This document from Gaming Regulatory Consultants discusses essential elements of gaming regulation compliance. It advocates for a cooperative regulatory approach focused on problem-solving over confrontation. Regulators should monitor operations and hold operators accountable while operators should maintain strong controls, self-report issues, and prioritize compliance. The document outlines regulatory techniques like inspections and meetings as well as operator responsibilities and best practices for addressing compliance issues. Throughout, it emphasizes the importance of open communication and working together to achieve regulatory goals.

1. ©2010 Gaming Regulatory Consultants COMPLIANCE Essential Elements Pat Leen & Tom Nelson Gaming Regulatory Consultants

2. ©2010 Gaming Regulatory Consultants Regulatory Philosophy The goal of regulation is compliance – Regulators shouldn’t try to run the business Avoid “Regulatory Creep” Focus resources on important issues Confrontation & punitive measures should be a last resort

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4. ©2010 Gaming Regulatory Consultants Management Philosophy There are two basic compliance models that management can adopt: “Compliance ~ Not Defiance” or “Complain ~ Not Comply”

5. ©2010 Gaming Regulatory Consultants Clear Roles Operator: Implement and maintain strong internal controls Keep the regulatory agency informed of problems Regulator: Monitor, inspect and verify Hold the operator accountable

6. ©2010 Gaming Regulatory Consultants Elements of Regulation Licensing Screen out risks Impose obligations Compliance Conducts random, focused inspections Investigates complaints and problems Audit Monitors internal control compliance Follows up on external audit findings

7. ©2010 Gaming Regulatory Consultants Instead of polishing the silverware . . .

8. ©2010 Gaming Regulatory Consultants Watch out for the icebergs . . .

9. ©2010 Gaming Regulatory Consultants Monitoring Techniques Weekly meetings with casino management Periodic inspections – Modules Review of audit reports & responses Just Doesn’t Look Right Patron complaints Special Projects

10. ©2010 Gaming Regulatory Consultants Weekly Compliance Meeting Identification of Problems/Concerns Clarification of Facts Discussion of Proposed Solutions Agreement Implementation, Monitoring, Evaluation

11. ©2010 Gaming Regulatory Consultants Inspection Elements Periodic Random Focused Meticulous Documented Reviewed Followed up

12. Gaming Regulatory Consultants Casino Regulation Phases Enthusiasm Disillusionment Panic Search for the Guilty Punishment of the Innocent Praise & Honors for the Non-participants

13. ©2010 Gaming Regulatory Consultants Whose to Blame?

14. ©2010 Gaming Regulatory Consultants Some Bad Ideas Denial Excuses Finger Pointing Blame the Regulator Find a Scapegoat (and fire them) Seek Pity Beg for Mercy

15. ©2010 Gaming Regulatory Consultants Better Approaches Be first – find it and report it Fix it without being told Develop preventative measures Accept responsibility Propose a settlement

16. ©2010 Gaming Regulatory Consultants Disciplinary Process Notice of Opportunity to Show Compliance Non-disciplinary compliance agreement If the licensee fails to show compliance or the matter is not otherwise resolved, a formal complaint may be filed Post complaint settlement requires a consent judgment

17. Compliance Pyramid ©2010 Gaming Regulatory Consultants

18. ©2010 Gaming Regulatory Consultants A Final Word Regulators: Find important problems ~ and Fix them! Licensees: Compliance before Commerce!

19. ©2010 Gaming Regulatory Consultants GRC www.grcgaming.com