| Action | Chapter 264 (2007 Acts of Assembly) added “electronic games of chance systems for charitable gaming in the Commonwealth”. |
| Stage | NOIRA |
| Comment Period | Ended on 9/30/2009 |
 |
7 comments
While we are pleased to see the Virginia Division of Charitable Gaming ("DCG") continuing to progress through the rule promulgation process relating to electronic pull-tabs, the latest draft of rules raise some significant concerns regarding the overall viability of the program. The combination of requirements and restrictions outlined in the current draft greatly increase the likelihood that the electronic pull-tab program will fail to benefit the charitable organizations throughout the Commonwealth of Virginia. Such an outcome would be absolutely inconsistent with the result envisioned by the sponsors of this legislation when the General Assembly passed the legislation to enable electronic pull-tabs.
The most problematic items from this draft are:
§ Requirement for a single Central System to service all Player Terminals throughout the Commonwealth of Virginia (Part III, section H)
§ Requirement for a Real-Time Payment Ticket Validation System (Part III, section E, item 23)
§ Restrictions on game denominations (Part III, section F, item 5)
§ Restrictions on sounds and animations (Part III, section F, items 2, 3, & 4)
§ Restrictions on game payouts (Part III, section O, item 4)
§ Restrictions on gross sales (Part II, section C, item 1)
As we have pointed out in the past, designing the Virginia electronic pull-tab program around a single central system will increase the overall cost of the program. In addition to the acquisition, implementation, and operation costs associated with a DCG-operated central system, the current draft of the rules would appear to require costly full-time data connections between the central system and every player terminal throughout the state. All program costs will directly or indirectly be paid for by Virginia’s charitable organizations.
The system requirements contained in the current draft of the rules essentially describe a system that could be used in a casino. Such a system would undoubtedly be highly secure. Unfortunately, it is also going to be quite expensive. Instead of setting out to end up with a system equivalent to Ft. Knox, regardless of cost, a better approach would be to evaluate what security measures and costs are appropriate, given the scope of the program. For example, real-time validation of cash-out tickets is almost surely not necessary in member-based organizations. Employee training, procedures, and water-marked paper are sufficient to prevent fraud at virtually all sites. We recognize that omitting the requirement for the Ticket Validation System represents a departure from the GLI-14 standard. However, based on the fact that the electronic pull-tabs will be sold in member-based, charitable organizations and not casinos, this requirement is not necessary. In fact, many states that currently implement electronic gaming do not employ validation in venues with small placements of terminals because of the costs associated with these systems. Even without the requirement for a Ticket Validation System, the electronic pull-tab program can still incorporate the security and integrity required by the Division of Charitable Gaming.
At the same time, the restrictions identified above will have a negative impact on both the experience of the players and potential revenue for the charities. We recognize the need to protect the player from games that offer a significant advantage to the house. However, establishing a maximum payout is not at all in the player's best interest. Along the same lines, limiting the denomination of games available does not benefit the player. In allowing the charities of Virginia to offer electronic pull-tabs, it was the stated goal of the state law makers to help the charitable organizations raise additional funds. Setting limits on the gross sales of electronic pull-tabs is certainly not consistent with this goal. In order for the electronic pull-tab program to be successful, the games offered need to be competitive with similar products available in neighboring states, both in terms of entertainment value and payout. If the DCG adopts rules that put the electronic pull-tab program at a competitive disadvantage, the program will not generate the expected returns for the VA charities.
Our suggested changes to the rules (submitted in a separate post) would help to make the forthcoming electronic pull-tab program more consistent with the intent of the enabling legislation. We strongly urge the Division to re-evaluate the direction being taken on the electronic pull-tab rules. The Division of Charitable Gaming is clearly chartered with ensuring the integrity and transparency of all charitable gaming products offered throughout the Commonwealth of Virginia. However, by over-regulating the electronic pull-tab program before it is even launched, the Division would be doing a great disservice to the state's charities that could otherwise benefit from this program.
[Part I] [Inserted] “Site Controller” means a computer system, including, but not limited to all devices and components that are utilized to support such a computer system, which is dedicated to the electronic accounting, reporting and monitoring of electronic game cards and player terminals; and to the storage and transmission of electronic game cards to the player terminals. A site controller must meet the same requirements as a Central System. The only difference is that Site Controllers are installed at the sites where electronic pull-tabs are sold. Site controllers will communicate directly with a central system to download packs ("Game Subsets") of electronic game cards ("Tickets") and upload sales, inventory, and event data. It would then distribute the game cards to the player terminals upon request. The site controller will also change the status of all connected player terminals in response to receiving an instruction from its central system. [Comment: Instead of specifying a monolithic central system that communicates directly to every player terminal, it would be beneficial to allow some flexibility. For example, the functionality of the central system could be broken out. The regulations should not preclude the use of a "site controller." This would be a system that meets the security requirements of a central system, but would reside within the site selling electronic pull-tabs. Such a configuration would cut communication costs, improve availability of the games to the players, and is completely compatible with GLI-14.] [Part II, Section C, Item 1] [Deleted] [Comment: This restriction would absolutely prohibit the electronic pull-tab program from ever getting off the ground. Each site would be limited to just $68 in sales per day (on average). Such a limit will prevent charitable organizations from realizing the level of benefits envisioned by the sponsors of this legislation.] [Part II, Section K] [Edited] The department shall set manufacturing and testing criteria for all electronic bingo devices, electronic games of chance system, player terminals and other equipment used in the conduct of charitable gaming. An electronic bingo device, electronic games of chance system, player terminal and other equipment used in the conduct of charitable gaming shall not be sold, leased or otherwise furnished to any person in the Commonwealth of Virginia for use in the conduct of charitable gaming until an identical sample device containing identical proprietary software has been approved by an independent testing facility, which has been formally recognized by the department as an independent testing facility that upholds the standards of integrity established by the department. The recognized independent testing facility must certify that the device, system, terminal and equipment conforms, at a minimum, to the restrictions, standards and conditions set forth in these regulations. Once the recognized independent testing facility submits the test results to the department, the department will either approve or disapprove the submission and inform the manufacturer of the results of its decision within thirty business days. If any such device, system, terminal or equipment does not meet the department’s criteria, it shall not be distributed in the Commonwealth of Virginia. The cost of testing shall be borne by the manufacturer of such device, system, terminal or equipment. [Comment: Provides some incentive for the department to be selective in requests for retesting.] [Part III, Section E, Item 1] [Edited] Upon the request of the player terminal, the central system or site controller shall dispense a card from an electronic game [Comment: Edited to allow for the use of Site Controllers.]A supplier may lease, rent or sell, distribute or otherwise provide charitable gaming supplies or equipment intended to be used in the conduct of charitable gaming to an organization that expects to generate gross receipt of $25,000 or less in any 12-month period, providing that the amount of such purchase would not be reasonably expected to generate more than $25,000 in gross receipts. For each such organization, the supplier shall maintain the name, address and telephone number. The supplier shall also obtain a written and signed statement from a director, officer or game manager of such organization confirming that gross receipts are expected to be $25,000 or less. Such statement shall be dated and kept on file with the supplier for a period of three years from the end of a fiscal year. The supplier or manufacturer shall not offer to lease, lease, offer to rent, rent, offer to sell, sell, distribute or otherwise provide electronic games of chance systems to an organization that expects to generate gross receipts of $25,000 or less in any 12-month period.The department may require additional testing of a device, system, terminal or equipment at any time to ensure it continues to meet construction standards and to allow for fair play. Such tests shall be borne by the manufacturer of such device, system, terminal or equipment, unless otherwise stated in these regulations. If there is evidence that a piece of software, terminal, or other previously tested piece of equipment in use in Virginia is no longer in compliance with charitable gaming laws and regulations, the department may require additional testing of the component in question. If the testing reveals that the characteristics or functionality of the component has changed to the point that it is no longer compatible with charitable gaming laws and regulations, the cost of the additional testing shall be born by the manufacturer of the device, system, terminal or equipment. If the component is found to have remained consistent with charitable gaming laws and regulations, the cost of the additional testing shall be born by the department. card subset, which meets the standards set forth in 11 VAC 15-31-30 (N) of the Supplier Regulations.
[Part III, Section E, Item 4] [Edited] The central system shall not permit the alteration of any accounting or electronic log information that was properly communicated from the player terminal without supervised access control. In the event financial data is changed, an [Comment: In the event of a component failure, the recovery may rely on a manual process. In such a case, there should be a standard form to be used to report the issue and the actions taken to correct.] [Part III, Section E, Item 5] [Edited] The central system shall have a separate physical medium for securely storing deals of electronic game card on such a central system, which shall be mirrored in real time by a backup medium within the same cabinet or enclosure. The central system shall also provide a means for storing duplicates of the deals of electronic game cards, which have already been transmitted to the player terminals, so as to reflect, on an ongoing basis, changes in the transmitted deals of electronic game cards as they occur. In addition, duplicates of the deals of electronic game cards, as stored on the central system, [Comment: Where a Site Controller is used, packs or subsets of game cards are sent from a Central System to the Site Controller on-site. The game cards are temporarily stored by the Site Controller until they are requested by the Player Terminals.] [Part III, Section E, Item 12] [Edited] In those incidences in which the central system or components are linked with one another in a local network for the function of sharing or other purposes, communication protocols shall be used in a manner that ensures that erroneous data or signals will not adversely affect the operations of any such central system or components. Dedicated and protected network connections, which prohibit unauthorized access, may allow multiple components of a central system to share information. [Comment: This would seem to preclude transmitting game cards to the player terminals or sharing game data among two or more components of a central system.] [Part III, Section E, Item 13] [Edited] One or more electronic accounting systems shall be required to perform reporting and other functions in support of the electronic game card game activities. The electronic accounting system shall not interfere with the outcome of any gaming functions. [Comment: This would seem to disallow web-based reports. Web-based reporting would provide the DCG with secure yet flexible access to sales and system status information without the high costs of dedicated computers of systems. Secure web-based applications are routinely deployed without needing to test every client system.] [Part III, Section E, Item 14, Sub-item d] [Deleted] automated electronic audit log shall record the following information: shall may be stored within a secure enclosure at the gaming facility. All storage shall be through an error checking, nonvolatile physical medium, so that if the primary storage medium should fail, then the functions of the central system and the process of auditing those functions can continue with no critical data loss. The database shall be stored on redundant media so that no single failure of any portion of the central system would cause the loss or corruption of data. The details of electronic game cards that are prohibited from being displayed, as stated in these particular regulations, shall not be available or transmitted between the connected systems or gaming location. The electronic accounting system may communicate with the other computers utilizing the protocol standards set forth within these regulations provided the other computers have undergone initial laboratory testing and on-site certification where the communications are set-up and tested on the property prior to implementation. Liability report, which shall report the outstanding funds, which carry forward to following day. At a minimum, such a report shall including the following information on a daily and monthly basis:1) Total amount of currency notes won by the players, but remain to be redeemed;2) Total amount of currency notes won by the players, but expired prior to redemption;3) Total amount of unused game plays and winnings that remain to be redeemed; and4) Total amount of unused game plays and winnings that expired prior to redemption.
[Part III, Section E, Item 24] [Edited] [Comment: Edited so that validation of pay tickets is not required.] [Part III, Section E, Item 25] [Replaced] The following payment ticket information shall be printed by the printer within the player terminal on the payment ticket. [Comment: Edited so that validation of pay tickets is not required.] [Part III, Section E, Item 25, Sub-item i] [Replaced] If the payment ticket is a re-printed payment ticket, the re-printed payment ticket must be clearly marked as such; [Comment: Edited so that validation of pay tickets is not required.] [Part III, Section E, Item 40] [Edited] [Comment: Edited to allow central systems to be located outside of Virginia. This may reduce operating costs.] [Part III, Section F, Item 1] [Edited] The player terminals shall be compatible and [Comment: Edited to allow for the use of Site Controllers.] [Part III, Section F, Item 2] [Edited] In order to distinguish the external appearance of the player terminals from that of a slot machine, the player terminal shall not have any of the following attributes: [Part III, Section F, Item 3] [Replaced] In addition to the certification by an approved testing laboratory, the following attributes of the player terminals and electronic games must be approved by the Division of Charitable Gaming prior to deployment: cabinet design (including artwork and lighting), communication methods, sounds, images, animations, secondary game features, and prize structures. The method in which the printer issues a payment ticket from the player terminal for any unused game plays and/or winnings shall only be permitted If the player terminal is linked to an approved payment ticket validation system, the information communicated between the payment ticket validation system and the player terminal shall use a secure communication protocol. The payment ticket validation system shall communicate the following payment ticket information to the printer within the player terminal to print such information on the payment ticket. The status of the payment ticket such as invalid, pending, redemption in progress, unredeemed, valid, void and any other possible statuses;The central system shall be located within the Commonwealth of Virginia and as such, the location of the central system will be known to the department. Any central system to be used in conjunction with player terminals in the Commonwealth of Virginia must be located in a facility that has been approved by the department. Once in operation, a central system shall not be moved to a new location with prior approval by the department. connected coupled with the a central system prior to play of any electronic game cards. All player terminals coupled to the central system shall bear an assigned, electronic, unique identification known to the department and available to the central system.
wireless communications,spinning reels (simulated or mechanical) reels, pull handle, sound, music, flashing lights, tower light, top box, coin tray, ticket acceptor, hopper, or coin acceptor, enhanced animation, cabinet or payglass artwork, or any other attribute not explicitly approved by the department.Any player terminal that displays electronic game cards shall not present any visual animation that simulates or displays rolling, flashing or spinning mechanical or video reels.
[Part III, Section F, Item 4] [Edited] The player terminal shall only be capable of engaging in the play of electronic game cards. The player terminal shall not simulate the play of roulette, poker, keno, lotto, lottery, twenty-one (21), blackjack, or any other card game [Comment: Clarified that known slot game titles are prohibited. Most pull-tab games utilize slot-style symbols.] [Part III, Section F, Item 5] [Replaced] The prize structure, features, and thematic elements (sounds and images) of every new electronic game must be approved by the DCG prior to deployment within the Commonwealth of Virginia. Once approved, the game provider must not change the prize structure, features, and thematic elements without advance approval from the DCG. [Comment: The current rules for paper pull-tabs do not limit ticket prices. There is no reason to do so for the electronic version. In order for electronic pull-tabs to compete with paper pull-tabs and other gaming options, they will need to be offered at a number of different price-points.] [Part III, Section F, Item 9] [Edited] After the bill acceptor device has accepted a currency note in the allowable denomination from the player, if the player terminal is configured to provide more than one game, the player shall select an electronic game card from the available games. [Comment: If the maximum number of games that can be offered at a player terminal must be specified, it should higher (8 - 12). Also, explicitly added “Reveal All” option.] [Part III, Section F, Item 18] [Deleted] [Comment: If this clause must be included, it should specify what equivalent word is acceptable.] [Part III, Section F, Item 28, Sub-items] [Inserted] The printer shall use printer paper containing security features such as a watermark, as approved by the department. [Inserted] If the payment ticket is a re-printed payment ticket, the re-printed payment ticket must be clearly marked as such; [Part III, Section F, Item 29] [Edited] The player terminal, in which contains the printer [Part III, Section F, Item 35] [Deleted] , or any type of slot machine game regardless of whether or not the player terminal has a payback feature or extra play awards. The traditional card and slot-stylesymbols are acceptable, provided that the aforementioned is adhered to accordingly. Slot machine game titles that are currently in use or have been used in the recent past in casinos are strictly prohibited (ex. “Blazing Sevens”). The player terminal shall accept only accept a wager of one dollar ($1) per a card within an electronic game card. among up to four different electronic game card themes that are available for selection by the player. Only one of the four electronic game card themes shall be payable at any one time. The player shall interact with the player terminal by pressing an electromechanical “Play” button or by pressing a designated touchpoint on the touchscreen. Such an interaction shall signal to the player terminal that the player is requesting a card within the selected electronic game card. The player shall use one or more electro-mechanical buttons on the player terminal or designated touch points on the touch screen in order to reveal the predetermined numbers or symbols and the predetermined win or loss on the card within the selected electronic game card. If an electronic pull-tab game utilizes multiple tabs to cover symbols, the tabs may be removed individually or all at once through a “Reveal All” button or touch point. The player terminal shall not display the word ‘credit’ on any single video monitor, touchscreen, cabinet or any other part of the player terminal. shall may be linked to an approved payment ticket validation system. The information communicated between the payment ticket validation system and the player terminal shall use a secure communication protocol. The payment ticket validation system shall meet the following standards:Up to four different electronic game card themes shall be available for selection by the player on any given player terminal along with only one of the four electronic game card themes being playable at any one time.
[Part III, Section H] [Replaced] In order to maintain the maximum level of game integrity, all systems to be used as part of the electronic pull-tab program must be certified by an independent testing laboratory designated by the Division of Charitable Gaming. Elements to be tested include the central system, site controller, player terminal(s), and games. The independent laboratory will test and certify that the hardware, software, and communication methods between elements meet the requirements specified within these rules. All fees and costs associated with the testing and certification will be the responsibility of the submitting manufacturer. [Comment: Requiring all player terminals to communicate directly with a single central system will significantly decrease the potential revenue to the charities by increasing the overall program costs. Through testing and certification, central systems from multiple vendors can be just as secure as a single system, while offering the advantages of competition, lower costs, potentially increased reliability, and shorter time-to-market.] [Part III, Section K, Item 3] [Edited] Each dispensing device shall be manufactured in such a manner that any visual animation does not simulate or display rolling, flashing or spinning mechanical or video reels [Comment: Edited for clarity. The latest generation of mechanical dispensing devices utilizes audio and video for point-of-sale promotion. While the machine is not being played, animation sequences run to promote games and charities. A touch screen monitor with on-screen buttons is used to dispense physical paper tickets. These innovations can significantly boost sales while maintaining the basic characteristics of a vending device.] [Part III, Section N] [Edited] The total face value of tickets being dispensed from the instant bingo, pull-tab, or seal card dispensing device shall match the amount deposited in the bill acceptor device or coin acceptor less change provided. [Comment: It is not clear if this would allow a player to make multiple selections after inserting currency.] [Part III, Section O, Item 4] [Edited] The payout percentage for an electronic game card shall not be less than fifty percent (50%). [Comment: The current rules for paper pull-tabs do not limit game payouts. There is no reason to do so for the electronic version. In order for electronic pull-tabs to compete with paper pull-tabs and other gaming options, they will need to provide an equivalent or better playing experience. Also, capping the payout provides absolutely no benefit to players.] [Part III, Section O, Item 6] [Deleted] [Comment: The current rules for paper pull-tabs do not limit ticket prices. There is no reason to do so for the electronic version. In order for electronic pull-tabs to compete with paper pull-tabs and other gaming options, they will need to be offered at a number of different price-points.] [Part III, Section O, Item 14] [Deleted] In order to maintain the maximum level of game integrity, the central system shall be provided by a single vendor that has been contracted by the department to provide and to operate such a central system within the Commonwealth of Virginia. All player terminals shall be connected to the central system prior to the play of any electronic game cards. Manufacturers or suppliers who lease, rent or distribute player terminals; or sell or distribute electronic game cards shall pay a reasonable fee, which is determined by the department to such a single vendor. Such a single vendor shall not offer to lease, lease, offer to rent, rent or distribute player terminals to any manufacturer, supplier or organization within the Commonwealth of Virginia. or produce audible music or enhanced sound effects or any other attribute not explicitly approved by the department. The following attributes of the dispensing device must be approved by the Division of Charitable Gaming prior to deployment: cabinet design (including artwork and lighting), communication methods, sounds, images, and animations. and not be more than seventy-five percent (75%) for the entire electronic deal. The electronic game card shall only contain wagers in the amount of one dollar per card. Following the initiation of a RAM reset procedure, the electronic game card shall execute a routine, which initializes each and every bit in RAM to the default state. The RAM reset procedure shall be conducted by a certified RAM clear method as approved by the department. For an electronic game card that allows for partial RAM clears, the methodology in doing so must be accurate and the electronic game card must validate the un-cleared portions of RAM. After the conduct of the RAM reset procedure, the single video monitor or touchscreen shall not display the top award for the electronic game card. In addition, upon entering game play mode, the default display for the electronic game card shall not be the top award.