(1) A system of
internal controls submitted by a gaming licensee in accordance with
205
CMR 138.02 shall include tables of
organization, which shall provide for:
(a) A
system of personnel and chain of command which permits management and
supervisory personnel to be held accountable for actions or omissions within
their areas of responsibility;
(b)
The segregation of incompatible functions so that no employee is in a position
both to commit an error or to perpetrate a fraud and to conceal the error or
fraud in the normal course of his or her duties;
(c) Primary and secondary supervisory
positions which permit the authorization or supervision of necessary
transactions at all relevant times; and
(d) Areas of responsibility which are not so
extensive as to be impractical for one person to monitor.
(2) A system of internal controls submitted
by a gaming licensee in accordance with
205
CMR 138.02 shall include provisions detailing
the structure, function, and area of responsibility for the following mandatory
departments and supervisory positions, with each of the mandatory departments
and supervisors cooperating with, yet performing independently of, all other
mandatory departments and supervisors of the gaming licensee as follows:
(a) A surveillance department supervised by
an executive who shall be responsible for the management of the surveillance
department. The chief surveillance executive shall be subject to the reporting
requirements specified in
205
CMR 138.04(4). The
surveillance department monitoring room shall be supervised by an individual
licensed as a key gaming employee in accordance with
205 CMR
134.00: Licensing and Registration of
Employees, Vendors, Junket Enterprises and Representatives, and Labor
Organizations who shall be present in the room at all times or, if not
present, be within immediate contact and at a known location at the gaming
establishment.
(b) An internal
audit department supervised by an audit department executive. The audit
department executive shall be subject to the reporting requirements specified
in 205 CMR
138.04(4).
(c) An IT department supervised by an
executive who shall be responsible for the management of the IT
department.
(d) A casino games
department supervised by an executive who shall be responsible for the
management of the casino games department. The chief casino games executive
shall be responsible for the operation and conduct of all authorized games and
gaming devices in a gaming establishment
(e) A security department supervised by an
executive who shall be responsible for the management of the security
department.
(f) A gaming accounting
department supervised by an executive who shall be responsible for the
management of the gaming accounting department. The chief gaming accounting
executive shall be responsible for all gaming related accounting control
functions.
(g) A compliance
committee consisting of at least three members, at least one of whom shall be
independent of the gaming licensee. The compliance committee may consist of
less than three members on a temporary basis upon a showing of good cause by
the gaming licensee, but, under all circumstances, a compliance committee must
include at least one independent member. The compliance committee may be
created at either the gaming licensee level or at the level of a parent,
holding or intermediary company. The compliance committee shall provide its
policies and procedures to the commission, which policies and procedures shall
provide for, at a minimum, the following:
1.
The monitoring of policies, procedures, material transactions and proposed
transactions for purposes of avoiding impropriety or the appearance
thereof;
2. The review of payments
to individuals and entities and the provision of services, gifts or anything of
value to or on behalf of any public official provided, that review of such
conduct as it relates to foreign public officials may be performed by legal
counsel to the gaming licensee who shall then report their findings to the
compliance committee;
3. The review
of political contributions;
4.
Ensuring compliance with all applicable federal, state and local laws and
regulatory requirements;
5.
Protecting against unethical or unlawful behavior by employees;
6. The conduct of due diligence reviews and
investigations of directors, officers, executive level employees and those
entities and individuals having material associations with the gaming licensee;
and
7. Providing the commission
with the minutes of its meetings within 45 days of the conduct of those
meetings. If necessary, minutes in draft form may be submitted followed by
final minutes when approved.
(h) An independent audit committee consisting
of at least three members provided, however, that the independent audit
committee may be comprised of less than three members on a temporary basis upon
a showing of good cause to the commission. The independent audit committee may
be created at either the gaming licensee level or at the level of a parent,
holding or intermediary company. The Committee shall provide the commission
with the minutes of its meetings within 45 days of the conduct of those
meetings. If necessary, minutes in draft form may be submitted followed by
final minutes when approved.
(3) Each mandatory department shall be
supervised at all times by at least one individual who has been licensed as a
key gaming employee in accordance with
205 CMR
134.00: Licensing and Registration of
Employees, Vendors, Junket Enterprises and Representatives, and Labor
Organizations.
(4) The
chief executives of the surveillance and internal audit departments required by
205
CMR 138.04(2) shall comply
with the following reporting requirements:
(a)
Each executive shall report directly to the chief gaming executive of the
gaming licensee regarding administrative matters and daily operations provided,
however, a gaming licensee may allow each of these executives to report
directly to a management executive of the licensee other than the chief gaming
executive if that management executive reports directly to the chief gaming
executive.
(b) Each executive shall
report directly to one of the following persons or entities regarding matters
of policy, purpose, responsibility, and authority. The hiring, termination, and
salary of each executive shall also be controlled by one of the following
persons or entities:
1. The independent audit
committee of the gaming licensee's board of directors;
2. The independent audit committee of the
board of directors of any holding company of the gaming licensee which has
absolute authority to direct the operations of the gaming licensee;
3. The senior surveillance or internal audit
executive of any holding company included in
205
CMR 138.04(4)(b)2. if such
executive reports directly to the independent audit committee of the board of
directors of the holding company; or
4. For gaming licensees or holding companies
which are not corporate entities, the non-corporate equivalent of any of the
persons or entities listed in
205
CMR 138.04(4)(b)1. through
3.
(5) In the
event of a vacancy in the chief executive officer position, the chief gaming
executive, or in any executive position responsible for management of one of
the mandatory departments set forth in
205
CMR 138.04(2)(a) through
(f), the gaming licensee shall:
(a) Provide written notice to the commission
no later than five days from the date of the vacancy, advising of the
following:
1. The vacant position;
2. The date on which the position became
vacant; and
3. The date on which it
is anticipated that the vacancy will be filled on a permanent basis.
(b) Within 30 days, the gaming
license shall either fill the vacant position described in
205
CMR 138.04(5) on a
permanent basis or designate an individual to assume the duties and
responsibilities of the vacant position on a temporary basis, which appointment
shall not exceed 120 days, subject to extension upon approval by the
commission. An individual temporarily designated shall not simultaneously
function as the department supervisor for any department identified in
205
CMR 138.04(2) and such
individual's areas of responsibility shall not be so extensive as to be
impractical for one individual to monitor.
(c) Within five days of filling any vacancy,
whether on a temporary or permanent basis, the gaming licensee shall provide
written notice to the commission advising of the following:
1. The position;
2. The name of the person
designated;
3. The date that the
vacancy was filled; and
4. An
indication of whether the position has been filled on a temporary or permanent
basis.
(6) A
system of internal controls submitted by a gaming licensee in accordance with
205
CMR 138.02 shall include, and a gaming
licensee shall maintain on file, a current table of organization delineating
the lines of authority for all personnel engaged in the operation of the gaming
establishment, which shall, for each department and division, include direct
and indirect lines of authority within the department or division.
(7) A system of internal controls submitted
by a gaming licensee in accordance with
205
CMR 138.02 shall include a plan for ensuring
that all gaming employees employed in the gaming establishment are properly
trained in their respective professions. Proper training of a gaming employee
in the respective field for which the gaming employee is or shall be employed
by the gaming licensee may be established as follows:
(a) Satisfactory completion by the employee
of a course of instruction in the employee's respective field provided by a
person recognized by the commission as a certified training school in
accordance with
205 CMR
137.00: Gaming Schools;
(b) Satisfactory completion by the employee
of a course of instruction or on the job training program provided by the
gaming licensee in the employee's respective field;
(c) Relevant prior work experience of the
employee in the employee's respective field; or
(d) Other relevant training or
experience.
