Supporting Statement For 3141-0001 (10-30-2013)

SUPPORTING STATEMENT
FOR RECORDKEEPING AND REPORTING REQUIREMENTS
25 CFR PART 571
A. JUSTIFICATION
1. Explain the circumstances that make the collection of information necessary. Identify
any legal or administrative requirements that necessitate the collection. Attach a copy
of the appropriate section of each statute and regulation mandating or authorizing the
collection of information.  
The Indian Gaming Regulatory Act (IGRA or the Act), Public Law 100–497, 25 U.S.C.
2701, et seq., was signed into law on October 17, 1988. The Act established the National Indian
Gaming Commission (NIGC or Commission) and set out a comprehensive framework for the
regulation of gaming on Indian lands. The Act sets standards for the regulation of Indian gaming,
including certain auditing, recordkeeping, and reporting requirements. Specifically, 25 U.S.C.
2706(b)(4) authorizes the Commission to “demand access to and inspect, examine, photocopy,
and audit all papers, books, and records respecting gross revenues of class II gaming conducted
on Indian lands and any other matters necessary to carry out the duties of the Commission.”
Section 2710(b)(1)-(b)(2) authorizes tribes to engage in gaming only if they have an ordinance
approved by the NIGC Chair, and amongst other things, only if the ordinance provides that the
tribe will cause an annual outside audit to be conducted on their gaming activities, including an
audit on all contracts for supplies, services, or concessions for a contract amount in excess of
$25,000 annually (except contracts for professional legal or accounting services) relating to such
gaming. The Act also authorizes the Commission to “promulgate such regulations and guidelines
as it deems appropriate to implement” IGRA. 25 U.S.C. 2706(b)(10). Part 571 of title 25, Code
of Federal Regulations, implements these statutory requirements.

25 CFR §§ 571.7, 571.14
Section 571.7(a) of title 25, Code of Federal Regulations, requires Indian gaming
operations to keep/maintain permanent books of account and records sufficient to establish the
amount of gross and net income, deductions and expenses, receipts and disbursements, and other
relevant financial information. Section 571.7(c) requires that these records be kept for at least
five years. Under § 571.7(b), the Commission may require a gaming operation to submit
statements, reports, accountings, and specific records that will enable the NIGC to determine
whether or not such operation is liable for fees payable to the Commission (and in what amount),
and that the gaming operation has properly and completely accounted for all transactions and
other matters monitored by the Commission. Lastly, § 571.7(d) requires a gaming operation to
keep copies of all enforcement actions that a tribe or a state has taken against the operation.
The Act requires the Commission to establish a schedule of fees that the tribes must pay
to fund the NIGC. These fees are computed based on quarterly fee reports submitted under 25
CFR Part 514. Because fee payments are based on “assessable gross revenues” that represent a
formula developed by the NIGC and not readily reflected in the financial statements, a
reconciliation is necessary to provide proof of payment. Section 571.14 requires tribes to
reconcile quarterly fee reports with audited financial statements and to keep/maintain this
information to be available to the NIGC upon request in order to facilitate the performance of
compliance audits.
25 CFR §§ 571.12, 571.13
Section 571.12 requires tribes to prepare comparative financial statements covering all
financial activities of each class II and class III gaming operation on the tribe’s Indian lands, and
to engage an independent certified public accountant (CPA) to provide an annual audit of the

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financial statements of each class II and class III gaming operation. The financial statements
prepared by the CPA must conform to generally accepted accounting principles (GAAP) and the
annual audit must conform to generally accepted auditing standards.
Section 571.13 requires tribes to prepare and submit to the Commission two paper copies
or one electronic copy of the aforementioned financial statements and audits, together with
management letter(s) and other documented auditor communications and/or reports as a result of
the audit, setting forth the results of each fiscal year. The submission must be sent to the
Commission within 120 days after the end of the fiscal year of each gaming operation, including
when a gaming operation changes its fiscal year or when gaming ceases to operate.
2. Indicate how, by whom, and for what purpose the information is to be used. Except for
a new collection, indicate the actual use the agency has made of the information
received from the current collection.  
The Commission receives and analyzes the required filings for a variety of purposes. The
regulatory requirement that Indian gaming operations keep/maintain permanent books of account
and records sufficient to establish the amount of gross and net income, deductions and expenses,
receipts and disbursements, and other relevant financial information; and the receipt and review
of the audited financial statements, inclusive of management letters, is essential to effectively
evaluate the risk posed to the Indian gaming industry by others. To the trained NIGC analyst, the
information in these financial-type records can reveal gaming operations that possess
dysfunctional internal control systems. Because the financial data is often the first indicator that
an organization is being victimized by corrupting influences, this information helps the
Commission identify gaming operations that are noncompliant. In short, the NIGC uses this
information to ensure that tribes are adequately shielded from organized crime and other
corrupting influences, to ensure that the Indian tribe is the primary beneficiary of the gaming

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operation revenue, and to assure that the gaming activities are conducted fairly and honestly by
both the operator and players. Thus, the receipt and maintenance of these financial records is
vital for the Commission to efficiently and effectively fulfill its statutory responsibilities.
In addition, obtaining reliable and timely financial information in the form of audited
financial statements is necessary for the Commission to accurately forecast the future gross
gaming revenue of the tribal gaming industry, as Commission funding is derived from the
assessment of fees on the gaming tribes based on a determination of gross gaming revenue. The
reconciliation of the quarterly fee reports is necessary for the NIGC to verify the accuracy of the
fee payments. The Commission first forecasts the gross gaming revenue and then sets a fee rate
necessary to generate sufficient funding for the agency’s budget for the upcoming year. Without
the reconciliation, it would be difficult for the agency to verify compliance with part 514 of its
regulations.
Lastly, the Commission collects data from the gaming operations, aggregates it, and
disseminates the information to the general public. These submissions provide information about
the Indian gaming industry to Congress and the general public, and identify trends and industry
norms.
3. Describe whether, and to what extent, the collection of information involves the use of
automated, electronic, mechanical, or other technological collection techniques or other
forms of information technology, e.g., permitting electronic submission of responses,
and the basis for the decision for adopting this means of collection. Also describe any
consideration of using information technology to reduce burden.  
Under NIGC regulations, tribes may maintain and/or submit this information to the
Commission by compatible automated, electronic, and/or mechanical means.
4. Describe efforts to identify duplication. Show specifically why any similar information
already available cannot be used or modified for use for the purposes described in Item
2 above.

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The information required to be maintained and/or annually submitted to the Commission
is unique to each Indian tribe and each gaming operation. No similar information pertaining to
gaming on Indian lands is collected by the Commission or by any other federal agencies.
5. If the collection of information impacts small businesses or other small entities (Item 5
of OMB Form 83-I), describe any methods used to minimize burden.  
Not applicable. Nonetheless, the Commission’s regulations require operations to submit
the minimum amount of information that the Commission requires to fulfill its statutory
responsibilities. The audit requirements apply to all Indian gaming operations, regardless of size.
The burden is directly proportional to the economic activity conducted.
6. Describe the consequence to Federal program or policy activities if the collection is not
conducted or is conducted less frequently, as well as any technical or legal obstacles to
reducing burden.  
Amongst other purposes, Congress enacted IGRA and established the Commission to
ensure that:


the industry is shielded from organized crime and other corrupting influences;



the tribe is the primary beneficiary of its gaming revenue; and



fairness and honesty are the hallmarks of Indian gaming.

Accordingly, the Commission has determined necessary that basic accounting and recordkeeping
be employed by the gaming operators to provide for a methodology that would produce reliable
financial data in a timely manner, and reconciliations to ensure timely and accurate payment of
fees to the agency. The specific recordkeeping, accounting, and auditing requirements of these
information collections represent long-established norms of conducting business and are
essential to the NIGC being able to fulfill its statutory obligations. Without the information
required to be kept for review or provided by the submissions, the Commission would be
hampered in the fulfillment of its mission.

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7. Explain any special circumstances that would cause an information collection to be
conducted in a manner:
 requiring respondents to report information to the agency more often than
quarterly;
 requiring respondents to prepare a written response to a collection of information in
fewer than 30 days after receipt of it;
 requiring respondents to submit more than an original and two copies of any
document;
 requiring respondents to retain records, other than health, medical, government
contract, grant-in-aid, or tax records, for more than three years;
 in connection with a statistical survey, that is not designed to produce valid and
reliable results that can be generalized to the universe of study;
 requiring the use of a statistical data classification that has not been reviewed and
approved by OMB;
 that includes a pledge of confidentiality that is not supported by authority
established in statute or regulation, that is not supported by disclosure and data
security policies that are consistent with the pledge, or which unnecessarily impedes
sharing of data with other agencies for compatible confidential use; or
 requiring respondents to submit proprietary trade secrets, or other confidential
information unless the agency can demonstrate that it has instituted procedures to
protect the information's confidentiality to the extent permitted by law.
Under 25 CFR § 571.7(c), gaming operations are required to maintain financial books
and records for no less than 5 years. This requirement corresponds to financial-type records
retention mandated by other federal agencies, such as the implementing regulations for the Bank
Secrecy Act, found at 31 CFR chapter X.
8. If applicable, provide a copy and identify the date and page number of publication in
the Federal Register of the agency's notice, required by 5 CFR 1320.8(d), soliciting
comments on the information collection prior to submission to OMB. Summarize public
comments received in response to that notice and describe actions taken by the agency
in response to these comments. Specifically address comments received on cost and
hour burden.
Describe efforts to consult with persons outside the agency to obtain their views on the
availability of data, frequency of collection, the clarity of instructions and
recordkeeping, disclosure, or reporting format (if any), and on the data elements to be
recorded, disclosed, or reported.
Consultation with representatives of those from whom information is to be obtained or
those who must compile records should occur at least once every 3 years - even if the
collection of information activity is the same as in prior periods. There may be
circumstances that may preclude consultation in a specific situation. These
circumstances should be explained.  

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On July 8, 2013, a notice containing the information collection renewals was published in
the Federal Register allowing the public an opportunity to comment on the requirements. (78 FR
40766, July 8, 2013). The public comment period closed on September 6, 2013. No public
comments were received.
In addition, the Commission consulted with 18 tribal gaming regulatory commissions
and/or tribal gaming operators, and laid out the recordkeeping and submission requirements
contained in its regulations, but did not provide its own estimates to the tribes. The Commission
asked the tribal gaming commissions and/or tribal gaming operators to provide annual hourly
estimates required to perform the tasks, as well as any cost estimates. The average burden hours
per response and average annual costs in this information collection were provided by these 18
tribes. The Commission has upwardly adjusted its previous estimates accordingly.
9. Explain any decision to provide any payment or gift to respondents, other than
reenumeration of contractors or grantees.  
Not applicable. The NIGC does not provide any payment or gift to respondents.
10. Describe any assurance of confidentiality provided to respondents and the basis for the
assurance in statute, regulation, or agency policy.  
The Act requires the Commission to keep confidential trade secrets, privileged or
confidential, commercial or financial information, or information related to ongoing law
enforcement investigations. Section 2716 of title 25, United States Code, removes from the
Commission any discretion it otherwise would have to disclose information that falls within
FOIA exemptions 4 and 7, and requires the Commission to disclose such information only to
other law enforcement agencies for law enforcement purposes.
11. Provide additional justification for any questions of a sensitive nature, such as sexual
behavior and attitudes, religious beliefs, and other matters that are commonly
considered private. This justification should include the reasons why the agency
considers the questions necessary, the specific uses to be made of the information, the
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explanation to be given to persons from whom the information is requested, and any
steps to be taken to obtain their consent.  
Not applicable. No sensitive questions are asked.
12. Provide estimates of the hour burden of the collection of information. The statement
should:
 Indicate the number of respondents, frequency of response, annual hour burden,
and an explanation of how the burden was estimated. Unless directed to do so,
agencies should not conduct special surveys to obtain information on which to base
hour burden estimates. Consultation with a sample (fewer than 10) of potential
respondents is desirable. If the hour burden on respondents is expected to vary
widely because of differences in activity, size, or complexity, show the range of
estimated hour burden, and explain the reasons for the variance. Generally,
estimates should not include burden hours for customary and usual business
practices.
 If this request for approval covers more than one form, provide separate hour
burden estimates for each form and aggregate the hour burdens in Item 13 of OMB
Form 83-I.
 Provide estimates of annualized cost to respondents for the hour burdens for
collections of information, identifying and using appropriate wage rate categories.
The cost of contracting out or paying outside parties for information collection
activities should not be included here. Instead, this cost should be included in Item
13.  
As mentioned in Item 8 above, the Commission consulted with 18 tribal regulatory
gaming commissions and/or tribal gaming operators to gather the burden estimates for these
information collections. The sizes of tribal gaming operations in the United States vary from
small, truck stop-sized facilities to one of the largest gaming operations in the world. More
specifically, the sizes of the gaming operations consulted included six Tier A gaming operations
(annual gross gaming revenues of more than $1 million but not more than $5 million), four Tier
B gaming operations (annual gross gaming revenues of more than $5 million but not more than
$15 million), and eight Tier C gaming operations (annual gross gaming revenues of more than
$15 million). Depending on market forces, a gaming operation can fall into one tier during one
year, and into another tier the following year.

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Because the estimates provided by the tribal gaming commissions and/or tribal gaming
operators sometimes varied dramatically for an information collection even amongst gaming
operations in the same tiers (e.g., one Tier A operation reported 10,410 burden hours for a
specific collection while another Tier A operation reported 16 burden hours for the same
collection), the Commission averaged the estimates received only after dropping the highest and
lowest estimates for each aspect of the information collection. Another example of the dramatic
variances in reported estimates include one Tier C operation reporting a $2 million cost estimate
for an outside firm to perform an independent annual audit, while another Tier C operation
reported a $27,000 cost estimate.
These are mandatory information collections, as each tribe is required to create and
maintain certain permanent financial books and records, cause an annual independent audit to be
performed, and submit certain financial statements, reports, and accounting records to the
Commission once per year (two respondents are self-regulating, and thus those burden estimates
are recorded under another OMB control number). The table below shows the Commission’s
estimated hourly burdens and the hourly cost burdens for respondents. The average hours per
response and average hourly rates were provided by the tribal gaming commissions and/or tribal
gaming operators.
ESTIMATED ANNUAL BURDEN HOUR TOTALS
FREQUENCY
AVERAGE
NUMBER OF
OF
TOTAL
HOURS AVERAGE
CFR CITE/
ANNUAL
RESPONSES
ANNUAL
PER
HOURLY
COLLECTION RESPONDENTS PER YEAR RESPONSES RESPONSE
RATE

TOTAL
HOURS

TOTAL
WAGES

571.7;
571.14
571.12
571.13

239

1

239

994.0

$20

237,566

$4,751,320

422
237

1
1

422
237

1506.75
20.5

$23
$28

635,848.5
4,858.5

$14,624,516
$136,038

TOTAL

898

1

898
9

878,273 $19,511,874

13. Provide an estimate for the total annual cost burden to respondents or recordkeepers
resulting from the collection of information. (Do not include the cost of any hour
burden shown in Items 12 and 14).
 The cost estimate should be split into two components: (a) a total capital and startup cost component (annualized over its expected useful life) and (b) a total operation
and maintenance and purchase of services component. The estimates should take
into account costs associated with generating, maintaining, and disclosing or
providing the information. Include descriptions of methods used to estimate major
cost factors including system and technology acquisition, expected useful life of
capital equipment, the discount rate(s), and the time period over which costs will be
incurred. Capital and start-up costs include, among other items, preparations for
collecting information such as purchasing computers and software; monitoring,
sampling, drilling and testing equipment; and record storage facilities.
 If cost estimates are expected to vary widely, agencies should present ranges of cost
burdens and explain the reasons for the variance. The cost of purchasing or
contracting out information collections services should be a part of this cost burden
estimate. In developing cost burden estimates, agencies may consult with a sample of
respondents (fewer than 10), utilize the 60-day pre-OMB submission public
comment process and use existing economic or regulatory impact analysis associated
with the rulemaking containing the information collection, as appropriate.
 Generally, estimates should not include purchases of equipment or services, or
portions thereof, made: (1) prior to October 1, 1995, (2) to achieve regulatory
compliance with requirements not associated with the information collection, (3) for
reasons other than to provide information or keep records for the government, or
(4) as part of customary and usual business or private practices.  
The majority of the dollar cost for this information collection ($44,438,710) is the
estimated total amount that the tribes will have to pay to engage independent CPA firms to
provide an annual independent audit of the financial statements of each of the 422 class II and
class III gaming operations. The remaining, unspecified total costs were provided by the tribes.
ESTIMATED ANNUAL COST TOTALS

NUMBER OF
FREQUENCY
TOTAL
CFR CITE/
ANNUAL
OF RESPONSE
ANNUAL
COLLECTION RESPONDENTS
PER YEAR
RESPONSES

571.7; 571.14
571.12
571.13

239
422
237

1
1
1

239
422
237

TOTAL

898

1

898

10

AVERAGE
ANNUAL
COSTS
(if any)

$14,618
$105,305
$67

TOTAL
COSTS

$3,493,702
$44,438,710
$15,879
$47,948,291

14. Provide estimates of annualized costs to the Federal government. Also, provide a
description of the method used to estimate cost, which should include quantification of
hours, operational expenses (such as equipment, overhead, printing, and support staff),
and any other expense that would not have been incurred without this collection of
information. Agencies may also aggregate cost estimates from Items 12, 13, and 14 in a
single table.  
The Commission determined its cost and burden hour estimates, inclusive of operational
expenses, based on the workflows of the agency, and the functions specific to the receipt,
recordation, and analysis of the submissions. As a general matter, the cost rate was based upon
the hourly rate of personnel assigned to task. Support services are included in cost estimates.
ESTIMATED ANNUAL AGENCY BURDEN TOTALS

NUMBER OF
CFR CITE/
ANNUAL
COLLECTION RESPONDENTS

FREQUENCY
OF
RESPONSES
PER YEAR

TOTAL
ANNUAL
RESPONSES

REVIEW
HOURS
PER
RESPONSE

TOTAL
HOURS

HOURLY
RATE

571.7;
571.14
571.12;
571.13

424

1

424

16

6,784

$44

$298,496

422

1

422

24

10,128

$44

$445,632

TOTAL

846

1

846

16,912

TOTAL
AGENCY
COST

$744,128

15. Explain the reasons for any program changes or adjustments reported in Items 13 or 14
of the OMB Form 83-I.  
The Commission has made several program changes:
(i)

the Commission did not previously include the hourly burden estimates for certain
recordkeeping functions (§ 571.7), as it previously considered them customary and
usual business practices. However, the Commission is now including the burdens for
these recordkeeping and administrative functions because, while most gaming
operations would probably maintain certain of these records, it is possible that not
every operation would do so according to the standards set forth in the NIGC
regulations;

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(ii)

the Commission has changed the manner in how it reports some of the burden
estimates for this collection. Specifically, the Commission previously reported how
many hours it might take an outside CPA firm to provide an annual independent audit
of the financial statements. However, tribes are not allowed to submit audits that they
have performed themselves but are instead required by IGRA to engage outside CPA
firms. Thus, the Commission is now only reporting the estimated total amount that
the tribes will have to pay to engage independent CPA firms to provide an annual
independent audit of the financial statements of each of the 422 class II and class III
gaming operations; and

(iii)

the Commission previously included burden estimates for certain submission
requirements (§§ 575.5, 575.6, 577.3, 577.8, 577.12, 577.14), but has determined that,
under 44 U.S.C. 3518(c)(1)(ii), these estimates were erroneously included because
tribes are not required to make these submissions unless and until the Commission
has begun an administrative action or investigation against the specific tribes.

The Commission has made the following adjustments:


the Commission has increased the number of estimated annual responses from 877 to 898.
This is based on a combination of the above-mentioned program changes;



the Commission has increased the number of estimated burden hours from 192,690 to
878,273. The Commission believes that the large increase in burden hours is due to
estimation errors in the previous request for renewal. For example, some of the biggest
drivers of this increase include:


§§ 571.7 and 571.14, which require tribes to submit to the Commission financial
statements, reports, accountings, and other specific records, and to keep and/or

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maintain: permanent books of account and records for at least five years; copies of
enforcement actions issued by tribe or state against the gaming operation for at least
five years; and reconciliations of Commission fee assessment reports with audited or
reviewed financial statements. Based on tribal feedback, 239 tribal operators each
annually spend approximately 994 hours performing these tasks. That quickly adds up
to 237,566 burden hours; and


§ 571.12, which requires tribes to engage an outside CPA firm to provide an audit of
financial statements in conformance with § 571.12(c)-(e), and to prepare and keep
and/or maintain comparative financial statements. Based on tribal feedback, 237 tribal
operators each annually spend approximately 1,506.75 hours performing these tasks
for each one of the 422 gaming operations. That quickly adds up to 635,848.5 burden
hours.

These estimates are based on feedback from the 18 tribal regulatory gaming commissions
and/or tribal gaming operators. The Commission believes that these new estimates more
accurately reflect the actual burden hours for these information collections; and


the Commission has increased the estimated dollar cost burden from $0 to $47,948,291. The
main driver of this increase in dollar cost is the estimated total amount ($44,438,710) that the
tribes will have to pay to engage independent CPA firms to provide annual independent
audits of the financial statements of all of the 422 class II and class III gaming operations.
This increase in burden is based on a combination of the above-mentioned program changes,
and on feedback from 18 tribal regulatory gaming commissions and/or tribal gaming
operators.

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In 2012, the Indian gaming industry generated $27.9 billion in gross gaming revenue.
Since 2008 when the previous burden estimates were approved, the Indian gaming revenues in
the U.S. have increased by approximately $1.2 billion. This growth in the Indian gaming industry
may account for the dramatic increase in the burden hour and cost estimates as provided by the
18 tribal regulatory gaming commissions and/or tribal gaming operators.
16. For collections of information whose results will be published, outline plans for
tabulation and publication. Address any complex analytical techniques that will be
used. Provide the time schedule for the entire project, including beginning and ending
dates of the collection of information, completion of report, publication dates, and other
actions.  
These are ongoing information collections with no ending date and no plans for
publication.
17. If seeking approval to not display the expiration date for OMB approval of the
information collection, explain the reasons that display would be inappropriate.  
Not applicable.
18. Explain each exception to the certification statement identified in Item 19,
“Certification for Paperwork Reduction Act Submissions,” of OMB Form 83-I.  
Not applicable. The NIGC certifies compliance with 5 CFR § 1320.9.
B. COLLECTIONS OF INFORMATION EMPLOYING STATISTICAL METHODS  
This section is not applicable. Statistical methods are not being employed.

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