linked to a video monitor and a printer. The player 
electronically reveals concealed numbers to determine whether he or she 
is a winner. * * * The game retains the fundamental characteristics of 
the paper version of pull-tab: the video pull tab machine is supplied 
with a computer chip cartridge that insures a predetermined and known 
number of winning tickets from a finite pool of tickets with known 
prizes * * *''. Sycuan, 54 F.3d. at 541.)

    While the Cabazon II and Sycuan cases deal with pull-tabs in 
electronic format, other important cases decided by the United States 
Courts of Appeals for the District of Columbia Circuit, Tenth Circuit, 
and Eighth Circuit discuss ``paper'' pull-tabs played with 
``electronic, computer, or other technologic aids.''
    In Diamond Game Enterprises v. Reno, 230 F.3d 365 (D.C. Cir. 2000), 
United States Court of Appeals for the District of Columbia Circuit 
concluded that a gaming device known as the Lucky Tab II was a 
technological aid to the play of paper pull-tabs and a Class II device 
under the IGRA. There is, however, a substantial difference in how the 
Lucky Tab II game described in Diamond Game is played compared to the 
game in Cabazon II. The Lucky Tab II device uses a paper roll of pull-
tabs that are read by optical scanner and then displayed on a video 
monitor. The Court concluded that the game was not an electronic 
facsimile of the paper game and thus was not excluded from the Class II 
definition. The Lucky Tab II machine was described by the court as 
follows:

    The machine dispenses pull-tabs from a roll containing 
approximately 7500 tabs. About 100 rolls comprise a deal, within 
which winning pull tabs are randomly distributed. The machine cuts 
the pull-tab from the roll and drops it in a tray. A bar code 
scanner inside the machine automatically reads the tab and then 
displays its contents on a video screen. A placard on the machine 
informs players that ``video images may vary from actual images on 
pull tabs. Each tab must be opened to verify.'' To collect prizes, 
players must present the actual winning tab to a clerk. We think the 
Lucky Tab II is quite different from the machine at issue in Cabazon 
II. To begin with, the Lucky Tab II is not a ``computerized 
version'' of pull-tabs. Although the Lucky Tab II has a video 
screen, the screen merely displays the contents of a paper pull-tab. 
Instead of using a computer to select patterns, the Lucky Tab II 
actually cuts tabs from paper rolls and dispenses them to players. 
In other words, the game is in the paper rolls, not as in the case 
of the Cabazon machine, in the computer.

Diamond Game v. Reno, 230 F. 3d at 367-368.
    Thus, the court concluded that ``the machine functions as an aid--
it `helps or supports,' or `assists' the paper game of pull-tabs.'' 
Consequently, the court ruled that the game played with Lucky Tab II is 
not a facsimile of paper pull-tabs, but it is paper pull-tabs.
    The Eighth Circuit Court of Appeals has also held that Lucky Tab II 
was a Class II technological aid. United States v. Santee Sioux Tribe, 
324 F.3d 607 (8th Cir. 2003), cert. denied, 2004 U.S. Lexis 1807 (U.S. 
Mar. 1, 2004). The court's analysis was that:

    Operation of the Lucky Tab II machines does not change the 
fundamental fact that the player receives a traditional paper pull-
tab from a machine, and whether he or she decides to pull the tab or 
not, must present that card to the cashier to redeem winnings. * * * 
the machines do not replicate pull-

[[Page 30252]]

tabs; rather, the player using the machines is playing pull-tabs.

Santee Sioux Tribe, 324 F.3d at 615.
    The Magical Irish Instant Bingo Dispenser System, identical to the 
Lucky Tab II system, was also held to be a ``technologic aid.'' See 
Seneca-Cayuga Tribe of Okla. v. NIGC, 327 F.3d 1019, 1042-44 (10th Cir. 
2003), cert. denied, 2004 U.S. Lexis 1651 (U.S. Mar. 1, 2004). The 
Tenth Circuit Court of Appeals decided that the Magical Irish machine 
was a Class II aid because:

    The Machine (1) cuts tabs from paper rolls and dispenses them to 
players, and when its ``verify'' feature is enabled, displays the 
contents of the paper pull-tab on the video screen; (2) does not use 
a computer to select the patterns of the pull-tabs it dispenses; and 
(3) requires players to peel each pull-tab to confirm the result and 
provide the pull-tab to a clerk for inspection prior to receiving 
any prize.

Seneca-Cayuga Tribe, 327 F.3d at 1043. Therefore, the court concluded 
that the ``Machine is not the game of pull-tabs; rather, the Machine 
facilitates the playing of pull-tabs, the game is in the paper rolls.''
    The Commission understands that courts have concluded that the 
Lucky Tab II and the Magical Irish machines are ``technological aids'' 
because they assist players in playing actual paper pull-tabs. See, 
e.g., Diamond Game, 230 F.3d at 370 (``the machine functions as an 
aid--it helps or supports, or assists the paper game of pull-tabs''); 
Seneca-Cayuga Tribe, 327 F.3d at 1043 (the ``Machine facilitates the 
playing of pull-tabs, the game is in the paper rolls''). These machines 
do not alter the format of the game--the game remains in the actual 
paper pull-tabs, not in a computer or electronic format. See, e.g., 
Seneca-Cayuga Tribe, 327 F.3d at 1043; Diamond Game, 230 F.3d at 370; 
Santee Sioux Tribe, 324 F.3d at 615.
    The proposed regulation relies specifically on the developed 
federal case in this area, as discussed above.
    The Commission recognizes that gaming technology has moved forward 
in the ten years since the Cabazon II and Sycuan cases were decided. 
Nevertheless, the Commission believes these cases continue to represent 
the state of the law for the play of pull-tabs that do not exist in 
tangible format readily accessible to the player. Consequently, the 
proposed regulation requires the pull-tabs or ``instant bingo'' tickets 
exist in tangible medium readily accessible to the player at the player 
station. Pull-tabs that exist in tangible medium remote from the 
player, such as in a controlled storage room at or near the gaming 
facility where the game is played and which are converted to electronic 
images for display at the player station are not immediately available 
to the player. In this method of play, the game is not in the paper, as 
the courts require for Class II play, but is in the computer or 
electronic format, which the courts find to be a Class III electronic 
facsimile.
    Under the proposed regulation, the game may not accumulate credits 
for the player. The player station may not dispense winnings in any 
form. Additionally, the pull-tabs themselves must exist in tangible 
format at the player station and be available for the player and the 
gaming operation to validate the game results and prize, if desired.
    The proposed regulation also permits alternative display of game 
results. The results may appear on a screen using game theme graphics, 
spinning reels, or other imagery. The alternative display of pull-tab 
game results may be shown on a primary screen or on a secondary display 
screen. The alternative display of pull-tab game results may also be 
shown on a technologic aid using mechanical reels but only if there is 
also a screen which is a component of the technologic aid which always 
shows the contents and results of the pull-tab game as well as other 
important player information such as current bet amount.

XV. Process for Certification of Games and ``Electronic, Computer, and 
Other Technologic Aids'' as Meeting the Classification Standards

    The Commission recognizes that Indian tribes are the primary 
regulators for Indian gaming. Accordingly, this proposed regulation 
provides that a Tribe's gaming regulatory authority will be the entity 
authorizing specific games and gaming systems for use in that Tribes' 
gaming operation. From its standpoint, however, the Commission believes 
that establishing uniform minimum classification standards for Class II 
``electronic, computer, or other technologic aids'' is part of its 
oversight role. Before permitting operation and play of Class II 
``aids'' in its gaming operation, the Tribe's gaming regulatory 
authority must ensure that a game or ``aid'' to the play of bingo, 
lotto, or ``other games similar to bingo,'' or pull-tabs or ``instant 
bingo'' is certified as meeting the criteria established by the 
Commission's Classification Standards by an independent testing 
laboratory recognized as qualified to perform such testing. The testing 
laboratory does not ``classify'' the game or ``aid'' or otherwise usurp 
the authority of the Tribe's gaming regulatory authority. Rather, the 
testing laboratory merely provides a report that it has tested and 
evaluated the game or ``aid'' and that the game or ``aid'' meets the 
Commission's Classification Standards. The Tribe may rely on this 
certification. The Tribe may adopt additional classification standards 
that do not undermine the Commission's minimum standards, if it so 
desires, and require testing and certification to the Tribe's 
additional standards as a condition to operation and play of the game 
or ``aid'' in the Tribe's gaming operation.
    The Commission believes that, as a condition of being recognized to 
perform these important evaluations, a testing laboratory must be 
required to demonstrate its integrity, independence, and financial 
stability by providing evidence that it has been licensed in a 
competent jurisdiction that required a thorough background 
investigation as part of the licensing process. The testing lab must 
also demonstrate its technical skill and capability by providing 
evidence that it has conducted suitable testing to standards 
established by other jurisdictions. The NIGC will conduct an onsite 
review of the testing lab's facilities prior to recognizing a lab as 
qualified and competent to perform evaluation and testing under its 
standards. The Commission may extend provisional recognition to a new 
testing laboratory that has not undergone a background investigation 
review for a license or that has not previously provided testing and 
evaluation to comparable standards.
    A testing laboratory recognized by the NIGC should expect to 
demonstrate its continuing level of technical skill through a Key 
Performance Indicator (KPI) analysis evaluated yearly as a condition to 
maintaining its recognition. This KPI analysis will take into account:
    (1) Accuracy of evaluation of Class II Classification and Technical 
standards conducted through periodic audit by the NIGC of the testing 
laboratory's recommendations.
    (2) Reports of serious classification or technical faults in games 
and associated equipment placed in operation in tribal gaming 
facilities following certification by the testing laboratory. To assist 
with this evaluation, tribal gaming regulatory authorities are 
encouraged to report serious classification or technical faults to the 
NIGC Chairman as they become known.
    The Commission recognizes that in some unique circumstances, a 
testing laboratory may have questions about aspects of the 
Classification Standards. Accordingly, the process set out in the 
proposed regulation provides that the laboratory may seek to resolve 
questions with the gaming developer or manufacturer, the sponsoring 
tribe, or

[[Page 30253]]

with the NIGC Chairman. The Commission expects these discussions will 
normally resolve any question.
    In even more unique circumstances, a testing laboratory may not 
properly apply the Classification Standards or may misinterpret those 
standards when it issues a report.
    In these circumstances, the NIGC Chairman may object to a 
certifying laboratory report and require its withdrawal. The Chairman 
will provide notice to the testing laboratory, the requesting party 
submitting the game for evaluation, and the sponsoring tribe, and 
attempt to resolve the matter through negotiation. If the Chairman 
continues to have objection following these discussions, the Chairman 
will issue a determination. This determination by the Chairman may be 
reviewed by the full Commission on appeal from the testing laboratory, 
the requesting party, or the sponsoring tribe. A Commission decision 
upholding the Chairman's objection will constitute a ``final agency 
action'' that may be appealed to federal court.

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

    This proposed rule is not a major rule under 5 U.S.C. 804(2), the 
Small Business Regulatory Enforcement Fairness Act. This rule does not 
have an annual effect on the economy of $100 million or more. This rule 
will not cause a major increase in costs or prices for consumers, 
individual industries, federal, state or local government agencies or 
geographic regions and does not have a significant adverse effect on 
competition, employment, investment, productivity, innovation, or the 
ability of U.S.-based enterprises to compete with foreign-based 
enterprises.

Unfunded Mandates Reform Act

    The Commission has determined that this proposed rule does not 
impose an unfunded mandate on state, local, or Tribal governments or on 
the private sector of more than $100 million per year. Thus, it is not 
a ``significant regulatory action'' under the Unfunded Mandates Reform 
Act, 2 U.S.C. 1501 et seq. The Commission has determined that this 
proposed rule may have a unique effect on Tribal governments, as this 
rule applies to Tribal governments, whenever they undertake the 
ownership, operation, regulation, or licensing of gaming facilities on 
Indian lands as defined by the Indian Gaming Regulatory Act. Thus, in 
accordance with section 203 of the Unfunded Mandates Reform Act, the 
Commission implemented a small government agency plan that provides 
Tribal governments with adequate notice, opportunity for meaningful 
consultation, and information, advice, and education on compliance.
    The Commission's plan includes the formation of a Tribal Advisory 
Committee and request for input from Tribal leaders through government-
to-government consultations and through written comments to draft 
regulations that are provided to the Tribes. Section 204(b) of the 
Unfunded Mandates Reform Act exempts from the Federal Advisory 
Committee Act (5 U.S.C. App.) meetings with Tribal elected officials 
(or their designees) for the purpose of exchanging views, information, 
and advice concerning the implementation of intergovernmental 
responsibilities or administration. In selecting Committee members, 
consideration was placed on the applicant's experience in this area, as 
well as the size of the Tribe the nominee represented, geographic 
location of the gaming operation, and the size and type of gaming 
conducted. The Commission attempted to assemble a committee that 
incorporates diversity and is representative of Tribal gaming 
interests. The Commission will meet with the Advisory Committee to 
discuss the public comments that are received as a result of the 
publication of this proposed rule and make recommendations regarding 
the final rule. The Commission also plans to continue its policy of 
providing technical assistance, through its field offices, to Tribes to 
assist in complying with classification issues.

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.

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 OMB. 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 by the manufacturer 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

[[Page 30254]]

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 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 
ambit 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 analysis 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 20 such manufacturers and 5 such laboratories. 
The frequency of responses to the information collection requirement 
will vary.
    During the first 6 to 12 months after adoption of the proposed 
rule, all existing games or aids in Class II operations that fall 
within this rule must be submitted and reviewed if they are to continue 
in Class II operations. Following that period, the frequency of 
responses will be a function of the Class II market and the need or 
desire for new games or aids. Thus, the Commission estimates that the 
frequency of responses will range over an initial period of frequent 
submissions, settling down into 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 submission will number approximately 200 during the 
first year after adoption and approximately 75 per year thereafter.
    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 is 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 a gathering and 
preparing documentation for a single submission requires, on average, 8 
hours of an employee's time for a manufacturer and that following 
examination and analysis, writing a report and certification requires, 
on average, 12.5 hours of an employee's time for a laboratory. In the 
first year after adoption, then, the Commission estimates that the 
information collection requirements in the proposed rule will be a 
1600-hour burden on manufacturers during the first year after adoption 
and a 600-hour burden thereafter. The Commission estimates that the 
information collection requirements in the proposed rule will be a 
2500-hour burden on laboratories during the first year after adoption 
and a 940-hour burden thereafter. The following table summarizes:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                Collections,
             Provision                   Respondents       Number of   Collections,    Hours per   Total hours     year 2       Hours per       Total
                                                          respondents    1st year     collection                   forward     collection
--------------------------------------------------------------------------------------------------------------------------------------------------------
25 CFR 546.11.....................  Laboratories........            5           200          12.5         2500            75          12.5         937.5
25 CFR 546.11.....................  Manufacturers.......           20           200           8           1600            75           8           600
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Comments: Pursuant to t