Current through Register Vol. 43, No. 39, September 26, 2024
(a) Each facility
manager's internal control system shall include internal controls for meter
reading and the related statistical reports. The internal controls shall be
submitted to and approved by the commission according to K.A.R. 112-104-1.
Accounting department employees who are independent of the drop process
according to K.A.R. 112-104-18 shall read and record on a gaming machine meter
sheet the numbers on all meters as required under the technical standards
adopted by the commission in article 110.
(b) Any facility manager may have a computer
system, as approved by the commission under K.A.R. 112-107-2, to record any of
the required meter readings if the meter readings are recorded in accordance
with subsection (a) at least weekly. The computer shall store in
machinereadable form all information required by this regulation. The stored
data shall not be susceptible to change or removal by any personnel without the
system identifying and establishing a record of the personnel making the
change, maintaining an archive of the original record, and identifying the new
record as having been changed. Access to this information shall be restricted
to the following:
(1) Accounting department
personnel;
(2) internal audit
department personnel;
(3) EGM
department personnel when diagnosing EGM problems;
(4) management staff when assessing EGM
performances; and
(5) count room
supervisors when reconciling an EGM drop.
(c)
(1) Bill
validator meter readings shall be taken when any of the following occurs:
(A) Devices containing bill validators are
moved.
(B) Denominations change.
(C) Devices containing bill
validators are placed in service.
(D) Devices containing bill validators are
taken out of service.
(E) The
computer components of the devices containing bill validators are accessed,
which could cause the device or system meters to reset.
(2) A bill validator meter reading shall be
taken for each drop.
(d) After preparation of the gaming machine
meter sheet, each employee involved with its preparation shall sign the gaming
machine meter sheet attesting to the accuracy of the information contained on
the sheet. The sheet shall then be forwarded directly to the accounting
department for comparison to the gaming machine win sheet and calculation of
gaming machine statistics.
(e)
Upon receipt of the gaming machine meter sheet, the accounting department shall
review all meter readings for reasonableness using preestablished parameters
and prior meter readings. Meter readings shall not be altered except to correct
meters that were incorrectly recorded. All changes shall have adequate
supporting documentation. The accounting department shall notify the EGM
department of potentially faulty meters and follow up to ensure that proper
maintenance is performed. Documentation that supports machine service and
maintenance shall be maintained.
(f) If a meter unexpectedly resets to 0000,
which is also known as "zeroing out," accounting personnel shall notify the EGM
department to determine the cause of the reset. Using the information obtained
from the EGM department, accounting personnel shall complete a meter reset form
whenever a meter is reset. On a monthly basis, accounting personnel shall
review the meter reset form to determine if there are any ongoing problems with
any electronic device. If a problem is noted in three consecutive drops, the
commission shall be notified. The accounting department shall ensure that
appropriate and adequate meter readings are available to generate statistical
reports.
(g) The EGM activity for
all EGMs that were active on the gaming floor shall be reflected on statistical
reports. Large or unexpected variances shall be investigated by the appropriate
personnel, and the results shall be documented in accordance with internal
control procedures as approved by the commission according to K.A.R. 112-104-1.
The accounting department shall prepare, review, and analyze the following
reports:
(1) The EGM revenue summary report,
which is also called an EGMR report, shall be prepared at least once each
month. This report shall be a summary of EGM activity by drop and by
denomination, for the period reported on. Information included on this report
shall be the dollar value of currency by denomination, drops, payouts, fills,
and net EGM income. Tickets and coupons redeemed shall include total tickets
and coupons redeemed by all devices and in all cages. All reconciling items,
including a statewide multilink progressive contribution, unclaimed jackpots,
and bills accepted into the cage from bill validator malfunctions, shall be
documented on the EGMR report.
(2)
The comparison of the meter drop with the actual drop report shall compare the
meter drop with the actual drop by device, by denomination, and in total, which
shall be prepared at least once each month. The report shall be prepared on a
drop-by-drop basis. Additionally, monthly and yearly drop information by
machine, by denomination, and in total shall be either included on the last
report of each month or available on a separate report. Information needed to
calculate the drop report shall include the actual drop from the EGMR report
and current and prior drop meter readings. The incremental change in the drop
meter shall reflect what the EGM machine recorded as dropped, pursuant to
K.A.R. 112-104-18, in the current drop period. The variance percentages between
what the meter records and what is counted in the count room shall be computed
by dividing the dollar variance by the meter drop amount. When a variance both
equals or exceeds 2% and equals or exceeds $25, the variance shall be
investigated and documented in accordance with internal control procedures as
approved by the commission under K.A.R. 112-104-1.
(3) The comparison of meter jackpots with
actual jackpots paid report shall be prepared at least monthly. This report
shall compare the total attendant-paid jackpot meter and cancelled credit
meters with the actual manual pay jackpots by machine, by denomination, and in
total. The report shall be prepared on a drop-by-drop basis. Additionally,
monthly and yearly jackpot information by machine, by denomination, and in
total shall be either included on the last report of each month or available on
a separate report. The monthly totals on this report shall agree with the
manual jackpot payout totals shown on the EGMR report.
(A) Information needed to calculate the
report shall include the actual manual pay jackpots from the jackpot payout
slips and the current and prior jackpot meter readings.
(B) Variance percentages between meter and
actual jackpots shall be computed by dividing the dollar variance by the meter
jackpot amount. If a variance both equals or exceeds 1% and equals or exceeds
$10, the variance shall be investigated and documented in accordance with
internal control procedures as approved by the commission under K.A.R.
112-104-1.
(C) Payouts that are
not a result of a wager shall be considered promotional and shall be included
in the calculation of net EGM income. These types of payments shall be shown as
a reconciling item on the EGMR report. These payouts shall include the
following:
(i) Amount of overpayment of
jackpots due to incorrectly calculating the jackpot;
(ii) payments due to incorrect machine setup;
(iii) payments due to failing to
perform slot machine maintenance; and
(iv) any payment resulting from a patron
dispute that is not supported by documentation verifying accuracy of the
transaction and is not approved by the executive director.
(4) The comparison of
the theoretical hold with the actual hold report shall be prepared at least
monthly. This report shall compare the theoretical hold with the actual hold by
machine, by denomination, and in total, on a month-to-date and year-to-date
basis. A theoretical hold shall be defined as the intended hold percentage or
win of a machine as computed by reference to its payout schedule or reel strip
settings, or both. The actual hold percentage shall be calculated by dividing
net EGM income by the dollar value of currency in. The theoretical hold
percentage shall be obtained from the par sheet, which is a manufacturer's
specification sheet located and maintained in each EGM machine. Each facility
manager with any EGM games whose outcome is determined in whole or in part by
skill shall use the higher range of the manufacturer's expected field return
subtracted from 100 as the theoretical hold for these types of games. Each
facility manager with multigame and multidenominational EGMs shall use the
weighted theoretical hold percentage from the EGM each month. The machines'
weighted theoretical hold shall be compared to the actual hold percentage. The
dollar value of currency in for the current month shall be calculated by
subtracting the prior month's end meter readings from the current month's end
meter readings and multiplying the difference by the denomination of the
machine. Large or unexpected variances between the theoretical and the actual
hold shall be investigated and documented in accordance with internal control
procedures as approved by the commission under K.A.R. 112-104-1.
(5) The comparison of ticket-in meter to
tickets redeemed by device report shall be prepared at least monthly. This
report shall compare the change in the ticket-in meter to the actual tickets
redeemed by machine. This report shall be prepared on a drop-by-drop,
month-to-date, and year-to-date basis and shall show totals by machine,
denomination, and grand totals. Variance percentages between the ticket-in
meter and actual tickets redeemed shall be computed by dividing the dollar
variance by the total ticket-in meter amount. When a variance both equals or
exceeds 1% and equals or exceeds $10, the variance shall be investigated and
documented in accordance with internal control procedures as approved by the
commission under K.A.R. 112-104-1.
(6) The comparison of ticket-out meter to
tickets issued by device report shall be prepared at least monthly. This report
shall compare the change in the ticket-out meter to the actual tickets issued,
as reported by the ticket verification system, by each device. This report
shall be prepared on a drop-by-drop, month-to-date, and year-to-date basis and
shall show totals by machine, denomination, and grand totals. This report shall
be used in the reconciliation of outstanding tickets in order to determine
ticket liability.
(7) A comparison
of coupon-in meter to coupons redeemed by device report shall be prepared at
least monthly. This report shall compare the change in the coupon-in meter to
the actual coupons redeemed by machine. This report shall be prepared on a
drop-by-drop, month-to-date, and year-to-date basis and shall show totals by
machine, denomination, and grand totals. Variance percentages between the
coupon-in meter and actual coupons redeemed shall be computed by dividing the
dollar variance by the total coupon in meter amount. When a variance both
equals or exceeds 1% and equals or exceeds $10, the variance shall be
investigated and documented in accordance with internal control procedures as
approved by the commission under K.A.R. 112-104-1.
(h) No person shall alter meter information
on any statistical report, unless the meter was read or recorded incorrectly or
a data entry error occurred. All changes shall be supported with adequate
documentation.
(i) If a variance
exceeds any of the variances listed in subsection (g), then the facility
manager shall prepare and file an incident report documenting the variance with
the commission. The facility manager shall report the actual cause of the
variance, unless the cause cannot be definitively determined after an
investigation, in which case the probable cause of the variance shall be
reported. The incident report shall be filed at least within one week from
discovery. The incident report shall include the following:
(1) The date of the meter reading;
(2) the date the report was filed;
(3) the asset number of the device involved;
(4) the amount of the variance by
currency, gaming tickets, or coupons;
(5) an explanation for the cause of the
variance, with documentation to support the explanation;
(6) the manufacturer and model number of the
device to which the bill validator is attached or in which the bill validator
is embedded;
(7) the manufacturer
of the bill validator involved;
(8) the total number of reported variances,
by manufacturer and model number of the device;
(9) the total number of reported variances,
by manufacturer of the bill validator;
(10) the total number of reported variances
compared to the total number of bill validator canisters counted; and
(11) the signature and license
number of the preparer.
