BASIS AND PURPOSE FOR AMENDMENTS TO RULE 1
The purpose of amendments to Rule 1 is to establish definitions of various terms used throughout the rules of the Colorado Limited Gaming Control Commission so that the rules can be uniformly applied and understood. The statutory basis for Rule 1 is found in sections 12-47.1-201, C.R.S., 12-47.1-203, C.R.S., and 12-47.1-302, C.R.S.
RULE 1	  GENERAL RULES AND REGULATIONS
47.1-106	Definitions. 
(9)	“Drop” means the total amount of money, chips, tickets, coupons, and tokens removed from the drop boxes;
(15)	“Imprest bank” means a predetermined dollar amount of chips, tokens, or cash kept by the licensee;
(24.7) 	“Slot Coupon” means an encoded credit certificate which, when inserted into a slot machine, is validated by a computerized system which causes redeemable credits on the face amount to be placed on the machine.  A slot coupon has no value unless inserted into a slot machine or redeemed by the casino in another approved manner; 
(30)	“Wireless” means a wireless handheld validation unit used with a supporting Wireless Local Area Network (WLAN) as part of an approved automated slot monitoring system.

BASIS AND PURPOSE FOR AMENDMENTS TO RULE 12
The purpose of amendments to Rule 12 is to establish the specifications for slot coupons and wireless handheld verification devices. The statutory basis for Rule 12 is found in sections 12-47.1-201, C.R.S.; 12-47.1-203, C.R.S.; and 12-47.1-302, C.R.S.
RULE 12	GAMING DEVICES AND EQUIPMENT
47.1-1221	Definitions for slot machines.
(9)	“Ticket Redemption Kiosk” is a device which uses real-time transaction processing to the Ticket In/Ticket out (TITO) module of the slot monitoring system for redemption of tickets or slot coupons in exchange for currency and coin.  Kiosks are not capable of gaming functionality and may not issue tickets or slot coupons in exchange for currency and coin.  
(11)	TITO System: A system which has a centralized TITO Validation Component and allows for issuance, validation, and acceptance of tickets at TITO-enabled gaming devices, and the validation and acceptance of tickets at kiosks or validation units, for gaming operations.  
47.1-1222	Control program requirements.	
(4)	All slot machines must have the capacity to display a complete play history for the last ten games.  Retention of play history for additional prior games is encouraged.  The display must indicate the game outcome (or a representative equivalent), intermediate play steps (such as a hold and draw sequence or a double-down sequence), credits available, bets placed, credits or coins paid, and credits cashed out.  Slot machines offering games with a variable number of intermediate play steps per game may satisfy this requirement by providing the capability to display the last 50 play steps.  Slot machines interfaced to any bonusing event or system must display a complete transaction history for the most recent transaction and the previous thirty-four transactions prior to the most recent transaction that incremented any of the meters.  Last game recall must also be time and date stamped, to allow for determination of credit meter incrementatation (i.e., coins, notes, tickets, slot coupons, or won credits). If a game incorporates take-or-risk bonus play, then last game recall must recall all award values presented or offered, and the ordering and outcome of the risk events. 
(5)	The slot monitoring system or TITO-enabled slot machines must maintain an audit log(s) that records, at a minimum, the total of the last 25 ticket-in and slot coupon-in transactions.  Upon redemption of a ticket or slot coupon, the log(s) shall properly update with the redemption information, including the date and time of redemption, amount, and at least the last four digits of the validation number.  
(6)	The slot monitoring system or TITO-enabled slot machines must maintain an audit log that records, at a minimum, the last 25 tickets out transactions.  Upon ticket issuance, the log shall properly update with the ticket issued information, including the date and time of issuance, amount of ticket, and at least the last four digits of the ticket validation number.  
47.1-1223	Meters.
(2)	All slot machines must have the following soft meters. These meters are displayed in dollars and cents. 
(a)	Coin in.  The machine must have a meter specifically labeled “Coin In” that accumulates for all wagers made no matter the form in which the wager was made. The Coin In meter must accumulate the total value of all wagers (coins, tokens, currency, tickets, or any other means of placing a wager). This meter shall:
(i)	Not include subsequent wagers of intermediate winnings accumulated during game play sequence such as those acquired from “double up” games;
 (ii)	For multi-game and multi-denomination/multi-game machines, provide the information necessary, on a per paytable basis, to calculate a weighted average theoretical payback percentage; and
 (iii)	For machines which contain paytables with a difference in theoretical payback percentage which exceeds four percent between wager categories, maintain and display coin in meters and the associated theoretical payback percentage, for each wager category with a different theoretical payback percentage, and calculate a weighted average theoretical payback percentage for that paytable. 
(b)	Coin Out.  The machine must have a meter specifically labeled ”Coin Out” that accumulates the total value of all amounts directly paid by the machine as a result of winning wagers, whether the payout is made from the hopper, to a credit meter, or by any other means.  This meter will not record amounts awarded as the result of any external bonusing system.
(c)	Machine Paid Progressive Payout.  The machine must have a meter specifically labeled “Machine Paid Progressive Payout” that accumulates the total value of credits paid as a result of progressive awards paid directly by the machine.  This meter does not include awards paid as a result of an external bonusing system.
(d)	Coin Drop.  The machine must have a meter specifically labeled “Coin Drop” that accumulates the total value of coins or tokens diverted to the drop.              
(e)	Bill In.  The machine must have a meter specifically labeled “Bill In” that accumulates the total value of currency accepted. Additionally, the machine must have a specific meter for each denomination of currency accepted that records the number of bills accepted of each denomination.
(f)	Attendant Paid Jackpots.  The machine must have a meter specifically labeled “Attendant Paid Jackpots” that accumulates the total value of credits paid by an attendant resulting from a single winning alignment or combination, the amount of which is not capable of being paid by the machine itself.  This does not include attendant paid progressive amounts or amounts awarded as a result of an external bonusing system.  This meter only includes awards resulting from a specifically identified amount listed in the manufacturer’s par sheet.  
(g)	Attendant Paid Progressive Payout.  The machine must have a meter specifically labeled “Attendant Paid Progressive Payout” that accumulates the total value of credits paid by an attendant as a result of progressive awards that are not capable of being paid by the machine itself. 
(h)	Attendant Paid Cancelled Credits. The machine must have a meter specifically labeled “Attendant Paid Cancelled Credits” that accumulates the total value paid by an attendant resulting from a player initiated cash-out that exceeds the physical or configured capability of the machine to make the proper payout amount.  
(i)	Voucher Out.  The machine must have a meter specifically labeled “Voucher Out” that accumulates the total value of all tickets issued by the machine.
(j)	Voucher In.  The machine must have a meter specifically labeled “Voucher In” that accumulates the total value of all tickets accepted by the machine.
(k)	Cashable Coupon In.  The machine must have a meter specifically labeled  “Cashable Coupon In” that accumulates the total value of all slot coupons accepted by the machine.  
(l)	Wagering Account Transfer In (WAT In).  The machine must have a meter specifically labeled “WAT In” that accumulates the total value of cashable credits electronically transferred to the machine from a wagering account by means of an external connection between the machine and a cashless wagering system.
(m)	Wagering Account Transfer Out (WAT Out).  The machine must have a meter specifically labeled “WAT Out” that accumulates the total value of cashable credits electronically transferred from the machine to a wagering account by means of an external connection between the machine and a cashless wagering system.
(n)	Cashable Electronic Promotion In. The machine must have a meter specifically labeled “Cashable Electronic Promotion In” that accumulates the total value of cashable credits electronically transferred to the machine from a promotional account by means of an external connection between the machine and a cashless wagering system.
(o)	Cashable Electronic Promotion Out.  The machine must have a meter specifically labeled “Cashable Electronic Promotion Out” that accumulates the total value of cashable credits electronically transferred from the machine to a promotional account by means of an external connection between the machine and a cashless wagering system.
(p)	Machine Paid External Bonus Payout.  The machine must have a meter specifically labeled “Machine Paid External Bonus Payout” that accumulates the total value of additional amounts awarded as a result of an external bonusing system and paid by the slot machine. 
(q)	Attendant Paid External Bonus Payout.  The machine must have a meter specifically labeled “Attendant Paid External Bonus Payout” that accumulates the total value of amounts awarded as a result of an external bonusing system paid by an attendant.
(r)	Such other meters as may be required by the Director.
47.1-1261	Specification for slot coupons.
A slot coupon is an encoded coupon that is only issued by a licensee’s slot monitoring system to be redeemed at a slot machine, cage validation unit or kiosk.
Slot coupons must:
(1)	Be the same dimensions as U.S. currency. 
(2)	Have an expiration date. 
(3)	Contain the printed name of the casino.
(4) 	Be clearly labeled as a slot coupon.
(5)	Have a validation number, which must be printed on the leading edge of the ticket.  The validation number must be unique to each slot coupon.
(6)	Have a secondary validation number, identical to the primary validation number, which must be printed on the body of the ticket.
(7)	Contain a coupon bar code generated with a unique algorithm.
(8)	Contain a description of any restrictions on the redemption of the coupon. 
(9)	Be generated by a slot monitoring system approved by the Division. 
(10)	Contain the dollar value of the coupon printed both numerically and in text.
(11)	Contain a sequence number for all slot coupons printed for each specific promotion or event.
(12)	Be redeemable by being played or cashed out.
47.1-1262	Use of slot coupons.
(1)	Slot coupons can be accepted by slot machines, redeemed at the cage validation unit or redeemed at a kiosk as part of a slot monitoring system. 
(2)	The slot machines must have note acceptors. The note acceptors accepting slot coupons must communicate with the slot machines’ microprocessors. The slot monitoring system must validate all slot coupons before redeeming and stacking the slot coupons. Only after redeeming the slot coupons can credits be issued to the slot machine, through the slot monitoring system. The slot monitoring system must maintain a record of each slot coupon accepted, valdiated and redeemed by the system. Once a slot coupon is accepted, validated and redeemed, that coupon shall not be redeemed again.
(3)	The status of a slot coupon shall not be changed to unpaid or unredeemed once it has been redeemed, voided or expired.  If communication is broken between the slot monitoring system and the slot machine, cage validation unit or kiosk, the slot machine, validation unit or kiosk must reject all slot coupons until communication is restored.
(4)	Slot coupons redeemed at a slot machine are included as drop in the calculation of adjusted gross proceeds (AGP); however, slot coupons are not a deduction from AGP.
(5)	All credits vended to the slot machine from redeemed slot coupons must be capable of either being played or cashed out. Patrons must not be required to play credits. 
47.1-1268	Validity of tickets and slot coupons.
(1)	Casinos may offer ticketing systems whereby TITO-enabled slot machines accept tickets and slot coupons and issue tickets in exchange for cash, tokens, credits, or tickets using TITO systems. 
(2)	A slot monitoring system shall not use, permit the use of, accept, or redeem tickets or slot coupons issued by another licensee.
(3)	If a slot machine, validation unit in the cage, or kiosk cannot validate the ticket or slot coupon, it must reject the ticket or slot coupon.
(4)	The slot monitoring system must have the ability to identify invalid tickets and slot coupons and notify the cashier;
(a)	The validation number cannot be found,
(b)	The ticket or slot coupon has already been redeemed, or
(c)	The amount on file for the ticket or slot coupon.
47.1-1271	Use of tickets under circumstances of conflicting wagering denominations. 
If a ticket or slot coupon has a value that is not evenly divisible by the wagering denomination, when inserted into a TITO-enabled slot machine, the machine shall either 
(1)	Return the ticket or slot coupon to the patron, 
(2)	Accept the ticket or slot coupon and allow for insertion of additional wagering consideration if the ticket value is less than the wagering denomination, or 
(3)	Accept the ticket or slot coupon and either display the indivisible portion of the ticket or slot coupon on a credit meter or issue another ticket for that indivisible portion. 
47.1-1277	Ticket and slot coupon irregularity notification.
The Division of Gaming must be immediately notified of any incident of a ticket or slot coupon being presented for redemption which the validation system indicates has already been redeemed, or evidence that a ticket or slot coupon has been counterfeited, tampered with, or altered in any way which would affect the Integrity, fairness, reliability or suitability of the ticket or slot coupon.  This would include the system issuance of an invalid ticket or slot coupon.
47.1-1278	Secure database.
Once the validation information is stored in the revenue database, the data must be encrypted.  The database must be password-protected. An unalterable audit trail must be maintained by the system that documents all activity in the revenue database.  No data shall be removed from the database.
47.1-1279	Wireless Handheld Validation Unit and the Supporting Wireless Local Area Network.
Wireless Handheld validation units may be used with a supporting wireless local area network (WLAN) for activities that impact gaming transactions provided the following security precautions are observed:
(1)	The wireless local area network must comply with industry standards, defined in the Internal Control Minimum Procedures.
(2)	An authentication process must comply with industry standards, defined in the Internal Control Minimum Procedures, to maintain network security.
(3)	Licensees will provide an encryption/decryption process which complies with industry standards, defined in the Internal Control Minimum Procedures, to maintain network security.
(4)	Each unit and user must be authenticated to the slot monitoring system before transactions can proceed.  Users must be authorized and registered in the slot monitoring system to perform transactions.
(5)	All wireless access points and units must be controlled to prevent unauthorized physical and virtual access.
(6)	Each wireless access point must communicate through a firewall.  The firewall must reside between the WLAN and the Local Area Network (LAN).
(7)	An Intrusion Detection System (IDS) and an Intrusion Protection System (IPS) must be used to identify and prevent attacks from unauthorized users and devices.  The IDS/IPS must have a system produced audit trail, and must be provided to the Division upon request.
(8)	Each wireless access point and device must be configured so that the settings are different from the default values and must not identify the casino, Service Set Identifier (SSID) or domain name.
(9)	The licensee must perform periodic review and testing of the unit and the supporting WLAN as defined in the Internal Control Minimum Procedures.
(10)	The licensee will be held responsible for proper use of the unit and the supporting WLAN as defined in the Internal Control Minimum Procedures.
(11)	Wireless handheld transactions cannot occur outside the licensed premises.

BASIS AND PURPOSE FOR AMENDMENTS TO RULE 16
The purpose of amendments to Rule 16 is to establish computations for adjusted gross proceeds and criteria for free play items. The statutory basis for these requirements is found in sections 12.47.1-201, C.R.S., 12-47.1-203, C.R.S., and 12-47.1-302, C.R.S.
RULE 16	ACCOUNTING REGULATIONS
47.1-1603	Adjusted gross proceeds computations. 
(2)	For each slot machine, adjusted gross proceeds equals drop plus tickets plus  slot coupons dropped less fills to the machine, less hand pay jackpot payouts and accumulated credits, and less tickets redeemed. The initial hopper load is not a fill and does not affect adjusted gross proceeds. The difference between the initial hopper load (or the amount in the hopper at the time of the previous hopper count if the coins/tokens counted were returned to the hopper) and the total amount that is in the hopper at the time the hopper is currently counted must be adjusted accordingly as additional revenues or a credit adjustment when calculating adjusted gross proceeds. This amount is reported on the monthly gaming tax return for the month in which the hopper count was conducted, and is reflected in the hopper adjustment column for the corresponding denomination. Hoppers must also be counted and the corresponding adjustment reflected on the gaming tax returns at other times as specified in the internal control minimum procedures. If a licensee does not make or makes inaccurate additions or subtractions when calculating adjusted gross proceeds, the Division may compute an estimated total amount in the slot machine hoppers and may make reasonable adjustments to adjusted gross proceeds during the course of an audit, review, or other examination procedures. 
47.1-1614	Free play items. 
Free play is allowed for use on slot machines only.  Free play does not have any impact on Adjusted Gross Proceeds.  Free play is considered promotional only.  Free play must only be set up on slot machines that are configured to allow this functionality, and cannot be offered on machines that are configured for normal slot play.