On Nov. 10, 2008, the minimum technical standards for gaming equipment used with the play of Class II games went into effect. The regulations taking effect mean something completely different to everyone involved with this process, from the tribal gaming regulator, the Class II gaming system manufacturers and the independent testing laboratory.
During the development of the National Indian Gaming Commission (NIGC) standards, the Tribal Standards Workgroup attendees crisscrossed the country for face-to-face meetings, spent countless hours on conference calls and devoted time on weekends and holidays to their development. For these individuals, the process of having a Class II gaming system grandfathered should be second nature.
In many ways, however, these individuals have the same amount of experience as the rest of the industry in the process of what it takes to actually grandfather a Class II gaming system—zero. The process of testing a Class II gaming system to qualify for grandfathering is new to everyone involved. In this article, we will attempt to provide an overview regarding the important role each party plays in the process and give a summary of the technology behind what drives a Class II gaming system. Hopefully after reading this article, even the not-so-technical people will be able to hold their own in a water cooler conversation about Class II.
Class II is Not Second Class
The statement “Class II is not second class” can be heard at almost any tribal gaming conference, meeting or training session held throughout Indian country. The statement is correct; Class II gaming systems today are some of the most advanced gaming systems in the world. Class II has had server-based gaming technology implemented for more than a decade. Because this technology was not developed by one of the major gaming operators, but was developed by Class II gaming manufacturers and tribal gaming operators, it does not receive the same front-page coverage.
Knowledge = Empowerment; Now I’m an Engineer
One of the biggest Class II concerns is that many people feel they do not understand the technology behind the gaming systems, let alone understand the new technical standards and what they all mean. Typically when people fear technology, they try to avoid the subject at all costs, or worse, begin to develop an understanding on their own that misses the mark. Misinformation puts everyone at a disadvantage, from the tribal gaming regulator to the manufacturer to the independent testing laboratory.
As you begin to understand the technical aspects you once thought were out of your realm of understanding, the clarity of the process will become apparent. This information will not make you an engineer overnight, but it will help you develop a working understanding of the grandfathering process.
In many discussions, panels and conferences, you will hear the term “bright line” thrown around as a way of looking to develop a distinction between Class II and Class III gaming devices. Well, it already exists and has existed since the first Class II gaming systems were developed. To determine if your system is Class II, ask yourself these four questions:
1. Is the electronic player interface receiving game determinations from the server to which it is attached?
2. Do a minimum of two other players need to be present to initiate game play?
3. Is the math of the game derived from a bingo ball draw?
4. If I disconnect the electronic player interface from the server, can I still play the game?
If you answered “yes” to the first three questions and “no” to the fourth question, then you, my friend, have a Class II gaming system. There are many other determining factors as to how the game is played, including specific regulatory standards that govern the play of Class II gaming systems, but these four criteria break it down to the lowest common denominator. Now you can proudly tell your friends about your newfound expertise in Class II gaming systems.
Next, let us tackle the testing process of a Class II gaming system as it applies to the grandfathering provision. Your first question will most likely be, “What does grandfathering mean?” In the Class II world, it refers to the criteria a Class II gaming system needs to meet from a testing perspective to have a Class II gaming system available for play to the public for a period of five years from the date the regulations became effective. The main reason for this provision is to ensure the integrity of the software and that the Class II manufacturers could have that five-year period to bring their system into full compliance. The new NIGC Class II regulations are designed to ensure the integrity of the Class II gaming system software, its fairness, and that it is not designed to mislead the player in any way. The criteria of a system meeting the integrity and fairness standards are measured by successfully complying with the requirements of the following key areas:
1. Section 547.5(c) Fairness:
a) The Class II gaming system applying for the grandfathering provision must not cheat or mislead the player.
b) All advertized prizes should be available for the player to win.
c) No progressive prize shall have a probability of winning less than 1 in 100 million.
d) No other prizes shall have a probability of winning less than 1 in 50 million.
2. Section 547.8(b) Game Initiation and Play:
a) The Class II gaming system must not deviate from the stated rules of the game contained within the game artwork, pay glass, help and rules screen, etc.
3. Section 547.8(f) Software Signature Verification:
a) The manufacturer or developer of the Class II gaming system applying for the grandfathering provision must provide the Tribal Gaming Regulatory Authority an industry standard methodology for verifying the Class II gaming software. Such methodology includes signature algorithms and hashing formulas such as SHA-1.
4. Section 547.14 Minimum Technical Standards for Electronic Random Number Generation:
a) The Class II gaming system’s Random Number Generator (RNG) will be tested for statistical randomness, unpredictability and non-repeatability in the same manner that compacted gaming devices are tested. These tests include but are not limited to the
Chi-squared test, gap test, poker test, diehard test, etc.
b) The numbers produced by the RNG shall pass the statistical tests for randomness at a 99 percent confidence level.
c) The algorithm used must be unbiased and not exceed odds greater than 1 in 100 million.
Successfully passing the testing of these key areas will enable a Class II gaming system to be grandfathered. The mechanics of the grandfathering process involves several stakeholders. The next section addresses the key roles of each group involved in the grandfathering process for Class II gaming systems.
The Tribal Gaming Regulatory Authority
The Tribal Gaming Regulatory Authority (TGRA) has the largest stake in this process. The TGRA is responsible to ensure the following key events happen regarding the testing of a Class II gaming system applying for the grandfathering provision:
• Require the Class II gaming manufacturer to submit the software that affects game play within 120 days after Nov. 10, 2008. This submission must be made to an independent testing laboratory (ITL) recognized by your TGRA.
• Require the ITL to test the submission to the standards set forth in section 547.4 of the new Class II regulations.
• Require that the ITL provide the TGRA with a formal written report certifying the findings of the submission.
Upon receipt of the ITL certification, the TGRA must then write a certification to the Class II gaming manufacturer that the Class II gaming system in question qualifies for grandfathering under the provisions of section 547.4 of the regulations.
As you can see, the TGRA is tasked with many of the key decisions in the process. Depending on the volume of Class II devices in your respective jurisdiction, this process may require the TGRA to dedicate resources to this process to ensure the tribal gaming operation stays in compliance.
The Class II Manufacturer
The Class II manufacturer’s main role is to ensure they meet the criteria set forth by the TGRA and send the required submission to an ITL within the timeframe required. Upon receipt of the qualification letter from the TGRA, the manufacturer must permanently affix a label on each electronic player interface with an identifying number as well as the date of manufacture. The date of manufacturer must be on or before Nov. 10, 2008. This places a limit on the amount of grandfathered electronic player interfaces in the field.
The Independent Testing Laboratory
The role of the ITL is to test the submission to the standards set forth in the regulations, to provide technical advice to the TGRA and work with them to establish a useful knowledge of the process to qualify or grandfather Class II gaming systems.
Available Help
The process of grandfathering is complicated, strenuous and tedious, and can stretch an already taxed TGRA to its limits. But alas, there is readily available help. Some of the best regulatory resources are the National Tribal Commissioners and Regulators Association (NTGCR). The NTGCR is the leading national regulatory organization focused on providing tribal gaming regulators and operators with the training and information needed to better regulate gaming floors. In addition, the Oklahoma Indian Gaming Association (OIGA) and the Oklahoma Tribal Gaming Regulators Association (OTGRA) are both excellent sources of information regarding Class II gaming systems.
From a tribal gaming regulatory perspective, you may want to “ask an Okie.” The majority of tribal gaming operations in Oklahoma have a large Class II footprint and can provide great insight on many different topics concerning Class II gaming systems. The gaming floors in Oklahoma are some of the most advanced in the world today, running in concert both Class II and Class III devices with a single accounting system.
As was initially stated in the beginning of this article, Knowledge = Empowerment. Taking the time to learn and understand all aspects of Class II gaming is a lifelong journey. There are many places to go for assistance and knowledge as described. Tribes have the sovereign right to operate Class II gaming systems and should take full advantage of the technology that is currently in the marketplace today.
Here to Help
Some of the tribal regulators and tribal leaders you may want to tap for guidance would be:
• Barbara Collier, director of the Quapaw Tribal Gaming Agency
• Jaime Hummingbird, director of the Cherokee Nation Gaming Commission
• Richard Chissoe, director of the Osage Nation GamingCommission
• Matt Morgan, director of the Chickasaw Tribal Gaming Commission
• J R Mathews, vice chairman of the Quapaw Tribal Business Committee
• Jess Green, Geoff Standing Bear and Elizabeth Homer, gaming attorneys representing several of the Gaming Tribes of Oklahoma.
All of the individuals listed have worked tirelessly during the development of the new Class II technical standards and minimum internal control standards and continue to fight the good fight and spread the word on the benefits of Class II gaming systems to anyone who will listen.
Additionally, the BMM Regulatory Services team has developed Class II grandfathering submission kits for both Class II gaming systems and Class II session bingo systems, which are designed to assist tribal gaming regulators and operators, providing the procedures, guidelines, checklists and vital information needed to help navigate this difficult task. Learn more about these free kits at www.bmm.com.
Russell Witt is the Director of Field Services for BMM Compliance, where he develops BMM’s field service training plans and service offerings. He can be reached at rwitt@bmm.com.
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