4
August 7, 1997
SMOKE SIGNALS
During the FIRST QUARTER OF 1997, the Grand Ronde
Gaming Commission's workload was dominated by the conduct
of an annual compliance audit, drafting and approving Gaming
Regulations and Minimum Internal Control Standards governing
the new games of Roulette, Pai-Gow Poker and Let-It-Ride Poker,
reviewing and approving the gaming facility's new games request,
staff training on the new games, and continuing with the licensing
of new employees and renewing the licenses of existing casino
staff. Additionally, the Commission began drafting changes to
the Gaming Regulations and Minimum Internal Control Standards
to bring them into compliance with the recently negotiated Tribe
State Compact. During the quarter, the Commission acted on 142
new employee gaming licenses and 148 gaming license renewals.
In addition to agenda items pertaining to personnel licensing
applications, the Commission's agenda also included the follow
ing items relating to the licensure of Major, Minor and Sensitive
Procurement Contractors:
JANUARY 17, 1997 GENERAL SESSION MEETING
1. IGT (A Nevada Corporation), Las Vegas, Nevada, was ap
proved for a temporary Major Procurement Contractor License
until February 1997.
2. Action regarding IGTSodak Gaming, Inc.'s Native American
Wide Area Progressive System was deferred to the Commission
Meeting in February 1997.
3. Wallace Computer Services, Inc., Portland, OR, was approved
for a temporary Sensitive Procurement Contractor License which
expires in March 1997.
4. The Bud Jones Company, Inc., Las Vegas, Nevada, was ap
proved for a temporary Major Procurement Contractor License
which expires in April 1997.
FEBRUARY 21, 1997 GENERAL SESSION MEETING
1. IGT (A Nevada Corporation), Las Vegas, Nevada, was ap
proved for a Major Procurement Contractor License until Febru
ary 1998.
2. A petition filed by the Director seeking approval of the IGT
Sodak Gaming, Inc.'s Native American Wide Area Progressive
System gaming contract was approved.
3. Mikohn Gaming Corporation, Las Vegas, Nevada, was ap
proved for renewal of a temporary Major Procurement Contractor
License which expires in April 1997.
MARCH 21, 1997 GENERAL SESSION MEETING
1. Shuffle Master Gaming, Las Vegas, Nevada, was approved
for licensure as a Major Procurement Contractor. Said licensure
expire in March 1998.
2. Wintech International, Inc., Chantilly, VA, was approved for
licensure as a Sensitive Procurement Contractor which expires in
June 1997.
REGULATION CHANGES:
Following are summarizations of the modifications, amend
ments and additions to the Regulations approved by the Commis
sioners during the first quarter of 1997:
JANUARY 17, 1997 GENERAL SESSION MEETING
REG. 3.030 Primary management official, high security
employee, low security employee and temporary student in
tern. Commission authorized the Gaming Commission Director to
establish procedures staggering the renewal of licenses to con
form to a three (3) year licensing renewal cycle.
REG. 4.010 Application general.
REG. 4.030 Classification of licenses, and other Commis
sion action for which application must be made.
Director petitioned the Commissioners to render guidance and
interpretation of the referenced regulation as same applies to the
licensure of all employees of Spirit Mountain Casino and con
tractors or consultants who have the appearance of an employee.
REG. 4.030, 1., a. Classification of licenses, and other Com
mission actions for which application must be made.
Commissioners approved a new quarterly licensing fee of
$100,000 for Spirit Mountain Casino.
REG. 4.040 Application, notices, statements and reports;
contents; amendments; incorporation by reference; proceed
ings not to have substantive implications.
Commissioners approved modifications to this regulation stat
ing that in all licensing matters or issues of suitability, the Direc
tor shall cause a letter of notification to applicant within ten (10)
working days for granting of unconditional approval, and within
three (3) working days in days in all other licensing decisions.
REG. 5.085 Unauthorized games.
No gaming establishment shall permit any class III game other
than those authorized in the Tribe-State Compact to be operated
without first applying for and receiving permission from the Com
mission and State of Oregon to operate such games.
No gaming establishment shall permit any class I or class II
game other than those specifically named in the gaming ordinance
to be operated without first applying for and receiving permission
from the Commission to operate such games.
REG. 5.090 Authorized games.
Except for blackjack, keno, video lottery terminals and
parimutuel wagering, which are deemed to be approved Class III
games as of December 20, 1996, gaming establishments must
submit a written request for approval to operate any additional
Class III games. The written request shall include supporting docu
mentation as listed under Regulation 5.090 (a) through (c):
Upon receipt, the Director will review the submission for com
pleteness. If the submittal is complete, the Director shall forward
a copy to the Oregon State Police Tribal Gaming Section, who
shall have sixty (60) days to review and approve or deny, in whole
or in part, the submission. If the State approves the submission,
the Director will petition the Commission at its next regularly
scheduled meeting to consider the gaming establishment's request.
In conjunction with the petition, the Director will submit a rec
ommendation for approval or denial.
If the State disapproves the submission, the Director, in con
junction with management of the gaming establishment, will use
his best efforts to resolve the issues warranting the State's denial.
REG. 5.115, 3. Periodic payments.
The Commission granted a waiver of REG. 5.1 15, "3", pursu
ant to Regulation 5.1 15 "9", for the benefit of International Gam
ing Technologies, Inc., (IGT) a Nevada Corporation. The waiver
is limited, to expire at date and time of the Commission's regu
larly scheduled meeting in January 1998, and is conditioned as
follows:
IGT shall at all times maintain in a reserve consisting of cash or
United States Government Treasury Securities of not less than
the sum of the following amounts:
1 . The present value of the aggregate remaining balances owed
on all jackpots previously won by patrons through any IGT sys
tem; and
2. An amount sufficient to fully fund the present value of all
amounts currently reflected on the progressive meters of all IGT
systems included in the Native American Wide Area Progressive
System.
In addition, IGT shall at all times maintain in a restricted ac
count a surplus reserve consisting of cash andor United States
Government Treasury Securities of not less than an amount equal
to fifty percent (50) of the present value of the current liabilities
to winners of IGT's Native American Wide Area Progressive
System due and payable within one ( 1 ) year, or $ 1 million, which
ever is less.
In addition to the reserve and surplus reserve, IGT shall at all
times satisfy and be in compliance with the following ratios and
tests, the precise components and definitions of which may be
separately determined by the Director of the Commission or his
designee:
1 . A current ratio of not less than 2 to 1 ; and
2. An interest coverage ratio of not less than 3 to 1.
IGT must engage at its sole expense an independent certified
public accountant to examine each fiscal year, and IGT's Chief
Financial Officer ("CFO") must examine quarterly, the pertinent
records relating to the reserve, surplus reserve, and the financial
ratios and tests set forth in Regulation 5.1 15, "2", "C", and deter
mine for each such fiscal year or quarter, respectively:
1. The reserve and surplus reserve amounts maintained by IGT;
and
2. IGT's degree of satisfaction of the financial ratios and tests set
forth in Regulation 5.1 15, "2", "C".
IGT shall make available to such accountant all books, records
and information which may be necessary to enable the accountant
to make these determinations. Said accountant and CFO shall
report and certify to the Director in writing in a format acceptable
to the Director or his designee their findings with respect to the
fiscal year and quarter, respectively, under review. Such report
and certification by the independent certified public accountant
and the CFO must be made to the Director no later than ninety
(90) calendar days after the end of the fiscal year and thirty (30)
calendar days after the end of the quarter.
If said accountant and CFO reports and certifies to the Director
that IGT is not in full compliance with all of the conditions herein
for the period under review, and if the Director or his designee
notifies IGT in writing of such noncompliance, then IGT must
obtain a one (1) year letter of credit in an amount sufficient to
fund the present value of the then outstanding obligations to be
paid to jackpot winners through any IGT system in the Native
American Wide Area Progressive System. IGT must draw down
on such letter of credit and distribute to any such unpaid winners,
cash equal to the present value of the remaining payment obliga
tions of IGT on such jackpots if IGT, by the end of the quarter
preceding the expiration date of the letter of credit, continues to
be in a state of noncompliance with any condition herein and IGT
has not provided documentation satisfactory to the Director or his
designee conclusively demonstrating that the letter of credit shall
be renewed or replaced, or has filed a request for and received a
waiver thereof from the Commission.
If the letter of credit is not obtained within fifteen (15) days
after receiving notification of any noncompliance and no admin
istrative extension has been granted by the Director or his desig
nee, IGT shall make immediate payments to the unpaid jackpot
winners through any Native American Wide Area Progressive
System in amounts equal to the present value of any unpaid obli
gations, and IGT shall immediately cease to offer any licensed
game, tournament contest, or promotional activity involving any
IGT system within any gaming facility located on tribal lands of
the Confederated Tribes of the Grand Ronde Community of Or
egon and under the jurisdiction of the Grand Ronde Gaming Com
mission for which periodic payments are utilized.
IGT's CFO must immediately notify the Director or his desig
nee of any nonpayment of a periodic payment of a jackpot winner
through any IGT system, or any event or circumstance which
impair its ability to satisfy its payment obligations to any such
unpaid jackpot winners. Upon such notification, the Director or
his designee may invoke the powers granted him.
Solely in connection with matters involving the foregoing ap
proval and conditions, IGT must execute within fifteen (15) cal
endar days herefrom an appropriate document which shall irrevo
cably and unconditionally remise, release, indemnify and forever
discharge the Confederated Tribes of the Grand Ronde Commu
nity and the Grand Ronde Gaming Commission, and their mem
bers, employees, agents and representatives, of and from any and
all claims, actions, causes of actions, losses, damages, liabilities,
costs, expenses, and suits of any nature whatsoever, in law or
equity, including reasonable attorneys fees, arising from any act
or omission of the Grand Ronde Gaming Commission, and its
members, employees, agents and representatives.
Any failure of IGT to maintain full compliance at all times with
each and every condition set forth hereinabove, or any failure of
IGT to immediately notify the Director or his designee of any
deficiencies, shall constitute an unsuitable method of operation
and may subject IGT to the institution of appropriate disciplinary
proceedings.
The Commission finds that the waiver granted is consistent with
the public policy of the Tribe.
MIC. Gaming Integrity, Conduct of Games, Patron Require
ments This MIC was modified to read that no person under 21 years
of age may play any Class II or Class III game.
MIC. Internal Audit, "6" was modified to read as follows:
Observations and examinations, with emphasis on-compliance
with the Grand Ronde Gaming Commission Minimum Internal
Control Standards, are performed (based on an audited fiscal year
ended) on the following activities as applicable to. the operation:
The Table games and VLT departments are reviewed at least
semi-annually:
The Keno, Card Games, Bingo, Entertainment, Race and sports
book, Cage and credit procedures and Cage accountability de
partments are reviewed at least annually.
-FEBRUARY 21, 1997
REG. 5.115, 3. Periodic payments.
Refer to January 17,1997 agenda for like agenda item. Waiver
approved until the regularly scheduled meeting of the Commis
sion in January 1998.
REG. 5.200 Commission response to incidents of non-compliance
with gaming regulations or minimum internal control
standards.
It is the do lev ot the Commission to reauire a icensed gam- fe
ing contractors and establishments to conduct operations in ac
cordance with the gaming regulations contained herein, and mini
mum internal control standards incorporated herein by reference.
The Commission deems any incident or activity inconsistent with
the gaming regulations and minimum internal control standards