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. 
The following definitions of terms, in addition to those set forth in section 12-47.1-103, C.R.S., shall apply to all rules and regulations promulgated pursuant to article 47.1 of title 12, of the Colorado Revised Statutes:
(9)	“Drop” means the total amount of money, chips, tickets, coupons, and tokens removed from the drop boxes;
(15)	“Imprest bank” means an area on a poker table in which a predetermined dollar amount of chips, tokens, or cash are kept by the licensee.;
(8.2)(24.7) “Gaming Slot Coupon” means an encoded credit certificate which, when inserted into a slot machine, is validated by a computerized system which causes redeemable credits in on the face amount to be placed on the machine.  A gaming slot coupon has no value unless inserted into a slot machine or redeemed by the casino in any other another approved manner.  Gaming  Coupon does not include marketing or promotional coupons used for gaming purposes which cannot be inserted into a slot machine; 
(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.
The following definitions apply to all slot machine hardware and software requirements:
(1)	“Leakage current” means an electrical current which flows when a conductive path is provided between exposed portions of a slot machine and the environmental electrical ground when the slot machine is isolated from the normal AC power ground;
(2)	“Inappropriate coin-in” means a coin or token which has been accepted by a slot machine after the slot machine has already accepted the maximum number of coins or when the slot machine is in a state which normally rejects additional coins, sometimes caused by mechanical timing limits in coin handling equipment;
(3)	“Par sheet” means a document which depicts the possible outcomes from the play of a slot machine, the probability of occurrence of each, and the contribution of each winning outcome to the payback percentage of a slot machine;
(4)	“Random access memory” or “RAM” means the electronic component used for computer work space and storage of volatile information in a slot machine;
(5)	“Randomness” means the unpredictability and absence of pattern in the outcome of an event or sequence of events;
(6)	“Random number generator” means a hardware, software, or combination hardware and software device for generating number values that exhibit characteristics of randomness;
(7)	“Read only memory” or “ROM” means the electronic component used for storage of nonvolatile information in a slot machine, including programmable ROM and erasable programmable ROM (EPROM); 
(8)	“Tilt condition” means a programmed error state for a slot machine which occurs when the slot machine detects an internal error, malfunction, or attempted cheating. The machine ceases processing further input, output, or display information other than that indicating the tilt condition itself.
(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.  
(10) 	Ticket definitions:
(a)	Delayed Ticket: A ticket generated by a TITO-enabled slot machine, which contains all information necessary for validation, but for which the TITO system has not yet received the validation information.
(b)	Incomplete Ticket:  An incomplete ticket contains, at a minimum, the ticket validation number printed across the leading edge of the ticket, but is not of a quality that can be validated and redeemed through the automated functionality of a TITO system.
(c)	Online Ticket: A ticket which contains all information necessary for validation, which may be presented for redemption to the TITO system before its expiration.
(d)	Redeemed Ticket: A ticket which has been properly validated and redeemed by the TITO system and is no longer reflected as an active (i.e., unredeemed) ticket in the TITO system database.  
(11)	TITO System: A Ticket In/Ticket Out 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.  
(12)	TITO Validation Component: That function of the automated slot system whereby this system receives information about a ticket from a floor device and compares the ticket in question to the information in the system’s database. This determines the validity of the ticket for redemption. 
47.1-1222	Control program requirements.	
(1) 	Slot machine control programs must test themselves for possible corruption caused by failure of the program storage media. Test methodology must detect 99.99 percent of all possible failures. The ROM must be tested at least once during a game cycle.
(2)	The program residing in the slot machine must be contained in a storage medium which is not alterable through any use of the circuitry or programming of the slot machine itself. This storage medium must be approved by the Division. Non-volatile memory chips (a flash EPROM) may be used for note acceptor, sound and graphic programs if the procedure used to send information to the Flash EPROM is secure from unauthorized tampering and the procedure has been approved in writing by the Division. All changes sent to these Flash EPROMs must be documented on Division approved forms. Flash EPROMs must not contain any information related to the security, operation, or metering of the game except as directly related to the operation of the note acceptor and sound and graphics routines.  
(3)	The control program must check for corruption of random access memory locations used for crucial slot machine functions, including information relating to the play and final outcome of the last ten games played, random number generator outcome, and any error states. These memory areas must be checked for corruption following game initiation but prior to the display of the game outcome to the player. Detection of corruption is a game malfunction and must result in a tilt condition which identifies the error and causes the slot machine to cease further functions.
(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)	Either the TITO system 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 ticket redemption of a ticket or slot coupon, the log(s) shall properly update with the ticket redemption information, including the date and time of redemption, amount of ticket, and at least the last four digits of the ticket validation number.  
(6)	Either the TITO system  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.  
(7)	Slot machines equipped with note acceptors must maintain an audit log that records, at a minimum, the last five notes accepted.  Upon note acceptance, the log shall properly update with the note information, including the date and time of acceptance, and the note value. This log must not be cleared upon removal of the stacker. 
47.1-1223	Meters.
(1) 	A slot machine must have electronic (soft) meters with all meters being visible without opening the machine. These meters must have at least ten digits and they must accumulate in electronic digital storage and provide the means for on-demand display of the stored information.
(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 theorectical theoretical payback percentage, and calcualte 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 Coupon Promotion In.  The machine must have a meter specifically labeled “Coupon Promotion In” “Cashable Coupon In” that accumulates the total value of all slot machine 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 lableled labeled “Attendant Paid External Bonus Payout” that accumulates the total value of amounts awarded as a result of an external bounusing bonusing system paid by an attendant.
(r)	Such other meters as may be required by the Director.
(3)	Slot machines that are unable to comply with the full requirements of CLGR 47.1-1223(2), shall:
(a)	For slot machines that are unable to display the specific meter labels required, use a legend to indicate what information a specific meter accumulates.  Such legend must be located within the slot machine.
 (4)	A slot machine must be equipped with electronic meters that record the number of times the cabinet door was opened. No slot machine may have a mechanism that causes the electronic accounting meters to clear automatically when an error occurs. A slot machine’s meters must be maintained at all times, regardless of whether the machine is being supplied with power. Meter readings must be recorded before and after the electronic accounting meter is cleared. Licensees must maintain adequate records when any electronic accounting meters are cleared.  
(5)	Electronic meters must have an accuracy rate of 99.99 percent or better.  
(6)	A slot machine must have an electronically stored digital meter of at least eight digits for the number of games played since “power on”, the number of games played since “door closure”, and since “game initialization (ram clear)”. The slot machine must provide the means for on-demand display of the stored information.
(7)	Slot machines must have electronic meters that are visible to the player capable of displaying the following information relating to the current play or monetary transaction:
(a) 	The number of coins or credits wagered;
(b) 	The number of coins or credits won;
(c) 	The number of coins paid by the hopper;
(d) 	The number of credits available for wagering (credit meter), if applicable. 
47.1-1261	Specification for paper gaming 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.
Paper gaming Slot coupons must:
(1)	Be the same dimensions as U.S. currency. 
(2)	Have an expiration date. 
(3)	Contain a serial number.
(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.
(47)	Contain a coupon bar code generated with a unique algorithm which must identify the issuing casino, coupon credit (denomination) amount, and expiration date.  
(58)	Contain a description of any restrictions on the redemption of the coupon. 
(69)	Be generated on by a secure system, which is capable of communicating with 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 paper gaming slot coupons.
(1)	Paper gaming Slot coupons can only 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 gaming slot coupons must have serial communication communicate with the slot machines’ microprocessors. The gaming coupon slot monitoring system must validate all gaming slot coupons before accepting redeeming and stacking the gaming slot coupons. Only after accepting redeeming the gaming slot coupons can credits be issued to the slot machine, through the slot monitoring system. Gaming coupon systems cannot communicate directly with a slot machine unless the gaming coupon system is a subsystem of a slot monitoring system. If either the slot monitoring system or gaming coupon system is down, the note acceptors must reject all gaming coupons. The gaming coupon slot monitoring system must maintain a record of each gaming slot coupon accepted, valdiated and redeemed by the system. Once a gaming slot coupon is accepted, validated and redeemed and validated, that coupon cannot shall not be redeemed accepted by either the slot monitoring system or the gaming coupon system 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 validated gaming redeemed slot coupons must be capable of either being played or cashed out. Patrons must not be required to play credits. 
47.1-1268	Ticketing. 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)	Rreturn the ticket or slot coupon to the patron, 
(2)	Aaccept 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)	Aaccept 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. 
(1) 	For each blackjack game, adjusted gross proceeds equals the closing bankroll plus credit slips for cash, chips, or tokens returned to the casino cashier cage, plus drop, plus face value of coupons less opening bankroll and less fills to the table.
(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.  (amend. perm. 03/30/02)
(3)	For each player banked poker game, adjusted gross proceeds equals all money received by the licensee as compensation through the rake process, for conducting the game, plus poker tournament entry fees exceeding winnings paid out to tournament players.  (47.1-1603(3) amended; perm. 11/30/96)
(4)	For each house banked poker game, adjusted gross proceeds equals the closing bankroll plus credit slips for cash, chips, or tokens returned to the casino cashier cage, plus drop, plus face value of coupons, less opening bankroll, less fills to the table, and less hand-paid jackpots or awards. (47.1-1603(4) (shill computations) deleted; new (4) added, perm. 11/30/96)
(5)	A licensee shall not exclude from adjusted gross proceeds money paid out on wagers that are knowingly accepted by the licensee in violation of Article 47.1 of Title 12, C.R.S., or the regulations thereunder of the Commission.
(6)	Returned and uncollectable checks are not allowed as a deduction from adjusted gross proceeds. (47.1-1603 amended perm. 10/30/99)
(7)	A licensee shall not exclude from adjusted gross proceeds money paid out on wagers that exceed the value of the winning combination posted unless previously approved by the Division.
47.1-1614	Free play coupons items. 
Free play coupon items are allowed, but once used may not be retained for subsequent play by the customer.  Free play coupons and resulting payment to players for slot machines are not included in the calculation of adjusted gross proceeds.  Free play coupons do not apply to table games of blackjack or poker.  When a free play item is used, the fills to the game must be increased by 50 percent multiplied by the total dollar value of the free play item as listed in the count. The total face value of the coupons must be reflected on the soft count card as a part of the drop. A free play coupon must have printed on it the name of the issuing establishment, the city in which the establishment is located, explanation of its use, and the monetary worth of the coupon. All coupons must have an expiration date printed on them. (47.1-1614 amended perm. 10/30/99)
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.