N.Y. Comp. Codes R. & Regs. tit. 9 § 5108.2

Current through Register Vol. 46, No. 45, November 2, 2024

Section 5108.2 - Purpose, format, submission and amendment of the video lottery gaming agent's system of internal control

(a) The video lottery gaming agent shall design a system of internal control procedures that shall conform to the guidelines established by the commission.

(b) The procedures of the system of internal control will be designed to ensure that:

(1) that assets of the video lottery gaming agent and commission are safeguarded;

(2) that the financial records of the video lottery gaming agent are accurate and reliable;

(3) that the transactions of the video lottery gaming agent's operation are performed only as authorized by the act and these regulations;

(4) that accountability for assets is maintained in accordance with generally accepted accounting principles;

(5) that only authorized personnel have access to assets;

(6) that recorded accountability for assets is compared with actual assets at reasonable intervals and appropriate action is taken with respect to any discrepancies;

(7) that employee and management functions, duties, and responsibilities are appropriately segregated and performed in accordance with sound practices by competent, qualified, licensed personnel and that no employee of the video lottery gaming agent is in a position to perpetuate and conceal errors or irregularities in the normal course of the employee's duties;

(8) that gaming is conducted with integrity and in accordance with the Act and these regulations; and

(9) that the video lottery gaming agent complies with all Federal, State, and local tax laws, codes, and reporting requirements.

(c) Each video lottery gaming agent shall submit to the commission a description of such agent's system of internal procedures and administrative and accounting controls in accordance with these regulations. Such submission shall be made to the commission at least 45 days prior to the expected date of commencement of video lottery gaming activities unless otherwise decided by the commission. The video lottery gaming agent shall be solely responsible for the design of the internal control system and for maintaining all the provisions and requirements of such system in day to day operations. The video lottery gaming agent shall not commence gaming operations unless and until the submitted internal control system is approved by the commission.

(d) The commission shall review each submission and shall determine whether it conforms to the requirements of the act, these regulations and the guidelines established by the commission. If the commission finds any insufficiency, it shall specify such insufficiency in writing to the video lottery gaming agent, which shall make timely and appropriate revisions and provide same to the commission. When the commission completes a review of the final submission and finds no insufficiencies, the commission shall so notify the video lottery gaming agent in writing. The commission reserves the right to direct the video lottery gaming agent to revise such agent's internal control procedures at any time if the commission determines that an internal control weakness exits.

(e) The video lottery gaming agent shall submit to the commission for review and approval any changes to such agent's approved internal control system not less than 60 days before the changes are to become effective, unless otherwise permitted in writing by the commission.

(f) If an event occurs at the video lottery gaming facility that would not allow for a 60-day review by the commission as set forth in subdivision (e) of this section, an emergency shall be deemed to exist. In such event, the video lottery gaming agent shall be permitted to make an emergency amendment to the approved internal control system as follows:

(1) In the event of an emergency, the video lottery gaming agent may amend an internal control procedure.

(2) The video lottery gaming agent shall submit a description of the emergency amendment of the internal control procedures and the circumstances necessitating the emergency amendment to the commission within five business days of the adoption of the emergency amendment.

(3) When the circumstances necessitating the emergency amendment to the internal control procedures abate, the video lottery gaming agent shall resume compliance with the internal control procedures.

(g) Each applicant for a video lottery gaming agent license shall prepare a description of such agent's internal employee licensing procedures. Unless otherwise directed by the commission, the employee licensing procedures shall be completed at least 60 days prior to the projected date of issuance of a certificate of operation and shall be made available to the commission upon request. Each such submission shall be prepared and maintained in a format provided by the commission; shall contain a narrative and, where appropriate, diagrammatic representations of the internal control system to be utilized by the applicant, and shall address, without limitation, the following employee licensing requirements:

(1) procedures used to prepare and maintain a jobs compendium;

(2) procedures used to process and submit applications for video lottery gaming agent employee licenses;

(3) procedures used to prepare and submit petitions for temporary employee licenses.

(h) The video lottery gaming agent shall establish procedures to be approved by the commission for the issuance, distribution and control of temporary and permanent identification and access badges to each such identified employee who is to be permitted, during the normal course of performing such employee's duties or during emergencies, access to one or more restricted areas.

(1) Badges shall be serially numbered, shall include a photograph of the employee, the employees first name, designation of position and access code as published by the commission. No person shall have access to any non-public area of a video lottery gaming facility without having an authorized and valid identification badge prominently displayed. The commission will prescribe the design, color(s), wording and lettering of the identification badge in accordance with job title of the employee. The badge shall be of sufficient size to be readily visible by surveillance monitoring.

(2) Such identification badge shall remain the property of the commission and must be surrendered by the licensed gaming employee upon the demand by any authorized representative of the video lottery gaming agent or the commission or the commission's designee where such employee has been suspended, discharged or has terminated such employee's employment. The name of each badge recipient, the employment position, badge number and assigned code shall be forwarded to the commission by the video lottery gaming agent no later than five business days following the last date of employment.

(3) No video lottery gaming agent shall permit any person to have access to any restricted area in such agent's video lottery gaming facility unless such access is permitted in accordance with the video lottery gaming agent's internal controls and these regulations. No video lottery gaming agent shall permit any person to have access to any area restricted only to commission employees as designated by the commission.

(4) Each video lottery gaming agent may deny or limit access to any public areas in order to preserve the policies of the act and these regulations, including, but not limited to, the following:

(i) employees of video lottery gaming agents;

(ii) unruly or disruptive patrons;

(iii) underage persons; and

(iv) any person who has voluntarily excluded themselves pursuant to the exclusion policy of the video lottery gaming agent.

(5) Nothing in this section shall limit the authority of the commission or the commission's duly authorized representative from obtaining immediate, unfettered access to restricted areas during the performance of their respective duties and responsibilities in accordance with the act and these regulations.

(6) The commission and the commission's designees shall have unfettered and complete access to badge system records including, but not limited to, name of each badge recipient, the employment position, badge number and assigned code. This listing shall be provided to the commission or the commission's designees upon commencement of the operation of the video lottery gaming facility and updated pursuant to subdivision (c) of this section.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 5108.2