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February 2, 2017 CSI Filing and OAC 3772-10-26 Refiling

Created by Executive Order 2011-01K, the Common Sense Initiative (CSI), and Senate Bill 2 of the 129th General Assembly, require state agencies, including the Casino Control Commission, to draft rules in collaboration with stakeholders, assess and justify any adverse impact on the business community (as defined by Senate Bill 2), and provide opportunity for the affected public to provide input on the rules. 

The Ohio Casino Control Commission submitted the following proposed rules to the CSI office for review on February 2, 2017, and, on March 20, 2017 resubmitted rule 3772-10-26 for review:

 

Brief Explanation of the Rules 

This package is the seventh containing rules subject to five-year review for 2016. This batch includes rules relating to casino operators’ internal controls and surveillance. Many of the changes are small housekeeping amendments to clean up and clarify rule language. Several of the amendments remove the terms “applicant or licensee” and instead use the name of the entity in an effort to streamline and clarify Ohio Adm. Code 3772 in its entirety. Another consistent change is replacing the term “slot machine,” with the term “electronic gaming equipment,” where applicable. This change has been made throughout five-year review to harmonize the code and clarify the applicability of the code to all electronic gaming equipment, as appropriate.

3772-10 Internal Control Systems (13 rules)

  • 3772-10-01 (amendment), titled “Definitions.” This rule defines certain internal control-related terms. The purpose of this rule is to create a clear set of definitions that will apply throughout the code. The amendments to this rule are largely intended to clarify and streamline rule language, including deleting definitions for terms that are not otherwise used. As the Commission has been doing throughout the code, we have replaced the words “this chapter” with “rules adopted by the commission” to ensure that these general terms apply throughout the entire code and not just Ohio Adm. Code Chapter 3772-10.
  • 3772-10-02 (amendment), titled “Internal controls.” This rule requires casino operators to submit internal control plans to the Commission before operating. These include controls on electronic gaming equipment, table games, responsible gambling, advertising, surveillance, and security, among others. The amendments to this rule clarify that certain internal controls, which each casino operator already has, are required, as well as provides greater flexibility to casino operators and the Commission by allowing for the controls to be submitted on a schedule approved by the Commission, instead of on a rigid timeframe. The purpose of this rule is to implement all the statutorily required plans in R.C. Chapter 3772 and to allow the Commission to audit casino gaming processes pursuant to its authority in R.C. 3772.033, while still allowing each casino operator to implement processes unique to them in their internal controls.
  • 3772-10-04 (amendment), titled “Accounting records.” This rule provides that casino operators shall have internal controls for preparing accounting records. The purpose of this rule is to ensure the Commission fulfills its statutory mandate to prescribe accounting-related standards. The amendment to this rule deletes many specific and superfluous provisions, as to how audit records are to be kept, instead requiring casino operators to have those procedures in their internal controls.  Additionally, these removals will allow casino operators to simply comply with the general records retention requirement in Ohio Adm. Code 3772-1-07. The purpose of the amendment is to provide the Commission and casino operators with greater flexibility relating to accounting internal controls.
  • 3772-10-10 (amendment), titled “Patron financial transactions at the cashier’s cage.” This rule specifies that casino operators may process certain financial transactions, as designated in their internal controls, at the cashier’s cage and provides some detail on how such transactions are to be handled. The amendments to this rule combine rules 3772-10-10, 3772-10-11, and 3772-10-12 into one rule and provides greater flexibility to the Commission and the casino operators by allowing the casino operators to provide procedures for conducting different types of financial transactions in its internal controls.   The purpose of this rule is to allow the casino operators to determine which financial transactions they want to offer patrons while still ensuring the proper controls are in place for integrity’s sake.
  • 3772-10-11 (rescind), titled “Wire transfers.” This rule is being rescinded and reserved. This rule has been combined with 3772-10-10. The purpose of the rescission is to streamline the code.
  • 3772-10-12 (rescind), titled “Cash equivalents.” This rule is being rescinded and reserved. This rule has been combined with 3772-10-10. The purpose of the rescission is to streamline the code.
  • 3772-10-14 (amendment), titled “Internal audit standards.” This rule provides that each casino must have an internal audit department and lists the functions and duties of this department. The amendments to this rule are largely streamlining and clarifying in nature. Additionally, the amendment narrows when the casino operator’s internal audit department must perform a follow-up examination, from all instances of noncompliance cited by the Commission to only those instances where corrective action has been taken. The purpose of this rule is to ensure that casino operators are working internally to comply with R.C. Chapter 3772 and the rules adopted thereunder.
  • 3772-10-19 (amendment), titled “Count Procedures.” This rule details the procedures that a casino operator must follow when conducting a count of the proceeds from casino gaming, including who may be present during the count, conditions on how the count must occur, and what to do at the end of the count. The rule allows casino operators to put further specifics related to the count in their internal controls. Although most of the changes are not substantive, the rule now details certain events, before and after which an individual must clear their hands.  This amendment will allow for greater integrity control of the count without increasing operator cost. The purpose of this rule is to ensure that all winnings, compensation from casino gaming, and gross revenue is accurately counted and reported.
  • 3772-10-24 (amendment), titled “Signature requirements.” This rule specifies how each casino operator will issue and maintain a signature card for each licensed employee. While the rule gives some requirements, the overall procedures are left to each casino operator in its internal controls. The amendments to this rule are merely housekeeping in nature. The purpose of this rule is to ensure that casino operators have appropriate controls on signature cards, allowing both the casino operator and the Commission to quickly and confidently investigate any issues that may arise in an area where a signature is required by an employee.
  • 3772-10-25 (amendment), titled “Unclaimed winnings.” This rule provides that each casino operator must comply with R.C. Chapter 169 and submit internal controls that allow the Commission to ensure that the casino operator complies with R.C. Chapter 169. The amendment to this rule removes an unnecessary reporting requirement. The purpose of this rule is to ensure that all casino operators are complying with R.C. Chapter 169.
  • 3772-10-26 (amendment), titled “Key access.” This rule governs access to assets, restricted areas, and sensitive keys. While the rule specifies certain requirements in regard to access controls, including that access shall be controlled by security and that certain records must be kept regarding access, the amendments to this rule largely remove detailed specifics, instead allowing the casino operators to detail such information in their internal controls, creating flexibility for the Commission and casino operators. The purpose of this rule is to ensure that all areas that are required to be kept restricted under R.C. Chapter 3772 and the rules adopted thereunder are so restricted.
  • 3772-10-27 (amendment), titled “Controlled demonstration.” This rule provides that each casino facility must perform a controlled demonstration to open to the public. The substantive amendments to this rule remove requirements that the demonstration be invitation-only and involve restaurants and retail shops in addition to casino gaming. The purpose of this rule is to ensure that new casino facilities can operate in compliance with R.C. Chapter 3772 and the rules adopted thereunder before the casino opens to the public.
  • 3772-10-28 (amendment), “Amendments to internal control plans.” This rule provides that amendments to internal control plans must be approved by the Commission, but can be temporarily approved by the Executive Director until the next public Commission meeting. The rule also provides that in submitting requests for waivers for administrative rules, casino operators can submit internal controls and show how those controls would meet the requirements of R.C. Chapter 3772 and the rules adopted thereunder. The amendment to this rule is solely streamlining. The purpose of this rule is to ensure that all casino operator’s internal controls are in accordance with R.C. Chapter 3772 and the rules adopted thereunder, while still giving casino operators the flexibility to make changes to those controls.

3772-11 Table Games (1 rule)

  • 3772-11-03 (amendment), titled “Approval of table games.” This rule provides that casino operators must submit the rules for any table games it wants to provide and allows the Commission to require testing of the game, rules, or equipment. The rule also provides that the casino operator may not offer a game or use any associated equipment, until approved by the Commission, including provisions for how to notify the Commission of any proposed modifications. Finally, the rule requires that the casino operator notify the Commission of any known or suspected defect or malfunction. The purpose of this rule is to carry out the Commission’s statutory mandate, contained in R.C. 3772.03(D), to identify permitted casino gaming and gaming equipment, as well the standards these must meet. There are two proposed substantive amendments.  First, the rule allows the Commission to evaluate table games, rules, and associated equipment for fairness to patrons.  Second, the amendment to this rule states that casino operators must alert the Commission of any suspected defect or malfunction at the time of detection, rather than within four hours. The purpose of this amendment is to allow the Commission to quickly investigate defects and to continue to meet its goal with respect to ensuring the integrity of casino gaming in the State of Ohio.

3772-19 Security, Surveillance System & Commission Facilities (1 rule)

  • 3772-19-09 (amendment), “Surveillance logs and incident reports.”  This rule specifies that casino operators must maintain surveillance logs and incident logs for certain occurrences at the casino, including unusual or criminal activity. Additionally, the rule requires the casino operator to maintain a visitor’s log of access to the casino surveillance room. The amendment to this rule allows the Executive Director to approve a threshold at which transfers of cash or cash equivalents must be logged, instead of logging all transfers. The purpose of this rule is to ensure that the casino operator is accurately monitoring and logging incidents that have an impact on the integrity of casino gaming.

Associated CSI Documents
Business Impact Analysis (Ohio Adm. Code 3772-10-26 Refile)

Business Impact Analysis

Contact Information for Comments

The Commission welcomes comments regarding these proposed rules. For all comments regarding the resubmission of Ohio Adm. Code 3772-10-26, the Commission should receive them no later than March 27, 2017.

Any questions or comments with respect to these rules may be directed to Michelle Siba via email at Michelle.Siba@casinocontrol.ohio.gov or U.S. Mail at 10 West Broad Street, 6th Floor, Columbus, Ohio 43215. Comments may also be directed to the CSI Office at csipubliccomments@governor.ohio.gov.


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