Section 542.10 - What are the minimum internal control standards for keno?(a)Computer applications. For any computer applications utilized, alternate documentation and/or procedures that provide at least the level of control described by the standards in this section, as approved by the Tribal gaming regulatory authority, will be acceptable.(b)Game play standards.(1) The computerized customer ticket shall include the date, game number, ticket sequence number, station number, and conditioning (including multi-race if applicable).(2) The information on the ticket shall be recorded on a restricted transaction log or computer storage media concurrently with the generation of the ticket.(3) Keno personnel shall be precluded from having access to the restricted transaction log or computer storage media.(4) When it is necessary to void a ticket, the void information shall be inputted in the computer and the computer shall document the appropriate information pertaining to the voided wager (e.g., void slip is issued or equivalent documentation is generated).(5) Controls shall exist to prevent the writing and voiding of tickets after a game has been closed and after the number selection process for that game has begun.(6) The controls in effect for tickets prepared in outstations (if applicable) shall be identical to those in effect for the primary keno game.(c)Rabbit ear or wheel system.(1) The following standards shall apply if a rabbit ear or wheel system is utilized: (i) A dedicated camera shall be utilized to monitor the following both prior to, and subsequent to, the calling of a game: (A) Empty rabbit ears or wheel;(D) Full rabbit ears or wheel.(ii) The film of the rabbit ears or wheel shall provide a legible identification of the numbers on the balls drawn.(iii) Keno personnel shall immediately input the selected numbers in the computer and the computer shall document the date, the game number, the time the game was closed, and the numbers drawn.(iv) The Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with procedures that prevent unauthorized access to keno balls in play.(v) Back-up keno ball inventories shall be secured in a manner to prevent unauthorized access.(vi) The Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with procedures for inspecting new keno balls put into play as well as for those in use.(d)Random number generator.(1) The following standards shall apply if a random number generator is utilized: (i) The random number generator shall be linked to the computer system and shall directly relay the numbers selected into the computer without manual input.(ii) Keno personnel shall be precluded from access to the random number generator.(e)Winning tickets. Winning tickets shall be verified and paid as follows: (1) The sequence number of tickets presented for payment shall be inputted into the computer, and the payment amount generated by the computer shall be given to the customer.(2) The Tribal gaming regulatory authority, or the gaming operation as approved by the Tribal gaming regulatory authority, shall establish and the gaming operation shall comply with procedures that preclude payment on tickets previously presented for payment, unclaimed winning tickets (sleepers) after a specified period of time, voided tickets, and tickets that have not been issued yet.(3) All payouts shall be supported by the customer (computer-generated) copy of the winning ticket (payout amount is indicated on the customer ticket or a payment slip is issued).(4) A manual report or other documentation shall be produced and maintained documenting any payments made on tickets that are not authorized by the computer.(5) Winning tickets over a specified dollar amount (not to exceed $10,000 for locations with more than $5 million annual keno write and $3,000 for all other locations) shall also require the following:(i) Approval of management personnel independent of the keno department, evidenced by their signature;(ii) Review of the video recording and/or digital record of the rabbit ears or wheel to verify the legitimacy of the draw and the accuracy of the draw ticket (for rabbit ear or wheel systems only);(iii) Comparison of the winning customer copy to the computer reports;(iv) Regrading of the customer copy using the payout schedule and draw information; and(v) Documentation and maintenance of the procedures in this paragraph.(6) When the keno game is operated by one person, all winning tickets in excess of an amount to be determined by management (not to exceed $1,500) shall be reviewed and authorized by a person independent of the keno department.(f)Check out standards at the end of each keno shift.(1) For each writer station, a cash summary report (count sheet) shall be prepared that includes: (i) Computation of net cash proceeds for the shift and the cash turned in; and(ii) Signatures of two employees who have verified the net cash proceeds for the shift and the cash turned in. Unverified transfers of cash and/or cash equivalents are prohibited.(g)Promotional payouts or awards.(1) If a gaming operation offers promotional payouts or awards, the payout form/documentation shall include the following information:(ii) Dollar amount of payout or description of personal property (e.g., jacket, toaster, car, etc.), including fair market value;(iii) Type of promotion; and(iv) Signature of at least one employee authorizing and completing the transaction.(h)Standards for statistical reports.(1) Records shall be maintained that include win and write by individual writer for each day.(2) Records shall be maintained that include win, write, and win-to-write hold percentage for: (iv) Year-to-date or fiscal year-to-date as applicable.(3) A manager independent of the keno department shall review keno statistical data at least on a monthly basis and investigate any large or unusual statistical variances.(4) At a minimum, investigations shall be performed for statistical percentage fluctuations from the base level for a month in excess of ±3%. The base level shall be defined as the gaming operation's win percentage for the previous business year or the previous twelve (12) months.(5) Such investigations shall be documented, maintained for inspection, and provided to the Tribal gaming regulatory authority upon request.(i)System security standards.(1) All keys (including duplicates) to sensitive computer hardware in the keno area shall be maintained by a department independent of the keno function.(2) Personnel independent of the keno department shall be required to accompany such keys to the keno area and shall observe changes or repairs each time the sensitive areas are accessed.(j)Documentation standards.(1) Adequate documentation of all pertinent keno information shall be generated by the computer system.(2) This documentation shall be restricted to authorized personnel.(3) The documentation shall include, at a minimum:(i) Ticket information (as described in paragraph (b)(1) of this section);(ii) Payout information (date, time, ticket number, amount, etc.);(iii) Game information (number, ball draw, time, etc.);(iv) Daily recap information, including: (v) System exception information, including: (C) Appropriate system parameter information (e.g., changes in pay tables, ball draws, payouts over a predetermined amount, etc.); and(vi) Personnel access listing, including:(A) Employee name or employee identification number; and(B) Listing of functions employee can perform or equivalent means of identifying same.(k)Keno audit standards.(1) The keno audit function shall be independent of the keno department.(2) At least annually, keno audit shall foot the write on the restricted copy of the keno transaction report for a minimum of one shift and compare the total to the total as documented by the computer.(3) For at least one shift every other month, keno audit shall perform the following: (i) Foot the customer copy of the payouts and trace the total to the payout report; and(ii) Regrade at least 1% of the winning tickets using the payout schedule and draw ticket.(4) Keno audit shall perform the following: (i) For a minimum of five games per week, compare the video recording and/or digital record of the rabbit ears or wheel to the computer transaction summary;(ii) Compare net cash proceeds to the audited win/loss by shift and investigate any large cash overages or shortages (i.e., in excess of $25.00);(iii) Review and regrade all winning tickets greater than or equal to $1,500, including all forms that document that proper authorizations and verifications were obtained and performed;(iv) Review the documentation for payout adjustments made outside the computer and investigate large and frequent payments;(v) Review personnel access listing for inappropriate functions an employee can perform;(vi) Review system exception information on a daily basis for propriety of transactions and unusual occurrences including changes to the personnel access listing;(vii) If a random number generator is used, then at least weekly review the numerical frequency distribution for potential patterns; and(viii) Investigate and document results of all noted improper transactions or unusual occurrences.(5) When the keno game is operated by one person:(i) The customer copies of all winning tickets in excess of $100 and at least 5% of all other winning tickets shall be regraded and traced to the computer payout report;(ii) The video recording and/or digital record of rabbit ears or wheel shall be randomly compared to the computer game information report for at least 10% of the games during the shift; and(iii) Keno audit personnel shall review winning tickets for proper authorization pursuant to paragraph (e)(6) of this section.(6) In the event any person performs the writer and deskman functions on the same shift, the procedures described in paragraphs (k)(5)(i) and (ii) of this section (using the sample sizes indicated) shall be performed on tickets written by that person.(7) Documentation (e.g., a log, checklist, etc.) that evidences the performance of all keno audit procedures shall be maintained.(8) A manager independent of the keno department shall review keno audit exceptions, and perform and document investigations into unresolved exceptions. These investigations shall be documented, maintained for inspection, and provided to the Tribal gaming regulatory authority upon request.(9) When a multi-game ticket is part of the sample in paragraphs (k)(3)(ii), (k)(5)(i) and (k)(6) of this section, the procedures may be performed for ten(10) games or ten percent (10%) of the games won, whichever is greater.(l)Access. Access to the computer system shall be adequately restricted (i.e., passwords are changed at least quarterly, access to computer hardware is physically restricted, etc.).(m)Equipment standards.(1) There shall be effective maintenance planned to service keno equipment, including computer program updates, hardware servicing, and keno ball selection equipment (e.g., service contract with lessor).(2) Keno equipment maintenance (excluding keno balls) shall be independent of the operation of the keno game.(3) Keno maintenance personnel shall report irregularities to management personnel independent of the keno department.(4) If the gaming operation utilizes a barcode or microchip reader in connection with the play of keno, the reader shall be tested at least annually by personnel independent of the keno department to determine that it is correctly reading the barcode or microchip.(n)Document retention.(1) All documents (including computer storage media) discussed in this section shall be retained for five (5) years, except for the following, which shall be retained for at least seven (7) days:(i) Video recordings and/or digital records of rabbit ears or wheel;(ii) All copies of winning keno tickets of less than $1,500.00.(o)Multi-race tickets.(1) Procedures shall be established to notify keno personnel immediately of large multi-race winners to ensure compliance with standards in paragraph (e)(5) of this section.(2) Procedures shall be established to ensure that keno personnel are aware of multi-race tickets still in process at the end of a shift.(p)Manual keno. For gaming operations that conduct manual keno games, alternate procedures that provide at least the level of control described by the standards in this section shall be developed and implemented.67 FR 43400, June 27, 2002, as amended at 70 FR 47106, Aug. 12, 2005