State Codes and Statutes

5-601.02. New standard form of tribal-state gaming compact; effects

(Caution: 1998 Prop. 105 applies)

A. Notwithstanding any other law, within 30 days after receipt of a timely written request by the governing body of an Indian tribe, the state, through the governor, shall enter into the new standard form of tribal-state gaming compact with the requesting Indian tribe by executing the new compact and forwarding it to the United States department of the interior for any required approval.

B. The state, through the governor, may only enter into a new compact with an Indian tribe with a pre-existing compact if the Indian tribe requests a new compact pursuant to subsection A during the first 30 days after the effective date of this section. The state, through the governor, shall serve a timely notice of nonrenewal of a pre-existing compact on any Indian tribe that does not request a new compact during the first 30 days after the effective date of this section. Any Indian tribe without a pre-existing compact on the effective date of this section may request a new compact at any time.

C. Notwithstanding any other law, an Indian tribe may conduct the following forms of gambling as regulated gambling, as defined in section 13-3301, if the gambling is conducted in accordance with the terms of a tribal-state gaming compact: gaming devices, keno, offtrack pari-mutuel wagering, pari-mutuel wagering on horse racing, pari-mutuel wagering on dog racing, blackjack, poker (including jackpot poker), and lottery.

D. The department of gaming shall administer and carry out its responsibilities under the procedures for the transfer and pooling of unused gaming device allocations described in section 3(d) of the new compact.

E. The state, through the governor, is authorized to negotiate and enter into amendments to new compacts that are consistent with this chapter and with the policies of the Indian gaming regulatory act.

F. At the request of any Indian tribe for which paragraph 6 of subsection I does not specify a possible additional devices allocation, the state, through the governor, shall negotiate with the Indian tribe for a possible additional devices allocation. This allocation shall not be less than the smallest or greater than the largest possible additional devices allocation provided to an Indian tribe with an equal number of devices in the current device allocation column set forth in the new compact. At the option of the Indian tribe, the possible additional devices allocation shall be included in either the Indian tribe's new compact or an amendment to such new compact.

G. The authority and obligations of the state, through the governor, to negotiate additional compact terms pursuant to subsections E and F are independent of and separate from the obligations of the state pursuant to subsection A, and shall not constitute grounds for any delay by the state in carrying out its obligations to execute and forward new compacts to the United States department of the interior as required in subsection A.

H. The Arizona benefits fund is established consisting of monies paid to the state by Indian tribes pursuant to section 12(c) of new compacts and interest earned on those monies. An Indian tribe with a new compact satisfies the requirements of subsection F of section 5-601. Tribal contributions paid to the state pursuant to a new compact shall be deposited in the Arizona benefits fund, not the permanent tribal-state compact fund pursuant to subsection G of section 5-601.

1. The department of gaming shall administer the Arizona benefits fund. The department of gaming shall make an annual report to the governor, the president of the senate, the speaker of the house of representatives and each Indian tribe with a new compact within 90 days after the end of the state's fiscal year. This report shall be separate from any other report of the department of gaming. The report shall include a statement of aggregate gross gaming revenue for all Indian tribes, aggregate revenues deposited in the Arizona benefits fund, including interest thereon, expenditures made from the Arizona benefits fund, and aggregate amounts contributed by all Indian tribes to cities, towns and counties pursuant to paragraph 4 of this subsection. The department of gaming shall provide a copy of this report to the secretary of state and the director of the Arizona state library, archives and public records.

2. Except for monies expended by the department of gaming as provided in subdivision (a) of paragraph 3 of this subsection, which shall be subject to appropriation, the Arizona benefits fund is not subject to appropriation, and expenditures from the fund are not subject to outside approval notwithstanding any statutory provision to the contrary. Monies paid to the state by Indian tribes pursuant to a new compact shall be deposited directly with the Arizona benefits fund. On notice from the department of gaming, the state treasurer shall invest and divest monies in the Arizona benefits fund as provided by section 35-313, and monies earned from investment shall be credited to the fund. Monies in the Arizona benefits fund shall be expended only as provided in paragraph 3 of this subsection, and shall not revert to any other fund, including the state general fund. Monies in the Arizona benefits fund are exempt from the provisions of section 35-190 relating to the lapsing of appropriations.

3. Monies in the Arizona benefits fund, including all investment earnings, shall be allocated as follows:

(a)(i) Eight million dollars or nine percent, whichever is greater, shall be used for reimbursement of administrative and regulatory expenses, including expenses for development of and access to any online electronic game management systems and for law enforcement activities incurred by the department of gaming pursuant to this chapter. Any monies that are allocated pursuant to this subsection 3(a) that are not appropriated to the department of gaming shall be deposited in the instructional improvement fund established by section 15-979.

(ii) Two percent shall be used by the department of gaming to fund state and local programs for the prevention and treatment of, and education concerning, problem gambling.

(b) Of the monies in the Arizona benefits fund that are not allocated pursuant to subdivision (a):

(i) Fifty-six percent shall be deposited in the instructional improvement fund established by section 15-979 for use by school districts for classroom size reduction, teacher salary increases, dropout prevention programs, and instructional improvement programs.

(ii) Twenty-eight percent shall be deposited in the trauma and emergency services fund established by section 36-2903.07.

(iii) Eight percent shall be deposited in the Arizona wildlife conservation fund established by section 17-299.

(iv) Eight percent shall be deposited in the tourism fund account established by paragraph 4 of subsection A of section 41-2306 for statewide tourism promotion.

4. In addition to monies contributed to the Arizona benefits fund, twelve percent of tribal contributions pursuant to new compacts shall be contributed by Indian tribes to cities, towns and counties as defined in title 11, Arizona Revised Statutes, for government services that benefit the general public, including public safety, mitigation of impacts of gaming, and promotion of commerce and economic development.

(a) An Indian tribe may distribute such funds directly to cities, towns and counties for these purposes. The amount of monies so distributed by each Indian tribe shall be reported to the department of gaming in the quarterly report required by the new compact.

(b) Any monies comprising the twelve percent not so distributed by an Indian tribe shall be deposited in the commerce and economic development commission local communities fund established by section 41-1505.12 for grants to cities, towns and counties.

5. The deposit of monies required by subdivision (b) of paragraph 3 of this subsection shall be made on a quarterly basis, or more frequently if practicable.

I. For the purposes of this section:

1. "Gaming devices" means gaming devices as defined in subdivision (b)(i) of paragraph 6 of this subsection.

2. "Indian gaming regulatory act" means the Indian gaming regulatory act of 1988 (P.L. 100-497; 102 Stat. 2467; 25 United States Code sections 2701 through 2721 and 18 United States Code sections 1166 through 1168).

3. "Indian lands" means lands as defined in 25 United States Code section 2703(4)(a) and (b), subject to the provisions of 25 United States Code section 2719.

4. "Indian tribe" means:

(a) The Cocopah Indian tribe.

(b) The Fort Mojave Indian tribe.

(d) The Tonto Apache tribe.

(e) The Yavapai-Apache nation.

(f) The Yavapai-Prescott Indian tribe.

(g) The Colorado River Indian tribes.

(h) The San Carlos Apache tribe.

(i) The White Mountain Apache tribe.

(j) The Ak-Chin Indian community.

(k) The Fort Mcdowell Yavapai nation.

(l) The Salt River Pima-Maricopa Indian community.

(m) The Gila River Indian community.

(n) The Pascua Yaqui tribe.

(o) The Tohono O'odham nation.

(p) The Havasupai tribe.

(q) The Hualapai tribe.

(r) The Kaibab-Paiute tribe.

(s) The Hopi tribe.

(t) The Navajo nation.

(u) The San Juan Southern Paiute tribe.

(v) Any Indian tribe, as defined in 25 United States Code section 2703(5), with Indian lands in this state.

5. "Pre-existing compact" means an Indian tribe's tribal-state gaming compact and amendments thereto as approved by the United States department of the interior, and all appendices thereto, as of the effective date of this section.

6. "New standard form of tribal-state gaming compact" or "new compact" means:

(a) For an Indian tribe without a pre-existing compact, a tribal-state gaming compact that contains the provisions of the most recent tribal-state gaming compact entered into by the state and an Indian tribe and approved by the United States secretary of the interior, and its appendices, prior to the effective date of this section, modified to include the provisions described in subdivision (b)(i) through (xi) of this paragraph.

(b) For an Indian tribe with a pre-existing compact, a tribal-state gaming compact that contains the provisions of the Indian tribe's pre-existing compact, modified as follows, with any cross references in a pre-existing compact to be conformed accordingly:

(i) The following definition shall replace the corresponding definition in section 2 of the pre-existing compact:

""Gaming device" means a mechanical device, an electro-mechanical device or a device controlled by an electronic microprocessor or another manner, whether that device constitutes class II gaming or class III gaming, that allows a player or players to play games of chance, whether or not the outcome also is affected in some part by skill, and whether the device accepts coins, tokens, bills, coupons, ticket vouchers, pull tabs, smart cards, electronic in-house accounting system credits or other similar forms of consideration and, through the application of chance, allows a player to become entitled to a prize, which may be collected through the dispensing of coins, tokens, bills, coupons, ticket vouchers, smart cards, electronic in-house accounting system credits or other similar forms of value. Gaming device does not include any of the following:

(1) Those technological aids for bingo games that function only as electronic substitutes for bingo cards.

(2) Devices that issue and validate paper lottery products and that are directly operated only by Arizona state lottery licensed retailers and their employees.

(3) Devices that are operated directly by a lottery player and that dispense paper lottery tickets, if the devices do not identify winning or losing lottery tickets, display lottery winnings or disburse lottery winnings.

(4) Devices that are operated directly by a lottery player and that validate paper lottery tickets for a game that does not have a predetermined number of winning tickets, if:

(a) The devices do not allow interactive gaming;

(b) The devices do not allow a lottery player to play the lottery for immediate payment or reward;

(d) The devices are not video lottery terminals.

(5) Player activated lottery terminals."

(ii) The following definitions shall be added to section 2 of the pre-existing compact:

"(mm) "Additional gaming devices" means the number of additional gaming devices allocated to the tribe in column (2) of the tribe's row in the table.

(nn) "Card game table" means a single table at which the tribe conducts the card game of poker or blackjack.

(oo) "Class II gaming device" means a gaming device which, if operated on Indian lands by an Indian tribe, would be class II gaming.

(pp) "Class III gaming device" means a gaming device which, if operated on Indian lands by an Indian tribe, would be class III gaming.

(qq) "Class III net win" means gross gaming revenue, which is the difference between gaming wins and losses, before deducting costs and expenses.

(rr) "CPI adjustment rate" shall mean the quotient obtained as follows: the CPI index for the sixtieth (60th) calendar month of the applicable five-year period for which the wager limitations are being adjusted shall be divided by the CPI index for the calendar month in which the effective date occurs. The CPI index for the numerator and the denominator shall have the same base year. If the CPI index is no longer published, or if the format of the CPI index has changed so that this calculation is no longer possible, then another substantially comparable index shall be substituted in the formula by agreement of the tribe and the state so that the economic effect of this calculation is preserved. If the parties cannot agree on the substitute index, the substitute index shall be determined by arbitration in accordance with section 15.

(ss) "CPI index" means the "United States city average (all urban consumers) - all items (1982-1984 = 100)" index of the consumer price index published by the bureau of labor statistics, United States department of labor.

(tt) "CPR" means the CPR institute for dispute resolution.

(uu) "Current gaming device allocation" means the number of class III gaming devices allocated to the tribe in column (1) of the tribe's row in the table as adjusted under section 3(c)(4).

(vv) "Effective date" means the day this compact goes into effect after all of the following events have occurred:

(1) It is executed on behalf of the state and the tribe;

(2) It is approved by the secretary of the interior;

(3) Notice of the secretary of the interior's approval is published in the federal register pursuant to the act; and

(4) Each Indian tribe with a gaming facility in Maricopa, Pima or Pinal counties has entered into a new compact as defined in A.R.S. section 5-601.02(I)(6), each of which has been approved by the secretary of the interior, and notice of the secretary of the interior's approval has been published in the federal register pursuant to the act, unless the governor of the state waives the requirements of this section 2(vv)(4).

(ww) "Forbearance agreement" means an agreement between the state and an Indian tribe in which the Indian tribe that is transferring some or all of its gaming device operating rights waives its rights to put such gaming device operating rights into play during the term of a transfer agreement.

(xx) "Gaming device operating right" means the authorization of an Indian tribe to operate class III gaming devices pursuant to the terms of a new compact as defined in A.R.S. section 5-601.02(I)(6).

(yy) "Maximum devices per gaming facility" means the total number of class III gaming devices that the tribe may operate within a single gaming facility.

(zz) "Multi-station device" means an electronic class III gaming device that incorporates more than one player station and contains one central processing unit which operates the game software, including a single random number generator that determines the outcome of all games at all player stations for that class III gaming device.

(aaa) "Player activated lottery terminal" means an on-line computer system that is player activated, but that does not provide the player with interactive gaming, and that uses the terminal for dispensing purposes only, in which:

(1) The terminal algorithm is used for the random generation of numbers;

(2) The tickets dispensed by the terminal do not allow the player the means to play directly against the terminal;

(3) The player uses the dispensed ticket to participate in an off-site random drawing; and

(4) The player's ability to play against the terminal for immediate payment or reward is eliminated.

(bbb) "Player station" means a terminal of a multi-station device through which the player plays an electronic game of chance simultaneously with other players at other player stations of that multi-station device, and which:

(1) Has no means to individually determine game outcome;

(2) Cannot be disconnected from the gaming device central processing unit that determines the game outcomes for all player stations without rendering that terminal inoperable; and

(3) Does not separately contain a random number generator or other means to individually determine the game outcome.

(ccc) "Population adjustment rate" means the quotient obtained as follows: the state population for the calendar year immediately preceding the calendar year in which the sixtieth (60th) calendar month of the applicable five-year period for which the applicable figure or amount is being adjusted occurs divided by the state population for the calendar year immediately preceding the calendar year in which the effective date occurs. If the state population is no longer published or calculated by the Arizona department of economic security, then another substantially comparable agency of the state shall be substituted by agreement of the tribe and the state so that the effect of this calculation is preserved. If the parties cannot agree on the substitute agency of the state to provide the state population, the substitute agency or person shall be determined by arbitration in accordance with section 15.

(ddd) "Previous gaming facility allocation" means the number of facilities allocated to the tribe in column (3) of the tribe's row in the table.

(eee) "Revised gaming facility allocation" means the number of facilities allocated to the tribe in column (4) of the tribe's row in the table or by section 3(c)(6).

(fff) "Rules" means the CPR rules for non-administered arbitration (2000 rev.).

(ggg) "State population" means the population of the state as determined using the most recent estimates published by the Arizona department of economic security.

(hhh) "Table" means the gaming device allocation table set out at section 3(c)(5).

(iii) "Transfer agreement" means a written agreement authorizing the transfer of gaming device operating rights between the tribe and another Indian tribe.

(jjj) "Transfer notice" means a written notice that the tribe must provide to the state gaming agency of its intent to acquire or transfer gaming device operating rights pursuant to a transfer agreement.

(kkk) "Wager" means:

(1) In the case of a gaming device, the sum of money placed into the gaming device in cash, or cash equivalent, by the player which will allow activation of the next random play of the gaming device.

(2) In the case of poker, the sum of money placed into the pot and onto the card game table by the player in cash, or cash equivalent, which entitles the player to an initial deal of cards, a subsequent deal of a card or cards, or which is required to be placed into the pot and onto the card game table by the player entitling the player to continue in the game.

(3) In the case of blackjack, the sum of money in cash, or cash equivalent, placed onto the card game table by the player entitling the player to an initial deal of cards and to all subsequent cards requested by the player."

(iii) Section 3 of the pre-existing compact shall be replaced with the following:

"Section 3. Nature, size, and conduct of class III gaming.

(a) Authorized class III gaming activities. Subject to the terms and conditions of this compact, the tribe is authorized to operate the following gaming activities: (1) class III gaming devices, (2) blackjack, (3) jackpot poker, (4) keno, (5) lottery, (6) off-track pari-mutuel wagering, (7) pari-mutuel wagering on horse racing, and (8) pari-mutuel wagering on dog racing.

(b) Appendices governing gaming.

(1) Technical standards for gaming devices. The tribe may only operate class III gaming devices, including multi-station devices, which comply with the technical standards set forth in appendix A to this compact. The tribal gaming office shall require each licensed and certified manufacturer and distributor to verify under oath, on forms provided by the tribal gaming office, that the class III gaming devices manufactured or distributed by them for use or play at the gaming facilities meet the requirements of this section 3(b)(1) and appendix A. The tribal gaming office and the state gaming agency by mutual agreement may require the testing of any class III gaming device to ensure compliance with the requirements of this section 3(b)(1) and appendix A. Any such testing shall be at the expense of the licensed manufacturer or distributor.

(2) Operational standards for blackjack and jackpot poker. The tribe shall conduct blackjack and jackpot poker in accordance with an appendix, which shall consist of the minimum internal control standards of the commission as set forth in 25 C.F.R. part 542 as published in 64 Fed. Reg. 590 (Jan. 5, 1999) as may be amended from time to time, without regard to the commission's authority to promulgate the standards, until an appendix setting forth the operational standards, specifications, regulations and any limitations governing such gaming activities is agreed to by the tribe and the state.

(3) Additional appendices.

(a) Except as provided in sections 3(b)(1) and (2), the tribe may not conduct any gaming activities authorized in this compact without a mutually agreed-upon appendix setting forth the operational standards, specifications, regulations and any limitations governing such gaming activities. For purposes of this subsection, promotional activity conducted as a lottery is a gaming activity for which an appendix shall be required. Any disputes regarding the contents of such appendices shall be resolved in the manner set forth in section 15.

(b) The gaming facility operator shall conduct its gaming activities under an internal control system that implements the minimum internal control standards of the commission as set forth in 25 C.F.R. part 542 as published in 64 Fed. Reg. 590 (Jan. 5, 1999) as may be amended from time to time, without regard to the commission's authority to promulgate the standards.

(c) The tribal gaming office and the state gaming agency may agree to amend appendices to this compact in order to continue efficient regulation and address future circumstances. A change in an appendix or the addition of a new appendix shall not be considered an amendment to this compact.

(4) Security and surveillance requirements. The tribe shall comply with the security and surveillance requirements set forth in appendix C to this compact.

(a) If the gaming facility operator operates the surveillance system, the manager of the surveillance department may report to management of the gaming facility operator regarding administrative and daily matters, but must report to a person or persons independent of the management of the gaming facility operator (e.g., the gaming facility operator's management board or a committee thereof, the tribe's council or a committee thereof, or the tribe's chairperson, president, or governor) regarding matters of policy, purpose, responsibility, authority, and integrity of casino management.

(b) If the tribal gaming office operates the surveillance system, the manager of its surveillance department must report directly to the executive director of the tribal gaming office.

(5) Online electronic game management system. Each gaming facility must have an online electronic game management system that meets the requirements of appendix A.

(a) If the tribe is Ak-Chin Indian community, Ft. McDowell Yavapai nation, Gila River Indian community, Pascua Yaqui tribe, Salt River Pima-Maricopa Indian community, or Tohono O'odham nation, then the gaming facility operator shall provide the state gaming agency with real time read-only electronic access to the online electronic game management system for each gaming facility of the tribe that is located within forty (40) miles of a municipality with a population of more than four hundred thousand (400,000), to provide the state gaming agency a more effective and efficient means of regulating gaming devices and tracking revenues.

1. The state gaming agency's real time read-only electronic access shall be limited to the following data maintained by the online electronic game management system, provided that the data is available in real-time and providing real-time access does not result in the loss of accumulation of data elements: coin in; coin out; drop (bills and coins); individual bills denomination; vouchers; theoretical hold; variances; jackpots; machine fills; ticket in; ticket out; slot door opening; drop door opening; cash box opening; ticket in opening; ticket out opening; and no-communication. If providing this data in real-time would result in the loss of accumulation of data elements, the gaming facility operator must provide the state gaming agency with access to the data via end-of-day reports containing the required data.

2. The state gaming agency shall phase in the system to provide it with real time read-only access to the online electronic game management system over a three year period. The state gaming agency shall pay the cost of:

A. Constructing and maintaining a dedicated telecommunications connection between the gaming facility operator's server room and the state gaming agency's offices;

B. Obtaining, installing, and maintaining any hardware or software necessary to interface between the gaming facility operator's online electronic game management system and the dedicated telecommunications connection; and

C. Obtaining, installing, and maintaining any hardware or software required in the state gaming agency's offices.

3. The state gaming agency's dedicated telecommunications connection from its offices to each gaming facility must meet accepted industry standards for security sufficient to minimize the possibility of any third-party intercepting any data transmitted from the gaming facility operator's online electronic game management system over the connection. The state gaming agency's system security policy must meet accepted industry standards to assure that data received from the gaming facility operator's online electronic game management system will not be accessible to unauthorized persons or entities.

(b) The state gaming agency (and its officers, employees, and agents) are prohibited from:

1. Using any information obtained from the gaming facility operator's online electronic game management system for any purpose other than to carry out its duties under this compact; and

2. Disclosing any information obtained from the gaming facility operator's online electronic game management system to any person outside the state gaming agency, except as provided in section 7(b) and section 12(c).

(1) Number of gaming devices. The tribe's gaming device operating rights are equal to the sum of its current gaming device allocation, plus any rights to operate additional gaming devices acquired by the tribe in accordance with and subject to the provisions of section 3(d). The tribe may operate one class III gaming device for each of the tribe's gaming device operating rights.

(2) Class II gaming devices. The tribe may operate up to forty (40) class II gaming devices in a gaming facility without acquiring gaming device operating rights under section 3(d), but such class II gaming devices shall be counted against the tribe's number of additional gaming devices. Each class II gaming device in excess of forty (40) that the tribe operates within its Indian lands shall be counted against the tribe's current gaming device allocation.

(3) Number of gaming facilities and maximum devices per gaming facility. The tribe may operate gaming devices in the number of gaming facilities in column (3) or (4) of the tribe's row in the table, whichever is lower, but shall not operate more than its maximum devices per gaming facility in any one gaming facility. The maximum devices per gaming facility for the tribe is the sum of the tribe's current gaming device allocation (including automatic periodic increases under section 3(c)(4)), plus the tribe's additional gaming devices, except if the tribe is Salt River Pima-Maricopa Indian community, Gila River Indian community, Pascua Yaqui tribe, Tohono O'odham nation, or Navajo nation, then the maximum devices per gaming facility is the same number as the maximum devices per gaming facility for Ak-Chin Indian community and Ft. McDowell Yavapai nation. If the tribe is the Tohono O'odham nation, and if the tribe operates four (4) gaming facilities, then at least one of the four (4) gaming facilities shall:

(i) Be at least fifty (50) miles from the existing gaming facilities of the tribe in the Tucson metropolitan area as of the effective date;

(ii) Have no more than six hundred forty-five (645) gaming devices; and

(iii) Have no more than seventy-five (75) card game tables.

(4) Periodic increase. During the term of this compact, the tribe's current gaming device allocation shall be automatically increased (but not decreased), without the need to amend this compact on each five-year anniversary of the effective date, to the number equal to the current gaming device allocation specified in the table multiplied by the population adjustment rate (with any fractions rounded up to the next whole number).

(5) Gaming device allocation table.

Gaming device allocation table

                           (1)         (2)         (3)           (4)
                           Current     Additional  Previous      Revised
 Listed tribe              gaming      gaming      gaming        gaming
                           device      devices     facility      facility
                           allocation              allocation    allocation
 The Cocopah Indian tribe     475         170           2            2
 Fort Mojave Indian tribe     475         370           2            2
 Quechan tribe                475         370           2            2
 Tonto Apache tribe           475         170           2            1
 Yavapai-Apache nation        475         370           2            1
 Yavapai-Prescott tribe       475         370           2            2
 Colorado River Indian tribes  475        370           2            2
 San Carlos Apache tribe      900         230           3            2
 White Mountain Apache tribe  900         40            3            2
 Ak-Chin Indian community     475         523           2            1
 Ft. McDowell Yavapai nation  475         523           2            1

Salt River Pima-Maricopa

 Indian community             700         830           3            2
 Gila River Indian community  1400        1020          4            3
 Pascua Yaqui tribe           900         670           3            2
 Tohono O'odham nation        1400        1020          4            4
 Subtotal                     10,475                    38           29

Non-gaming tribes

 (as of 5/1/02)
 Havasupai tribe              475                       2
 Hualapai tribe               475                       2
 Kaibab-Paiute tribe          475                       2
 Hopi tribe                   900                       3
 Navajo nation                2400                      4

San Juan Southern Paiute

 tribe                      ___475                   2___
 Subtotal                     5,200                     15
 State total                  15,675                    53

(6) If the tribe is not listed on the table, the tribe's current device allocation shall be four hundred seventy-five (475) gaming devices and the tribe's revised gaming facility allocation shall be two (2) gaming facilities.

(7) Multi-station devices. No more than two and one-half percent (2.5%) of the gaming devices in a gaming facility (rounded off to the nearest whole number) may be multi-station devices.

(d) Transfer of gaming device operating rights.

(1) Transfer requirements. During the term of this compact, the tribe may enter into a transfer agreement with one or more Indian tribes to acquire gaming device operating rights up to the tribe's number of additional gaming devices or to transfer some or all the tribe's gaming device operating rights up to the tribe's current gaming device allocation, except that if the tribe is Navajo nation, then the tribe may transfer only up to 1400 gaming devices of its current gaming device allocation. The tribe's acquisition or transfer of gaming device operating rights is subject to the following conditions:

(a) Gaming compact. Each Indian tribe that is a party to a transfer agreement must have a valid and effective new compact as defined in A.R.S. section 5-601.02(I)(6) that contains a provision substantially similar to this section 3(d) permitting transfers of the Indian tribe's gaming device operating rights.

(b) Forbearance agreement. If the tribe enters into a transfer agreement to transfer some or all of its gaming device operating rights the tribe shall also execute a forbearance agreement with the state. The forbearance agreement shall include:

1. A waiver of all rights of the tribe to put into play or operate the number of gaming device operating rights transferred during the term of the transfer agreement;

2. An agreement by the tribe to reduce its gaming facility allocation during the term of the transfer agreement as follows:

      Number of transferred               Reductions in gaming
      gaming device operating             facility allocation

rights

      1 - 475                             1
      476 - 1020                          2
      1021 - 1400                         3

(i) If the tribe's number under column (4) of the table is lower than the tribe's number under column (3), then the tribe shall be credited for the reduction, if the tribe enters into a transfer agreement.

(ii) The numbers in the column under number of transferred gaming device operating rights shall be increased on each five-year anniversary of the effective date by multiplying each such number, other than one (1), by the population adjustment rate.

(iii) Reductions in the gaming facility allocation will be based on the cumulative total number of gaming device operating rights transferred by the tribe under all transfer agreements that are in effect.

(iv) If the tribe is the Navajo nation, then the tribe's gaming facility allocation shall be two (2), even if the tribe transfers up to 1400 gaming device operating rights.

(c) Gaming facility not required. The tribe may transfer unused gaming device operating rights whether or not it has a gaming facility allocation.

(d) Current operation. The tribe must operate gaming devices at least equal to its current gaming device allocation before, or simultaneously with, the tribe acquiring the right to operate additional gaming devices by a transfer agreement. The tribe is not required to utilize any gaming device operating rights it acquires, or to utilize them prior to acquiring additional gaming device operating rights.

(e) Transfer of acquired gaming device operating rights prohibited. The tribe shall not at any time simultaneously acquire gaming device operating rights and transfer gaming device operating rights pursuant to transfer agreements.

(2) Transfer agreements. Transfers of gaming device operating rights may be made pursuant to a transfer agreement between two Indian tribes. A transfer agreement must include the following provisions:

(a) Number. The number of gaming device operating rights transferred and acquired.

(b) Term. The duration of the transfer agreement.

(c) Consideration. The consideration to be paid by the Indian tribe acquiring the gaming device operating rights to the Indian tribe transferring the gaming device operating rights and the method of payment.

(d) Dispute resolution. The dispute resolution and enforcement procedures, including a provision for the state to receive notice of any such proceeding.

(e) Notice. A procedure to provide quarterly notice to the state gaming agency of payments made and received, and to provide timely notice of disputes, revocation, amendment, and termination.

(3) Transfer notice. At least thirty (30) days prior to the execution of a transfer agreement, the tribe must send to the state gaming agency a transfer notice of its intent to acquire or transfer gaming device operating rights. The transfer notice shall include a copy of the proposed transfer agreement, the proposed forbearance agreement and a copy of the tribal resolution authorizing the acquisition or transfer.

(4) State gaming agency denial of transfer. The state gaming agency may deny a transfer as set forth in a transfer notice only if:

(i) The proposed transfer violates the conditions set forth in section 3(d)(1), or

(ii) The proposed transfer agreement does not contain the minimum requirements listed in section 3(d)(2). The state gaming agency's denial of a proposed transfer must be in writing, must include the specific reason(s) for the denial (including copies of all documentation relied upon by the state gaming agency to the extent allowed by state law), and must be received by the tribe within thirty (30) days of the state gaming agency's receipt of the transfer notice. If the tribe disputes the state gaming agency's denial of a proposed transfer, the tribe shall have the right to have such dispute resolved pursuant to section 15.

(5) Effective date of transfer. If the tribe does not receive a notice of denial of the transfer from the state gaming agency within the time period specified above, the proposed transfer agreement shall become effective on the later of the thirty-first (31st) day following the state gaming agency's receipt of the transfer notice or the date set forth in the transfer agreement.

(6) Use of brokers. The tribe shall not contract with any person to act as a broker in connection with a transfer agreement. No person shall be paid a percentage fee or a commission as a result of a transfer agreement, nor shall any person receive a share of any financial interest in the transfer agreement or the proceeds generated by the transfer agreement. Any person acting as a broker in connection with a transfer agreement is providing gaming services.

(7) Revenue from transfer agreements. The tribe agrees that:

(i) All proceeds received by the tribe as a transferor under a transfer agreement are net revenues from tribal gaming as defined by the act and that such proceeds shall be used for the purposes permitted under the act; and

(ii) The tribe shall include the proceeds in an annual audit and shall make available to the state that portion of the audit addressing proceeds from transfer agreements.

(8) Agreed upon procedures report. The tribe agrees to provide to the state gaming agency, either separately or with the other party to the transfer agreement, an agreed upon procedures report from an independent certified public accountant. The procedures to be examined and reported upon are whether payments made under the transfer agreement were made in the proper amount, made at the proper time, and deposited in an account of the Indian tribe transferring gaming device operating rights.

(9) State payment. Proceeds received by the tribe as a transferor under a transfer agreement from the transfer of gaming device operating rights are not subject to any payment to the state under this compact or otherwise.

(10) Compact enforcement; effect on transfer agreements. If the tribe acquires gaming device operating rights under a transfer agreement, no dispute between the state and the other party to the transfer agreement shall affect the tribe's rights under the transfer agreement or the tribe's obligations to make the payments required under the transfer agreement. If the tribe transfers gaming device operating rights under a transfer agreement, no dispute between the state and the other party to the transfer agreement shall affect the tribe's rights under the transfer agreement or the obligations of the other party to the transfer agreement to make the payments required under the transfer agreement. These provisions shall not apply to a dispute among the state and both parties to a transfer agreement regarding the validity of a transfer agreement or to a dispute between the parties to a transfer agreement regarding a breach of the transfer agreement.

(11) Access to records regarding transfer agreement. The state gaming agency shall have access to all records of the tribe directly relating to transfer agreements and forbearance agreements under section 7(b).

(12) Transfer and acquisition of pooled gaming devices.

(a) The tribe is authorized to join with other Indian tribes to periodically establish a pool to collect gaming device operating rights from Indian tribes that desire to transfer gaming device operating rights and transfer them to Indian tribes that desire to acquire gaming device operating rights. If the tribe is operating all of its current gaming device allocation and, after making reasonable efforts to do so, the tribe is not able to acquire additional gaming devices pursuant to an agreement described in section 3(d)(2), the tribe may acquire additional gaming devices up to the number specified in the table for the tribe from a transfer pool under procedures agreed to by Indian tribes participating in the transfer pool and the state.

(b) The tribe and the state are authorized to establish a pooling mechanism, under procedures agreed to by the tribe and the state, by which the rights to operate gaming devices that are not in operation may be acquired by an Indian tribe through an agreement with the state. If the tribe is operating all of its current gaming device allocation and, after making reasonable efforts to do so, the tribe is not able to acquire additional gaming devices pursuant to an agreement described in section 3(d)(2) or from any transfer pool established pursuant to section 3(d)(12)(a) within 90 days after the opening of a transfer pool established pursuant to section 3(d)(12)(a), the tribe may acquire additional gaming devices from the state up to the number specified in the table for the tribe at a price that is at least one hundred percent (100%) of the highest price paid to date for the transfer of at least one hundred (100) gaming device operating rights for a term of at least five (5) years. The monies paid by an Indian tribe to acquire additional gaming devices under an agreement pursuant to this section 3(d)(12)(b) shall benefit Indian tribes that have the right to operate gaming devices that are eligible to be transferred and are not in operation. The state shall provide Indian tribes that are eligible to enter into an agreement with the state pursuant to this section 3(d)(12)(b) the opportunity to participate in the pool pursuant to the procedures agreed to by the tribe and the state.

(c) Prior to agreeing to any procedures with any Indian tribe pursuant to sections 3(d)(12)(a) or (b), the state shall provide notice to the tribe of the proposed procedures.

(e) Number of card game tables.

(1) Number of card game tables; number of players per game. Subject to the terms and conditions of this compact, the tribe is authorized to operate up to seventy-five (75) card game tables within each gaming facility that is located more than forty (40) miles from any municipality with a population of more than four hundred thousand (400,000) persons; and up to one hundred (100) card game tables within each gaming facility that is located within forty (40) miles of a municipality with a population of more than four hundred thousand (400,000) persons. Each blackjack table shall be limited to no more than seven (7) available player positions plus the dealer. Each poker table shall be limited to no more than ten (10) available player positions plus the dealer. The tribe agrees that it will not operate card games outside of a gaming facility.

(2) Periodic increases in the number of card game tables. The number of card game tables that the tribe is authorized to operate in each gaming facility shall be automatically increased (but not decreased), without the need to amend this compact on each five-year anniversary of the effective date, to the number that is equal to the number of card game tables the tribe is authorized to operate in each gaming facility set forth in section 3(e)(1) multiplied by the applicable population adjustment rate (with any fraction rounded up to the next whole number).

(f) Number of keno games. Subject to the terms and conditions of this compact, the tribe is authorized to operate no more than two (2) keno games per gaming facility.

(g) Inter-tribal parity provisions.

(1) Gaming devices. Except as provided in section 3(g)(5), if, during the term of this compact:

(a) An Indian tribe listed on the table is authorized or permitted to operate in the state:

1. More class III gaming devices than the total number of that Indian tribe's current gaming device allocation in column (1) of the table, plus the number of that Indian tribe's additional gaming devices in column (2) of the table; or

2. More class III gaming devices than that Indian tribe's current gaming device allocation in column (1) of the table without acquiring gaming device operating rights pursuant to and in accordance with section 3(d); or

3. More class III gaming devices within a single gaming facility than that Indian tribe's maximum devices per gaming facility (as adjusted in accordance with section 3(c)(3)); or

(b) Any Indian tribe not listed on the table is authorized or permitted after the effective date to operate in the state more than four hundred seventy-five (475) class III gaming devices, or more than five hundred twenty-three (523) additional gaming devices under terms other than section 3(d); then

(c) The following remedies shall be available to the tribe to elect, as the tribe may determine in its sole discretion, from time to time:

1. The tribe shall automatically be entitled to a greater number of gaming device operating rights, without the need to amend this compact and without the need to acquire any gaming device operating rights under section 3(d). The greater number of gaming device operating rights is the product of a ratio (which is the total number of class III gaming devices the other Indian tribe is in fact authorized or permitted to operate following the occurrence of any of the events specified in subsections (a) or (b) of this section 3(g)(1) divided by the total number assigned to the other Indian tribe under column (1) plus column (2) of the table) multiplied by the total number assigned to the tribe in column (1) plus column (2) of the table. If the tribe is not listed on the table, then the ratio described in the previous sentence is multiplied by the tribe's total number of gaming devices authorized in the compact; and

2. The tribe shall automatically be entitled to immediately reduce its obligations to make contributions to the state under section 12. Instead of the amounts payable under section 12(b), the tribe shall make quarterly contributions to the state equal to seventy-five hundredths of one percent (.75%) of its class III net win for the prior quarter. This remedy will not be available after any Indian tribe with a new compact as defined in A.R.S. section 5-601.02(I)(6) enters its final renewal period as described in section 23(b)(3).

(2) Contribution terms. If, during the term of this compact any other Indian tribe is authorized or permitted to operate gaming devices in the state and the terms of the other Indian tribe's obligation to make contributions to the state are more favorable to the other Indian tribe than the obligation of the tribe to make contributions to the state under the terms of section 12, then the tribe may elect to have section 12 automatically amended to conform to those more favorable terms.

(3) Additional class III gaming. Except as provided in section 3(g)(5), if during the term of this compact, any Indian tribe is authorized to operate:

(a) A form of class III gaming in the state that is not listed in section 3(a), then the tribe shall be entitled to operate the additional form of gaming that the other Indian tribe is authorized to operate, without the need to amend this compact.

(b) Blackjack on more card game tables per gaming facility than authorized under this compact, then the tribe shall be entitled to operate blackjack on the additional number of card game tables that the other Indian tribe is authorized to operate, without the need to amend this compact.

(4) Wager limits. Except as provided in section 3(g)(5), if, during the term of this compact, any Indian tribe is authorized or permitted to operate in the state any class III gaming devices or card game tables with higher wager limits than the wager limits specified in section 3, then the tribe is also authorized to operate its gaming devices and/or card game tables with the same higher wager limits, without the need to amend this compact.

(5) Exceptions. The provisions of section 3(g) shall not be triggered:

(a) By the automatic periodic increases in:

(i) The current gaming device allocation provided in section 3(c)(4), or the resulting increase in the maximum device per gaming facility;

(ii) The number of authorized card game tables provided in section 3(e)(2); or

(iii) The authorized wager limits for gaming devices or card game tables provided in section 3(m)(4);

(b) If the state enters into a compact with an Indian tribe listed as a non-gaming tribe on the table that provides a number of additional gaming devices that is no greater than the largest number of additional gaming devices shown on the table for another Indian tribe with the same current gaming device allocation as shown on the table for such non-gaming tribe; and

(h) Additional gaming due to changes in state law with respect to persons other than Indian tribes.

(1) If, on or after May 1, 2002, state law changes or is interpreted in a final judgment of a court of competent jurisdiction or in a final order of a state administrative agency to permit either a person or entity other than an Indian tribe to operate gaming devices; any form of class III gaming (including video lottery terminals) that is not authorized under this compact, other than gambling that is lawful on May 1, 2002 pursuant to A.R.S. section 13-3302; or poker, other than poker that is lawful on May 1, 2002 pursuant to A.R.S. section 13-3302, then, upon the effective date of such state law, final judgment, or final order:

(a) The tribe shall be authorized under this compact to operate class III gaming devices without limitations on the number of gaming devices, the number of gaming facilities, or the maximum gaming devices per gaming facility, and without the need to amend this compact;

(b) The tribe shall be authorized under this compact to operate table games, without limitations on the number of card game tables, on wagers, or on the types of games, and without the need to amend this compact, subject to the provisions of 3(b)(3); and

(c) In addition to sections 3(h)(1)(a) and (b), the tribe's obligation under section 12 to make contributions to the state shall be immediately reduced. Instead of the amounts payable under section 12(b), the tribe shall make quarterly contributions to the state equal to seventy-five hundredths of one percent (.75%) of its class III net win for the prior quarter.

(2) The provisions of this section 3(h) shall not apply to casino nights operated by non-profit or charitable organizations pursuant to and qualified under A.R.S. section 13-3302(b); to social gambling as defined in A.R.S. section 13-3301(7); to any paper product lottery games, including ticket dispensing devices of the nature used prior to May 1, 2002, by the Arizona lottery; or to low-wager, non-banked recreational pools or similar activities operated by and on the premises of retailers licensed under title 4, Arizona Revised Statutes, as may be authorized by state law.

(i) Notice. Prior to the tribe obtaining rights under sections 3(g) or (h), either the tribe or the state must first give written notice to the other describing the facts which the tribe or the state contend either do or may satisfy the elements of sections 3(g) or (h). The receiving party shall serve a written response on the other party within thirty (30) days of receipt of the notice. If the parties do not agree on whether sections 3(g) or (h) have been triggered, the dispute may be submitted to dispute resolution under section 15 by either the tribe or the state.

(j) Location of gaming facility.

(1) All gaming facilities shall be located on the Indian lands of the tribe. All gaming facilities of the tribe shall be located not less than one and one-half (1 1/2) miles apart unless the configuration of the Indian lands of an Indian tribe makes this requirement impracticable. The tribe shall notify the state gaming agency of the physical location of any gaming facility a minimum of thirty (30) days prior to commencing gaming activities at such location. Gaming activity on lands acquired after the enactment of the act on October 17, 1988 shall be authorized only in accordance with 25 U.S.C. § 2719.

(2) Notice to surrounding communities. The tribe shall notify surrounding communities regarding new or substantial modifications to gaming facilities and shall develop procedures for consultation with surrounding communities regarding new or substantial modifications to gaming facilities.

(k) Financial services in gaming facilities. The tribe shall enact a tribal ordinance establishing responsible restrictions on the provision of financial services at gaming facilities. At a minimum, the ordinance shall prohibit:

(1) Locating an automatic teller machine ("ATM") adjacent to, or in close proximity to, any gaming device;

(2) Locating in a gaming facility an ATM that accepts electronic benefit transfer cards issued pursuant to a state or federal program that is intended to provide for needy families or individuals;

(3) Accepting checks or other non-cash items issued pursuant to a state or federal program that is intended to provide for needy families or individuals; and

(4) The gaming facility operator from extending credit to any patron of a gaming facility for gaming activities.

(l) Forms of payment for wagers. All payment for wagers made for gaming activities conducted by the tribe on its Indian lands, including the purchase of tokens for use in wagering, shall be made by cash, cash equivalent, credit card or personal check. Automatic teller machines (ATMs) may be installed at a gaming facility.

(m) Wager limitations.

(1) For gaming devices. The maximum wager authorized for any single play of a gaming device is twenty five dollars ($25.00).

(2) For blackjack. The maximum wager authorized for any single initial wager on a hand of blackjack by each individual player shall be (a) five hundred dollars ($500.00) at up to ten (10) card game tables per gaming facility, and (b) two hundred and fifty dollars ($250.00) for all other card game tables in a gaming facility. The foregoing maximum wager limits shall apply to each subsequent wager that an individual player shall be entitled to make on the same hand as the result of "splits" and/or "doubling down" during the play of such hand.

(3) For poker. The wager limits for a hand of poker shall be (a) $75.00/$150.00 at up to ten (10) card game tables per gaming facility, and (b) $20.00/$40.00 for all other card game tables in a gaming facility.

(4) Periodic increases in wager limitations. During the term of this compact, the wager limitations set forth in this section 3(m) shall each be automatically increased (but not decreased) without the need to amend this compact on each five-year anniversary of the effective date to an amount equal to the wager limitations specified in sections 3(m)(1), (2) and (3) multiplied by the CPI adjustment rate (with all amounts rounded up to the next whole dollar). The tribe will notify the state gaming agency of such wager limitation adjustments as soon as reasonably possible after the CPI adjustment rate has been determined.

(n) Hours of operation. The tribe may establish by ordinance or regulation the permissible hours and days of operation of gaming activities; provided, however, that with respect to the sale of liquor the tribe shall comply with all applicable state liquor laws at all gaming facilities.

(o) Ownership of gaming facilities and gaming activities. The tribe shall have the sole proprietary interest in the gaming facilities and gaming activities. This provision shall not be construed to prevent the tribe from granting security interests or other financial accommodations to secured parties, lenders, or others, or to prevent the tribe from entering into leases or financing arrangements.

(p) Prohibited activities. Any class III gaming not specifically authorized in this section 3 is prohibited. Except as provided herein, nothing in this compact is intended to prohibit otherwise lawful and authorized class II gaming upon the tribe's Indian lands or within the gaming facilities.

(q) Operation as part of a network. Gaming devices authorized pursuant to this compact may be operated to offer an aggregate prize or prizes as part of a network, including a network:

(1) With the gaming devices of other Indian tribes located within the state that have entered into tribal-state gaming compacts with the state, or

(2) Beyond the state pursuant to a mutually-agreed appendix containing technical standards for wide area networks.

(r) Prohibition on firearms. The possession of firearms by any person within a gaming facility shall be strictly prohibited. This prohibition shall not apply to certified law enforcement officers authorized to be on the premises as well as any private security service retained to provide security at a gaming facility, or armored car services.

(s) Financing. Any third-party financing extended or guaranteed for the gaming operation and gaming facilities shall be disclosed to the state gaming agency, and any person extending such financing shall be required to be licensed by the tribe and annually certified by the state gaming agency, unless said person is an agency of the United States or a lending institution licensed and regulated by the state or the United States.

(t) Record-keeping. The gaming facility operator or the tribal gaming office, whichever conducts surveillance, shall maintain the following logs as written or computerized records which shall be available for inspection by the state gaming agency in accordance with section 7(b): a surveillance log recording all material surveillance activities in the monito